Regulation (EU) 2019/2088 of the European Parliament and of the Council of November 27, 2019 on disclosure of information related to sustainability in the financial services sector (“SFDR”) establishes harmonized rules for financial market participants and financial advisors regarding transparency with respect to the introduction of sustainability risks into their activities and the consideration of adverse sustainability effects in their operations, as well as with respect to their presentation of sustainability-related information on financial products.
Under the SFDR, Hard2beat Spółka z ograniczoną odpowiedzialnością (“ZASI”) qualifies as a financial market participant, and the alternative investment company it manages – Hard2beat Spółka z ograniczoną odpowiedzialnością Fund 1 Alternatywna Spółka Inwestycyjna Spółka komandytowo-akcyjna (“ASI” or the “Company”) – constitutes a financial product.
Pursuant to Article 3 of the SFDR, the Company has a strategy for incorporating risks to sustainability in its investment decision-making process, specifying how to take into account environmental, social or governance situations or conditions that, if they occur, could have, actual or potential, a material negative impact on the value of an investment (the “ESG Strategy”). The identification of risks to sustainability does not, in principle, have to form the basis for a negative decision to make an investment by the Company. The content of the ESG Strategy is published on the Company’s website. The ESG Strategy may be supplemented or amended, including changes to bring it in line with current market practices or standards.
[Article 6 (1) SFDR] Sustainability risks are not introduced in ASI’s investment decisions, as sustainability risks are considered insignificant. Environmental, social and corporate governance issues (ESG criteria) are taken into account in the selection process of ASI’s investments, while the identification of sustainability risks does not necessarily form the basis for a negative decision to make an investment by the Company. However, the Company’s investments are generally made in early-stage entities. The entities in which the Company invests its assets focus primarily on analytical processes and development work, offering products or services based on their results. Most such companies have no or very limited traditional manufacturing, processing or other processes that may have a significant impact on the climate or environment. In addition, due to, as a rule, the few teams of companies in which the Company intends to invest, the far-reaching specialization of their members and specific competence requirements, the composition of these teams does not significantly affect the communities in which their members operate, and thus the risk of negative social impact is, as a rule, insignificant. For the above reasons, the impact of risks to sustainability on the return on investment in the Company will also be insignificant.
[Article 7 (2) SFDR] When making investment decisions on ASI investments, no consideration is given to their adverse effects on sustainable development factors. ASI invests funds in early-stage entities. Both the subject matter and the small scale of their activities mean that the impact of its funding by ASI on factors for sustainable development will be negligible. Therefore, using valid and reliable metrics in the impact on environmental or social factors would be inadequate and unjustified in the Company’s current investment profile.
[Articles 8, 9 and 10 SFDR] The company does not offer financial products that promote the environmental or social aspect (or both), or aim at sustainable investments.
Investments under this financial product (i.e., ASI) do not take into account EU criteria for environmentally sustainable economic activities.