Our investment team considers, where applicable and appropriate, ESG factors as part of our overall assessment of investment opportunities and integrates the same into our investment decision making process.

We have adopted various approaches to integrate ESG factors into our investment decision making process:

Integration

We conduct proprietary, detailed research to understand the long-term sustainability of earnings and the risk profile of an asset class. We also adopt a pragmatic approach whereby information on ESG factors is integrated into established investment assessment processes as a component of our overall financial risk analysis. Where potential ESG concerns are identified during due diligence, these are raised with our Investment Committee and, where appropriate, discussed with the management of the prospective investment target to identify potential steps to mitigate the associated risks. An identified ESG concern does not automatically preclude an investment where the Investment Committee determines, on a case-by-case basis, that the associated financial risk is acceptable having regard to the risk level, the achievability of any proposed mitigation steps and the willingness of the target’s management team to address such concerns.

Negative and positive screening

We will actively engage with our clients to understand whether they have specific regulatory requirements or concerns about particular activities and/or industries, and will consider such requirements on a case-by-case basis in order to maintain any such exclusions on an on-going basis.

Exclusions

We consider the following sectors to present heightened ESG-related financial risk and, as a matter of general investment practice, our investment committee will apply heightened scrutiny to potential investments where the primary business activity of the target falls within the following areas:

• Alcohol;
• GMOs;
• Fossil Fuels;
• Nuclear;
• Tobacco;
• Weapons; and
• Adult Entertainment.

We will assess these types of investments on a case-by-case basis, taking into account the specific financial risk profile of the investment. Any potential for indirect exposure is carefully considered and factored into investment selection.

Alignment of Remuneration Policy with sustainability investments

In line with our Remuneration Policy, no variable remuneration is paid to our staff unless it is determined to be justified following a performance assessment based on quantitative (financial) as well as qualitative (non-financial) criteria. Due to this very limited impact on the risk-profile of our clients, as well as the nature of our business, we deem that there is no risk of misalignment with the integration of the sustainability risks in our investment decision making process with respect to our clients. As such, we believe that our existing structures are sufficient to prevent excessive risk taking in respect of sustainability risks.

Kindly contact Alanda investor relations for a full copy of our ESG Policy.