SFDR Disclosure
Information Related to the European Union Sustainable Finance Disclosure Regulation (the “SFDR”)
Integration of Sustainability Risks
More information about Falcon House Partners’ policies on the integration of sustainability risks in its investment decision making process via its E&S Management System can be found on the Our Responsibility section of this Site.
No Consideration of Sustainability Adverse Impacts
White not directly subject to European Union law and regulation, Falcon House Capital Management Pte. Ltd. (“FHCM”) is voluntarily publishing information on whether it considers the “adverse impacts of investment decisions on sustainability factors” (the “Principal Adverse Impacts”) under the SFDR. FHCM does not currently consider the Principal Adverse Impacts of investment decisions on sustainability factors in connection with all its products and services, as defined under and in accordance with the SFDR. This is because FHCM is not, in its view, currently in a position to obtain and/or measure all the data which it would be required by the SFDR to report, or to do so systematically, consistently, and at a reasonable cost with respect to all its investment strategies to clients and investors. This is in part because underlying investments are not widely required to, and may not currently, report by reference to the same data.
In addition, the final regulatory technical standards which set out the scope of Principal Adverse Impacts and the corresponding mandatory reporting template have not yet been adopted by European legislators, and hence there remains legal uncertainty.
In practice, depending on the investment strategy and product, FHCM considers a relevant sub-set of the “sustainability factors” listed in the SFDR, including environmental, social and employee matters, respect for human rights, anti-corruption and/or anti-bribery matters by means of its policy on integration of environmental, social, and governance risks and value creation opportunities into its investment process. For further information, please see the Our Responsibility section of this Site.
With respect to certain investment strategies and products, FHCM has applied established ESG-related standards which vary depending on the investment strategy.
Information on How Remuneration Policies Are Consistent with the Integration of Sustainability Risks
FHCM’s remuneration practices are designed to promote sound and effective risk management and not to encourage risk-taking which is inconsistent with its risk appetite or the risk profiles of the investments which it manages or advises. FHCM’s E&S Management System sets out how its investment process incorporates consideration of ESG risks. Such risks form part of FHCM’s assessment of risk for the purposes of its remuneration policy. FHCM’s approach to remuneration enables variable remuneration for employees to be adjusted for performance. This adjustment is not based solely on financial metrics. Qualitative non-financial performance metrics form a significant part of the assessment process. These metrics may include, for example, an employee’s failure to adhere to effective risk-management, to comply with applicable regulatory rules, unethical behavior, or other behavior that is contrary to FHCM’s policies, culture, and values. Consideration of these factors (including where relevant an individual’s contribution to ESG-related efforts) may form part of the employee’s performance assessment process. In addition, a proportion of the variable remuneration for employees may be deferred. This allows ex post performance adjustments to be applied to deferred remuneration where risks, including sustainability risks, materializes in the future.