Environmental, Social and Governance Sangha Capital S.à r.l.

1.1

Pursuant to EU 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 (the “SFDR”), Sangha Capital S.à r.l., a Luxembourg private limited liability company (société à responsabilité limitée), with registered office at 58, rue Charles Martel, L-2134 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of Commerce and Companies (Registre de Commerce et des Sociétés) under number B260274 (the “Company”) is required to disclose the manner in which ESG Risks (as defined hereafter) are integrated into the investment decision-making process.

1.2

The aim of this document is to set out the environmental, social and governance (“ESG”) policy (this “Policy”) of the Company when providing investment services in terms of the Company’s investment services licence. This policy has been adopted in accordance with the SFDR.

1.3

As at the date of this document, the Company does not manage collective investment schemes (each a “Scheme” and collectively the “Schemes”) that actively promote environmental and/or social characteristics, or otherwise have sustainable investment as their principal objective.
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However, the Company is aware that the integration of sustainability risks in the investment process (whether at the investment and/or divestment stages) and the consideration of principle adverse impacts on sustainability, will likely need to be assessed and implemented at a future date.

1.4

The Board of Managers of the Company (the “Board”) is satisfied that this document is consistent with the risk-profiles, long-term business strategy, objectives, values, and interests of the Company. The Board recognises that sustainability is key to generating value for all stakeholders.

1.5

The Board will periodically review this document to ensure that it remains up-to-date and
consistent with the Company’s regulatory obligations under applicable law and risk appetite. The Board shall be responsible for initiating and facilitating an annual review of this document and its implementation, which review shall be carried out in light of legal and business developments as well as the Company’s experiences in its implementation.

1.6

All changes or material exceptions to this document are to be approved by the Board, whether in relation to the annual review or otherwise.

2.1

The Company is registered under the laws of the Grand Duchy of Luxembourg. The Company is in the process of registration with the CSSF (Commission de Surveillance du Secteur Financier) to act as an Alternative Investment Fund Manager in terms of Directive 2011/61/EU and the Law of 12 July 2013.

3.1

The Company qualifies as a Financial Market Participant in terms of the SFDR. As a result, the Company is required to have in place policies and procedures setting out, as applicable, the approach adopted by the Company on the integration of sustainability factors in the investment decision‐making process and within its risk management framework.

SFDR defines “sustainability factors” as “...environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters...” (the “ESG Factors”).

3.2

The Company is also required to publish on its website information about its policies on the
integration of sustainability risks in its investment decision‐making process.
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SFDR defines ‘sustainability risk’ as an “environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment” (the “ESG Risk”).

3.3

The Company is also required to include in its remuneration policies (if any) information on how these remuneration policies are consistent with the integration of ESG Risks and to include a description of the following matters in its pre‐contractual disclosures:
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a. the manner in which sustainability risks are integrated into their investment decisions;
b. the results of the assessment of the likely impacts of sustainability risks on the returns
of the financial products they make available; and
c. disclosures required under Regulation (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088.

4.1

Given the particular investment strategies pursued by the Scheme managed by the Company, ESG Factors do not currently form part of the investment decision making process of the Company. As a result, the Company does not assess ESG Factors that may have investment ramifications, and which may have a material impact on the investment’s long-term financial performance.

4.2

Depending on the investment strategies to be pursued by any current and/or future Schemes, the Company may, as applicable, seek to identify material ESG Factors that have investment ramifications, and which can have a material impact on the investment’s long-term financial performance. In this respect, the ESG Factors that will be considered by the Company shall, inter alia, include:
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- Environmental: climate change; air/water pollution; biodiversity; deforestation; energy efficiency; carbon intensity; depletion of finite resources; and product evolution (energy-efficient products/renewable energy).
- Social: human rights; unethical supply chains; severe labour controversies; brand and reputational issues; and illegal working conditions.
- Governance: transparency & integrity; inadequate management of conflicts of interests; corporate governance failures; lack of appropriate board oversight; shareholder rights; bribery and corruption.

