As part of the implementation of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on disclosure about sustainability in the financial sector (the "Sustainable Finance Disclosure Regulation", further abbreviated to "SFDR"), we answer the following questions:
- do we take sustainability risks into account in our investment process?
- do we consider the main adverse effects of investment decisions on sustainability factors?
- do we take sustainability risks into account in our remuneration policy?
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Integration of sustainability risks into the investment process
Within the meaning of the SFDR, "sustainability risk" means an environmental, social or governance event or circumstance that, if it occurs, could cause an actual or potentially material adverse effect on the value of Hoofbosch's investments.
In order to be considered for inclusion in the Hoofbosch portfolio as a 'solid stock' a company has to meet these seven criteria:
- stable management
- stable dividend
- stable sector
- long history
- preferably head office in Switzerland, US or the Netherlands
- the company pays attention to diversity
- acceptable sustainability risks.
When assessing the sustainability risks that a company runs, it is also examined what the consequences could be for the value of the company if a sustainability risk should unexpectedly materialize. In order to avoid or limit sustainability risks, we prefer to invest in shares of companies that act predominantly in accordance with the UN Global Compact Principles, the United Nations guidelines for good governance with regard to human rights, working conditions, anti-corruption and environment. To this end, we conduct our own research, which also looks at how companies take sustainability risks into account in their long-term strategy. Sustainability research from external specialized research agencies is also used for this purpose.
Every year, we ask Sustainalytics to investigate to what extent the companies in which Hoofbosch invests act in accordance with the UN Global Compact Principles and subsequently report on the results of that survey in Hoofbosch's annual report.
Remuneration policy & sustainability risks
The remuneration policy does not contain any incentives that could lead to sustainability risks being neglected when making investment decisions and monitoring investments.
Adverse effects of investment decisions on sustainability factors are not taken into account
Hoofbosch does not promote ecological and / or social characteristics ("light green investments" as referred to in Article 8 SFDR), nor does it focus on sustainable investments ("dark green investments as referred to in Article 9 SFDR).
In the field of sustainability, our activities amount to assessing the impact of sustainability risks on the performance of Hoofbosch, in the manner described above ("Integration of sustainability risks in the investment process"). In doing so, we do not focus on what the effects of our investment decisions (could) be on environmental, social and employment matters, respect for human rights, and the fight against corruption and bribery (the so called "sustainability factors" as meant in article 4 section 1 under a of the SFDR) and we do not produce a yearly so-called "principle adverse sustainability impacts statement", hereafter referred to as "impact statement").
This is for the following reasons:
- Hoofbosch's objective is to grow capital over time at an acceptable risk. Participants in Hoofbosch expect us to invest in accordance with this objective and to take sustainability risks into account in the context of risk management. Managing to avoid adverse effects on sustainability factors is not part of the investment objective;
- If we were to decide to issue an impact statement, numerous detailed rules would have to be taken into account when drafting this statement, many of which are not relevant to Hoofbosch, given its investment universe and investment strategy.
- Incidentally, the information required to prepare an impact statement is not available within Hoofbosch and measures should therefore be taken to publish such a statement. The possible added value for (potential) participants of issuing an impact statement is disproportionate to the costs, amount of time and attention that will be involved in drawing up and maintaining that statement.
Reconsideration of the foregoing may become relevant in various circumstances, for example if the investment policy is adjusted or if it appears that the majority of the participants wish to see an impact statement.
Date of declaration: March 10, 2021
LEI no. De Grote Voskuil Capital B.V: 724500RO07JNYFXUZG67