In order to comply with the sustainable finance disclosure regulation (SFDR)[1], MITS Industries Management B.V. (MITS) makes the following disclosures.
Integration of sustainability risks
A sustainability risk means:
“an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment”.
Prior to making any investment decision on behalf of a fund under its management, MITS conducts a comprehensive due diligence process covering financial, legal, tax and ESG matters, engaging external advisers where appropriate. MITS considers ESG factors to be an integral part of its investment assessment process.
As part of the investment decision-making process, MITS identifies and assesses the risks associated with each potential investment, including sustainability risks. Any identified sustainability risks are taken into account alongside other relevant investment considerations when evaluating and making investment decisions on behalf of the fund.
In addition, MITS pays staff a combination of fixed remuneration and variable remuneration (including a possible bonus). Variable remuneration for relevant staff also takes into account compliance with all policies and procedures which are in effect within MITS, including those relating to taking into account sustainability risks on the investment decision making process.
Employees are made aware of the applicable policies and procedures when starting their employment with MITS.
No consideration of sustainability adverse impacts
In accordance with article 4 sub 1 (b) of the SFDR, MITS states that it does not consider adverse impacts of investment decisions on sustainability factors as set forth in article 4 sub 1 (a) of the Disclosure Regulation and therefore does not make the disclosures as described in article 4 sub 1 (a) of the SFDR.
At this stage MITS does not consider the adverse impacts of its investment decisions on sustainability factors, (i) because MITS could not reasonably gather and/or measure all the relevant data of the portfolio companies of MITS, taking into account reasonable cost for clients and investors and (ii) due to the small size of the organisation of MITS, such disclosure as set forth in article 4 sub 1 (a) of the SFDR and the administrative burden in connection therewith would not be proportional.
MITS continues to closely monitor the market developments (including the level of availability of the data) as well as the regulatory developments. MITS will at least on an annual basis review whether and when to comply with article 4 sub 1 (a) of the SFDR.
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[1] Regulation (EU) 2019/2088