Partners Group (Luxembourg) S.A. – SFDR entity disclosure
Partners Group (Luxembourg) S.A. – SFDR entity disclosure – December 2022
Art 3: Integration of sustainability risks in Partners Group’s investment decisions
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 “Disclosure Regulation”) aims at providing more transparency to investors on sustainability risk integration, on the consideration of adverse sustainability impacts in the investment processes and on the promotion of environmental, social and/or governance (“ESG”) factors.
In particular, it requires financial market participants to publish on their websites, information concerning their policies on the integration of sustainability risks in their investment decision‐making process.
Partners Group as a global private markets' player recognizes for products it manages that various sustainability risks may potentially affect the value of investments at individual asset level and portfolio level. These sustainability risks are environmental, social or governance events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of the products’ investment.
Partners Group (Luxembourg) S.A. includes sustainability risks in its general investment decision-making process, during the ownership and at the time of exit. Where Partners Group (Luxembourg) S.A. delegates portfolio management to other Partners Group entities, the investment teams are generally responsible for following relevant sustainability processes as applicable. Partners Group as a group strives to mitigate sustainability risks and create value by acting on sustainability opportunities. Indeed, Partners Group will apply an active value-creation approach with an objective of improving the ESG profile of an investment when possible.
Partners Group (Luxembourg) S.A.’s affiliates which act as delegated portfolio managers are generally considering materially relevant sustainability risks into their investment process alongside with other material factors. The degree to which sustainability risks will be taken into account may vary from one product to another and may depend on the product scoping and concrete structuring of each individual product. Partners Group utilises both proprietary ESG due diligence tool and external sources for evaluating the sustainability risk profile of potential investments. Partners Group is also taking guidance from the UN Principles for Responsible Investment (PRI) in including ESG issues in the analysis and decision-making processes.
Sustainability risks that could occur and which might potentially affect the performance of the products may vary from one investment to another and no exhaustive list can be given, and these risks will also vary from time to time. Further information of Partners Group’s ESG & Sustainability Directive can be found on the group’s website at https://www.partnersgroup.com/en/sustainability/.
Art 4: No consideration of sustainability adverse impacts / Transparency of adverse sustainability impacts at entity level
Pursuant to the Disclosure Regulation, financial market participants shall publish on their websites information about whether or not they consider principal adverse impacts of investment decisions on sustainability factors.
Consideration of Principal Adverse Impacts
Entity-level consideration (Article 4(1)(b) Disclosure Regulation)
At this stage, Partners Group does not consider the principal adverse impacts of its investment decisions on sustainability factors ("PAI") due to:
- The requirement that consideration of PAI at the entity-level applies across all financial products managed by the relevant entity. Partners Group's portfolio of financial products includes financial products which do not disclose under either article 8 or article 9 of the Disclosure Regulation and which do not commit to consider any PAI. As a result, Partners Group is not able to commit to the consideration of PAI across all financial products managed by Partners Group; and
- The requirement that consideration of PAI at the entity level is undertaken across all indicators set out in Table 1 of Annex I to the Commission Delegated Regulation 2022/1288 supplementing the Disclosure Regulation (the "Level 2 RTS"), plus additional indicators set out in tables 2 and 3 of Annex I to the Level 2 RTS. In addition to the consideration set out above, Partners Group is not able to commit to consideration of all such indicators across all financial products managed by Partners Group and their underlying investments.
However, Partners Group continues to review the situation in this respect and intends to consider PAI in future, to the extent it is in a position to be able to properly meet the above requirements.
Art 5: Transparency of Partners Group’s remuneration policies in relation to the integration of sustainability risks
Pursuant to the Disclosure Regulation, financial market participants are required to disclose on their websites how their remuneration policy is consistent with the integration of sustainability risks
In its group wide Remuneration Directive, Partners Group derives the final compensation of the Executive Team of Partners Group Holding AG from a combination of qualitative and quantitative assessments. One qualitative assessment includes the meeting of ESG targets and includes the assessment of the implementation of Partners Group's ESG strategy based on the year-on-year change and the meeting of ESG corporate and portfolio level targets, as defined in Partners Group's ESG strategy 20220428_Partners_Group_Sustainability_Strategy.pdf (partnersgroup.com).
For Partners Group (Luxembourg) S.A., its Remuneration Directive seeks to ensure that Partners Group (Luxembourg) S.A.'s remuneration practices are consistent with and promote sound and effective risk management and do not encourage risk-taking (including sustainability risks) which is inconsistent with the risk profiles, rules or instruments of incorporation of the products under management.
With regard to product’s whose portfolios are managed by third parties, and to whom Partners Group (Luxembourg) S.A. has delegated such activities, Partners Group (Luxembourg) S.A. will enquire if the delegate is subject to regulatory requirements on remuneration which are similar to those applicable to Partners Group (Luxembourg) S.A. under the Disclosure Regulation or will otherwise use commercially reasonable efforts to oblige the delegate to comply with remuneration principles which reflect such requirements by contract.
Art 7: Product-level consideration (Article 7 Disclosure Regulation)
Certain financial products managed by Partners Group promote environmental and/or social characteristics and are therefore classified as article 8 financial products under EU Regulation 2019/2088 on sustainability-related disclosures in the financial services sector, as amended (the "Disclosure Regulation"). Partners Group, in respect of each such financial product, considers selected principal adverse impacts on sustainability factors from Annex I of the Level 2 RTS in connection with the environmental and social characteristics that such financial products promote. These indicators will be subject to a materiality assessment with respect to such financial products' investment strategies and individual investments.
Principal adverse impacts are considered by Partners Group, in respect of each such financial product, through the processes and approaches detailed in such financial products' investment strategies, including the binding elements of their investment strategies.
Information about principal adverse impacts on sustainability factors by Partners Group, in respect of each such financial product can be found under the heading "Principal adverse impacts on sustainability factors" [here]. Further information on principal adverse impacts will be provided in an annex to each such financial product's annual report.