Belnord Capital AB is registered with the Swedish Financial Supervisory Authority (Sw. Finansinspektionen) as a registered alternative investment fund manager under the Swedish Alternative Investment Fund Managers Act (2013:561), and is the alternative investment fund manager of Belnord Capital Fund I AB.
Date of publication: 5 September 2023
Version: 1
Under Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR”), Belnord Capital AB, Reg. No. 559438-0817, (in the following, “we” or “Belnord”) is required to make the following disclosures in accordance with Articles 3(1), 4(1), and 5(1) of the SFDR.
Belnord is the alternative investment fund manager of Belnord Capital Fund I AB (the “Fund”). The Fund has been established for the purpose of making, managing and subsequently realising (i) investments in other alternative investment funds or similar investment vehicles (“Indirect Investments”) and (ii) direct investments in portfolio companies (“Direct Investments”).
Belnord’s investment decision-making process involves that, prior to any investment decisions being made on behalf of the Fund, material risks (including Sustainability Risks, as defined below) associated with underlying funds and their fund managers (with respect to Indirect Investments) or associated with the underlying companies (with respect to Direct Investments) are identified and evaluated. Belnord assesses identified risks (including Sustainability Risks) alongside other relevant factors set out in the investment proposal.
A “Sustainability Risk” is 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 an investment, and hence the net asset value of the fund. Sustainability Risks include environmental risks, social risks and governance risks. Environmental risks could be (without limitation) events like earthquakes, flood risk, physical and transitional risks due to climate change, inadequate environmental management, or other environment-related factors. Social risks could be circumstances like social unrest, labor right issues, human rights violations, and governance risks could be factors like bribery and corruption, compliance risks or similar.
During the due diligence phase, Belnord examines, in relation to Indirect Investments, inter alia, (i) how the relevant fund manager of an underlying fund incorporates Sustainability Risks into its investment decisions; (ii) the fund’s classification under the SFDR; (iii) whether the fund manager considers principal adverse impacts on sustainability factors; (iv) whether the fund manager is a signatory of any ESG-related standards (such as the UN Principles for Responsible Investments); and (v) the fund manager’s reporting on Sustainability Risks in portfolio companies and ESG issues to its investors. In relation to Direct Investments, Belnord’s due diligence will take into account potential risks (including Sustainability Risks) to which the company may be exposed to. During this process, Sustainability Risks are identified and assessed using the same process as is applied to other relevant risks affecting the Fund. In participating in co-investment opportunities, Belnord will also review the fund manager’s own ESG due diligence on the company.
If Sustainability Risks are identified, this may lead to the abortion of the investment, unless the manager of the underlying fund, or the company itself (as the case may be) can demonstrate that such risks are effectively managed or mitigated through appropriate measures. Once an investment has been made, Belnord monitors Sustainability Risks on a regular basis as part of its overall risk management and monitoring.
Belnord’s remuneration system does not encourage excessive risk-taking with respect to Sustainability Risks. We pay staff a combination of fixed remuneration (salary and benefits) and variable remuneration (discretionary bonus). Remuneration is determined on the basis of an annual performance review, where both financial and non-financial criteria are taken into account. The non-financial criteria include compliance with Belnord’s core values, which includes integration of Sustainability Risks. The remuneration is set so that the structure of remuneration does not encourage excessive risk taking, including with respect to direct or indirect Sustainability Risks.
At the date of this disclosure, Belnord does not consider principal adverse impacts on sustainability factors. When making Indirect Investments and certain Direct Investments (e.g. participation in co-investment opportunities or minority non-control direct investments), Belnord has limited control over and access to data from underlying fund managers and/or portfolio companies and cannot provide the information in relation to its consideration of the adverse impacts of its investment decisions on sustainability factors in the manner set out in the SFDR. Belnord will keep this position under review and closely monitor market developments, the regulatory landscape and future availability of information in relation to principal adverse impacts on sustainability factors. Whether Belnord will consider principal adverse impacts on sustainability factors will be assessed at least annually.