Riverside Europe Partners S.à r.l.– EU Sustainable Finance Disclosure Regulation
Riverside Europe Partners S.à r.l. (the Firm) makes the following disclosures in accordance with the Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”)
Pursuant to Article 3 of the SFDR, the Firm is required to disclose the manner in which sustainability risks (as defined hereafter) are integrated into the investment decision-making process.
A sustainability risk means an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investments made by the Firm. In the context of the Firm, sustainability risks are risks which, if they were to crystallise, would cause a material negative impact on the value of the portfolios of the Firm's funds.
Such risk is principally linked to climate-related events resulting from climate change (i.e. physical risks) or to the society’s response to climate change (i.e. transition risks), which may result in unanticipated losses that could affect an investment. Sustainability risks can also affect companies by introducing social risks (e.g. gender gaps, social inequality) and governance risks (e.g. bribery issues, selling practices).
The impacts following the occurrence of a sustainability risk event may be numerous and vary in significance depending on industries, regions and asset classes.
Such sustainability risks are integrated into the investment decision making and risk monitoring to the extent that they represent a potential or actual material risks and/or opportunities to maximizing the long-term risk-adjusted returns. In particular, to mitigate risks and identify the value potential of an investment, the Firm and its affiliates (“Riverside”) conduct thorough due diligence on its investment opportunities. This process includes scoring every investment opportunity using the Riverside ESG Screen and the Riverside ESG&V Index, which assesses the status of the potential investment with regard to environmental, social, governance and value standards and identify areas for potential improvement. After Riverside makes its investment, it aims to improve the ESG&V score of the portfolio company during its hold period. The Riverside ESG&V Index also tracks, since the beginning of 2020, certain quantitative data about ESG, enabling to show the progress made in that respect during the hold period of the investment.
No consideration of sustainability adverse impacts
The Firm does not consider the adverse impacts of investment decisions on sustainability factors (as defined hereafter) in the manner prescribed by Article 4 of the SFDR considering that non-financial data is still not available in satisfactory quality and quantity to allow the Firm to adequately assess the potential adverse impact of its investment decision on sustainability factors.
The position will be kept under review as the underlying rules are finalised and are embedded in the short to medium term.
Sustainability factors means environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.
The Firm pays its staff a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration for relevant staff takes into account compliance with all of the firm's policies and procedures as well as with the firm’s internal risk management framework and risk limits, including those relating to the integration of sustainability risks. In this regard, the Firm’s remuneration policies do not encourage risk-taking which is inconsistent with its internal risk limits or with the risk profile of the funds that the Firm manages, including regarding sustainability risks stemming in particular from climate-related events or from the society’s response to climate change.