Sustainable Finance Disclosure

 

Pursuant to EU Regulation 2019/2088 on sustainability-related disclosures in the financial services sector (the “SFDR”), financial market participants are required to disclose the manner in which Sustainability Risks (as defined hereafter) are integrated into the investment decision-making process, and the results of the assessment of the likely impacts of Sustainability Risks on the returns of the Fund.

 

"Sustainability Risk" means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. Such risks are principally linked to climate-related events resulting from climate change (physical risks) or to the society’s response to climate change (transition risks), which may result in unanticipated losses that could affect the Fund’s investments and financial condition. Social events (e.g., inequality, inclusiveness, labour relations, investment in human capital, accident prevention, changing customer behaviour, etc.) or governance shortcomings (e.g. recurrent significant breach of international agreements, bribery issues, products quality and safety, selling practices, etc.) may also translate into Sustainability Risks. The impacts of the occurrence of a Sustainability Risk may be numerous and vary depending on the specific risk, region and asset class. Where a Sustainability Risk occurs in respect of an asset, there might be a negative impact on its value.

 

Sustainability Risks are integrated into the investment decision process and risk monitoring to the extent that they represent a potential or actual material risk and/or opportunity to maximizing the long-term risk-adjusted returns of the Fund.

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Due to its exposure to the real estate sector, the Fund may experience some specific Sustainability Risks. For instance, real estate assets are exposed to potential physical risks resulting from climate change, like for example the tail risk of significant damage due to increasing erratic and potentially catastrophic weather phenomena (e.g. droughts, wildfires, flooding and heavy precipitations, landslides, storms, etc.). As the frequency of extreme weather events increases, the Fund’s assets exposure to these events increases too. For example, flooding may cause damage requiring refurbishment works or might render the building incapable of being occupied resulting in the loss of rents. Additionally, flood damage might impact the resale value of the building and/or make it more difficult or even impossible to resale.

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For the time being, Guardian Managers S.à.r.l. acting as AIFM of the Fund does not consider the adverse impacts of its investment decisions on Sustainability Factors (as defined under SFDR). The principal reason is the lack of information and data available to adequately assess such principal adverse impacts.

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The investments underlying this Fund do not take into account the EU criteria for environmentally sustainable economic activities as per the Regulation (EU) 2020/852 (Taxonomy) on the establishment of a framework to facilitate sustainable investment.