Sustainability

Vertis adopts a responsible investment approach in selecting its investments; ESG factors are therefore integrated into the investment process, thus allowing an even more reliable analysis of both potential opportunities and any risks

Adaptation to Regulation (UE) 2019/2088 of the European Parliament and of the Council of 27 November 2019

Sustainable Finance Disclosure Regulation

(SFDR)


ART. 3: Integration of sustainability risks into investment decisions

Vertis in 2021 started a gradual process of raising awareness of ESG issues.

Vertis pays particular attention to sustainability issues and the impacts of its investment activities. To this end, the AM, during the 2022, signed the Principles for Responsible Investment (PRI) adopted by the United Nations and has integrated the assessment of sustainability risks, as defined by Regulation (EU) 2019/2088, within its risk management system, in order to identify and manage sustainability risks that are likely to create potential impacts for the AM and for the AIFs managed.

Furthermore, Vertis has hired a Head of ESG and also takes advantage of external consultants during the investment process.

The ESG framework is integrated into the investment process through the implementation of the following activities conducted by the Head of ESG:

Scouting phase (pre-investment)

  • investment opportunities in the sector / market are identified, considering the main ESG drivers obtained through know-how, networks and media analysis;
  • a verification is carried out on the ethics of the sector to which the Target belongs in compliance with the exclusion criteria listed in the Regulations of each specific fund.

Preliminary phase (acquisition)

  • an ESG analysis (first level analysis) is carried out in order to better understand the sustainable aspects of the Target’s business model. The observed ESG considerations are included in the Investment Memorandum;
  • if the Investment Committee decides to proceed with further investigations on the Target, among others, an ESG Due Diligence (second level analysis) is conducted by an ESG Advisor, coordinated by the Head of ESG, in order to identify ESG risks and consequently define an Action Plan.

Monitoring phase (management)

  • the ESG performance of the investee is measured by monitoring the progress of the Action Plan and the ESG indicators considered material;
  • in order to improve the ESG performance of the investee companies, an engagement activity is carried out with their management.

Exit phase (divestment)

  • the ESG objectives achieved are observed.

 

ART.4: Transparency of adverse sustainability impacts at entity level

The AM currently does not take into consideration, with the meaning provided by the art. 4, paragraph 1, of Regulation (EU) 2019/2088, the negative effects of investment decisions on sustainability factors.

Following the adoption and entry into force of the regulatory technical standards (RTS) that will establish detailed requirements regarding the content, methodologies and presentation of information about the sustainability indicators identified by the Regulation and following the clarification of the relevant interpretative issues, Vertis will re-evaluate its position in relation to the definition of due diligence policies to consider the negative effects of investment decisions on sustainability factors and will consider updating the website accordingly.

 

ART.5: Transparency of remuneration policies in relation to the integration of sustainability risks

Vertis is not obliged to draft a remuneration and incentive policy as a sub-threshold asset manager pursuant to AIFM regulations.

 

ART.10: Transparency of the promotion of environmental and social characteristics of Vertis Venture 5 Scaleup Fund

1. Introduction

Vertis Venture 5 Scaleup (hereinafter “the Fund”) is one of the products referred to in Article 8 of EU Regulation 2019/2088 (Sustainable Finance Disclosure Regulation or “SFDR”), which promote, among others, environmental and social characteristics, provided that the companies in which the investments are made comply with good governance practices.

2. Environmental and social characteristics of the financial product

The Fund promotes ESG (i.e. Environmental, Social and Governance) characteristics as well as the acceptance and implementation of the principles set out in the PRI (Principles of Responsible Investment) within the financial sector, integrating sustainability risks into the investment process.

The Fund has as its main investment objective assets that pursue typical objectives of financial management which stand out by their attention to environmental, social and governance aspects.

3. Investment Strategy

The Fund exclusively carries out investment transactions in instruments issued by italian companies active in the sectors of industrial technologies and digital technologies, such as, but not limited to: robots, automatic machines, medical devices, Internet of Things, aerospace, transport, services on-line sales and distribution, telecommunications systems, health services (e-health), hardware, software, agritech, new materials, chemistry, technologies for the financial, insurance and real estate sectors.

Initial investment operations fall into the Late stage / Scaleup types: meaning the contribution of capital to italian companies that have already introduced their products and services on the market, and that need additional capital to develop innovative projects intended to represent a significant part of their business activity and expected growth.

The Fund will pay particular attention to italian companies located in the regions of southern Italy.

The ESG framework is integrated into the investment process through the implementation of the following activities conducted by the Head of ESG:

Scouting phase (pre-investment)

  • investment opportunities in the sector / market are identified, considering the main ESG drivers obtained through know-how, networks and media analysis;
  • a check is carried out on the ethics of the sector to which the Target belongs in compliance with the exclusion criteria listed in the Regulation of the Fund.

Preliminary phase (acquisition)

  • an ESG analysis (first level analysis) is carried out in order to better understand the sustainable aspects of the Target’s business model. The observed ESG considerations are included in the Investment Memorandum;
  • if the Investment Committee decides to proceed with further investigations on the Target, among others, an ESG Due Diligence (second level analysis) is conducted by an ESG Advisor, coordinated by the Head of ESG, in order to identify ESG risks and consequently define an Action Plan.

Monitoring phase (management)

  • the ESG performance of the investee is measured by monitoring the progress of the Action Plan and the ESG indicators considered material;
  • in order to improve the ESG performance of the investee companies, an engagement activity is carried out with their management.

Exit phase (divestment)

  • the ESG objectives achieved are observed.

4. Monitoring of environmental and social characteristics

In order to evaluate in advance the compatibility of the investments with the environmental and social characteristics promoted by the Fund and to measure to what extent the Fund meets them, an ESG Score model is implemented based on the main international standards on sustainability.

The model is based on indicators that are coherent and compliant with the best practices of the sector and the current legislation.

Therefore, over 40 ESG indicators are monitored (selected, from time to time, depending on the business model of the company and its reference industry) belonging to the following 14 ESG macro-areas:

  1. Reduction of CO2 emissions;
  2. Reduction of air pollution;
  3. Energy efficiency;
  4. Sustainable procurement;
  5. Parental Policy;
  6. Diversity measurement;
  7. Encouragement of diversity & inclusion;
  8. Staff well-being;
  9. Collaboration with the community;
  10. Supervision of the Board;
  11. Fair and equal remuneration;
  12. Cyber ​​security;
  13. Health & Safety;
  14. Corporate Policies.