Sustainability-related disclosures

Summary

This information is provided pursuant to Article 10.1(1) of Regulation (EU) 2019/2088 SFDR in the format required by Delegated Regulation 2022/1288 in Articles 37 to 49.

The Environmental and Solidarity Revolution Fund SLP is an impact fund classified Article 9 according to the SFDR and financed by the Crédit Mutuel Alliance Fédérale societal dividend. It aims to support changes in production patterns, support carbon sinks, improve infrastructure and respond to market failures with a long-term focus.

The investments aimed sustainable investment. In accordance with the fund's investment strategy and the management company's sustainability policy, the investments made meet the climate change mitigation objective as a priority.

The verification that investments comply with the objective pursued is conducted during the initial assessment and regularly updated through direct communication between the asset management company and the beneficiary counterpart. Information on eligibility and alignment with environmental objectives is collected through an internal questionnaire (on Environmental, Social and Governance issues) and reported by the beneficiary entities, which are not subject to the obligation of publishing a non-financial performance statement. A clause on environmental, social and governance aspects introduced in shareholders' agreements sets out minimum reporting, monitoring and dialog requirements on impact.

The process is overseen by an internal control system.

No significant harm to the objective of sustainable investment

The sustainable investments made have not harmed any environmentally or socially sustainable investment objectives.

For each of the funded participations, the verification of the absence of injury was carried out by:

  • ensuring compliance with normative and sectoral exclusion policies. In particular, the fund has not directly or indirectly invested, guaranteed, provided financial or other support to companies or entities that do not comply with the applicable Sectoral Policies within Crédit Mutuel Alliance Fédérale (https://www.bfcm.creditmutuel.fr/fr/rsm/politiques-sectorielles/index.html)
  • based on exchanges with the managers of the investment beneficiaries, the instruction of eligibility and alignment to the European taxonomy, the collection of the main significant impacts, the collection of the key sustainability indicators of the Environmental and Solidarity Revolution SLP Fund and associated documentation

For negative impacts, the fund requires data from funded companies on the 14 mandatory criteria in Table 1 of Annex I to the European Commission Delegated Regulation (EU) 2022/1288. Two additional indicators are collected:

  • water consumption
  • the existence of an occupational accident prevention policy

While taking into account the main negative impacts on sustainability, it has been verified that all investments are made in companies that comply with the United Nations Global Compact and the OCDE Guidelines for Multinational Enterprises.

Sustainable investment objective of the financial product

The main purpose of the SLP Environmental and Solidarity Revolution Fund is to invest in projects with an environmental and/or solidarity-based focus to amplify the transformation of production models and intervene in key areas of climate and environmental transformation where financial needs are very important.

The fund is designed to support technological disruption, support the scaling up of companies and contribute to the financing of societal adaptation induced by climate change. Investments are being made in industries that are making a significant contribution to achieving the 2050 net-zero target.

To this end, the following objectives are adopted:

  • On environmental impact:
    - Climate Change Mitigation
    - Adaptation to climate change
    - Transition to a circular economy
    - Protection and restoration of biodiversity and ecosystems
    - Sustainable use and protection of aquatic and marine resources
    - Pollution prevention and control
  • On social and societal impact:
    - Cohesion Social integration
    - Tackling Inequality
    - Economically or socially disadvantaged communities
    - Human capital

Investment strategy

To achieve the objective of sustainable investment, the Environmental and Solidarity Revolution Fund SLP invests directly or indirectly in unlisted companies carrying out infrastructure, real estate, venture capital or development capital projects located mainly in the European Union and notably in France, Belgium and Germany.

Its portfolio is organized around the six themes of ecological planning: better movement, better housing, better consumption, better food, better production, and better preservation and enhancement of our ecosystems. With a broad investment scope, it engages with technology breakthrough companies and facilitates the scaling up of emerging sectors as well as societal and inclusive transformation. The fund's investment policy prioritizes the environmental added value of industrial players by giving them the time they need to develop and establish their financial soundness.

The good governance practices of the companies benefiting from the investments are analyzed at all stages of the investment cycle and are regularly monitored, including through the initiation of an internal questionnaire, the key points of which are updated annually.

This internal questionnaire includes sections on internal organization, staff relations, staff remuneration and tax obligations, and reviews the principal adverse impacts to measure negative sustainability impacts, i.e. the most significant negative impacts of investment decisions on sustainability factors related to environmental, social and personnel issues, respect for human rights and anti-corruption.

