EU Sustainable Finance Disclosure Regulation (the “SFDR”)
The EU Sustainable Finance Disclosure Regulation (SFDR), as mandated by Article 4, requires EuroMena FMC Limited (referred to as "EuroMena" or the "Company") to show how Sustainability Factors are incorporated into investment decisions and the assessment of sustainability risks' potential impacts. Read More
In accordance with SFDR Article 4(1)(b), Financial Market Participants, including EuroMena, must publicly disclose their reasons for not considering adverse impacts on sustainability factors in investment decisions.
They must provide clear explanations for this stance and, if applicable, specify if and when they plan to include these adverse impacts. EuroMena, authorized by the Malta Financial Services Authority, serves as a de minimis private equity Alternative Investment Fund Manager. The Company manages two funds, one licensed in Malta and another in UK, both being private-equity funds.
These sustainability risk considerations apply to the funds' investments in their portfolio companies. EuroMena refrains from assessing the potential impact of sustainability risks on the returns of their investments in portfolio companies. Given the private-equity nature of the funds, assessments lead to investments being made, proceeding with caution, or no investment at all.
Throughout the investment duration, EuroMena strives to uphold the applied standards and address identified sustainability risks.
Upon divestment, EuroMena factors in the value added through the implementation of ESG standards in the exit valuation of the investment.
These assessment results are made available to investors in accordance with the applicable offering documents.
EuroMena's sustainability risk considerations encompass environmental, social, and governance (ESG) factors, as outlined in the standards used for screening potential and holding investments in the funds. In applying these considerations, EuroMena takes into account the applicable local national laws and the internationally adopted standards of major DFIs, which include IFC's Performance Standards, IFC Environmental, Health, and Safety Guidelines and IFC’ Anti-Corruption Guidelines as well as EIB Statement of Environmental and Social Principles and Standards dated 2009 together with the EIB Environmental and Social Practices Handbook.
EuroMena also abides by DEG’s environmental and social principles and invests solely in industries that comply with the exclusion list of IFC and EIB among other DFIs. EuroMena also actively oversees compliance with sustainability-related issues through internally developed annual questionnaires to ensure that portfolio companies adhere to relevant local and international standard regulations. Furthermore, EuroMena completes questionnaires developed by DFIs such as IFC, EIB, and Proparco, among others, as part of its comprehensive sustainability monitoring efforts.
The Company's ESG policy, the Environmental and Social Management System, guides the risk appraisal process to make informed investment decisions, managing environmental and social risks for the funds through their portfolio companies.
The ESG Policy applies to all investments considered by the funds' investment committees. However, when due diligence is limited or other circumstances hinder the assessment, EuroMena encourages investee companies to adopt relevant ESG principles.
While EuroMena is dedicated to promoting ESG factors, it currently refrains from considering the adverse impacts of its investment decisions on sustainability factors. This decision is based on the belief that investee companies' provided information does not sufficiently describe the principal adverse impacts as required by SFDR and Commission Delegated Regulation (EU) 2022/1288 ("RTS").
Nevertheless, the Company remains committed to transparency and will provide other relevant sustainability disclosures in its reporting. EuroMena continually reviews and assesses its investment processes, periodically evaluating the feasibility of integrating sustainability adverse impacts into its decision-making. The Company stays attuned to market and regulatory developments and is prepared to adjust its approach should circumstances change. Any future alterations or updates concerning the consideration of sustainability adverse impacts will be promptly communicated via the Company's website. In compliance with SFDR Article 5, EuroMena's remuneration policy aligns with the integration of sustainability risks.
EuroMena believes there is no risk of misalignment with integrating sustainability risks into the investment decision-making process. In cases where portfolio management is delegated to a third party, the delegate must adopt remuneration policies in line with sustainability risk integration, provided sustainability risks are part of their decision-making process.
EuroMena seeks periodic confirmation from delegates to ensure policy compliance and prevent excessive risk-taking in relation to sustainability risks. The Company trusts that its existing structures are adequate to prevent excessive risk-taking in terms of sustainability risks when it retains portfolio management responsibilities.
This statement was updated on October 18th, 2023.
ESG Management
We have developed the Environmental and Social Management System (“ESMS”) in which we formally incorporate the consideration of Environmental and Social factors into our investment processes.
The EuroMena Funds is a member of the Investors for Governance & Integrity (IGI) network and commits to protect shareholders rights and promote sound corporate governance as set forth in the declaration.
In September 2017, The EuroMena Funds committed to the United Nations Global Compact (UNGC), the world’s largest corporate sustainability initiative. This initiative is a call for companies to align strategies and operations with universal principles on human rights, labor, environment, and anti-corruption. Collaboration with the UNGC is a commitment to prove that responsible business practices can bring about powerful change in markets and societies.
EuroMena aims to embed a new culture that will erode the prejudice against women and trigger the economy to work at full capacity. The EuroMena Funds is committed to inspiring gender diversity in the Arab world. Accordingly, we have leveraged our intellectual capital and resources to engage, support, and empower women in our own firm, on the boards of the companies we deal with, and throughout the communities we live and work in. We aspire to fill the gender gap in the business world, further influencing public policy and honoring women with the leadership positions they deserve. To learn more about The EuroMena Funds “Women on Board” initiative, EuroMena sponsored the drafting of the Women On Board Report 2016