A fundamental part of SAGA’s core values is to act responsibly and seek to conduct its business in a manner which does not adversely impact the environment and society, in which SAGA operates and invests. SAGA has a strong commitment to ESG and has signed the UN Principles for Responsible Investment. SAGA’s ESG policy and processes are thus a fully integrated part of the entire screening, investment, and monitoring process. SAGA always considers sustainability risks and ESG factors alongside commercial and financial factors when evaluating investment opportunities and reaching investment decisions.
Pre-investment and during the due diligence phase, SAGA is focused on understanding the ESG policy and processes of prospective fund managers and how they have handled ESG issues historically. As part of this process, prospective fund managers are also requested to fill out SAGA’s ESG Questionnaire. Based on this, SAGA will assess whether the fund manager’s policy and approach to ESG fits with SAGA. SAGA will always seek appropriate disclosure on ESG issues by its fund managers and generally encourage its managers to increase their own commitment to ESG.
The specific ESG policy of SAGA’s funds are developed in co-operation with investors and builds on SAGA’s overall ESG process. This typically includes avoidance of certain investments/industries (e.g. coal, tobacco, and gambling) and an expectation that fund managers and their portfolio companies comply with the Ten Principles of the United Nations Global Compact. Furthermore, prior to making an investment, SAGA will seek to ensure that fund managers apply a responsible tax approach and do not engage in any aggressive tax planning.
Post-investment, and as part of its ongoing monitoring of fund managers and portfolio fund investments, SAGA will have specific focus on potential issues related to ESG. When relevant, this will be discussed with fund managers to ensure that proper actions are taken. Furthermore, fund managers are asked to complete and submit an ESG review of their portfolio investments on a periodic basis. SAGA’s ongoing monitoring and the ESG review completed by the fund managers will then form the basis for SAGA’s own assessment and reporting to its investors about ESG findings and potential actions across the portfolio.
All professionals at SAGA understand the importance of ESG and acknowledge it as an integrated and vital part of SAGA’s investment and monitoring process. SAGA’s remuneration policy is not directly linked to ESG factors.
No consideration for adverse impacts on sustainability factors
In accordance with Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the Disclosures Regulation), financial market participants must disclose whether considerations of adverse impacts on sustainability factors are included in their investment decisions.
Financial market participants, including managers of alternative investment funds, which do not consider adverse impacts of their investment decisions on sustainability factors, must publish clear reasons for why they do not do so on their websites. Saga does not consider adverse impacts of investment decisions on sustainability factors as Saga does not usually have the control or influence to require the data and information needed to report on such indicators. Furthermore, many of the underlying investments do not produce the information needed to report on principle adverse impacts. Finally, as many of Saga’s portfolio fund managers are based in US and therefore not subject to EU regulation, it will be difficult for Saga to acquire the data and information needed.
Saga will continue to follow the developments as the industry adopts the EU regulation 2019/2088 and continuously monitor market developments regarding data and reporting on principle adverse impacts in close collaboration with Saga’s investors.