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BACKGROUND AND SCOPE
This disclosure is provided by “Melliore Asset Management” AIFP in accordance with the requirements of 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 ("SFDR").
The SFDR mandates that financial market participants and investment advisers publish information regarding their approach to incorporating sustainability risks in investment decision-making and advisory services. Additionally, it requires disclosure on whether and how negative impacts on sustainability factors are taken into account, as well as how remuneration policies align with the integration of sustainability risks into investment processes.
Under Article 3 of the SFDR, investment advisers must disclose their policies on integrating sustainability risks into investment strategies. A sustainability risk refers to an environmental, social, or governance (ESG) event or condition that could potentially or actually impact the value of an investment, as outlined in Article 2(22) of the SFDR.
Various sustainability risks have the potential to significantly impact investment values, including:
- **Environmental risks**: Climate change, greenhouse gas emissions, air and water pollution, deforestation, and natural disasters such as hurricanes and wildfires.
- **Social risks**: Labor rights violations, human trafficking, child labor, workplace discrimination, and unequal access to resources.
- **Governance risks**: Lack of transparency, poor corporate ethics, inadequate shareholder rights, cybersecurity vulnerabilities, and insufficient risk management frameworks.
These sustainability risks may function as standalone risk factors or may amplify other financial risks, such as market risk, credit risk, operational risk, or liquidity risk.
INFORMATION ABOUT POLICIES ON THE INTEGRATION OF SUSTAINABILITY RISK IN INVESTMENT DECISION-MAKING PROCESSES (Article 3 disclosures)
“Melliore Asset Management” AIFP actively considers environmental, social, and corporate governance (ESG) factors in its investment evaluation and decision-making processes. Sustainability risks refer to events or conditions related to ESG factors that, if materialized, could negatively impact investment value.
“Melliore Asset Management” AIFP plans to systematically assess ESG risks during due diligence and investment structuring. The scope and depth of these assessments vary depending on the nature, size, and characteristics of each investment opportunity. We recognize that sustainability issues can affect financial performance and operational efficiency, thereby influencing overall investment returns.
To mitigate exposure to sustainability-related risks, “Melliore Asset Management” AIFP adheres to an exclusionary investment policy. We avoid investments in sectors that are associated with significant ESG concerns, including but not limited to:
- The production and marketing of tobacco and related products,
- Alcohol manufacturing and sales,
- Gambling and betting activities,
- Arms manufacturing and distribution,
- The adult entertainment industry.
While sustainability considerations form a key component of our risk assessment framework, “Melliore Asset Management” AIFP does not currently operate investment funds that specifically aim to promote environmental or social characteristics as their primary objective.
STATEMENT OF NO CONSIDERATION OF ADVERSE IMPACTS OF INVESTMENT DECISIONS ON SUSTAINABILITY FACTORS (Article 4 disclosures)
At this time, “Melliore Asset Management” AIFP does not formally consider the principal adverse impacts (PAI) of investment decisions on sustainability factors as specified under Article 4 of the SFDR. This decision is based on the size, scope, and nature of our activities.
Our investment strategy primarily focuses on small and medium-sized enterprises (SMEs), many of which do not have the regulatory obligation or resources to collect and disclose ESG-related data. The process of gathering, analyzing, and reporting such data would impose a disproportionate administrative burden on these businesses.
However, “Melliore Asset Management” AIFP remains committed to monitoring developments in sustainability-related data availability and regulatory requirements. As industry standards evolve, we will periodically reassess our approach to integrating and reporting adverse sustainability impacts, ensuring alignment with emerging best practices and regulatory expectations.
INFORMATION ON CONSISTENCY OF REMUNERATION POLICIES WITH THE INTEGRATION OF SUSTAINABILITY RISKS (Article 5 disclosures)
“Melliore Asset Management” AIFP will establish a remuneration policy designed to promote responsible risk management while preventing excessive risk-taking or conflicts of interest. Our compensation structures align with long-term financial stability and sustainable business practices.
At present, our remuneration framework does not explicitly incorporate sustainability risk-related performance indicators. However, we ensure that the overall compensation system remains aligned with prudent investment strategies that consider various risk factors, including ESG risks.
“Melliore Asset Management” AIFP continues to evaluate evolving sustainability regulations and best practices. If future developments necessitate adjustments to our remuneration policies to further integrate ESG risk considerations, we will make appropriate amendments to ensure continued compliance and responsible investment management.