The purpose of this policy is to establish the general guidelines for AidanN ApS ntegration of sustainability risks in the Company’s investment decision process in connection with the management of alternative investment funds (“AIFs”) and the dissemination of information to the Company. customers. This policy is the Company’s overall set of rules on the integration of and information on sustainability risks and aims to ensure that the Company complies with applicable legislation at all times and conducts responsible business, taking into account employees, customers and investors. The purpose of the policy is to establish guidelines for how the Company wishes to contribute to sustainable development and respect for international guidelines and conventions. The policy has been prepared in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council (the “ Regulation”) and has been prepared taking into account the size and organization of the Company as well as the nature, scope and complexity of the Company’s business.
Scope of application
The policy applies to personnel employed by the Company, as well as employees in other parts of the Company, when they act or act on behalf of the Company and / or enter into customer relationships with the Company’s customers (ie AIFs). The policy also applies to the Company’s management. The policy applies to all of the Company’s investments made on behalf of the AIF and constitutes the underlying foundation across investments.
Integration of sustainability risks into the investment decision-making process
The basic view behind this policy is that environmental, social and managerial factors (“ESG”) can have a major impact on the value of the individual business and on long-term returns. Therefore, it is also central for the Company to integrate these ESG factors into its investment decision-making process and use them as an indicator for the valuation of a given company.
At present, the Company manages one AIF, AidanN US Equities A / S (the “AIF”). On behalf of the AIF, the Company invests in equities represented in the S&P 500 and ETFs that represent the S&P 500 index. The company’s primary goal is to achieve absolute returns based on S&P 500 shares. The company’s secondary goal is to preserve capital and thereby aim to provide attractive risk-adjusted returns for investors. Sustainability risks are assessed by the Company before an investment decision is made.
The Company will strive and actively seek to avoid such sustainability risks. This applies to the selection of companies as well as the ongoing monitoring and evaluation of the investment. The company wants to achieve the greatest possible return on investments, but at the same time wants to ensure that value creation is responsible and does not violate internationally recognized norms or conventions to which Denmark has acceded. Against this background, the Company uses the exclusion of companies that do not live up to the Company’s ESG requirements. The company uses the S&P 500 ESG Exclusions II index as a screening method in order to achieve the above wishes.
Identification and response to adverse sustainability impacts
The AidanN Aps identifies and prioritizes the most important negative sustainability effects and indicators prior to deciding to invest in a company. The company uses an AI-based hedge fund strategy that automatically addresses the key negative ESG factors using the screening method mentioned below. In this context, the Company will identify and exclude companies that may have an actual or potentially significant negative impact on the value of an investment.
Using the S&P 500 ESG Exclusions II index as a screening method, the Company screens companies for the production of controversial weapons, civilian firearms, tobacco and thermal coal, as well as standards-based screening that follows the ten principles of the UN Global Compact. These cover human rights, labour rights, the environment, business ethics and anti-corruption. The screening is updated quarterly, and the AIF’s portfolio is adjusted in the following quarter. The table below lists the main negative impacts on sustainability factors and the method of identifying and excluding companies that could have caused such adverse impacts.
Criteria (as defined by S&P Dow Jones Indices LLC)
Non-compliance with the UN Global Compact
involvement in production or trade with controversial weapons
(i) Internal production or sale of controversial weapons
(ii) Ultimate benefical ownership of > 10% of voting rights of offending company
Producers of tobacco
Revenue from extraction or prospection of thermal coal or from production of electricity termisk kul ekstraktion eller efterforskning eller fra elproduktion
(i) >25% of revenue from extraction or prospection of thermal coal (including coal mining or prospection)
ii) >25% revenue from electricity production based on thermal coal
involvement in production or trade civil firearms
(i) producing or selling small firearms or assault rifles destined for civil or military law enforcement
(ii) Companies with >10% of revenue from sales of small firearms or assault weapons
(iii) target company owns or controls >10% of voting rights in an offending company
Sustainability risk information
AidanN US Equities A/S – the Alternatiove Investment Fund – does not specifically aim to promote sustainability or sustainable investment. To the extent that new AIFs managed by AidanN Aps have sustainable investment as their goal, and an index has been specified as a reference benchmark, the Company includes in the offering memorandum information on how the specified index is adapted to this target, and an explanation of why and how the specified index adapted to this target differs from a broad market index.
To the extent that the Company’s AIFs promote sustainable characteristics, and provided that the companies invested in follow good management practices, the Company includes the following in the investment information:
- information on how the characteristics in question are met
- if an index is specified as a reference benchmark, information on whether and how this index conforms to those characteristics.
- Fund-specific documentation provides more details on individual strategies, and can be found on the website. The Company’s exclusion lists are also published on the Company’s website. It is important for the Company that the information is clear, concise and understandable to the Company’s customers.
Remuneration policies and integration of sustainability risks
By virtue of the current registration, the company is not directly subject to a requirement to prepare a written salary policy. However, the Company is aware that the remuneration of employees and management members is central to promoting sustainability in the Company’s activities. In this connection, none of the Company’s employees receive variable remuneration. The company receives a fixed fee from the AIF, which is considered to be market-compliant and only has the option of receiving performance supplements, which are derived from the development of investments through the AIF.
Due to the size of the Company, the nature of activities and the investment strategy of the AIF, it does not have the same opportunities to exercise active ownership, commitment and investor cooperation as e.g. applies to larger companies or by direct investments exclusively in shares. To the extent possible, the Company will endeavor to influence the companies in which it invests to adapt in a sustainable manner. In this context, the Company will use its influence in the companies to positively influence their ESG factors, both through dialogue and the exercise of voting rights. The company continuously analyses the extent to which the companies’ activities are in line with the world goals. The goal is to increase behaviour in accordance with the goals and reduce the behaviour that is not in line with the goals.
Responsible business practice
The company is expected to exercise the necessary care in the work with social responsibility. This applies both in relation to the Company’s own activities and in relation to the Company’s employees and business partners. It is the Company’s basic understanding that proper handling of environmental, social and corporate governance matters is crucial to achieving the UN’s global goals, and the Company therefore does its best to integrate these matters into the investment decision process. Whenever the Company assesses risks and opportunities in relation to investments, the Company takes ESG principles into account and seeks to balance investments in a sound manner. This provides value for the Company as a responsible financial company, for the Company’s customers and contributes to a sound global approach. The Company’s employees are obliged to comply with the Company’s business procedures and policies, including this, which helps to ensure that the Company as a whole can expect general good behaviour and conduct within the values expressed by ESG