Environment, Social and Governance
Information about Policies on Integration of Sustainability Risks
Pursuant to the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“Sustainable Finance Disclosures Regulation” or “SFDR”), CapVest Irish Partners Limited (the “Firm”) is required to disclose the manner in which sustainability risks are integrated into the investment process and the results of the assessment of the likely impacts of sustainability risks on the returns of the alternative investment funds under management (“AIFs”).
A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment and the returns of the AIFs. Sustainability risks will vary and depend on several factors including but not limited to the type, extent, complexity and duration of the event of condition, prevailing market conditions and the existence of mitigating factors. Sustainability risks could negatively affect the value of a particular investment.
CapVest Partners LLP and the Firm (together “CapVest”) are committed to the ongoing development and integration of environmental, social and governance (“ESG”) aspects and sustainability risks into their operations and those of CapVest investments. The CapVest ESG Policy is guided by various codes and standards, including the United Nations Principles for Responsible Investment (PRI), the United Nations Global Compact, and all applicable laws and regulations.
CapVest is committed to responsible investment as a strategy and practice to incorporate sustainability risks into the investment decision-making process and active ownership. Throughout the investment lifecycle, from initial investment screening, through to acquisition and monitoring, and finally at exit, CapVest is guided by its ESG Policy and Sustainability Risk Policy.
Please contact ESG@capvest.co.uk if you have any questions on our approach to integrating ESG factors throughout the investment process.
No Consideration of Principal Adverse Impacts
SFDR requires CapVest Irish Partners Limited to determine whether it considers the principal adverse impacts of its investment decisions on sustainability factors. The Firm is supportive of the aim of this requirement which is to improve transparency to investors and the market generally as to how to integrate the consideration of the adverse impacts of investment decisions on sustainability factors. However, it is not currently possible for CapVest Irish Partners Limited to measure in a systematic or consistent manner all of the topics it is obliged by SFDR to report. This is in part because investee companies are not widely obliged to, and overwhelmingly do not currently, report by reference to the same data. On this basis, and due to the size, nature and scale of the AIFs managed by the data on which it would CapVest Irish Partners Limited, it does not consider the principal adverse impacts of investment decisions on sustainability factors at this time. The Firm’s position on this matter will be reviewed annually by reference to market developments.
SFDR requires CapVest Irish Partners Limited to include in its Remuneration Policy information on how its policy is consistent with the integration of sustainability risks.
Remuneration paid to the Independent Directors is currently comprised of a fixed salary component and the other Directors currently do not receive either fixed or variable remuneration due to their affiliation with the Investment Manager. Certain of the Designated Persons receive fixed and variable remuneration. The variable component of remuneration which may be paid would be discretionary and dependent on the performance of the individual and the AIFs in accordance with the Remuneration Policy. Compliance with all the Firm’s policies and procedures, including policies and procedures relating to the impact of sustainability risks on the investment decision-making process, may be taken into account as part of that overall assessment.
In accordance with the requirements of the Modern Slavery Act 2015, CapVest Partners LLP makes the following statement.
The Firm is fully committed to operating its business in a way that ensures the utmost respect for human rights and seeks to comply with current social legislation, industry standards and best practice. All investment opportunities pursued by us take such considerations into account, are subject to due diligence and have met our high standards with regards to modern slavery, servitude, and human trafficking concerns.
Specifically, with regards to Section 54 (Transparency in Supply Chains) of the Modern Slavery Act 2015, CapVest commits to follow the UK Home Office’s statutory guidance to ensure best practice is always followed. Furthermore, the Firm continues to monitor guidance from the European Commission following the publication of its Final Report on the Due Diligence Requirements Through the Supply Chain. In both the assessment of potential investment opportunities and in ongoing monitoring of its existing portfolio companies, the Firm uses such guidance to help it in identifying and preventing abuses of human rights, serious bodily injury or health risks, and environmental damage.
We engage with our suppliers in an effort to prevent modern slavery, servitude and human trafficking. The Firm’s supply chains are relatively simple as they are primarily in relation to professional services, IT, office and facilities management. We therefore do not consider that our relationships with suppliers are likely to give rise to risks associated with modern slavery, servitude and human trafficking.
With regards to the supply chains in the Firm’s portfolio companies (which, for the avoidance of doubt, do not form part of our supply chain), the due diligence conducted at the onset of the investment process seeks to identify any areas that could result in abuses under the Modern Slavery Act 2015.
CapVest takes this matter seriously and commits to continually monitor for risk areas in its own supply chain and those of portfolio companies. Any issues that are of concern will be flagged to the Firm’s Compliance team and a full investigation into the matter will be conducted.