Green Impact

The holdings in Simplicity’s funds must, as a minimum, comply with laws, international norms, and conventions such as the UN Global Compact, UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises. All holdings are screened on a regular basis to check that no violations have occurred. The norm-based screening is carried out by a third party. The screening serves as a base to assess good governance practices for the fund’s holdings.

If a company in which any of Simplicity’s funds has invested has breached any international norms and conventions our fund managers are obliged to initiate dialogues with the company. The actions taken next are based on the results from the dialogue with the company, which could include to sell the holding. Simplicity does not invest in companies that systematically violates international norms and conventions, without showing any progress or will to improve.

Sustainable investment should be at least 90% of the fund. “Not sustainable” investments are only cash held for liquidity. According to the fund terms, the fund may have cash held as liquidity up to 10% of the fund. All sustainable investments are related to an environmental objective.

Sustainability indicators are used to measure the attainment of the sustainable investment objective of the fund. All indicators are measured using quantitative data. The indicators are considered in investment decisions and are controlled on a regular basis.

The fund managers are regularly assessing data providers of sustainability data to ensure quality. The data is used to identify companies that contribute to the sustainability objective of the fund, that is, companies that are assessed to have environmentally sustainable economic activities in line with the EU taxonomy and in companies that are assessed to contribute to the SDGs relating to climate and the environment. Data is also used when considering principal adverse impacts. Most data is estimated.

The fund company has concluded that eventual limitations in data or method do not affect the attainment of the sustainable investment objective, as the fund only invests in companies with existing reported or estimated data that proves fulfilment of the fund sustainability requirements.

Statement on principal adverse impacts of investment decisions on sustainability factors (PAI) – Simplicity AB.

This text includes sustainability-related disclosures for Simplicity Green Impact. The fund has sustainable investments as objective.

Simplicity Green Impact is a global equity fund investing in companies that contribute to a sustainable development. The goal is to have a higher risk-adjusted return than its benchmark. The fund is actively managed, which means that the profiles of the companies the fund invests in may vary over time based on the market situation and the performance of the stocks.

Sustainability is a central part of the investment process. The fund follows the company’s policy for responsible investments but has also certain fund specific sustainability criteria. The fund invests in companies that are assessed to have environmentally sustainable economic activities in line with the EU taxonomy and in companies that are assessed to contribute to the UN Sustainable Development Goals (SDGs) relating to the climate and the environment. The goals in focus are SDG 7 (affordable and clean energy), SDG 11 (sustainable cities and communities), SDG 12 (sustainable consumption and production), SDG 13 (climate action), SDG 14 (life below water) and SDG 15 (life on land).

As Simplicity Green Impact invests in companies that are assessed to have environmentally sustainable economic activities in line with the EU taxonomy and in companies that are assessed to contribute to the SDGs relating to climate and the environment, the fund thus contributes to fulfilling to the environmental objectives of the EU taxonomy and the SDGs relating to climate and the environment. The fund does not invest in companies that neither fulfils the fund’s requirements in terms of the EU taxonomy nor the SDGs.

The fund considers principal adverse impacts on sustainability factors in investment decisions to control that the sustainable investments do not cause significant harm to any environmental or social sustainable investment objective. The indicators are measured and reported quarterly. Negative changes may lead to reducing or the exclusion of holdings. The indicators are considered based on data availability.

Norm-based screening and exclusions are made in line with Simplicity’s policy for responsible investments. Simplicity has identified several sectors which are ethically controversial or due to other reasons, as we see it, are deemed to have a negative contribution towards a sustainable society. Thus, Simplicity has chosen not to invest in the following sectors: weapons, alcohol, tobacco, gambling, pornography, fossil fuels and other companies within the GICS sector 10 classification. In addition, companies with large fossil reserves, companies with more than 25 % of their energy production based on fossil fuels and companies with other types of business that are the main owners of companies in any of the above-mentioned industries are also excluded.