The Sustainable Finance Disclosure Regulation (the SFDR) is a European regulation that requires financial market participants, like Vondel Private Equity, and financial advisors in the EU to disclose information related to environment, social aspects and governance (ESG). The SFDR entered into force on 10 March 2021.
Qualification of Vondel Private Equity under the SFDR and Taxonomy Regulation
Vondel Private Equity does not promote environmental and/or social characteristics (“light-green” within the meaning of Article 8 SFDR) and does not have sustainable investments as its objective (“dark-green” within the meaning of Article 9 SFDR). The investments by Vondel Private Equity do not take into account the EU criteria for environmentally sustainable economic activities. Vondel Private Equity therefore only complies with the disclosure requirements under Article 6 SFDR.
Integration of sustainability risks in investment decisions
Vondel Private Equity acknowledges that environmental, social or governance-related events or circumstances could, if they occur, have a real or possibly substantial negative impact on the value of its investments. Vondel Private Equity views ESG as a standard topic in the pre-investment due diligence process of portfolio companies. Sustainability risks are therefore part of Vondel Private Equity’s selection and due diligence policy and the risk management policy.
Results of the assessment of the likely impacts of sustainability risks on the returns of investments
Vondel Private Equity does not prepare an assessment of the likely impacts of sustainability risks on the returns of its investments. This is mainly based on the following reason:
If Vondel Private Equity decided to assess the likely impacts of sustainability risks on the returns of its investments, numerous detailed requirements must be taken into account, many of which are not relevant to the type of investments Vondel Private Equity includes in its portfolios. Given the small size of the organisation of Vondel Private Equity, such requirements and the administrative burden in connection therewith would not be proportional. Vondel Private Equity only considers it appropriate to do such assessments if it were to promote sustainability factors or sustainable investments, as it would enable investors to assess whether the promises made in this regard by Vondel Private Equity are being fulfilled.
The above may be reconsidered under different circumstances, for example when Vondel Private Equity’s investment policy changes, the assessment of the likely impacts of sustainability risk on the returns of its investments becomes less onerous than it currently is or appears to be, or the majority of the investors has a need for an assessment like this.
Employees play a crucial role in achieving the Vondel Private Equity objectives and therefore form a central part of the organization. Vondel Private Equity attaches great importance to the development of the competences of its workforce.
Vondel Private Equity pays employees a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration for relevant employees takes into account performance criteria including compliance with all policies and procedures, including the integration of sustainability risks in respect of investments.