Sustainable Finance Disclosures Regulations (SFDR)

This document highlights the SFDR disclosures for the Evelyn Partners Umbrella A ICAV and Evelyn Partners UCITS ICAV. Evelyn Partners also has a group policy on SFDR, which is viewable at www.evelyn.com.

Definitions:

SFDR means Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector

EU Taxonomy Regulation means Regulation EU 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework to facilitate sustainable investment, and amending SFDR

Copy of the SFDR disclosures for the Evelyn Partners Umbrella A ICAV and Evelyn Partners UCITS ICAV

Article 6 of the SFDR requires that financial market participants such as an Alternative Investment Fund Manager (AIFM) to disclose the manner in which Sustainability Risks are integrated into investment decision-making and the results of the assessment of the likely impacts of Sustainability Risks on the returns of the financial products they make available. The following are environmental, social and governance themes that are relevant for the Funds. Within these themes, events may happen or conditions may arise that impact the valuation of the Funds.

Environmental

  • Climate change and greenhouse gas emissions
  • Unsustainable resource depletion, including water
  • Environmental damage, land contamination, pollution and waste
  • Biodiversity loss and deforestation
  • Animal welfare and wildlife

Social

  • Human rights and workers’ rights, including anti-slavery and child labour
  • Health and safety
  • Employee relations and diversity
  • Local communities, including indigenous communities
  • Conflict and humanitarian crises

Governance

  • Board and management experience, diversity and structure
  • Executive remuneration policies
  • Anti-bribery and corruption
  • Shareholder rights and engagement
  • Legal, regulatory and taxation

Sustainability Risk can either represent a risk on its own, or impact and contribute significantly to other risks, such as market risks, operational risks, liquidity risks or counterparty risks. The following risks arising from the themes listed above are integrated into the Funds' investment decisions:

  • Market risks
  • Liquidity risks
  • Counterparty risks
  • Operational risks
  • Regulatory risks
  • Reputational risks
  • Stock and Collective Investment Scheme risk

Ultimately, where the relevant Fund is a fund of funds, decisions to include an individual asset in the portfolio of the underlying Collective Investment Scheme (CIS) are delegated to the fund managers of such CIS. Therefore, there will always be a degree of risk resulting from asset selection and possible negative impacts to individual fund performance should a sustainability issue arise at the underlying CIS level. The Investment Manager seeks to limit this risk by selecting a range of CIS across asset classes and regions, and by integrating environmental, social and governance (ESG) analysis into the selection of underlying managers.

An assessment is undertaken of the likely impacts of these Sustainability Risks on the Funds' returns. The result of that assessment is that the Investment Manager expects any negative impact on returns from Sustainability Risks to be limited, primarily due to: the focus of the investment philosophy on quality growth and sustainable returns over the longer term; the integration of ESG factors into the Funds' investment decisions and research; and portfolio diversification and positioning. For example, look-through analysis of the portfolio holdings highlight limited sector exposure to the oil & gas sector and the Funds generally score well with third party ESG data providers.

Copy of the Article 8 disclosure for the Evelyn Sustainable Cautious Portfolio and the Evelyn Sustainable Adventurous Portfolio only, 2 “Sustainable funds” within the Evelyn Partners Umbrella A ICAV.

The Investment Manager monitors compliance with the ESG characteristics outlined in the sections entitled Investment Policies through regular analysis of the CIS, investment companies in which they invest and in the underlying shares in companies or other assets that the these CIS and investment companies own. This includes, but is not limited to; quarterly asset allocation meetings to review market, geopolitical and macroeconomic risks; internal governance monitoring of liquidity risks; the Investment Manager's proprietary research framework; qualitative and quantitative analysis, regular Investment Manager meetings and the Investment Manager's selection principles.

The Investment Manager's proprietary research framework sees ESG factors integrated into the Sustainable Funds' policies and research, which ultimately means that all CIS held in the Sustainable Funds and their investment managers have had their ESG policies analysed as part of standard due diligence. In addition, the Investment Manager's analysts and portfolio managers have access to specialist ESG data providers, which provides the team with independent analysis of ESG and Sustainability Risks, both at the ICAV and Fund level.

The Funds' investment policies outlined above includes an ESG scoring system and screening (negative and positive).

An assessment is undertaken of the likely impacts of these Sustainability Risks on the Funds' returns. The screening policies (negative and positive) and ESG scoring system within the investment policies are designed to help the Investment Manager identify assets that demonstrate superior ESG and/or sustainability characteristics. No benchmark has been selected for the purposes of achieving the ESG objectives.

EU Taxonomy Regulation

Article 6
The Investments of the Funds do not take into account the EU criteria for environmentally sustainable economic activities. Where a particular Fund does take into account the EU criteria for environmentally sustainable economic activities, this will be reflected in the relevant Supplement.

Article 8 – Evelyn Sustainable Cautious Portfolio and the Evelyn Sustainable Adventurous Portfolio only EU Taxonomy

The Funds are fund of funds and intend to rely on the disclosures of the CIS in which they invest in respect of the Funds’ own disclosures in relation to EU Taxonomy Regulation. 

The Fund documentation includes an Annexe, setting out the required regulatory disclosure in terms of SFDR and EU Taxonomy. This Annexe confirms that the Funds promote Environmental and Sustainable characteristics but will not make any sustainable investments in line with the definition of ‘sustainable investments’ in that legislation.

Principle Adverse Impact

Evelyn Partners considers the principal adverse impacts of its investment decisions on sustainability factors. Sustainability factors means environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. For further information, please visit www.evelyn.com.

Remuneration Policies

The remuneration policy of Evelyn Partners is consistent with its approach to the integration of sustainability risks. Evelyn Partners has established policies and procedures in relation to remuneration which, in Evelyn Partners’ opinion, are proportionate and consistent with sound and effective risk management, including the management of sustainability risk, and in accordance with applicable requirements.

Additional information

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