Sustainability Policy
MS PE d.o.o., SIS, k.d. (the Fund) is a financial product managed by MS PE d.o.o., upravljanje naložb d.o.o. (the Manager) that promotes environmental and social characteristics in accordance with Article 8 of the Sustainable Finance Disclosure Regulation (SFDR), but it does not have sustainable investment as its primary objective.
In managing the Fund’s assets, the Manager follows the following fundamental sustainability investment guidelines:
Guidelines related to environmental issues
- adaptation to climate change and its management
- prevention and control of pollution
- sustainable consumption and conservation of natural resources
Guidelines related to social issues
- diversity, equality, and inclusion
- respect for human rights
- ensuring occupational health and safety
- appropriate management of human capital
Guidelines related to governance issues
- prevention of bribery, corruption, and money laundering
- data protection and cybersecurity
- proper internal control processes
Key sustainability goals of the Fund include the reduction of greenhouse gas intensity in portfolio companies and the strict application of sustainability-related exclusion criteria. These include exclusions of companies that derive a significant share of revenue from fossil fuel energy production, are in violation of the UN Global Compact principles, or are involved in controversial weapons or harmful pesticides. The Manager considers the management of sustainability-related risks as integral to its investment decision-making process.
The Manager primarily targets investments in small and medium-sized enterprises (SMEs) and lower mid-market companies facing succession challenges. It seeks majority or significant minority ownership with control rights, enabling an active ownership approach.
ESG integration is applied throughout the investment lifecycle:
Pre-investment phase
ESG due diligence is performed, and alignment with the Fund’s exclusion criteria and sustainability principles is assessed. Investments failing to meet these criteria are excluded.
Investment phase
Portfolio companies are monitored against key ESG indicators and are required to implement sustainability measures, governance structures, and regular reporting. The Manager monitors ESG performance and compliance through both internal assessments and external data sources, where appropriate.
Post-investment phase
ESG progress is considered in exit planning and communicated accordingly.
Approximately 80% of the Fund’s investments promote environmental or social characteristics. The remaining 20% of assets may be allocated to instruments such as temporary investments or cash holdings, which may not align with the Fund’s sustainability characteristics. The Manager does not commit to a minimum proportion of EU Taxonomy-aligned sustainable investments.
The Manager tracks and discloses performance against a defined set of indicators, including:
- Share of energy consumption from non-renewable sources
- Existence of carbon footprint reduction policies
- Management of non-recycled, hazardous, and radioactive waste
- Implementation of water use and recycling policies
- Workplace safety measures, including accident rates and lost workdays
- Whistleblower protection frameworks
- Proportion of investments aligned with the Fund’s key sustainability objectives
Portfolio companies are required to submit periodic ESG data. Where data is not available at acquisition, systems must be implemented within 12 months. The Manager may engage third-party providers to assist in data verification and compliance monitoring.
All portfolio companies are required to meet governance standards in the following areas: employee relations, anti-bribery and corruption, internal controls, and remuneration policies and practices. Compliance with these standards is mandatory.
Although the Manager does not designate a sustainability benchmark index, ESG performance is systematically monitored and reported.
The Manager has engagement policy; however, the engagement defined in this policy is not part of the environmental investment strategy.
Note: The sustainability-related disclosures will remain a dynamic document and will be reviewed periodically and updated, if required, to continuously reflect regulatory development, best practices, and the needs of our various stakeholders.
For more information, please contact info@mscap.si.
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