Sustainability-related disclosures
Towards greater transparency
To reorient capital flows toward a more sustainable economy, the EU has adopted a series of new regulations. One of them, the Sustainable Finance Disclosure Regulation (“SFDR”), aims to provide greater transparency regarding the sustainability of financial products.
All Norselab funds disclose under SFDR Article 9, the category of funds that have a sustainable investment objective. We remain committed to upholding a robust, institutional-grade impact investing practice while investing the necessary resources to adapt to the regulations' requirements. We are enthusiastic about the opportunities these regulations present to reinvent our economy. We are confident that, by embracing these changes, we can continue to make a meaningful impact through our investments.
Independent of regulatory developments, Norselab aims for a top-of-the-range approach to impact. This entails integrating impact into the product design, building solid frameworks for assessing, measuring, and tracking impact, and for publicly disclosing our data.
Sustainability risk integration in the investment decision-making process
Norselab’s Meaningfulness Policy describes our overarching impact philosophy and provides guidance on how Norselab identifies and measures impacts.
To ensure a solid foundation for investment decisions, our approach aims to build the most complete picture of a company’s impacts, as well as risks. This means using multiple lenses in our assessments of companies:
- SDGs: The contributions of companies’ products and services are mapped to the underlying targets and indicators of the SDGs. We consider both positive and negative contributions, and define impact as a net significant contribution to achieving the SDGs.
- Net impact quantification: We quantify both positive and negative impacts of companies’ products and services to provide a net impact score.
- EU regulatory assessments: We screen and assess companies based on the Principal Adverse Impact indicators defined by the SFDR, assess compliance on good governance principles, and perform assessments for potential eligibility and alignment with the EU Taxonomy.
- Operational risk assessments: We seek to uncover operational risks and strengths, to ensure that companies operate responsibly and sustainably. This includes mapping potential gaps to fill.
Based on our overarching approach, each of our investment products follow an impact due diligence process tailored to the product when investing. The due diligence processes are described in each of our products’ disclosures.
Considering Principal Adverse Impacts on sustainability factors in investment decisions
Norselab considers the mandatory indicators under investments in investee companies set out by the SFDR. Through a structured assessment process, we ensure that the issuers included in the investment universe do not cause significant harm to the sustainable investment objective. We use a combination of data disclosed by the relevant companies and data provided by third parties to assess Principal Adverse Impact indicators. We publish an annual statement for the previous reporting year by June 30th for each fund, available on the funds’ respective page.
Sustainability risks integration in our Remuneration Policy
Norselab’s compensation structure for its employees consists of fixed, and, for some selected employees, carried interest components. Sustainability risks are embedded in Norselab’s compensation model through our impact investing mandate. Impact is imperative and a baseline across all of the underlying funds and investments where Norselab has been appointed Investment Manager. Sustainability risks is integrated in our impact philosophy and investment process, as stated in our Meaningfulness policy to which all employees must adhere to. On this basis, Norselab does not establish additional compensation incentives to manage sustainability risks.