1. Purpose of the Policy
This document describes the policy for integrating environmental, social, and corporate governance criteria (hereinafter “ESG”) into the decision-making processes of COLUMBUS VENTURE PARTNERS, SGEIC, S.A. (hereinafter, “the Company”), defining the weight of each of these criteria in investment decisions related to financial instruments in the context of individual portfolio management or investment advisory services provided to clients.
The Sustainable Development Goals (2015–2030), adopted on September 25, 2015, also known by their acronym SDGs, are a United Nations initiative to continue the development agenda following the Millennium Development Goals (MDGs). These goals also guide the Company’s actions toward the integration of ESG criteria.
Additionally, this policy addresses and defines the scope of publication obligations in compliance with 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.
At present, the Company has decided not to integrate ESG criteria into its investment decision-making processes, as detailed in section 3 of this policy.
2. Definitions
2.1. ESG Criteria
ESG factors refer to all information related to environmental and social issues, as well as matters concerning employees, respect for human rights, and the fight against corruption and bribery.
- The Environmental (E) factor considers how business activities impact the environment. It focuses on environmental reporting and companies’ environmental impacts, as well as efforts made by companies to reduce pollution or carbon emissions. It includes waste management, water use, and the use of other environmental resources.
- The Social (S) factor assesses the impact of a company’s activities on the community, including aspects such as diversity, governance, human rights, healthcare, and corporate citizenship or philanthropic initiatives.
- The Governance (G) factor examines the influence of shareholders and corporate management. It considers issues such as board structure, executive compensation, shareholder rights, transparency, and relationships between shareholders and company management.
2.2. Sustainable Investments
These are investments in:
- An economic activity contributing to an environmental objective measured, for example, through key resource efficiency indicators related to energy use, renewable energy, raw material consumption, water and land usage, waste production and greenhouse gas emissions, and impacts on biodiversity and the circular economy; or
- An economic activity contributing to a social objective, in particular any investment that helps combat inequality, strengthens social and labor inclusion, or supports human capital or economically and socially disadvantaged communities;
As long as such investments do not significantly harm any of the above objectives and the investee companies follow good governance practices—especially regarding sound management structures, employee relations, staff remuneration, and tax compliance.
Sustainable investment thus involves adding ESG risk and opportunity analysis to traditional financial analysis for improved decision-making.
Environmental objectives include:
- Climate change mitigation;
- Climate change adaptation;
- Sustainable use and protection of water and marine resources;
- Transition to a circular economy;
- Pollution prevention and control;
- Protection and restoration of biodiversity and ecosystems.
3. Policy Objective
3.1. Company Position on ESG Integration
The Company recognizes the importance of ESG factors in achieving the Sustainable Development Goals (SDGs, 2015–2030). However, the Company's current policy is not to consider these "non-financial" factors in investment decision-making, focusing solely on financial factors (e.g., profitability, risk). This does not necessarily mean that the sustainability risks of managed portfolios cannot be significant, as indicated in section 3.3.
Nevertheless, the Company takes ESG (non-financial) factors into account for the purpose of analyzing the potential integration of such criteria in future portfolio management and investment recommendations.
3.2. Adverse Impacts
Given the size, nature, and scale of its activities, the Company declares that it does not consider the adverse impacts of investment decisions on sustainability factors.
However, consideration of adverse impacts may be developed as ESG risk management matures, allowing the establishment of sound methodologies.
3.3. Sustainability Risks
Without prejudice to sections 3.1 and 3.2, the Company will consider sustainability risks in decision-making using its own methodology, based on publicly available information published by potential investee entities and/or data from external providers. The sustainability risks of investments will depend, among other things, on the issuer type, sector, or geographic location.
Environmental, social, and governance risks applicable to the investment policies of the Company’s managed vehicles will be considered, even if such vehicles do not promote or account for environmental and/or social characteristics or pursue a sustainable objective. Examples include, but are not limited to:
Environmental Risks:
- Carbon Footprint Risk: Uncertainty related to the investee company’s potential contribution to global warming via GHG emissions or toxic discharges.
- Clean/Renewable Energy Risk: Uncertainty about the company’s use (or lack thereof) of renewable or zero-emission energy sources in its operations.
- Pollution Risk: Uncertainty stemming from poor or nonexistent waste management and recycling practices.
- Water and Natural Resource Management Risk: Uncertainty due to inefficient or absent reuse and management of natural resources and wastewater control.
- Climate Change and Energy Transition Risk: Uncertainty arising from physical and transitional climate-related impacts, including extreme weather events, long-term climate shifts, and sudden changes in environmental regulations or market preferences.
Social Risks:
- Human Rights Risk: Potential for human rights violations such as child labor, forced labor, human trafficking, slavery, or discrimination based on various personal attributes.
- Working Conditions Risk: Uncertainty regarding workplace safety, employee management, and implementation of occupational health and safety measures.
- Diversity and Equal Opportunity Risk: Internal discrimination in labor conditions between employees of the same category.
- Local Integration Risk: Actions that neglect or hinder local development and integration in the community where the company operates.
Governance Risks:
- Governance Structure Risk: Inadequate or absent corporate governance in line with legal or sector-specific best practices.
- Executive Compensation Risk: Poor or non-existent executive compensation policies that disregard ESG criteria.
- Fraud, Corruption, and Misappropriation Risk: Potential for corruption, fraud, or mismanagement by company personnel or related parties.
- Political Lobbying/Influence Risk: Risk of seeking favorable treatment through political connections or influence over regulation.
- Business Ethics and Compliance Risk: Poor ethical standards or legal compliance in areas such as criminal law, labor, data protection, competition, anti-money laundering, etc.
- Tax Transparency Risk: Lack of transparency in fiscal matters toward shareholders or stakeholders.
4. Publication of the Policy and ESG Documentation
In compliance with Article 3 of Regulation (EU) 2019/2088, the Company publishes this policy on its website and is committed to updating it to reflect future regulatory developments or changes in its approach to ESG matters.
5. Applicable Regulations
- 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.
- Law 11/2018 of 28 December amending the Commercial Code, the revised text of the Companies Act approved by Royal Legislative Decree 1/2010 of 2 July, and Law 22/2015 of 20 July on Auditing of Accounts, regarding non-financial and diversity reporting.
- Directive 2007/36/EC of the European Parliament and of the Council of 11 July 2007 on the exercise of certain rights of shareholders in listed companies.
- Sustainable Development Goals (SDGs).
