W&W Asset Management Dublin DAC

Sustainable Finance Disclosure Regulation

Sustainable Finance Disclosure Regulation (“SFDR”)

Introduction

This document fulfils the disclosure requirements under Articles 3, 4 and 5 of Regulation (EU) 2019/2088 on Sustainable Finance Disclosure Regulation (“SFDR”) for W&W Asset Management Dublin DAC (“W&W Asset Management” / “the Firm”) as a financial market participant and financial advisor within the meaning of this Regulation.

In accordance with Article 3 of the SFDR, financial market participants and financial advisors are required to publish information on their strategies for integrating sustainability risks in their investment decision-making processes or investment advisory activities on their websites.

In accordance with Article 4 (1) of the SFDR, financial market participants shall make a statement on due diligence strategies related to the main adverse sustainability impacts of investment decisions on sustainability factors.

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 websites.

Background

W&W Asset Management is wholly owned by W&W Asset Management GmbH, a member of Wüstenrot & Württembergische AG (“W&W AG“). 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 Manager and AIFM and provides fund management services to W&W Group in addition to external investors. W&W AG 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 group develops and provides the four components of modern financial planning: financial security, housing property, risk protection and savings and investment.

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.

The Firm delegates Portfolio Management to a number of investment managers and also delegates certain elements of Risk Management and Administration. 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 is responsible for providing collective Portfolio Management to spread across the following two Irish based UCITS collective investment schemes and two Qualifying Investor Alternative Investment Funds.

W&W Group Strategies for Sustainability and Environmental, Social, and Corporate Governance (“ESG”)

W&W AG 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 AG considers it is responsible. As financial planning specialist in the areas of financial coverage, residential property, risk protection and savings and investment, the W&W group generates sustainable growth that retains value. Not only is this a core part of the W&W AG business strategy, it has also has been explicitly made binding in the sustainability policy of the W&W AG. These policies covers such areas as resource use and procurement, employees, products and services and compliance with legal requirements as elements of the concept of sustainability.

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:

  1. We will incorporate ESG issues into investment analysis and decision-making processes.
  2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
  4. We will promote acceptance and implementation of the Principles within the investment industry.
  5. We will work together to enhance our effectiveness in implementing the Principles.
  6. We will each report on our activities and progress towards implementing the Principles.

In August 2020, W&W AG signed the United Nations Principles for Sustainable Insurance (“PSI“) further embedding environmental, social and governance-related aspects (ESG) in its insurance business. With its signature, W&W AG expressed its intent to enhance the company's economic, ecological and social responsibility and its commitment to the following four Principles for Sustainable Insurance:

  1. We will embed in our decision-making environmental, social and governance issues relevant to our insurance business.
  2. We will work together with our clients and business partners to raise awareness of environmental, social and governance issues, manage risk and develop solutions.
  3. We will work together with governments, regulators and other key stakeholders to promote widespread action across society on environmental, social and governance issues.
  4. We will demonstrate accountability and transparency by regularly disclosing publicly our progress in implementing the Principles.

Please see the attached links for further information:

Strategies for integrating sustainability risks in our investment decision-making processes

Sustainability risks are environmental, social or corporate governance events or conditions that could have a real or potentially significant negative impact on the value of investments. Sustainability risks are often referred to as ESG risks. In line with W&W Group strategies for sustainability and ESG, the Firm’s funds under management exclude certain investments, specifically those prohibited under the Ottawa Treaty. Investments Managers are required to comply with these exclusions and the Firm provides oversight to ensure these exclusions are being applied. The Firm’s appointed investment managers integrate ESG issues into their decision-making processes both pre and post investment. This both contributes to a prudent risk management and investment analysis, and over the longer term can positively impact both the value and sustainability of the underlying investments. The risks considered depend on the risk profile of the respective investment assets for each fund. The risk profile of each fund can be found in the respective fund prospectus. The Firm does not provide investment services in respect of funds which “promotes, among other characteristics, environment orsocial 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).

Portfolio management – UCITS

The Firm delegates portfolio management services to a number of investment managers for the W&W Global Strategies Fund and its one sub-fund and W&W Global Investment Fund and its four sub-funds (see above) (the "UCITS Funds"). The majority of investors in these funds are members of the W&W Group of companies. As part of its investment decision-making processes the Investment Managers consider:

  1. The level of sustainability risks prevalent in markets as part of its active selection of the markets in which the Fund's will invest.
  2. The sustainability risks applicable to individual companies as part of its active selection of stocks within each market in which the Fund's will invest.
  3. The UCITS Funds' prospectuses state 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 UCITS Funds' prospectuses (and also in line with the Firm’s sustainability and ESG policies) security filtering systems and methodologies are employed to screen proposed investments and monitor existing investments to ensure compliance with this rule. Where any exposure to such securities is identified, corrective action to remedy that situation in taken, taking due account of the interests of investors.

