Sustainability

Foreword

Arsenale Real Estate SGR S.p.A. (hereinafter also the “SGR” or the “Company“) publishes this disclosure in accordance with the provisions of Articles 3, 4 and 5 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of November 27, 2019, on sustainability reporting in the financial services sector (the “SFDR“)

Specifically, through this, the SGR intends to comply with the transparency requirements established by the SFDR regarding:

1. Policies on integrating Sustainability Risks into its investment decision-making process adopted by the SGR (see Article 3 of the SFDR);
2. Taking into account the actual negatives of investment decisions on Sustainability Factors (so-called PAI, see Article 4 of the SFDR);
3. Consistency of the SGR’s remuneration policy with the integration of Sustainability Risks (see Article 5 of the SFDR).

Consistent with the provisions of Article 2 of the SFDR, the following terms used herein with the first letter capitalized have the meanings respectively ascribed to them below:

• “ESG“: Environmental, Social and Governance;

• “Sustainability Factors“: environmental, social and personnel issues, respect for human rights, and issues related to combating active and passive corruption;

• “Sustainability Risk“: an environmental, social, or governance event or condition that, if it occurs, could cause a significant actual or potential negative impact on the value of the investment.

Information about the policies on the integration of Sustainability Risks into its investment decision-making process adopted by the SGR (Article 3 of the SFDR)

The SGR integrates Sustainability Risks into its investment decision-making process in order to understand and measure their impacts, being aware that this type of risk, if it materializes, could result in an impact on the financial returns of the investments of the AIFs under management.

In this context, when assessing identified investment opportunities and then making related investment decisions, SGR takes a direct approach to identifying, assessing-and subsequently monitoring and mitigating-the key Sustainability Risks associated with the relevant assets.

In particular, the SGR, in line with the provisions of its internal policies on ESG and investment decision-making process, implements:

1. A “pre-feasibility study,” aimed at determining the constraints or opportunities for intervention on the asset that is the subject of each investment opportunity, useful for improving its environmental performance;
2. a due diligence activity, aimed at analyzing – also with the support of external consultants – in addition to the peculiar aspects typical of real estate investment, ESG aspects;
3. An analysis of the risk profile of each investment opportunity, including, inter alia, an assessment of related Sustainability Risks.

The results emerging from the above due diligence activities are summarized within a memorandum, which, together with the appropriate report prepared by the SGR Risk Management Function, is submitted to the SGR Board of Directors for possible adoption of the decision to invest in the asset in question.

Failure to take into account the actual negatives of investment decisions on Sustainability Factors (Article 4 of the SFDR)

SGR pays special attention to ESG issues and Sustainability Risks. Notwithstanding the above, SGR does not currently consider any negative effects of investment decisions on Sustainability Factors in accordance with Article 4 of the SFDR.

In fact, the SGR believes that the limited availability of reliable and structured data in the market, as well as established practice, does not allow for an adequate assessment of the potential negative effects of investment decisions on Sustainability Factors in line with the metrics outlined in Delegated Regulation (EU) 2022/1288 (so-called RTS).

It should also be noted that the SGR does not currently manage AIFs that constitute qualified financial products under Articles 8 or 9 of the SFDR.

The SGR reserves the right to change its position with respect to the consideration of PAIs and to update this policy if necessary.

Information on how the SGR’s compensation policy is consistent with the integration of Sustainability Risks (Article 5 of the SFDR)

The SGR ensures that its internal remuneration policy is consistent with the integration of Sustainability Risks.
In particular, the determination of the variable component of SGR staff remuneration is based on performance evaluation criteria that also include the achievement of ESG objectives.