The FNZ 1297
SFDR DISCLOSURE
The Sustainable Finance Disclosure Regulation (SFDR–Regulation (EU) 2019/ 2088, the “Regulation” or the “SFDRRTS”) was introduced by the European Commission to improve transparency in the market for sustainable investment products, prevent green washing and increase transparency around sustainability claims made by financial market participants.
Summary
The FNZ 1297 Grimaldi Garden Hotel Fund is a private capital fund that invests in the funding, delivery and operational activities of providing the Grimaldi Garden Hotel. The Sub-Fund seeks to maximize operating returns and unrealized gains on the hotel development. The Sub-Fund prioritises sustainable property design, construction and operating practices in line with European Union’s Net-Zero sustainability targets on GHG emissions.
The Sub-Fund will achieve this by adhering to the Royal Institute of British Architects (RIBA) 2030 Climate Challenge Targets for Embodied Carbon in the design and build phase, targeting an EPC Category ‘A’ for Operating Carbon and Net-Zero Operating Carbon Emissions by 2030.
No Sustainable Development objectives
None
Suit la version française du texte qui précède
The FNZ 1297 Grimaldi Garden Hotel Fund is a private capital fund that invests in the funding, delivery and operational activities of providing the Grimaldi Garden Hotel. The Sub-Fund seeks to maximize operating returns and unrealized gains on the hotel development. The Sub-Fund prioritises sustainable property design, construction and operating practices in line with European Union’s Net-Zero sustainability targets on GHG emissions.
The Sub-Fund will achieve this by adhering to the Royal Institute of British Architects (RIBA) 2030 Climate Challenge Targets for Embodied Carbon in the design and build phase, targeting an EPC Category ‘A’ for Operating Carbon and Net-Zero Operating Carbon Emissions by 2030.
Environmental or Social Characteristics of the fund
The Sub-Fund will make investments with a view to promoting one or more of the following characteristics:
The Sub-Fund thereby also contributes to the following UN Social Development Goals, such as :
SDG 6 "Clean Water and Sanitation"
SDG 7 "Affordable and Clean Energy"
SDG 6 "Clean Water and Sanitation"
SDG 9 "Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation"
Investment Strategy
The FNZ 1297 Grimaldi Garden Hotel Fund is an investment fund that focuses on specialized financing for a premium hotel development and operation which meets the challenges of sustainable development, in particular the reduction of carbon emissions.
The strategy will be implemented by measuring, on a continuous basis, embodied carbon emissions during the build/construction phase and operating carbon emissions during the investment’s operating phase. The strategy targets maximum embodied carbon emissions of: <750 kgCO2/m2 and maximum operating Carbon of: <70kWh/m2 pa and <6kr CO2/m2 pa (European Union Energy Performance Certificate (EPC) rating ‘A’).
The objective of the Sub-Fund’s good governance policy is to establish a framework for assessing good governance practices within the investee companies of the investment fund. By promoting transparency, accountability, and ethical conduct, this policy aims to enhance long-term value creation, mitigate risks, and foster investor confidence. The Sub-Fund’s policy establishes a robust framework for assessing good governance practices within the investee companies of the investment fund. By adhering to the principles outlined herein and integrating governance considerations into the investment process, the Sub-Fund aims to enhance shareholder value, mitigate risks, and promote sustainable long-term growth.
The policy includes:
Definition of Good Governance: Good governance encompasses principles and practices that promote transparency, accountability, fairness, and responsibility in decision-making processes and operations.
Assessment Criteria: Board Composition, Governance Structures; Executive Compensation: Risk Management; Disclosure Practices; Stakeholder Engagement Ethical Conduct; Sustainability Practices.
Assessment Process: Regular Evaluation Engagement with Benchmarking and Regular Reporting.
Integration with Investment Decisions: Incorporate governance assessments into the investment decision-making process. Prioritize companies with strong governance practices and demonstrate a commitment to improving governance standards over time.
Continuous Improvement: Review and update the governance assessment framework periodically to reflect evolving best practices, regulatory requirements, and stakeholder expectations. Solicit feedback from stakeholders, including investors, investee companies, and governance experts, to enhance the effectiveness of the assessment process.
Compliance and Monitoring: Ensure compliance with applicable laws, regulations, and industry standards related to corporate governance.
Proportion of Investments
The Sub-Fund will invest at least 90% of investments aligned with the above-mentioned investment strategy. A maximum 10% of other assets will be neither aligned with the E/S characteristics nor qualified as sustainable investments. These will consist of ancillary liquid assets such as cash and cash equivalents for liquidity purposes. These assets are neither aligned with the environmental or social characteristics, nor are they sustainable investments.
The Sub-Fund will primarily make direct investments in investee companies. The Sub-Fund may at times also have exposure to cash and cash equivalent positions for purposes of cash, liquidity, and risk management.
Monitoring of Environmental of Social Characteristics
The Sub-Fund will invest at least 90% of investments aligned with the above-mentioned investment strategy. A maximum 10% of other assets will be neither aligned with the E/S characteristics nor qualified as sustainable investments. These will consist of ancillary liquid assets such as cash and cash equivalents for liquidity purposes. These assets are neither aligned with the environmental or social characteristics, nor are they sustainable investments.
The Sub-Fund will primarily make direct investments in investee companies. The Sub-Fund may at times also have exposure to cash and cash equivalent positions for purposes of cash, liquidity, and risk management.
Methodologies
To select the investments to attain each of the environmental and social characteristics promoted by the Sub-Fund, the AIFM uses a combination of various ESG metrics which may include:
- Aligning with the European Union’s Net-Zero sustainability targets on GHG emission;
- Setting a baseline target (RIBA 2030 target) for Embodied Carbon and measuring against this target during the build phase;
- and
Setting a target of EPC Category ‘A’ for Operating Carbon and measuring an annual emissions against this target.
The Investment Advisor’s procedure to measure the portfolios ESG parameters and achieve the minimum requirements defined consists of three (3) main steps:
(i) Calculation of the weighted average rating of the various investment categories;
(ii) Definition of specific minimum threshold for each investment category which will be the European Union’s Energy Performance Certificate rating ‘C’ or above defined as a maximum primary energy consumption of 179kWh/m2 per year and 29kg CO2/m2 per year; and
(iii) Calculation of the deviation between the Sub-Fund and the threshold of each investment category. In order to be considered compliant with the ESG standards defined by the Investment Advisor, the weighted average deviation shall be higher than the minimum threshold limits established by the Investment Advisor. These valuations are periodically updated.
Further, the exclusion investment strategy as elaborated above will also apply for these investments.
Data Sources and Processing
The Sub-Fund will use a multi-factor approach based on an external scoring model which combines inputs from a wide range of third-party data providers. Each investee company will be assessed using this scoring based on the different indicators mentioned above.
Limitations to Data Processing and Data
When making the above assessment, the Sub-Fund will endeavor to take into account the current state of-the-art and, where applicable, relevant European and / or international standards or certifications (if and when applicable).
Due Diligence
The Sub-Fund may, amongst others, in its due diligence have regard to the third party data sources and product of the relevant company based on publicly available information.
Engagement Policies
The Investment Manager is encouraged to engage with any investee company with a score below targets and will seek to resolve all practices until the targets are met.
No reference benchmark has been designated for the Sub-Fund
Carbon
Tracker
Parts per million CO2 in the atmosphere
Get in touch
We are on hand to help you learn more
about First Net Zero and our funds.