This document fulfils the disclosure requirements under Articles 3, 4 and 5 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector ("SFDR") for W&W Asset Management Ireland DAC ("W&W Asset Management" or the "Firm") as a financial market participant and financial advisor within the meaning of the SFDR and articulates the Firm's approach to the consideration of sustainability risks in the context of the Firm's activities.
In accordance with Article 3 of the SFDR, financial market participants and financial advisors, including firms authorised as a UCITS manager and AIFM, such as the Firm, are required to publish information on their websites regarding their strategies for integrating sustainability risks in their investment decision-making processes. The Firm prepares a summary of these strategies under 5. Strategies for integrating sustainability risks in our investment decision-making processes.
Where financial market participants, such as the Firm, do not take into account adverse impacts of investment decisions on sustainability factors, they are required to publish clear reasons for why they do not do so in accordance with Article 4(1)(b) of SFDR. W&W Asset Management does not take into account the adverse effects of investment decisions on sustainability factors, within the meaning of SFDR, and prepares a summary explanation for this under 6. No Consideration of Adverse Impacts below.
Furthermore, in accordance with Article 5(1)1 of the SFDR, financial market participants 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 website as further detailed under 8. Remuneration Policy.
As part of the process of integrating, environmental, social and corporate governance ("ESG") risks into the investment-decision making process and complying with the requirements around transparency regarding the integration of sustainability risks, Article 6 of the SFDR requires financial market participants, such as the Firm, where they deem sustainability risks to be relevant, to include in pre-contractual disclosures to its investors, a description of the manner in which sustainability risks are integrated into their investment decisions and the results of the assessment of the likely impacts of sustainability risks on the returns of the funds under management. W&W Asset Management shall comply with these requirements in its pre-contractual disclosures to investors for its funds under management and keep these disclosures under periodic review.
2. Company Background
W&W Asset Management is a wholly owned subsidiary of W&W Asset Management GmbH, a member of Wüstenrot & Württembergische AG or W&W AG (the "W&W Group"). The Firm was incorporated in Ireland in 1999 and aims to deliver a comprehensive and flexible fund management service offering centred around our clients. We provide a gateway for establishing, launching and managing fund structures in partnership with our clients.
The Firm is regulated in Ireland as a UCITS management company and AIFM and provides fund management services to the W&W Group in addition to external investors. The W&W Group is one of Germany’s oldest and largest financial services and insurance groups, employing 13,000 people with headquarters in Stuttgart, Germany and listed on the German stock exchange. W&W AG came into existence in 1999 as a result of the merger of the two long-standing companies Wüstenrot and Württembergische. Today, the W&W Group develops and provides the four components of modern financial planning: financial security, housing property, risk protection and savings and investment.
3. Fund Management services and activities
The Firm is authorised to perform collective portfolio management activities and services under UCITS and AIFMD Regulations in accordance with annex 1 and schedule 1 of those Regulations respectively.
As at the date of this Policy, the Firm does not provide investment advice, safe-keeping and administration in relation to shares or units of collective investment undertakings or the reception and transmission of orders in relation to financial instruments.
The Firm delegates portfolio management to a number of investment managers and administration activities.
The Firm is responsible for providing collective portfolio management to spread across two Irish based umbrella UCITS collective investment schemes and two umbrella Qualifying Investor Alternative Investment Funds.
[With effect from 1 August 2022, as a UCITS management company and AIFM, the Firm is required to comply with Commission Delegated Directive (EU) 2021/1270 of 21 April 2021 amending Directive 2010/43/EU as regards the sustainability risk and sustainability factors to be taken into account for UCITS and Commission Delegated Regulation (EU) 2021/1255 amending Delegated Regulation (EU) No 231/2013 as regards the sustainability risks and sustainability factors to be taken into account by AIFMs (the "Delegated Acts"). The Delegated Acts require sustainability risks to be taken into account in the Firm's organisational procedures, resources, the management of conflicts of interest and risk management policies.]
The Firm does not provide investment services in respect of funds which “promotes, among other characteristics, environment or social characteristics of a combination of those characteristics“ (known as Article 8 funds) or funds which “have sustainable investment as its objective and an index that has been designated as a reference benchmark“ (known as Article 9 funds).
4. W&W Group Strategies for Sustainability and ESG
The W&W Group considers that it seeks to conducts its business in an environmentally compatible, socially responsible and economically successful manner in consideration of the interests of current and future generations, for whom the W&W Group considers it is responsible.
In May 2020, W&W AG signed the UN Principles for Responsible Investment ("UNPRI"), thereby undertaking to incorporate ESG issues into its analysis and decision-making processes in the investment area. The UN Principles for Responsible Investment is an international organization that works to promote the incorporation of environmental, social, and corporate governance factors (ESG) into investment decision-making. Launched in April 2006, with support from the United Nations (UN), the UNPRI has over 3,000 participating financial institutions, as of January 2021. These institutions participate by becoming signatories to the UNPRI’s six key principles and then filing regular reports on their progress. The six key principles to which signatory companies must agree to commit themselves are:
We will incorporate ESG issues into investment analysis and decision-making processes.
We will be active owners and incorporate ESG issues into our ownership policies and practices.
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
We will promote acceptance and implementation of the Principles within the investment industry.
We will work together to enhance our effectiveness in implementing the Principles.
