Our approach to Environmental Social and Governance (ESG)
Ardea IM’s primary purpose is to achieve the best risk adjusted returns for our clients. We believe that incorporating ESG considerations within our investment process helps us to achieve this.
Ardea IM believes that ESG megatrends can affect important drivers in the economy which, in turn, can have a material impact on bond market returns in the longer term. It is therefore our fiduciary responsibility to integrate ESG considerations into our investment process.
At Ardea IM, we are committed to operating and investing responsibly and this is driven through our four pillar ESG framework: research, integration, engagement, and corporate sustainability.
Click here to view our most recent PRI Transparency Report.
Sustainability risk policy statement:
The Fund promotes environmental and/or social characteristics in a way that meets the specific criteria contained in Article 8 of SFDR but does not have sustainable investment as its objective in a way that meets the specific criteria contained in Article 9 of SFDR.
Notwithstanding this, the ICAV still considers that the Fund is managed responsibly. The Investment Manager evaluates and integrates Sustainability Risks and other relevant ESG factors at multiple stages throughout the investment process. This is considered an important element in contributing towards long-term investment returns and an effective risk-mitigation technique. The Investment Manager has carried out an assessment of the likely impacts of Sustainability Risks on the returns of the Fund and does not expect that it will materially impact the expected risk or return characteristics of the Fund currently. The Investment Manager believes its ESG-related research capabilities enables the identification of ESG risks and opportunities of most relevance to the strategy. Specifically, the Fund generates returns via the implementation of a relative value strategy which isolates mispricing between securities and mitigates exposure to market risks (including ESG risk factors). Further, the Investment Manager’s investment universe is confined to high grade liquid sovereign bond markets and their associated derivatives. The Investment Manager will continue to undertake research on evolving Sustainability Risks and opportunities as the Investment Manager believes Sustainability Risks may become more material risks for developed markets over time. This will necessitate an evolving ESG integration policy also.
No Consideration of Principal Adverse Impact Statement or Consideration of Principal Adverse Impact Statement:
Notwithstanding that the Investment Manager integrates the consideration of Sustainability Risks into the investment decision-making process, the Investment Manager does not currently consider the principal adverse impacts of its investment decisions on Sustainability Factors. The Investment Manager has opted against doing so, primarily market for Green Bonds is underdeveloped, there is a lack of sufficiently detailed data regarding the Fund’s investment universe that will allow the Investment Manager to make the relevant assessments and there is a lack of common criteria and practices for defining the necessary indicators that are relevant to the Fund’s investment strategy.
Remuneration Policy Summary:
Performance of staff on sustainability matters is evaluated through a KPI Framework in the Ardea IM staff Performance Plan. Staff are scored on People and Culture KPI’s and Individual ESG and sustainability KPI’s. This is applicable for most employees, including asset managers, C-suite level staff, fund/portfolio managers, investment analysts, investment committee members and investor relations.”