ILGTSPĒJA

Mandatory disclosures under REGULATION (EU) 2019/2088 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 27 November 2019 on sustainability‐related disclosures in the financial services sector (“SFDR”)

INFORMATION ABOUT POLICIES ON THE INTEGRATION OF SUSTAINABILITY RISK IN INVESTMENT DECISION-MAKING PROCESSES (Article 3 disclosures)

ZGI Capital applies exclusion policy and does not invest into companies which operate in those sectors of economy associated with significant sustainability risks, such as trade of alcoholic beverages, gambling and betting, sale of firearms and ammunition, adult entertainment, manufacturing, processing and marketing of tobacco and tobacco products and others.

ZGI Capital currently does not publicly offer and does not manage any funds which promote, among other characteristics, environmental or social characteristics, or a combination of those characteristics or funds which have sustainable investment as its objective, thus ESG considerations are regarded as inputs in the investment process rather than the objective of our work. As described above, ZGI Capital only takes into account some certain risks, which also fall under sustainability risks definition (such as governance risks), as a part of normal due diligence process. Given the size and nature of our investments, as well as the fact that we have never promoted our funds as "sustainable" funds or "green" funds, we believe that this process is sufficient.

The process chart below illustrates our investment decision making process. Certain sustainability risks are taken into account during 1st stage (such as exclusion criteria assessment, adverse media checks, and other), 2nd stage (if certain material deficiencies/risks, including in relation to ESG, are identified during initial screening phase, investment team takes this into account when deciding whether the case moves to stage 3), 3rd stage (investment committee (IC) takes into account material risks, including certain ESG risks, identified by the investment team, in their decision to issue the term sheet or not ), stage 4.1. stage (during Due Diligence phase certain ESG related aspects are analyzed, mostly company governance related), stage 4.2 stage (IC may decide to reject the case if any significant and non-manageable risks are identified), stage 5 (there may be contractual obligations introduced to mitigate findings of DD, including related to certain ESG risks, as pre-closing conditions or post-closing obligations), stage 6 (during investment monitoring the fund may use it's contractual rights to influence the behavior of the investee companies, including in relation to certain ESG risks.) 

STATEMENT OF NO CONSIDERATION OF ADVERSE IMPACTS OF INVESTMENT DECISIONS ON SUSTAINABILITY FACTORS (Article 4 disclosures)

Taking due account of the size, nature and scale of our activities, as well as the types of financial products we make available, currently ZGI Capital does not consider the adverse impacts ("PAI") of investment decisions as defined by Article 4 of the SFDR on sustainability factors as defined by Article 2 (24) of the SFDR. (Sustainability factor means environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters). Investment focus of the funds under our management is small and medium size companies, which, taking into account their inherent characteristics, are currently not required to collect and report the data necessary to reliably assess and monitor PAI of investment decisions. Requirement to collect and report such data would, in most cases, be disproportionate to the size of the operations of these companies and resources available to them. ZGI Capital will reevaluate our policies if and when the conditions described above will change materially.

INFORMATION ON CONSISTENCY OF REMUNERATION POLICIES WITH THE INTEGRATION OF SUSTAINABILITY RISKS (Article 5 disclosures)

The structure of remuneration policies does not encourage excessive risk‐taking with respect to sustainability risks. Remuneration policy does not incorporate sustainability risks. 

This information was first published on 11.08.2022. It was reviewed and updated on 25.06.2024.