Disclosure required by Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability reporting in the financial services sector

Art. 3 – Transparency of sustainability risk policies

Regulation (EU) 2019/2088 (the “Regulation”) defines sustainability risks as environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment to which they pertain.
PM & Partners SGR S.p.A. ( the “SGR”) restricts the assets in which it could theoretically invest by excluding the possibility of investing in economic sectors identified in accordance with widespread market practices, inspired by a set of considerations including the desire to prevent exposure to sustainability risks relating to a part of them. Moreover, in the preliminary phase, the SGR carries out an in-depth analysis of the investment opportunity, also through meetings with the management of the target company, aimed at defining a preliminary memorandum, in which risks, opportunities and critical areas are summarized, also with reference to sustainability risks. This assessment constitutes the basis for the investment team’s decision to continue the process. The continuation of the process foresees, for each investment opportunity, the carrying out of a due diligence, in collaboration with specialized third parties, which deepens the knowledge of the critical areas previously identified and which focuses on financial areas and areas pertaining to sustainability risks. With regard to the latter, the SGR carries out a materiality analysis that makes it possible to identify the environmental, social and governance aspects that are important for the target company and assesses the correct management of the same (e.g. organizational controls, strategies, objectives, etc.). On the basis of this assessment, corrective actions are defined on any deficiencies identified. The results of the activities carried out are included in the memorandum used for investment decisions.
In its quality as majority or qualified minority investor, the SGR adopts appropriate governance mechanisms and systems that allow for regular monitoring, inter alia, of the financial performance of the investee companies and of the management of the specific sustainability risks identified when selecting the relevant investment.
Moreover, when necessary or appropriate, the SGR constructively dialogues with the governing bodies of the investee companies and exercises its decision-making power in order to positively influence the management of sustainability risks in the portfolio company.

Release Date: March 10, 2021

No consideration of adverse impacts of investment decisions on sustainability factors

The SGR does not currently take into consideration, in the sense envisaged by art. 4, paragraph 1 point b) of the Regulation, principal adverse impacts (“PAIs”), defined as the most significant negative impacts of investment decisions on sustainability factors relating to environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. In fact, the SGR does not currently believe to be in the conditions to collect exhaustive and sufficient information and data from its portfolio companies to disclose according to the PAI statement template in Annex I of the Delegated regulation (EU) 2022/1288 (“RTS”).
However, the SGR assesses the negative externalities of its investment activity through (i) a negative screening designed to exclude investments in companies with characteristics that are incompatible with the SGR’s Responsible Investment approach, (ii) due diligence activities also extended to the ESG factors, and (iii) periodic monitoring, during the holding period, of the ESG performances and impacts of the investment portfolio. The SGR reserves the right to reassess its position, and should it decide to take into account PAIs in accordance with art. 4, paragraph 1 point a) of the Regulation and in the form prescribed by the RTS, it will update the website accordingly.

Release Date: March 10, 2021
Date of 1st update: March 10, 2023

Art. 5 – Transparency of remuneration policies in relation to the integration of sustainability risks
The SGR is required to adopt sound and prudent compensation and incentive policies that reflect and promote sound and effective risk management and do not encourage risk-taking that is inconsistent with the risk profiles and regulations of the funds it manages. In application of this principle, the SGR ‘s remuneration policies do not encourage sustainability risk-taking. In particular, the assessment of the results taken into account by the SGR for the purposes of assigning variable remuneration is carried out net of any negative impact deriving – ex ante or ex post – from the sustainability risks taken by the SGR.

Release Date: March 10, 2021