Sustainable Finance Disclosure Regulation (2019/2088) (the “SFDR”)
Emona GP S.à r.l. (the Firm) makes the following disclosures in accordance with Articles 3(1), 4(1)(b) and 5(1) of the SFDR.
The Firm, a private limited company (Société à responsabilité limitée) domiciled in Luxembourg, is the general partner and acts as a registered alternative investment manager (the AIFM) pursuant to Article 3(2) of the Luxembourg law of 12 July 2013 on alternative investment fund managers, of Sapphire Investors SCSp (the Fund), a special limited partnership (société en commandite spéciale) domiciled in Luxembourg.
Sustainability risk policies
A sustainability risk means "an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment". For the Firm, sustainability risks are risks which, if they were to crystallise, would cause a material negative impact on the value of the Fund's investment. The Firm sets out below its policy on the integration of sustainability risks in its investment decision-making.
Prior to the Firm's investment decision on behalf of the Fund to invest in Sapphire Holdings S.à r.l., the Firm considered all material risks associated with the investment strategy and policy of the Fund, including sustainability risks.
The Firm identifies and mitigates the material risks associated with each proposed investment to be made by the Fund, including sustainability risks, although the Firm does not guarantee that it can successfully identify and mitigate all material risks. The Firm is advised by its investment advisor, which considers sustainability risks on an investment-by-investment basis before making any investment recommendations to the Firm and with regard to the Firm's investment policy and objectives.
The Firm believes that sound governance, social responsibility and environmental impact mitigation are key to the success of our investments.
As part of its due diligence process, the Firm assesses whether an underlying prospective portfolio company breaches the Firm's policies on sustainability and whether this should be considered as a material risk that merits discontinuing diligence prior to making a formal investment recommendation to the investment team of Emona Capital LLP, being the investment advisor of the Fund.
Consideration of sustainability adverse impacts
Article 4 of the SFDR requires fund managers to make a clear statement as to whether or not they consider the "principal adverse impacts" of investment decisions on sustainability factors.
The Firm confirms that it does consider the principal adverse impacts of its investment decisions on sustainability factors in the manner prescribed by Article 4 of the SFDR.
ESG is a key part of our investment process, helping us to proactively manage ESG risks and opportunities and accelerate ESG best practices within our portfolio. In fact, we believe that ESG is an important part of creating sustainable long-term value. To this end, we encourage our investee companies to (a) institute effective grievance/complaints handling mechanisms related to employee matters, (b) implement clear anti-corruption/-bribery policies and employee codes of conduct and (c) uphold high human rights standards. Where relevant, we also ask our investee companies to monitor and reduce greenhouse gas emissions and other types of pollution as well as to continuously improve energy performance.
It is the policy of the Firm to ensure staff are paid remuneration that is consistent with and promotes sound and effective risk management and does not encourage risk-taking, which is inconsistent with the risk profiles, rules or instruments of incorporation of the Fund that it manages. Staff are predominantly paid a fixed salary and the Firm considers its sustainability risk policy, as part of its overall assessment of the Firm's remuneration.