The following information is provided by Arrowstreet Capital, Limited Partnership with reference to Regulation (EU) 2019/2088 of the European Parliament and of the Council of the European Union of 27 November 2019 on sustainability-related disclosures in the financial services sector (“SFDR”) in the firm’s capacity as a non-EU “Alternative Investment Fund Manager” under Directive 2011/61/EU of the European Parliament and of the Council of the European Union (“AIFMD”).
Integration of Sustainability Risks in the Investment Decision-Making Process
No Consideration of Sustainability Adverse Impacts
While Arrowstreet may be supportive of improving transparency to investors and the market generally as to how financial market participants consider the adverse impacts of their investment decisions on sustainability factors, we could not gather and measure all of the data on which we would be obligated by SFDR to report (or we could not do so systematically, consistently and at a reasonable cost). This is in part because underlying companies or issuers are not widely obliged to, and overwhelmingly do not currently, report by reference to the same data. In addition, taking account of our size, the nature and scale of our activities and the types of products we make available, we consider that it would be disproportionate to do so. On this basis, and in the absence of the finalized regulatory technical standards relating to this disclosure, we do not consider the principal adverse impacts of investment decisions on sustainability factors at this time. Our position on this matter will be reviewed annually by reference to market developments.
Integration of Sustainability Risks in the Remuneration Policy
Arrowstreet’s AIFMD Remuneration Policy promotes sound and effective risk management and seeks to avoid excessive risk taking. Under the policy, we carry out an assessment of an individual’s performance when assessing and determining variable remuneration. Compliance with all of our policies and procedures, including policies and procedures relating to the impact of sustainability risks on the investment decision-making process, may be taken into account as part of that overall assessment.