The nature of the environmental and social challenges to be faced worldwide has increased, over the last few years, the attention towards sustainable finance, that is, attentive to the consideration and enhancement of environmental, social and good governance issues (topics briefly indicated with the initials " ESG " - Environmental , Social and Governance ).
The creation of a financial system capable of promoting sustainable development that favors the needs of present and future generations led the European Commission to publish, in March 2018, the " Action Plan for sustainable finance " to guarantee, among other things, another, the transparency of the asset managers in favor of the final investors.
In this context, the European legislator has adopted Regulation (EU) 2019/2088, relating to disclosure on sustainability in the financial services sector (" Regulation 2088 ").
Regulation 2088 establishes specific disclosure obligations for financial market participants (including investment firms that provide individual portfolio management services) and financial advisors (including investment firms that provide consultancy services in investment matters).
These subjects are required to provide information regarding:
- the way in which they integrate sustainability risks in their investment decision-making processes and in their consultancy ( see Article 3 of Regulation 2088);
- any assessment of the main negative effects of investment decisions on sustainability factors ( see Article 4 of Regulation 2088); And
- the integration of sustainability risks into the remuneration policies ( see article 5 of Regulation 2088).
This document aims to clarify the choices made by Ceresio SIM SpA (" SIM " or " Company ") with respect to issues related to sustainability, taking into consideration the operations of the SIM as well as the characteristics of the financial products it offers .
The Company considers ESG risks as part of the investment selection process related to portfolio management and investment advisory services (“ Services ”).
To this end, the SIM attributes a specific internal ESG rating to the products and instruments. For the purposes of assigning the ESG rating, due to the different types of products, the Company uses data and information obtained from external suppliers as well as its own internal evaluation criteria.
With reference to UCITS units or shares, the sustainability assessment is carried out with regard to the investment policies of the target UCIs, not only maximizing the return / risk ratio, but verifying the existence of high standards of social and environmental responsibility and a good behavior in terms of governance. More specifically, the attribution of the ESG rating to the individual UCIs is based on the classification in terms of sustainability assigned to the UCITS by the relevant manager in accordance with the provisions of articles 8 and 9 of the SFDR. In the event that the UCITS should not be classified pursuant to articles 8 and 9 of the SFDR, the SIM carries out an assessment of the underlying assets of the UCITS concerned, according to the criteria used for the direct valuation of the financial instruments.
With regard to the direct assessment of individual financial instruments, the SIM, also making use of the data and information provided by third-party providers , assigns an internal ESG rating that takes into account the existence of high standards of social and environmental responsibility and a good governance behavior.
Furthermore, with regard to direct investment in securities, the SIM, by applying internationally recognized criteria and parameters, limits the presence within the investable universe of issuers operating in sectors that have a proven negative impact with respect to sustainability issues. including, but not limited to, alcohol, gambling, tobacco, nuclear power, weapons.
In addition, as part of the individual portfolio management service, the SIM considers the sustainability risks from the phase of defining strategies and asset allocation up to the phase of monitoring portfolios and risk management.
Without prejudice to all of the above, pursuant to article 4, paragraph 1, point b), and article 5, paragraph 1, point b), of Regulation 2088, the SIM intends to specify that it does not currently take into account the effects negative effects of its investment decisions on sustainability factors nor does it take into account the main negative effects on sustainability factors in the context of its consulting activity.
The remuneration and incentive mechanisms adopted by the Company and formalized in the “Remuneration and incentive policies” are aimed at the good governance of the Company. The SIM remuneration policies will be integrated starting from next year in order to take into account the most recent developments made to the investment process in order to integrate sustainability risks.