RESPONSIBLE INVESTMENT POLICY

Approved on 7 February 2023
Updated on 30 September 2024

PRELIMINARY REMARKS

“Sustainable and Responsible Investment” (SRI) means “an investment strategy geared towards the medium-long term which, in the assessment of companies and institutions, integrates financial analysis with the environmental, social and good governance analysis (Environmental, Social and Governance – “ESG”), in order to create value for the investor and for society as a whole[1]”. Therefore, this is an investment strategy consistent with the medium-long term prospects, typical of private equity operators and aimed at enhancing the value of the companies in the portfolio.

In this context, B4 Investimenti SGR S.p.A. (“B4 Investimenti” or the “Asset Management Company”) believes that the adoption of ESG criteria represents an important qualifying and incremental factor in relation to the value creation process for its stakeholders, in the context of the implementation of a (more) sustainable development strategy in the medium-long term for the (target) companies owned by the AIFs it manages and, more generally, for the Country.

In compliance with the obligations set forth in Article 3 of Regulation (EU) 2019/2088 (the “SFDR Regulation”), B4 Investimenti intends to define with this Responsible Investment Policy (the “ESG Policy”) the investment valuation methodologies for the AIFs that it manages in relation to ESG factors as part of the collective asset management service provided by it. In particular, this ESG Policy applies to all AIFs managed by the Asset Management Company, whether they are (i) AIFs that integrate sustainability risks into investment decisions, in compliance with the transparency requirements set forth in Article 6 of the SFDR Regulation, (ii) AIFs that promote, inter alia, environmental or social characteristics, or a combination thereof, pursuant to Article 8 of the SFDR Regulation and (iii) AIFs that target sustainable investments pursuant to Article 9 of the SFDR Regulation.

The AIFs currently promoted and managed by the Asset Management Company do not have sustainable investments as their objective pursuant to Article 9 of the SFDR Regulation.

 

[1]     Definition developed by the Forum for Sustainable Finance, starting from a consultation process with the involvement of its shareholders and, more generally, the main players in sustainable finance in Italy, which saw the establishment of an ad-hoc working group, whose activities were carried out between 2013 and 2014.

ROLES AND RESPONSIBILITIES

In order to promote the correct implementation of this ESG Policy, the Asset Management Company assigns roles and responsibilities to the corporate bodies and functions responsible for the supervision and/or management of ESG issues, as identified below.

Board of Directors

The Board of Directors of B4 Investimenti (the “Board of Directors”) is at the top of the Asset Management Company’s organisational structure and is responsible for defining, on the proposal of the Chief Executive Officer of B4 Investimenti (the “Chief Executive Officer”), the strategies and company policies of the Asset Management Company – including the definition of this ESG Policy – and the investment policies and strategies of the AIFs managed by the same, as well as to approve, again on the proposal of the Chief Executive Officer, the individual investment/divestment transactions to be arranged on the assets managed.

With specific reference to collective asset management activities, the Board of Directors is responsible, among others, for:

• defining the general investment policies and strategies on asset management, as well as the related risk management policy, periodically verifying their correct implementation;

• to resolve, at the proposal of the Chief Executive Officer, on all investment and divestment transactions and, more generally, on all transactions that involve a material disbursement of capital by the Asset Management Company or by the AIFs managed by it, based on the delegation system.

Chief Executive Officer

The Chief Executive Officer, as part of the Company strategy established by the Board of Directors, ensures the regular performance of the Asset Management Company and makes the most appropriate executive decisions to achieve the pre-established objectives.

In this context, the Chief Executive Officer is assigned, inter alia, the following responsibilities:

• submits to the Board of Directors the guidelines of the Asset Management Company’s corporate strategies and policies, as well as the investment policies and strategies of the AIFs managed by it;
• submits proposals to the Board of Directors regarding the investment/divestment of the assets of the AIFs managed by the Asset Management Company.

The Chief Executive Officer is also the Head of the Shareholdings and Investments Area of the Asset Management Company, with the task, among others, of coordinating the activities of identifying possible investment targets and conducting due diligence, evaluating the economic and financial analyses prepared in support of the various investment/divestment decisions, and carrying out an overall assessment of the business, ESG, legal, financial, accounting, tax and labour law risks linked to the investment and overseeing the management of the portfolio investments in the AIFs managed by the Asset Management Company through to their divestment.    