Where certain indicators are not available, the management company shall make its best efforts to identify comparable qualitative criteria.

Proportion of investments

The Fund invests 100% of its assets directly in assets that have been considered to be sustainable investments (calculated percentage excluding cash).

Controling the sustainable investment objective

The environmental characteristics promoted by the Environmental and Solidarity Revolution Fund SLP are regularly reviewed through:

  • taking environmental, social and governance aspects into account at all stages of the governance of the fund
  • the compliance, internal control, and risk control internal policies are verified by the compliance and internal control officer, including compliance by the operational staff with procedures related to the consideration of environmental, social, and governance criteria at all stages of the investment process
  • the internal questionnaire on environmental, social and governance aspects, including the collection of information on compliance with the main negative impacts
  • the review of the management report of the fund and in particular of its extra-financial part by an audit firm

Methods

The methods used to determine the extent to which the objectives of sustainable investment in the financial product have been achieved consist, in the context of an ongoing dialog with the beneficiaries of the investments, in:

  • aligning the funded activities with the selected sustainable development goals to identify the one or more to which the investment contributes
  • ensuring that the investment does not harm any of the objectives
  • ensuring that the recipient firm complies with sound governance practices

Information on environmental objectives is collected through an internal questionnaire and reported by the beneficiary entities, none of which being required to publish a non-financial statement of performance.

Verification of the absence of prejudice to other objectives is carried out on the one hand by monitoring compliance with the normative and sectoral exclusions, on the other hand by collecting and analyzing the indicators for monitoring the main negative impacts and the key indicators of the fund. Systematic analysis of eligibility and alignment to the European taxonomy also contributes to this.

The assessment of good governance practices is carried out through the internal questionnaire for gathering information on the environment, social aspects and governance, which concludes with the establishment and follow-up of an engaging roadmap for the funded society.

Data sources and processing

The data used to achieve the Sustainable Development Goal of the Environmental Revolution and Solidarity SLP fund are:

  • collected by the management company and reported by the beneficiary:
    • pre-investment phase from internal questionnaire
    • in the follow-up phase, building on the environmental, social and governance clause introduced in the shareholders' agreements, which sets out minimum reporting, monitoring and dialog requirements on impact
  • analyzed by the management company at all stages.

The management company does not use estimates for the Environmental and Solidarity Revolution fund (based for example on sectoral data).

Limitations to methods and data

The methods used to measure the extent to which sustainable investment goals are being met are based on regulations that are evolving, steadily enriching and yet to be finalized.

Furthermore, the data declared to be used shall not be published by the beneficiaries of the investments, which are not listed and do not exceed the minimum thresholds making it mandatory to publish their Extra-Financial Performance Declaration.

However, these limits do not affect the extent to which the Environmental Revolution and Solidarity SLP fund meets its sustainable investment objectives.

Due diligence

The asset management company has established methods to ensure that the environmental objectives of the Environmental Revolution and Solidarity SLP fund are respected through procedural frameworks and a governance system that is monitored as indicated above.

Engagement policies

Crédit Mutuel Impact’s shareholder engagement policy is published on its website in the “Regulatory framework” section. The review of its application is set out in the same document.

The report prepared by the management company pursuant to section 29 of the Climate Energy Act also specifies the results of the implementation of this policy regarding environmental, social and governance issues. The same report presents the methods applicable to the monitoring of controversies and other sustainability risks in funded companies.

Achieving the sustainable investment target

No benchmark is used to determine whether the Sustainable Investment Goal is achieved.

In line with Crédit Mutuel Alliance Fédérale’s commitments, Crédit Mutuel Impact is directly committed to environmental conservation and climate action. Crédit Mutuel Impact will take action by promoting sobriety and will invest in:

  • companies effectively contributing to this reduction objective regardless of their stage of development (R&D, prototype, scaling-up) where impact measurement is possible
  • in projects for the transformation of energy, waste recycling and recovery, transport, agri-food and lifestyle uses

Crédit Mutuel Impact made concrete commitments to align its activities with the Paris Agreement to limit temperature increases from 1.5°C to 2°C by 2100:

  • strict application of sectoral exclusion policies
  • priority investments in areas where reduction of greenhouse gas emissions is required, and funding is insufficient
  • life-cycle measurement of CO2 emissions and avoidance
  • systematic instruction on eligibility and alignment to the European taxonomy.