Mandatory disclosures under Regulation of the European Parliament and of the Council on Sustainability-Related Disclosures in the financial services sector (EU) 2019/2088 (“SFDR”)

The following information is given in light of the consideration of sustainability-related aspects in accordance with the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27th of November 2019 on sustainability disclosure requirements in the financial services sector (“SFDR”). Date of Publication: 09 June 2023

The manner in which sustainability risks are integrated into the investment decisions.

backtrace GmbH (“backtrace”, LEI: 3912008UQWDAIP4F2F69) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. backtrace considers sustainability risks as part of the due diligence process prior to any investment. This also includes an assessment of sustainability risks. Such assessment is being conducted using a questionnaire. The results of such assessment are taken into account when the investment decision is being taken. backtrace remains free in its decision to refrain from investing or to invest despite sustainability risks in which case backtrace can also apply measures to reduce or mitigate any sustainability risks. At all times, backtrace will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

The results of the assessment of the likely impacts of sustainability risks on the returns of the financial products.

backtrace expects sustainability risks within the meaning of Art. 3 SFDR not to negatively affect the returns of backtrace Capital Fund I GmbH & Co. KG (the “Fund”) as well as other financial products made available by backtrace. Where relevant, backtrace will apply reasonable efforts to appropriately assess such risks and their potential negative impacts on the Fund’s returns.

The manner in which sustainability risks are integrated into the investment decisions.

backtrace does not consider any adverse impacts of its investment decisions on sustainability factors and, hence, does not use the indicators listed in Annex I of the Regulatory Technical Standards (Delegated Regulation (EU) 2022/1288, “RTS”) to identify and assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery. Given that the SFDR, the Taxonomy and the accompanying RTS are relatively new legislative acts, there is very little or no practical experience or practice with regard to the application of their respective provisions. Therefore, substantial legal uncertainties would remain when applying those provisions. Moreover, the Fund will only hold minority interests in its portfolio companies. Such minority interests are, however, generally not sufficient to encourage the Fund’s portfolio companies to collect and provide the relevant data. If and to the extent that the legal uncertainties will be resolved and a practicable market and administrative practice will evolve in this regard, backtrace will re-evaluate considering principal adverse impacts of its investment decisions in due course.

 

Transparency of remuneration policies in relation to the integration of sustainability risks

As a registered alternative investment fund manager (AIFM) under the German Investment Code (Kapitalanlagegesetzbuch, "KAGB"), backtrace does not have a remuneration guideline (remuneration policy) in accordance with the requirements of the KAGB. Therefore, backtrace does not consider sustainability risks when determining remuneration, as defined by Article 5 of the SFDR.