Sustainability Manager

The issues and processes related to sustainability are the responsibility of the Asset Management Company’s Sustainability Manager (the “Sustainability Manager”), identified in B4 Investimenti as the Asset Management Company’s CFO.

The Sustainability Manager periodically updates the Chief Executive Officer on ESG issues relating to the AIFs managed by the Asset Management Company – and the related companies in the AIF’s portfolio – who in turn reports to the Board of Directors (at least) on an annual basis, without prejudice to the possibility of one or more further interim updates, if appropriate.

In order to consolidate skills on environmental, social and governance issues, the Sustainability Manager keeps informed through participation in courses, workshops, in-depth seminars and public events, held by qualified professional figures, such as, for example, associations, agencies specialised in the collection and analysis of data on ESG aspects, companies operating in the sustainability sector, as well as periodically comparing themselves with other market operators.

Unified Control Function

The Unified Control Function of the Asset Management Company monitors the activities of the Asset Management Company in relation to the provisions of this ESG Policy.

INTEGRATION OF SUSTAINABILITY FACTORS INTO THE MANAGED AIFs STRATEGY

B4 Investimenti – also taking into account the nature of the (target) companies in which the AIFs managed by it have invested or intend to invest (i.e. illiquid assets) – assesses sustainability-related factors (environmental, social and governance) with the aim of acquiring a complete picture of them, through non-financial information, to be integrated with the economic-financial assessments. The ESG factors will be considered on the basis of the principle of proportionality and the criteria described below.

 

Environment factor

The analysis of the “E” factor makes it possible to measure the performance of the (target) companies in which the AIFs managed by the Asset Management Company have invested or intend to invest on the basis of criteria relating to polluting emissions, climate change, energy efficiency, responsible use of resources, waste and circular economy, etc.

B4 Investimenti intends to act in favour of an economy with low polluting emissions, undertaking to analyse, promote and evaluate the attention to the environment of the (target) companies in which the AIFs managed by the Asset Management Company have invested or intend to invest.      

 

Social factor

The “S” factor concerns equal opportunities, health and safety, supply chain management, training and professional development, human rights, workers’ rights and a work culture based on legality, relations with customers and communities, etc.

B4 Investimenti undertakes to take action so that the (target) companies in which the AIFs managed by the Asset Management Company have invested or intend to invest do not present substantial discriminatory behaviour towards employees, suppliers, customers and associates deriving from differences in gender, ethnicity, language, religion, political opinions, personal or social conditions, as well as operating in a socially integrated and attentive manner towards their stakeholders and the relevant community.

 

Governance factor

The “G” factor expresses an assessment of the principles and processes of an organisation carrying out its activities, through the analysis of the governance systems adopted, the integration of ESG variables in the company strategy, the composition and functioning of the corporate bodies, measures to prevent corruption, money laundering and anti-competitive practices, tax fraud and transparency, etc.

B4 Investimenti is convinced that efficient organisation and good governance represent a material factor in value creation; in this regard, the Asset Management company undertakes to engage in dialogue with the (top) management of the (target) companies in which the AIFs managed by the Asset Management Company have invested or intend to invest, in relation to the adoption of adequate systems, controls and organisational processes, taking into consideration the size and structure of the companies themselves.

 

Cases of exclusion

Without prejudice to the specific characteristics of each AIF managed, in accordance with the provisions of the relative management rules/articles of association, the Asset Management Company does not make investments and does not provide financial support or other type of support directly or indirectly to any company:

• that is, or has been, involved in serious and/or repeated damage to the environment;
• that carries out criminal or illegal activities pursuant to the regulations to which the AIF is subject;
• that is, or has been, involved in serious and systematic violations of human rights;
• that is, or has been, involved in serious cases of manifest corruption;
• whose business is the production, distribution, promotion, sale, import, export and/or any other activity or service associated with (including directly associated technological research) with Controversial Weapons – meaning the following categories of weapons: nuclear weapons, chemical weapons, biological weapons, depleted uranium weapons, anti-personnel mines, anti-tank mines, ammunition and cluster submunitions/bombs or cluster ammunition.

ASSESSMENT OF THE ESG PERFORMANCE OF THE AIFs UNDER MANAGEMENT

One-off phases of the ESG performance assessment process

• Construction of the ESG measurement and assessment framework.
• Definition of the weighting methods of the ESG factors for the AIFs managed by the Asset Management Company.
• Setting up the system for collecting ESG Key Performance Indicators (“KPIs”) for the AIFs managed by the Asset Management Company.
• Setting up the system for collecting ESG KPIs for the (target) companies in which the AIFs managed by the Asset Management Company have invested.

 

Recurring phases of the ESG performance assessment process

• Collection of relevant data and information for ESG purposes, relating to the (target) companies in which the AIFs managed by the Asset Management Company have invested.
• Consolidation of ESG KPIs.
• Processing of reports to be presented to the Board of Directors and (subsequently) to the investors of the AIFs managed by the Asset Management Company (as part of the periodic annual report of each of the AIFs under management).

For the purposes of the implementation of the ESG Policy, B4 Investimenti has opted for an assessment of the ESG performance of the (target) companies in which the AIFs managed by the Asset Management Company have invested, through which it is possible to measure the system for managing ESG factors and the related factors risks in the following terms. The assessment of ESG performance is carried out by a prominent specialised agency, using a methodology that takes into account the sustainability aspects of the (target) companies in which the AIFs managed by the Asset Management Company have invested.

The ESG analysis is essentially based on standards and recommendations issued by international bodies (such as the UN, OECD and ILO regarding, inter alia, the protection of human rights, workers and the environment).

The assessment process is broken down into the Environment, Social and Governance areas, through a number of criteria that make it possible to correctly interpret the responsibility profile of the companies being measured.

The criteria are weighted to take into account the size (in terms of turnover and number of employees) of the (target) companies in which the AIFs managed by the Asset Management Company have invested and the sector to which they belong.

The assessment is based on documentary analysis (guidelines and internal company processes) and on information collected from the (target) companies in which AIFs managed by the Asset Management Company have invested and from external sources, also to verify the possible presence of disputes, defined as situations of conflict that a company may be involved in with its stakeholders.

The final result is a numerical rating that measures the company’s sustainability profile, the management of environmental, social and good governance variables, the degree of awareness of ESG risks and provides guidelines on areas for improvement that can be monitored by B4 Investimenti during the “holding period”.

The ESG performance of the individual (target) companies in which the AIFs managed by the Asset Management Company have invested are consolidated to obtain an overall assessment of sustainability at the level of the individual AIF.

In addition, the Asset Management Company, with specific reference to the AIFs managed by it that promote, among other things, environmental or social characteristics, or a combination of them, pursuant to Article 8 of the SFDR Regulation, also estimates the ESG risk factors through an internal assessment model that analyses specific KPIs, as resulting from a questionnaire completed by the (target) companies in which the AIFs invest or intend to invest.

ESG AND ORGANISATION OF THE ASSET MANAGEMENT COMPANY: THE COMMITMENTS OF B4 INVESTIMENTI

B4 Investimenti is inspired by good practices and ethical principles that guide the Asset Management Company in the way it operates and conducts relations with the local area, people, employees, suppliers, (target) companies in which the AIFs managed by it have invested and, in general, with the communities with which it operates or with which it has relations.

In this regard, due to the principle of proportionality, taking into account its size and organisational structure, the specific areas considered a priority by B4 Investimenti are the following:

