The SFDR and Taxonomy Regulation came into force respectively on 10 March 2021 and 12 July 2020 and were amended by SFDR RTS both applicable from 1 January 2023. The SFDR introduced disclosures to be made at the level of the product and the entity.
Pursuant to the SFDR, Pathena Fund (both as financial product and financial market participant as further defined in the SFDR) considers as not being itself a financial product that has sustainable investment as its objective nor a financial product that promotes, among other characteristics, environmental and social characteristics, or a combination of those characteristics.
Article 6 (1) – Policy on the integration of Sustainability Risks
Article 6 of the SFDR requires that Pathena Fund (as financial market participant) discloses the manner in which sustainability risks are integrated into investment decisions; and the results of the assessment of the likely impacts of sustainability risks on the returns of the Fund (as financial product), and where the Fund (as financial market participant) deems sustainability risks not to be relevant, the description shall include a clear and concise explanation of the reasons for this.
A sustainability risk in this context means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the Investment.
Pathena Fund (as financial market participant) has deemed it not relevant that sustainability risks are integrated into investment decisions for the Fund (as financial product), as the consideration of sustainability risks is not mandated by the investment objective and strategy of the Fund. In addition, the Investments of the Fund which were made way before the entry into force of the SFDR and the Taxonomy do not by nature trigger sustainability risk. There is no intention to acquire new Investment until the liquidation of the Fund.
Article 4 sub 1 (b) and Article 7(2) – Consideration of Sustainability Adverse Impacts
In accordance with article 4 sub 1 (b) of the SFDR, Pathena Fund (as financial market participant) does not consider principal adverse impacts of investment decisions on sustainability factors as set forth in article 4 sub 1 (a) of the SFDR and, therefore, it does not make the disclosures as described in article 4 sub 1 (a) of the SFDR.
The reasons for not publishing such a disclosure are twofold.
In the first place, the Fund is a self-managed AIF registered as a sub-threshold alternative investment fund manager within the meaning of Article 3 (3) of the AIFM Law. Given the small size of the organization of the Fund, such disclosure and the administrative burden in connection therewith would not be proportional.
Furthermore, the Fund considers that it would not have sufficient access to relevant and consistent data on the basis of which it would be able to accurately report on principal adverse impacts of investment decisions on sustainability factors within the meaning of article 4 of the SFDR.
Additionally, it should be noted that the Investments underlying the Fund does not take into account the EU criteria for environmentally sustainable economic activities.