4.3

To date, the Company does not carry out an assessment of the individual investments in respect of which it invests in as the assets managed by the Company are limitedly exposed to ESG Risk.

4.4

Information on ESG Factors and related ESG Risks may, as applicable, be incorporated into the Company’s investment decision-making processes at the asset selection stage when undertaking due diligence on such asset class and, where possible, further assessed in terms of the potential financial impact in the long term. When undertaking any ESG analysis, the Company will seek to obtain information from a variety of sources, including, but not limited to:
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i. the target company itself;
ii. third party specialist data providers;
iii. brokers; and
iv. academics.
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The Company will ordinarily also rely on due diligence measures adopted by target companies to identify, mitigate, and report on ESG Risk. The Company will also ensure that
this ESG Policy is updated accordingly.

4.5

ESG Risks and/or opportunities vary by country, industry, markets, as well as by characteristics specific to a target company such as size and geographical footprint. These matters shall be taken into consideration, where applicable, when undertaking the assessment of the ESG Factors and ESG Risks associated with a target investment.

4.6

Inadequate management of ESG Risk can lead to inefficiencies, operational disruption, litigation, and reputational damage. These outcomes may impact the performance of the investment and ultimately the financial returns of the Scheme managed by the Company where applicable.

4.7

The Company is aware that any integration of information on ESG Factors and ESG Risks into investment decision making processes will enhance the Company’s understanding of sectors.

Outsourcing, Delegation and Appointment of Investment Advisors

4.8

In the event that the Company outsources or delegates to other third-party managers (the “Delegates”), the performance of any of its functions or appoints any investment advisors (“Investment Advisors”), the Company shall, as applicable, ensure that the Delegates and/or Investment Advisors have in place an ESG policy or as a minimum adopt the ESG Policy of the Company.

4.9

Furthermore, the Delegates and/or Investment Advisors shall, as applicable, adhere to the same level of ESG disclosures as the Company and shall be contractually bound to provide the necessary disclosures to the Company to abide to its obligations under SFDR.

Principal Adverse Impacts

4.10

Principal adverse impacts (“PAIs”) are those impacts arising from investment decisions/ investment recommendations that have a negative effect on ESG Factors.

4.11

The Company does not undertake an assessment of the PAIs of its investment decisions on ESG Factors in light of the fact that:
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a. the Company does not have employees and is thus considered to be a small entity;
b. the assets managed by the Company are limitedly exposed to ESG Risk;
c. to date, the Company takes investment decisions in respect of an American software
company operating in the technology sector;
d. the Company’s assets under management are currently less than USD 55,000,000;
e. the Company is not actively involved in the internal governance of the target company
in which the Scheme it manages will invest in.

4.12

The Company shall disclose on its website that, at this stage, it does not undertake an assessment of the PAIs of its investment decisions/investment recommendations on ESG Factors.

5.1

Certain clients may have concerns about specific activities or industries and may instruct the Company to exclude such activities or industries. In the circumstances, the Company will actively engage with such clients to better understand and define these criteria such that it is able to maintain such exclusions on an on-going basis, as the case may be.

5.2

The consideration of sustainability factors and sustainability risks within the investment decision process may have either a positive or a negative impact on the value of investments and the overall performance of the Scheme.

5.3

Sustainability factors including environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters may represent a sustainability risk, that, if it occurs, similarly to other risks, could cause an actual or potential material negative impact on the value of the investments held by the Scheme. In a similar way, sustainability factors may represent an opportunity for the Schemes that, if it occurs, could case an actual or potential material positive impact on the value of investments in the Schemes.

5.4

The Company will not knowingly invest in companies or hold securities that are engaged in:

- arms manufacturing;
- manufacture of tobacco;
- hard spirits;
- narcotics/drugs;
- prostitution;
- human traffic;
- gambling; and
- genetically modified organisms.
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The scope of the above restrictions is reviewed on a regular basis and the ESG Policy updated accordingly.

6.1

The Company does not currently promote any products which are specifically labelled as ESG products.

7.1

This document shall be reviewed by the Board annually. Any changes to this document shall be approved by the Board.