SFDR

The funds of e3 are classified as Article 9 funds according to the

 

Sustainable Finance Disclosure Regulation (SFDR)

 

The funds of e3 are article 9 (sub 3: Dark Green) funds. Each fund has its own sustainability objectives, with the reduction of CO2 emissions being an overarching requirement.

What is the SFDR?

The European Union (EU) introduced the Sustainable Finance Disclosure Regulation (SFDR) to provide more insight into the sustainability of investment funds. This stems from the EU’s Sustainable Finance Action Plan (SFAP) which promotes sustainable investments to help achieve the Paris Agreement and European Green Deal climate goals. The regulation enters into force in 2 levels.

e3 and its funds comply with level 1 of the regulation:

e3 funds only finance initiatives and projects which contribute to the energy transition and the transition to a circular economy.
Sustainable investment is embedded in e3’s daily activities. Besides a good return, e3 aims to achieve an impact with focus on goals 7, 12, 13 of the Sustainable Development Goals (SDG’s) set by the United Nations. A demonstrable reduction in CO2 emissions is a prerequisite for eligibility for funding for all initiatives and projects. In order to realize the sustainability goals, the sustainability risks need to be adequately identified. This is part of the due diligence and monitoring of the progress of the initiatives and projects. Furthermore, the initiatives and projects are checked to makes sure they have no ecological or social negative impact (do no significant harm principle).
By seeking a financial return that takes risks into account and a transparent way of impact measurement. In the due diligence phase, an estimate is made of the amount of CO2 emissions a project will reduce. This is also included in the investment proposal. The impact of the initiatives and projects is reported on an annual basis. The reduction of CO2 emissions is determined by comparing the emissions of the project with emissions of the conventional alternative. The data sources are dependent on the fund. In some cases, certain data are determined in the fund documentation. The reduction of CO2 emissions is either calculated internally or by third parties, depending on the public availability of reference data and the complexity of the technology.
Through our network of professional service providers, we can offer our participants a high level of service while complying with relevant and current laws and regulations.
e3’s remuneration policy aims to provide reasonable remuneration that is in line with the interests of our clients, the laws and regulations and the core values of e3. During the annual re-evaluation of our remuneration policy, the policy is assessed for any undesirable risks or behaviour it might generate for our clients, participants in our funds or the continuity of e3.
e3 voluntarily complies with the Dutch Top Income Standardisation Act.
e3 can award and pay out variable remunerations. These remunerations are linked to achieved criteria related to the functioning and performance of the employee as well as the financial results of e3. Objectives are set for variable remunerations and the remuneration is based on an evaluation of these objectives. In the case of carry rules, these objectives are set in consultation with the participants of the fund concerned. If an objective is verifiable, an attempt is made to link the objectives to the sustainability goals of the fund concerned. When defining the objectives, it is critically examined whether they can lead to risk-seeking behaviour in a broad sense. In line with the SFDR, objectives do not contain incentives which might encourage employees to take excessive (sustainability) risks. e3 does not award guaranteed variable remunerations.
Paid variable remuneration to management and employees can be reclaimed up to three years after payment up to the full amount if e3 is of the opinion that the granted variable remuneration was unjustified on the basis of then incorrect or insufficient information.
e3’s education policy is for all employees working in investment and fund management activities and offers them the opportunity to stay informed of the latest technological, economic, social and political developments in the field of energy transition and the circular economy. This gives employees the tools to effectively consider relevant investment and sustainability risks and to mitigate them if necessary. Furthermore, employees are given the opportunity to receive required, job-related training, including subjects related to the Financial Supervision Act (Wet Financieel Toezicht – Wft).