SUSTAINABLE FINANCE DISCLOSURE REGULATION
With climate changes becoming increasingly imminent, the transition to a low-carbon and progressively sustainable circular economy represents a more realistic near-future scenario. Hence, the EU has developed a series of initiatives with the aim of redirecting capital towards sustainable businesses. One of the initiatives is the Sustainable Finance Disclosure Regulation (SFDR) which main objective is to create a transparent and systematic framework to prevent misrepresentation of ESG activities or initiatives (greenwashing) while ensuring sustainable financial growth.
ESG is a core part of AIP’s business and is integrated throughout AIP’s investment process with the purpose, on one hand, to identify and prioritize principal adverse impacts on sustainability factors and on the other hand, to assess sustainability risks on financial returns. Our ESG due diligence framework takes both principal adverse impacts on sustainability factors and sustainability risk on financial returns into account.
Article 3 of Regulation (EU) 2019/2088
According to article 3 of the SFDR, financial advisors shall publish on their websites information about their policies on the integration of sustainability risks in their investment decision process.
AIP’s ESG Policy and Responsible Investment Policy address AIP’s integration of sustainability risks throughout AIP’s investment process and operations, including our ESG due diligence framework. Through our ESG due diligence framework, we on one hand identify and prioritize principal adverse impacts on sustainability factors and on the other hand, assess sustainability risks on financial returns.
Article 4 of Regulation (EU) 2019/2088
In accordance with article 4 of the SFDR, financial market participants – including alternative investment fund managers with less than 500 employees – can choose whether or not to consider principal adverse impact of its investment decisions on sustainability factors.
Although not being legally required to do so, AIP has decided to consider principal adverse impact of investment decisions on sustainability factors across AIP Infrastructure II and subsequent funds managed by AIP. Please refer to our “Principal adverse impact statement” for a description on how AIP considers such principal adverse impact.
Article 5 of Regulation (EU) 2019/2088
According to article 5 of the SFDR, financial market participants – including alternative investment fund managers – shall include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks and shall publish that information on their websites.
AIP has both a remuneration policy and a diversity policy. The policies have been designed to align the personal objectives of AIP’s employees, considering the risk profile, values and long-term interests of AIP and funds managed by AIP, and to ensure that all relevant factors are taken into account when hiring, evaluating and promoting employees.
As part of the semiannual performance review, there is specific focus on compliance with ESG policies and procedures and with AIP’s values and principles. This way, AIP emphasizes the importance of these matters and supports good corporate governance as well as sustained and long-term value creation for our investors.
To further strengthen the setup and overall alignment of interests, AIP also has an external remuneration policy outlining the principles on how to handle investments with respect to aligning remuneration of the executives of the investment target company or portfolio companies with performance, the long-term strategy and the sustainable business goals of the investments.
AIP will continuously work to ensure that the remuneration policies support AIP’s work to integrate sustainability risks in all relevant processes.
Article 8 of Regulation (EU) 2019/2088
Article 8 sets out a transparency requirement for the promotion of environmental or social characteristics in pre‐contractual disclosures.
AIP Infrastructure II promotes environmental and social characteristics and thereby classifies as an Article 8 product under the SFDR. For this reason, AIP has published a statement with information on how those characteristics are met.