Portfolio management – AIF

The Firm delegates portfolio management services for the W&W Global Income Fund ICAV and its three sub-funds and to the Global Horizons ICAV and its sub-fund to a number of investment managers (the "QIAIF Funds"). The investors in these funds are members of the W&W Group of companies. As part of their investment decision-making processes the investment managers consider:

  1. The level of sustainability risks prevalent in markets as part of its active selection of the markets in which the Fund's will invest.
  2. The sustainability risks applicable to individual companies as part of its active selection of stocks within each market in which the Fund's will invest.
  3. The QIAIF Funds' prospectuses state 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 QIAIF Funds' prospectuses (and also in line with the Firm’s sustainability and ESG policies) security filtering systems and methodologies are employed to screen proposed investments and monitor existing investments to ensure compliance with this rule. Where any exposure to such securities is identified, corrective action to remedy that situation in taken, taking due account of the interests of investors.

Adverse sustainability impacts

The Firm and its investment managers consider the principal adverse impacts of investment decisions on sustainability factors in their portfolio management.

Description of principal adverse sustainability impacts The Firm and the W&W AG consider the main adverse sustainability impacts that can result from investment decisions to be the violations of human rights (socially detrimental) and the emergence of greenhouse gas emissions (ecologically adverse).

Violations of human rights may occur, inter alia, as a result of:

  • Anti-personnel mines and cluster munitions (controversial weapons)
  • Other weapons
  • Child and forced labour
  • Speculation on agricultural land and food

The emission of greenhouse gases of anthropogenic origin, in particular carbon dioxide, increases the natural greenhouse effect and thus contributing to global warming, according to current scientific opinion.

Description of policies to identify and prioritise principal adverse sustainability impacts The main adverse sustainability impacts are determined by an analysis of the Portfolio Management investments. Investment managers are required to analyse investments to filter and screen proposed investments of the Fund and ensure compliance with the Firm’s policy. The Investment Managers does not use weightings in terms of qualitative or quantitative weighting when reviewing the main adverse effects on sustainability.

Violation of human rights

Disadvantageous sustainability effects in the form of human rights violations are reduced by exclusions in investment decisions. Exclusions usually cover certain issuers and counterparties to financial instruments. The exclusions are applied to direct investments as well as to indirect investments in which the Firm provide investment services.

Anti-personnel mines and cluster munitions (controversial weapons):

Investments in listed manufacturers where there are reliable indications of the production of anti- personnel mines or cluster bombs are excluded.

Other weapons:

In our view, the exclusion of investments in controversial weapons in accordance with the UN Conventions is not sufficient. For this reason, investments in manufacturers and/or dealers of other weapons, which generate 5% or more of their turnover, are also excluded. Debt securities issued by issuers identified as excluded investments are held until maturity; no new and reinvestment are allowed.

Child and forced labour Investments in shares and debt securities of companies where there are certain violations of the UN Conventions on Child and Forced Labour are excluded, with the exception of green bonds.

Speculation with agricultural land and food

Great care is being taken to ensure that no investments are made in food and agricultural land that are used for speculation. In the case of the vast majority of indirect investments, such investments are systematically excluded. Direct investments do not include investments in agricultural raw materials.

Origin of greenhouse gas emissions

Adverse sustainability impacts in investment decisions in the form of greenhouse gas emissions are reduced by excluding investments in certain economic activities associated with increased CO2 emissions. Targeted investments are made in selected financial instruments and other assets that have a mitigating effect on CO2 emissions.

Engagement policies

All investments are held exclusively indirectly in Alternative Investment Funds with fixed investment conditions and in undertakings for the collective investment in transferable securities (UCITS). The Firm has delegated the investment management function for the funds under its management to various investment managers.

International standards

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 UN Principles for Responsible Investment. The application of the UN Principles for Responsible Investment is mandatory for the Firm, all W&W Group companies and appointed investment managers of the Firms funds. The UNPRI is an investor initiative in partnership with the financial initiative of the UN Environment Programme UNEP and the UN Global Compact. The United Nations-backed initiative is an international network of investors that has established and intends to implement six principles for responsible investments. The aim is to understand the impact of sustainability on investors and to help signatories incorporate these issues into their investment decision-making processes. Signatories contribute to a more sustainable global financial system.

Employees of the W&W Group are obliged to comply with the W&W Code of Conduct. This Code sets out the minimum standard for the W&W Group employees behaviour, which regulates the interaction of all members of the company (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 daily work.