The European Commission put forward the action plan on financing sustainable growth in March 2018. Action 7 of the action plan calls for clarifying institutional investors’ and asset managers’ duties. The European Commission followed through on this action in May 2018 with a proposal for a regulation on disclosures relating to sustainable investments and sustainability risks and amending Directive (EU) 2016/2341. The proposal was adopted as part of the sustainable finance package.

The Sustainable Finance Disclosures Regulation (“SFDR”) was adopted by co-legislators in spring 2019 and was published on 9 December 2019 in the Official Journal. It is applicable since 10 March 2021.

It lays down sustainability disclosure obligations for manufacturers of financial products and financial advisers toward end-investors. It does so in relation to the integration of sustainability risks by financial market participants (i.e. asset managers, institutional investors…, all entities offering financial products where they manage clients’ money) and financial advisers in all investment processes and for financial products that pursue the objective of sustainable investment.

In addition, the co-legislators added disclosure obligations as regards adverse impacts on sustainability matters at entity and financial products levels, i.e. whether financial market participants and financial advisers consider negative externalities on environment and social justice of the investment decisions/advice and, if so, how this is reflected at the product level. The reason is that investment decisions and financial advice might cause, contribute to or be directly linked to negative material effects on environment and society, regardless of whether the investment strategy pursue a sustainable objective or not, such as investments in assets that pollute water or devastate bio-diversity, to ensure the sustainability of investments.

On April 6th, 2022, the European Commission adopted the Regulatory Technical Standards (“RTS”), which describe the content, methodology and presentation of ESG disclosures required by SFDR. These RTS provide an application as of January 1st, 2023. Therefore, starting from this date, financial market players are required to disclose on their website specific information regarding the integration of sustainability risks and adverse impacts on sustainability matters. This information is available below.

Due diligence policy on adverse sustainability impact, Policy on integration of sustainability risks and Remuneration policy

Blue like an Orange’s strategy promotes products that have sustainable investment objective. In this regard, a document was prepared to summarize:

  • The integration of sustainability risks into investment decisions;

  • The consideration of adverse sustainability impacts of investment decisions;

  • The consistency of the remuneration policy with the integration of sustainability risks.

Statement on principal adverse impacts of investment decisions on sustainability factors

Blue like an Orange does consider the principal adverse impacts of investment decisions on sustainability factors. Below is the statement covering the period of 1 January until 31 December of 2022.

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In addition, considering that Blue like an Orange is promoting financial products that have, among other characteristics, a sustainable investment objective, relevant disclosures must be made at entity level at product level.

Blue like an Orange Sustainable Capital SICAV-SIF SCS - Latin America Fund I

Blue like an Orange Sustainable Capital SICAV-SIF SCS - Latin America Fund I (“Sub-Fund I” or “Fund I”) meets the characteristics of a product qualified as Article 9 by the European "Sustainable Finance Disclosure Regulation".

An Article 9 fund is a fund that has sustainable investment as its objective. Sustainable investments are defined in the Sustainable Finance Disclosure Regulation as any of the following:

  • Investments in economic activities that contribute to an environmental objective;

  • Investments in economic activities that contribute to a social objective and in particular an investment that contributes to tackling inequality, an investment fostering social cohesion, social integration or labor relations; and

  • Investments in human capital or economically or socially disadvantaged communities;

provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.

As an “Article 9” product, Blue like an Orange Sustainable Capital SICAV-SIF SCS - Latin America Fund I is committed to invest in economic activities that contribute to a social objective, provided that they respect the above-mentioned criteria.

Below is a document explaining how the sustainable investment objective will be attained and provides the following information:

  • Respect of the “Do No Significant Harm” criteria;

  • Description of the sustainable investment objective;

  • Description of the investment strategy;

  • Proportion of sustainable investments in the portfolio;

  • Information on the monitoring of the impact;

  • Information on the methodologies for assessing, measuring and monitoring of the impact;

  • Data sources and processing for impact measurement and monitoring;Limitation to methodologies and data.

  • Description of the Due diligence performed on the underlying assets;

  • Engagement policies

  • Description of the attainment of the sustainable investment objective.

This documentation is available on the Fund’s AIFM (Sanne LIS SA) website  https://www.fundrock-lis.com/esg/

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