We will each report on our activities and progress towards implementing the Principles.
Many of the Firm’s clients have committed themselves either directly to their application as a signatory or indirectly as a subsidiary of a signatory of the UNPRI. The application of the UNPRI is mandatory for the Firm, all W&W Group companies and appointed investment managers of the Firm's funds.
Please see the attached links for further information:
Link to the W&W Group ESG Policy - https://www.ww-ag.com/en/about-us/Sustainability
Link to UNPSI - https://www.unepfi.org/psi/ww-group/
5. Strategies for integrating sustainability risks in our investment decision-making processes
In accordance with Article 2 of SFDR, a "Sustainability Risk" is an "environmental, social or corporate governance event or condition that, if it occurs could cause an actual or potential material negative impact on the value of the investment." Sustainability Risks are often referred to as ESG risks.
The Firm delegates portfolio management services to a number of investment managers for the sub-funds of its UCITS, the W&W Global Strategies Fund and the W&W Global Investment Fund and the sub-funds of its QIAIF, the W&W Global Income Fund ICAV and the Global Horizons ICAV (the "Funds"). Examples of Sustainability Risks which may be taken into consideration by the investment managers are set out in the prospectus of each of the Funds. The investment managers' consideration of Sustainability Risks depends on the risk profile of the respective investment assets for each sub-fund.
As part of its investment decision-making processes the investment managers [are required to] consider:
the level of Sustainability Risks prevalent in markets as part of their active selection of the markets in which the Funds will invest;
the Sustainability Risks applicable to individual companies as part of their active selection of stocks within each market in which the Funds will invest;
where there are concerns over the ESG practices of a company or there is a higher likelihood of Sustainability Risks materialising during the period where the relevant sub-fund might be exposed to the company than in other potential companies being considered for investment by the sub-fund, this will impact on the investment managers' decision of whether and to what degree to pursue such investment, and may ultimately result in the relevant investment manager not proceeding with an investment.
The Firm seeks to reduce the likely impact of certain Sustainability Risks by providing as stated in each of the Fund's prospectuses that securities are excluded that are prohibited under international conventions on cluster munitions and anti-personnel mines in accordance with the Ottawa Treaty (1997) and the Convention on Cluster Munitions (2008), which prohibit the use, stockpiling, production and transfer of anti-personnel mines and cluster munitions respectively. As required under the Funds' prospectuses and also in line with the Firm’s ESG policy (available upon request) the investment managers employ security filtering systems and methodologies as agreed with the Firm to screen proposed investments and monitor existing investments of each Fund to ensure compliance with the Firm's ESG policy in relation to excluded issuers. Where any exposure to such securities of an excluded issuer is identified, the investment manager is required to take corrective action to remedy that situation, taking due account of the interests of investors.
[Results of the likely impacts of sustainability risks on the returns of the Funds
The Firm has assessed the likely impacts of Sustainability Risks on the returns of each of the sub-funds of the Funds, and considers it likely that Sustainability Risks will not have a material impact on the returns of the sub-funds, given the investment approach of the Firm as described above. However, to the extent that the investment managers are incorrect in their evaluation of the Sustainability Risks applicable to a particular investment of the relevant sub-fund, or a company to which a sub-fund is exposed experiences an ESG event or condition that was not considered by the relevant investment manager, this could negatively impact upon the returns of the sub-fund.]
6. No consideration of adverse sustainability impacts
"Sustainability factors" mean environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
As W&W Asset Management employs fewer than 500 people, there is no requirement for the Firm to develop an independent consideration of adverse sustainability impacts. In accordance with Article 4(1)(b) of SFDR, W&W Asset Management does not currently consider the adverse impacts of its investment decisions on sustainability factors as the relevant data are not yet available on the market to a sufficient extent.
The Firm may determine to consider sustainability impacts of investment decisions on sustainability factors in the future where it proposes to also manage funds within the scope of Article 8 and 9 of SFDR and the relevant data is more readily available.
7. Shareholder Engagement
The Firm’s Shareholder Engagement Policy and annual required disclosures are published on its website.
8. Remuneration Policy
The Remuneration Policy, which includes information on how the Firm's remuneration framework is consistent with the integration of sustainability risks, is published on the Firm's website.
9. Code of Conduct
The employees of the Firm are obliged to comply with the W&W Group Code of Conduct. This Code sets out the minimum standard for the Firm, which regulates the interaction of all members of the Firm (employees in the field and in the field, executives, members of the board) as well as in relation to customers, competitors, business partners, authorities, and our shareholders. This is not only about the practical implementation of existing laws and regulations, but also about ethically sound behaviour in our daily work.
10. Oversight of the Policy
The Chief Risk Officer bears responsibility for the implementation, oversight and ongoing monitoring of the Policy. The Policy will also be subject to approval by the Board of the Firm.
11. Review of and Updates to Policy
This Policy will be subject to review on at least an annual basis, or upon the occurrence of a change to applicable law or the Firm's investment strategy, to ensure that it continues to comply with the
SFDR and all other relevant applicable laws. The Board will also review and note the current version of the W&W Group ESG policy on an annual basis.
12. Access to Policy
A copy of this Policy is available to investors of the Funds on the Firm's website. The Firm will ensure that all information contained in this Policy, as published, is maintained accurate and up to date.