On March 10, 2021, the European Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088, SFDR) became applicable. This regulation emerged from the EU’s 2018 Action Plan on Sustainable Finance and is thus part of wider efforts at European level to make the financial sector more sustainable.
The SFDR requires fund managers like Riverdam B.V. to provide information with regards to (inter alia) the integration of sustainability risks, the consideration of adverse sustainability impacts, and where applicable, the promotion of environmental or social characteristics, and sustainable investment as an investment objective.In accordance with the SFDR, Riverdam makes the following disclosures in respect of:
(i) Integration of sustainability risks in the investment decision making;
(ii) Principle adverse impact statement; and
(iii) Remuneration policy.Integration of sustainability risks in investment decision making
A sustainability risk means “an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment“.
Before an investment decision is made on behalf of a fund that Riverdam manages, an investment decision process is followed. Part of the investment decisions process is that Riverdam assess the risks attached to a potential investment opportunity, which includes sustainability risks. Identified sustainability risks are taken into account by the investment committee and the board of Riverdam when making investment decisions.The portfolios and investments that Riverdam manages do not promote sustainability features or do not have sustainable investment as their objective, as referred to in Articles 8 or 9 of the SFDR. Due to our investment focus on SME’s we do not come across severe climate-related risks.
Principal adverse impact statement
In accordance with article 4 sub 1 (b) of the SFDR, Riverdam states that it does not consider adverse impacts of investment decisions on sustainability factors as set forth in article 4 sub 1 (a) of the Disclosure Regulation and therefore does not make the disclosures as described in article 4 sub 1 (a) of the SFDR. Given the small size of the organisation of Riverdam, such disclosure as set forth in article 4 sub 1 (a) of the SFDR and the administrative burden in connection therewith would not be proportional.
Employees play a crucial role in achieving the Riverdam objectives and therefore form a central part of the organization. Riverdam attaches great importance to the development of the competences of its workforce.Compensation depends on the job profile, experience and personal development. This is determined according to the Riverdam salary model. Riverdam regularly benchmarks its salary to ensure that our remuneration policy remains in line with the market and that the balance between the fixed and variable component of remuneration shall be reasonable and not encourage excessive risk taking.
During the performance review of the partners and employees of Riverdam, the compliance with the ESG policy applicable within Riverdam is taken into account, which includes the integration of sustainability risks in respect of investments.
(1) We refer to the website of the European Commission for more background information: Renewed sustainable finance strategy and implementation of the action plan on financing sustainable growth | European Commission (europa.eu)