Sustainable Finance Disclosure Regulation (SFDR)
Mandatory publication *1
- Sustainability is a fundamental concept for the LHI Group. Companies are successful in the long term if they are managed with a view to long-term periods. In every decision we make, we take into account its long-term consequences. This applies to all investment decisions for our financial products as well. The LHI Group already considers sustainability risks in the product and sales process and has developed binding exclusion criteria. Sustainability risks are events or conditions from the three areas of environment (Environment), social (Social) or corporate management (Governance), i.e. in relation to the so-called ESG criteria. The occurrence of such risks may have actual or potential material adverse effects on the net assets, financial position and results of operations of the LHI Group or the financial products managed by LHI Group entities through advisory or administrative services, as well as on the reputation of the LHI Group. These may include, for example, physical environmental risks such as climate change or so-called transition risks, e.g. in connection with the transition to a low-carbon economy.
- We incorporate the impact of our actions on sustainability factors into our start-up processes and asset management of our products, as well as into divestment decisions; this includes taking into account the main adverse impacts of investment decisions in the investment decision-making process on the sustainability factors, i.e. taking into account adverse impacts in particular on environmental, social and labour concerns, respect for human rights and the fight against corruption and bribery. All processes are carried out by trained employees, if necessary supported by suitable external consultants. At the current time, the LHI Group does not yet take into account in all details at company level the most important adverse effects of investment decisions on sustainability factors, i.e. adverse effects in particular on environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery (so-called "Principal Adverse Impacts").
- The measurement and reporting of adverse impacts of investment decisions on sustainability factors presupposes that a corresponding process is implemented in accordance with the legal requirements. Due to the fact that the legislative process has not yet been completed at this point in time, as a result of which there are still a large number of unresolved detailed questions with regard to the concrete requirements for measuring and reporting adverse effects, the LHI Group has decided to wait for further legal developments and to implement the corresponding processes at a later point in time.
- Our investment offers are based on the standards for sustainable investments of the United Nations (including PRI) and the sustainability standards of the European Union. If required, we agree on further detailed individual criteria at the level of the individual investment. In order to guarantee our sustainability standards, the LHI Group has established suitable processes to take the aforementioned standards into account in advance of the structuring and management of investment offers. We proceed in the same way for our services regarding bonds.
Each specific investment project is discussed in detail and individually evaluated in a management board meeting. The decision on investments and projects is thus made by the management. The sustainability risk profile of the LHI Group is therefore significantly influenced by the management. The management receives professional support on the topic of sustainability risks from the risk management department. This ensures compliance with the requirements associated with the management of sustainability risks.
- This also guides our remuneration policy. The variable remuneration of the management depends to some extent on the long-term success of the LHI Group. The acceptance of sustainability risks plays a significant role in this. The management receives performance-related remuneration in partial amounts. Retained portions remain in the company for several years. These are only paid out if positive results are consistently achieved during the retention period.
(1) This information is published in order to comply with the disclosure requirements set out in Articles 6 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosure requirements in the financial services sector, so-called Disclosure Regulation.