ESG-Strategy

16.06.2021

Information about the handling of sustainability risks and the main adverse impacts on sustainability factors

As a financial market participant within the meaning of Art. 2 No. 1 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector ("Disclosure Regulation"), HPG Capital GmbH, Hamburg, LEI 894500JUFK6I2WMZJM93 ("HPG") is obliged to provide the following information pursuant to Art. 3 (1) and Art. 4 (1) of the Disclosure Regulation. It is not intended to advertise environmental or social features in its investment strategy.

 

1. Strategy for handling of sustainability risks in investment decision-making processes

The concept of sustainability within the meaning of the Disclosure Regulation plays an important role at HPG. HPG wants to realise and secure its corporate success in the long term on the basis of jointly lived values and principles, technical professionalism, personal integrity, social competence and ecological awareness.

As a company, HPG wants to support the shift towards a sustainable economy by contributing to the achievement of climate protection and the UN Sustainable Development Goals. HPG is committed to the Sustainable Development Goals of the United Nations and the Paris Climate Change Agreement.

Sustainability risks describe environmental, social or governance (ESG) events or conditions, the occurrence of which may actually or potentially have a material adverse effect on the value of an investment. As part of its strategy, HPG incorporates sustainability risks into its investment decisions within financial portfolio management in various ways.

A central aspect of HPG's consideration of sustainability risks in investment decisions is the investment strategy, which forms the basis for the selection of investments upstream of portfolio management. In order to limit sustainability risks, HPG develops exclusion criteria to avoid investments in companies with an increased risk potential wherever possible. Through this approach, HPG aims to align investment decisions with environmental, social or corporate values.

 

2. Declaration of no consideration of adverse impacts on sustainability

Sustainability factors include environmental, social and labour concerns, respect for human rights and the fight against corruption and bribery. The investment in a financial product can lead to negative sustainability impacts depending on the underlying asset (e.g. the participation in or investment in receivables from companies), for example if this company violates environmental standards or human rights in a serious way.

As HPG has less than 500 employees, HPG is not obliged to consider adverse impacts of investment decisions on sustainability factors. Nevertheless, HPG has made the strategic decision to gen-erally design investment decisions in the context of financial portfolio management in such a way that undue adverse effects on sustainability factors are avoided.

However, possible adverse effects of investment decisions and recommendations on sustainability factors are not yet systematically and comprehensively considered by HPG with regard to the most important adverse effects on sustainability factors within the meaning of Art. 4 (1) (a) Disclosure Regulation.

The legal requirements for this are new and not sufficiently concrete. In addition, there is currently no criteria available on a sufficient scale that must be used to determine and evaluate the individual factors. However, HPG is observing the growing supply of ESG data from providers and will decide on the establishment of corresponding processes as soon as the supply of reliable data permits.

HPG expressly declares that the current approach does not change its willingness to contribute to a more sustainable, resource-efficient economy with the aim, in particular, to reduce the risks and impacts of climate change and other environmental or social ills.

 

3. Transparency of the remuneration policy in connection with the consideration of sustainability risks

HPG's reimbursement policy is consistent with the strategy to address sustainability risks. HPG's reimbursement policy ensures that employees are not compensated in a way that conflicts with the duty to act in the best interests of investors. The reimbursement policy also does not create incen-tives to broker investments that are not in line with the investment strategy of the HPG funds. Fur-thermore, the compensation structure does not favour any willingness to broker investment products with high sustainability risks.