What is the sustainable finance disclosure regulation?
Following the adoption of the 2015 Paris Agreement on climate change and the United Nations 2030 Agenda for Sustainable Development, the EU Commission has expressed in the Action Plan “Financing Sustainable Growth” its intention to clarify fiduciary duties and increase transparency in the field of sustainability risks and sustainable investment opportunities with the aim to:
- Reorient capital flows towards sustainable investment in order to achieve sustainable and inclusive growth;
- Assess and manage relevant financial risks stemming from climate change, resource depletion, environmental degradation and social issues; and
- Foster transparency and long-termism in financial and economic activity.
Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (“SFDR”) sets out sustainability disclosure requirements for a broad range of financial market participants, financial advisors and financial products. It was enacted to address the twin objectives of increasing transparency of sustainability-related disclosures and to increase comparability of disclosures for end-investors.
How does SFDR relate to Astanor?
The Astanor fund (the “Fund”) is managed by Crestbridge Management Company S.A. acting as authorized fund manager (the “AIFM”) in Luxembourg.
SFDR requires fund managers to categorize their funds as falling under one of three categories and to explain the category used in the marketing material for the fund.
Astanor is an impact investor, delivering financial, social and environmental returns in equal measure. We believe financial returns are strongly correlated with sustainable management of environmental, social and governance risks. Sustainability and impact are deeply rooted within the management of the Fund. It is embedded in its mission and investment process. The Fund is investing in mission-driven companies which contribute to an environmental and/or social objective. The Fund ensures that investments do not significantly harm any of these objective and the Fund’s investment process monitors that investee companies follow good governance practice. The Fund therefore classifies as an article 9 fund within the meaning of Regulation (EU) 2019/2088, that is, a product targeting sustainable investments.
What does Astanor have to achieve as of 10 March 2021?
The application of the SFDR Disclosures Requirements with respect to closed-ended AIFs which are no longer marketed (within the meaning of the AIFMD) after 10 March is currently debated on the Luxembourg market and at the European level. In this context, upon due inquiry, and until further guidance to the contrary is published at European or national level, the SFDR Disclosures Requirements are considered as not applicable to the Fund. If the European authorities were to consider that the SFDR Disclosures Requirements are applicable to the Fund, we will take the appropriate steps.
As of today, most of the SFDR obligations apply to the AIFM as manager of the Fund, including the disclosure on the website of Crestbridge which can be found here. Nevertheless, we will share an Astanor ESG policy which would include information related to the article 9 requirements under SFDR on our website, by the end of June 2021, with a view to enhancing transparency with regards to the inclusion of sustainability factors in our investment decisions and portfolio management process.