SFDR Article 10 Disclosure
This Fund is categorised as an Article 9 Fund for the purposes of SFDR.
No significant harm to the sustainable investment objective
Where the Fund makes SFDR sustainable investments it will seek to ensure through pre-investment due diligence that such investments:
· do not significantly harm any of the other sustainable investment objectives set out under SFDR, including taking into account the Minimum PAI Indicators referred to in section (b) below,
· are appropriately aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, and
· where relevant (for potentially EU taxonomy-aligned investments), do not significantly harm any of the other sustainable investment objectives set out under the relevant EU Taxonomy category.
Sustainable investment objective of the financial product
The Fund’s sustainable investment objective is less production of greenhouse gas emissions.
The Fund typically invests in minority equity stakes in growth-stage businesses in the consumer, technology, energy and materials, financial services and industrial sectors, associated with broad climate solution themes.
Proportion of investments
Other than ancillary cash, liquid assets and derivatives, the Fund invests wholly in SFDR sustainable investments.
The Fund has made no minimum commitment to/as between environmentally and socially sustainable investments or to EU-taxonomy aligned investments.
Monitoring of sustainable investment objective
Generation uses a suite of investment-specific sustainability indicators and cross-portfolio indicators to measure the attainment of the Fund’s sustainable investment objective.
For each investment of the Fund, Generation defines:
· the specific SFDR environmental or social objective to which that investment contributes to
· an investment-specific sustainability indicator used to measure the investment’s contribution to that objective over the life of the investment.
In line with the sustainable investment objective of the Fund, all investments of the Fund have been defined by Generation as contributing to the objective of less production of greenhouse gas emissions.
Methodologies for the sustainable investment objective
Investment-specific sustainability indicators used to measure contribution to the investment-specific social or environmental objective are typically designed in partnership with the portfolio company itself. These indicators are typically selected based on a combination of factors and strive to capture the ‘additional’ effect of the product or service on the specific social or environmental objective versus the status quo or business as usual.
The methodologies applied to measure the cross-portfolio measures vary according to the nature of the metric. Guidance is provided for portfolio companies in order to maximise consistency in calculation. This guidance is aligned to regulatory definitions, where relevant.
Data sources and processing
Generation aims to use primary data sources where possible by working closely with portfolio companies, supplemented with third party data providers, desktop research, as well as interviews and discussions with industry and subject matter experts. But in some cases data may be estimated.
Limitations to methodologies and data
The breadth of Generation’s overarching mission makes it hard to quantify the outcomes of all aspects associated with the actions underlying the attainment of the environmental and social characteristics promoted by the Fund. Generation has selected indicators that focus particularly on the contribution of the investee companies’ products and services to specific social or environmental objectives (specifically less production of greenhouse gas emissions), as well as cross-portfolio sustainability performance indicators.
There remain significant gaps in corporate sustainability reporting, and a lack of relevant, comparable, reliable and publicly available sustainability data on companies.
Sustainability (including PAI indicator) data often relies on the data collection and assessment efforts of third parties and delays in accessing disclosures or inaccuracies in the data supplied will be beyond Generation’s control. Even where data is available, its impact and/or interpretation may be disputed. This is particularly the case for sustainability indicators that draw on third-party assessments.
Due diligence carried out on underlying assets of the Fund, and the associated internal and external controls on that due diligence, is set out in Generation’s approach to Sustainability in the Investment Process.
The engagement policies implemented in support of the sustainable investment objective, including any management procedures applicable to sustainability-related controversies in investee companies, as set out in Generation’s Stewardship and Engagement Policy.
Designated reference benchmark
A reference benchmark is not applicable for the purposes of measuring the attainment of the Fund’s sustainable investment objective.
This section is intended to be treated as a summary of the following disclosures and does not purport to be complete.
IMPORTANT NOTE: This Fund’s investment period has ended, and ended prior to SFDR Level 2 becoming effective, so all statements within this document should be read within this context. The Fund made no commitments in respect of SFDR in its offering documents to investors.