Sustainability-related disclosures

Introduction

On this page investors are informed on sustainability-related matters, as required under the regulation on sustainability-related disclosures in the financial services sector (EU/2019/2088) (hereinafter ‘SFDR’).

SFDR sets out sustainability disclosure requirements for a broad range of financial market participants, financial advisors and financial products. It was enacted to address the objectives of increasing transparency of sustainability-related disclosures and to increase comparability of disclosures for end investors.

Cordaid Investment Management B.V. (‘CIM’) provides portfolio management services to its parent company Stichting Cordaid (‘Cordaid’). Cordaid is a Dutch development agency operating worldwide. Cordaid fights poverty and exclusion in fragile states and areas of conflict and extreme inequality. Investing is part of the core business of Cordaid. The investment mandate of Cordaid permits CIM to manage investment funds, including investment funds with Cordaid and like-minded third-party investors (the ‘Funds’).

CIM is registered as an ‘alternative investment fund manager’ with the Netherlands Authority for the Financial Markets (Autoriteit Financiële Markten or AFM) in accordance with article 2:66a of the Dutch Financial Supervision Act (Wet op het financieel toezicht or Wft). As a consequence, neither CIM nor the Funds have been authorised, recognised or otherwise approved by the AFM or the Dutch Central Bank (De Nederlandsche Bank or DNB). The registration with the AFM does not require the AFM to approve or disapprove either the adequacy or accuracy of the offering documents of the Funds or the investments held by the Funds. CIM is not subject to the detailed rules regarding operating conditions that apply to the internal organisation of authorised alternative investment fund managers under the Wft.

For the purposes of SFDR a ‘financial market participant’ comprises an ’alternative investment fund manager’ and includes registered alternative investment fund managers like CIM. For the purposes of SFDR, a ‘financial market participant’ also comprises an ‘investment firm which provides portfolio management’. CIM is not an investment firm under the Markets in Financial Instruments Directive (MiFID) as it exclusively provides investment services to its parent company Cordaid and it may do so without being subject to MiFID. Consequently, CIM makes the following SFDR disclosures in its capacity as alternative investment fund manager.

Entity level disclosures

Article 3 SFDR - Cordaid Investment Management’s approach to sustainability risks

CIM has determined that it does not consider sustainability risks in its investment process as defined in SFDR. CIM believes that a further reduction of complexity is essential for small market participants like CIM which are not subject to a license obligation, to be able to implement the SFDR disclosure requirements.

If you want to know more about the principles and pillars behind our approach to sustainability, please refer to the “Our Impact” section on this website.

Article 4 SFDR - No consideration of sustainability adverse impacts on sustainability factors

SFDR requires CIM to make a “comply or explain” decision whether to consider the principal adverse sustainability impact indicators (PASI) of its investment decisions on sustainability factors, in accordance with a specific regime as outlined in SFDR.

CIM has decided to opt out of the PASI reporting regime but will keep its decision under regular review. We have determined that the MFI’s and SMEs in which we invest are not, generally speaking, in a position to provide the relevant data, insufficient quality, to satisfy the requirements associated with reporting on the PASI. These institutions, located in fragile and conflict-affected markets, in our view, do not have sufficient capacity to generate the required information. In addition, high costs and availability of resources would be associated with the acquisition of the necessary data and the integration of the PASI reporting requirements in the internal organisation of CIM. We intend to continue monitoring this issue in the context of our ongoing in-depth ESG assessments and will revise our position when the availability of relevant data increases to consider the adverse impacts by reference to the PASI as defined by SFDR and when CIM is able to efficiently implement the PASI reporting requirements.

If you want to know more about how we measure and manage impact, please refer to the “Our Impact” section on this website.

Article 5 SFDR - The integration of sustainability risks in the remuneration policies of CIM

The group remuneration policy of Cordaid applies to the employees of CIM. The remuneration policy of Cordaid adheres to the code of Good Governance (Code Goed Bestuur) of the Cooperating Sector Organization Philanthropy (SBF) and the regulation on the remuneration of charities by the Central Bureau of Fundraising (CBF). The remuneration policy is consistent with the values and mission of Cordaid and its group companies. It does not integrate sustainability risks as defined in SFDR.

Product disclosures

CIM has recently launched the West Africa Bright Future Fund. The West Africa Bright Future Fund is developed in partnership with the USAID West Africa Trade and Investment Hub, the US International Development Finance Corporation and Cordaid to increase access to finance for small and medium-sized enterprises and microfinance institutions in Burkina Faso, Guinea, Mali and Sierra-Leone. The investment objective of the West Africa Bright Future Fund is to:

For general details on the West Africa Bright Future Fund, please refer to the section “West Africa Bright Future Fund” on this website.

Fund-specific SFDR disclosures are available free of charge for investors that are eligible for investment in the West Africa Bright Future Fund on request via investments@cordaid.org.

Definitions

CIM means Cordaid Investment Management B.V.

Cordaid means Stichting Cordaid

MFI means a microfinance institution

SME means a small and medium enterprise

Sustainability risk under SFDR means 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.

Sustainability factors under SFDR mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.

Sustainable investment means an investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labour relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance.