EU’s Sustainable Finance Disclosure Regulation (2019/2088) (SFDR)

SFDR is a European regulation introduced to improve transparency in the market with the goal of making the sustainability profile of funds more comparable and easy to understand for investor whilst preventing greenwashing around sustainability claims made by financial market participants. It imposes comprehensive sustainability disclosure requirements covering a broad range of environmental, social & governance (ESG) metrics at both entity- and product-level. The SFDR is a fundamental pillar of the EU Sustainable Finance agenda, having been introduced by the European Commission as a core part of its 2018 Sustainable Finance Action Plan, which also include the Taxonomy Regulation and the Low Carbon Benchmarks Regulation.

The SFDR applies to NBD Ventures Management S.àr.l. and NBD Ventures T&T Opportunity Fund SCS (NBD Ventures, We or Us). NBD Ventures Management S.àr.l. is registered as Alternative Investment Fund Manager (AIFM) in Luxembourg with the Commission de Surveillance du Secteur Financier (CSSF) under article 3(3) of the Alternative Investment Fund Managers Directive (AIFMD). NBD Ventures T&T Opportunity Fund SCS is an Alternative Investment Fund (AIF).

SFDR Article 3 Disclosure: Sustainability Risks

A sustainability risk means "an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment".  This is a broad term which could describe a large number of events or conditions related to, for example, climate change, pollution, biodiversity or human rights violations, amongst others.  For NBD Ventures, sustainability risks are risks which, if they were to crystallise, would cause a material negative impact on the value of the portfolios of our funds.

Before any investment decisions are made on behalf of any funds that we manage, we identify the material risks associated with each proposed investment, including sustainability risk.  We consider such risks as part of our fund risk management process, having regard to the fund's investment policy and objective.  This leads to the submission of investment proposals to investment committee.

The relevant investment committee assesses all identified risks alongside other factors set out in the proposal.  Following its assessment, investment decisions are made having regard to the fund's investment policy and objectives.

We expect in the future to pay staff a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Allocation of variable remuneration to investment professionals will reflect personal, team and firm performance.  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, shall be taken into account as part of that overall assessment.

SFDR Article 4 Disclosure: Principal Adverse Sustainability Impacts

Although ESG and sustainability risk is important to NBD Ventures, we do not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4 of the SFDR.

This is our current position, which we will keep under review.  We are continuing to assess the mandatory data collection and disclosure requirements which are applicable to firms which opt in to consider the principal adverse impacts of their investment decisions.  In particular, we are considering whether: (i) opting in would be the right strategic decision for us as a firm, and would help us to effectively facilitate our broader ESG and sustainability objectives; and (ii) we could gather and/or measure the mandatory data on which we would be obliged to report systematically, consistently and at a reasonable cost to our investors.