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The Sustainable Finance Disclosure Regulation (SFDR)

Sustainability considerations play an important role in the Investment Manager’s stock selection process.

Foresight SICAV has an objective of making sustainable investments (within the meaning of Article 2(17) of SFDR) and accordingly qualifies as an Article 9 product under SFDR. The Investment Manager seeks to avoid investing in any investment that it reasonably considers may significantly harm the sustainable investment objectives of the Fund. For the avoidance of doubt, derivatives are not used for investment purposes and therefore not used to contribute in any way to the sustainability objectives of the Company.

For the purposes of the Taxonomy Regulation, the Investment Manager has taken the view that the investments underlying this financial product contribute to climate change mitigation, pollution prevention and control, and the sustainable use and protection of water and marine resources.

The Fund will only invest in the shares of a company if the Investment Manager in its discretion considers that the target entity delivers a net social or environmental benefit through assessing the investment against the Sustainable Investment Criteria. The Investment Manager will firstly assess company shares based on the ten principles of the United Nations Global Compact for business which cover areas including human rights, labour rights, environmental safeguards and combating bribery and corruption. The Investment Manager will then make a qualitative assessment of the target entity and conclude whether sustainability is a core and long term focus of the target entity. If it is the Investment Manager’s opinion that an investee company no longer meets the Sustainable Investment Criteria, the Investment Manager will not make any further investments in that company and will seek to realise in an orderly fashion, its investment in such a company.

The Investment Manager reviews and assesses potential sustainability risks within the meaning of SFDR as part of its decision-making processes with respect to the investments to be made by the Fund and has integrated such review within its internal procedures and policies. Such review is performed by the management team of the Investment Manager on an ongoing basis if and when investments are made. The risk management team of the Management Company also performs a regular (ex-post) review of those risks as part of the discharge of its duties. The Investment Manager considers that the investments to be made by the Fund are likely to be materially affected by sustainability risks and that if any of those risks materialises, it is likely that the returns on such investments will be affected negatively. Investors should note that it is very difficult to assess with any reasonable certainty the likely outcome of any sustainability risk on the investments and/or the risk of occurrence of any such risk. The investors’ attention is drawn to the risk factors entitled “Sustainability Risks” in Section 5.25.

Sustainability Indicators

In assessing, measuring and monitoring the environmental characteristics of investments the Investment Manager considers the following factors which are sustainability indicators:#

IndicatorMetric
Employment during construction - temporary jobsPerson years
Employment during operation -permanent jobsFull-time equivalents
Baseline GHG emissions (e.g. reference scenario without investment implementation)kt CO2e/a
Absolute GHG emissions (e.g. after investment implementation)kt CO2e/a
GHG emissions saved or avoidedkt CO2e/a
Electricity generation capacity from renewable energy sourcesMW
Electricity generation capacity from conventional energy sourcesMW
Electricity produced from renewable energy sourcesGWh/yr
Electricity produced from conventional energy sourcesGWh/yr

Thermal produced from renewable energy sources

GWh/yr

Households which could be supplied with the energy generated by the project

No. of households

Electrical Energy Efficiency achieved

%

Thermal Energy Efficiency achieved

%

Environmental, Social and Governance (ESG) Policy 

The Investment Manager manages and monitors the Fund’s portfolio of investments by applying its sustainability and ESG policy that is made available to investors upon request and accessible on the Investment Manager’s website on the link set out in Section 6.8 above (ESG Policy). In accordance with the ESG Policy, the Investment Manager is relying on the United Nations Development Goals (SDGs) and the Principles for Responsible Investment supported by the United Nations (PRI) as frameworks to structure their corporate and investment activities.

The Investment Manager has established a ‘Sustainability and ESG Committee’ which is responsible for shaping and steering the Investment Manager’s approach to sustainability, developing vision and strategy and ensuring that sustainability and ESG considerations and frameworks that are incorporated into the Investment Manager’s investment processes and asset management activities are appropriate and market leading. Details on the composition and functioning of the Sustainability and ESG Committee are available in the ESG Policy.

The Investment Manager is a signatory to the PRI and is required to submit an annual assessment that grades the business’ performance across three different modules: strategy and governance; infrastructure and private equity. Therefore, all investment decisions taken by the Investment Manager must factor in, and remain true to, the PRI Principles. The Investment Manager’s adherence to these principles is assessed on an annual basis by the PRI.

The SDGs also represent a key driver of the Investment Manager’s investment and corporate activities. The SDGs are a list of 17 goals that seek to mobilise the international community to bring about an end to poverty and protect the planet. Across the spectrum of its activity, the Investment Manager sees itself as contributing most comprehensively to the following SDGs with respect to infrastructure: good health and well-being, affordable and clean energy, industry, innovation and infrastructure, climate action and life on land. The Investment Manager also aligns itself with a number of other external sustainability and ESG focused organisations which are listed in the ESG Policy.

In order to promote market-leading sustainability practices, the Investment Manager is required to develop a tailored approach to tracking, measuring, and reporting sustainability performance. This approach will continue to be assessed for appropriateness and updated as required. The Investment Manager implements a Corporate Social Responsibility (CSR) programme, as laid out in its ‘CSR Statement’ which is appended to the ESG Policy, through a comprehensive set of practices that are integrated into the Investment Manager’s wider business operations in order to achieve and promote sustainability activities. The Sustainability and ESG Committee is responsible for setting, reviewing, and monitoring corporate objectives in order to ascertain performance against specified CSR measures.