Integration of sustainability risks in investment decisions
The consideration of sustainability risks that may have a bearing on the potential or projected
value or performance of the portfolio forms part of a wider assessment in the investment
decision-making process at Caius Capital LLP (“Caius”). Caius undertakes extensive and tailored
research and due diligence when evaluating potential investments, including regarding specific
environmental, social or governance (“ESG”) factors that it believes may have a bearing on the
potential or projected performance of the portfolios it manages. Such assessment of
sustainability risks reflects ESG factors identified at the outset as well as factors which may
become relevant due to changes in environmental or social conditions, changes in law or policy,
market expectation, new information or research and other similar developments.
The degree to which sustainability risks are identified and evaluated varies across the asset
class, and depends on the materiality of the impact that actual and potential risks may have on
the returns of the specific investment or sector. Accordingly, certain asset classes may present
a more effective opportunity than others in identifying and assessing sustainability risk using
the tools and methodologies employed by Caius. For certain asset classes where ESG
considerations are at a nascent stage of development, Caius continues to evaluate the most
effective way to assess and monitor the sustainability risks associated with such investments.
Caius assesses the likely impact of sustainability risks on the returns of the investments
contained in the portfolios it manages as part of its broader assessment of projected returns
and risk management process.
“Sustainability risks” are ESG events or conditions, which, were they to occur, could have a
material negative impact on the value of an investment held in a portfolio managed by Caius.
Sustainability risks may impact returns
The assessment of sustainability risks is a complex process involving evaluation of a number of
factors and even when identified, there can be no guarantee that Caius will correctly assess the
impact of sustainability risks on the investments it makes. Sustainability Risks may have a
material adverse impact on the value of an investment, and a corresponding impact on the net
asset value of portfolios managed by Caius and could, in certain circumstances, result in the
total loss of value of the relevant investment(s) with a corresponding negative impact on the
value of any such portfolio.
Over time and not necessarily for any given investment, Caius has identified certain sustainability
risks as actually or potentially relevant to the portfolios that it manages.
Principal adverse impacts on sustainability factors
Caius does not consider the adverse impacts of its investment decisions on sustainability factors.
Caius seeks to understand the environmental and social policies and outcomes of its investments
where relevant information is available. However, Caius believes its portfolio investments do not
currently produce consistent and comparable information to allow it to undertake a meaningful
comprehensive assessment of the adverse impacts of its portfolio on specific environmental, social
and other non-financial factors.
Accordingly, Caius does not currently consider the adverse impacts of its investment decisions on
sustainability factors, other than as part of its wider investment research, risk management and
risk monitoring processes. Where relevant, and, assuming sufficient data is available, such research
and risk monitoring processes may include monitoring certain identified sustainability related
issues affecting specific investments, including degradation of the environment caused by those
Caius will continue to review the developments in the market and the availability of information
and tools in order to assess the viability of more broadly considering the adverse impacts of
investment decisions on sustainability factors.
Confirmation with respect to environmentally sustainable investments
The Funds and Accounts managed by Caius do not take into account the EU criteria for
environmentally sustainable economic activities.