• commitment to reducing the environmental impact and the use of resources in the performance of ordinary operating activities, which include, among others, (i) the efficiency of heating and air conditioning systems (also thanks to a reasonably limited use of the systems themselves), (ii) in raising the awareness of personnel and, in general, of stakeholders, to taking care in the use of resources (in particular, water), (iii) in the waste sorting and (iv) in the transition to cars – in favour of part of its personnel – with low CO₂ emissions, ideally with hybrid power (“Environmental” factor);
• establishment of a corporate welfare plan for Asset Management Company personnel, aware that the work-life balance is an important aspect in creating the right conditions for personnel to fully express and develop their professional skills, also favouring the creation of shared, long-lasting and sustainable value over time (“Social” factor);
• transmission and dissemination of an ESG culture at all levels of the corporate structure, including adequate periodic training on sustainability of key personnel (i.e. managers) and the administrative body of the Asset Management Company (“Governance” factor);
• the adoption and periodic updating of company processes and procedures to aid the proper functioning of the corporate bodies, in compliance with the relevant regulations and best practices, with a view to professional ethics, transparency and operational efficiency (“Governance” factor);
• promotion of a culture and flexible work management, with consequent positive effects in terms of environmental impact (less mobility) and greater satisfaction and well-being of the personnel employed (“Environmental” and “Social” factors).

In this context, B4 Investimenti has implemented a complete framework of procedures, policies, regulations and provisions, including (i) the code of ethics, (ii) the whistleblowing policy, (iii) the regulation of the corporate welfare plan and (iv) the company provisions for the execution of smart working.

DISCLOSURE AND TRANSPARENCY

In compliance with the provisions of current legislation, the Asset Management Company makes this ESG Policy available on its website, updated from time to time, as well as the additional communications required by current legislation. The ESG Policy is also made available to all Asset Management Company personnel for the purpose of its implementation as part of the relevant business processes.

For each AIF managed by the Asset Management Company, at the start of operations/marketing, the pre-contractual information provided to potential subscribers (i.e. the offer document) contains specific information relating to the objectives and main ESG characteristics of the AIFs, differentiated on the basis of their SFDR classification.

The Asset Management Company undertakes to report the main results relating to the assessment of the ESG performance of the (target) companies in which the AIFs managed by the Asset Management Company have invested, as part of the periodic annual report of each of the AIFs managed by it.

REVIEW AND ACCOUNTABILITY

B4 Investimenti undertakes to periodically review, and in any case annually, this ESG Policy also in consideration of significant regulatory updates on socially responsible investments, significant developments in this regard of the Asset Management Company’s activity, the best practices adopted by companies comparable to the Asset Management Company itself and any significant events reported as a result of monitoring activities relating to responsible investments.

REGULATORY FRAMEWORK OF REFERENCE

• 2013 (Europe) – Dissemination of social and environmental information.
• 2014 (Europe) – Directive 95/2014 on non-financial reporting.
• 2015 (Global) – UN Resolution adopted by the General Assembly on 25 September 2015, published on 21 October 2015, containing the 2030 Agenda for Sustainable Development.
• 2015 (Europe) – 2015 Paris Agreement, published in the Official Gazette of the European Union of 19 October 2016 no. L. 282/4.
• 2016 (Italy) – Directive 95/2014 transposed into Italian law as from January 2017.
• 2017 (Italy) – National Strategy for Sustainable Development.
• 2018 (Europe) – Communication (COM(2018)97 Final of 8 March 2018) from the European Commission to the European Parliament, the European Council, the Council, the European Central Bank, the European Economic and Social Committee and the Committee of the Regions on the action plan to finance sustainable growth (Action Plan for Sustainable finance).
• 2019 (Europe) – Regulation 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability reporting in the financial services sector (SFDR – Sustainable Finance Disclosure Regulation).
• 2020 (Europe) – Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a framework that encourages sustainable investments and amending Regulation (EU) 2088/2019 (Taxonomy Regulation).
• 2022 (Europe) – Delegated Regulation (EU) 2022/1288 of the Commission of 6 April 2022 supplementing Regulation (EU) 2019/2088 of the European Parliament and of the Council with regard to implementing technical standards specifying the details of the content and the presentation of information relating to the “do no significant harm” principle, which specifies the content, methodologies and presentation of information relating to sustainability indicators and negative effects for sustainability, as well as the content and presentation of information relating to the promotion of environmental or social characteristics and sustainable investment objectives in pre-contractual documents, on websites and in periodic reports.

 

Global Reporting Initiative Standards (GRI Standards).

Fundamental Conventions of the International Labour Organisation (ILO).