Legal

Sustainability information pursuant to the Sustainable Finance Disclosure Regulation (SFDR)

Sustainability risks (Article 3 SFDR)

Borski Fund integrates sustainability risks into its investment and financing decisions in accordance with Article 3 of the Sustainable Finance Disclosure Regulation (SFDR). We define a sustainability risk as an environmental, social or governance event or condition which, if it occurs, could have a material adverse effect on the value, continuity or risk profile of an investment.

We believe that companies that identify and manage sustainability risks in a timely manner are better positioned to create long-term value. We therefore assess not only the potential financial impact of ESG risks, but also the opportunities arising from sustainable innovation, more efficient use of resources, strong governance and future-proof business models.

Where our impact policy focuses on achieving positive social and environmental impact, our ESG policy focuses on identifying, assessing and managing potential negative effects and sustainability risks. In this way, both policy frameworks reinforce each other and contribute to a robust and future-proof portfolio.

Sustainability risks are taken into account throughout the entire investment cycle through an integrated approach:

ESG screening and selection: Before a company qualifies for financing, we assess whether it fits within the objectives, criteria and principles of the relevant fund. Relevant ESG risks, exclusion criteria and points for attention are identified as part of this process.
ESG due diligence: During the investment analysis, we assess relevant sustainability risks and ESG factors, including climate and transition risks, biodiversity, human rights, working conditions, governance and risks within the value chain. We also assess the extent to which these factors could lead to operational, legal, regulatory or reputational risks that may have a material effect on the investment.
Monitoring and engagement: After investment, material sustainability risks and ESG factors are actively monitored throughout the term of the investment. This is done, among other things, through periodic reporting, ESG questionnaires and engagement with portfolio companies and project organisations aimed at identifying, mitigating and managing risks and promoting improvements.

ESG in the investment process:

Selection procedure

Positively select enterprises based on impact KPIs.

Negatively screen enterprises based on high-level ESG scan.

Discuss the enterprise's ESG policy.

Assess management's position on ESG.

Due diligence procedure

Conduct ESG survey.

Engage external experts if relevant.

Discuss conclusions with enterprise.

Include ESG items in deal structuring.

Make Go/No-go decision based on ESG survey.

Include findings in investment memorandum.

Assessment by investment committee.

Monitoring procedure

Draw up an ESG plan of action.

Evaluate ESG actions in periodic reporting.

Consolidate ESG metrics annually for each fund.

Monitor changes in ESG risks.

Make enterprises ESG exit ready.

By structurally integrating sustainability risks into our investment process, we aim to build a portfolio that is not only financially attractive, but also resilient, responsible and future-proof. We are convinced that companies that effectively manage ESG risks and respond to sustainability opportunities are better able to attract talent, retain customers, attract capital and create long-term value. In doing so, they contribute not only to positive social impact, but also to stable and sustainable returns for our investors.

Below is an overview of the ESG themes and assessment criteria that we analyse prior to making an investment or financing decision.

Intern

Environmental

Resource efficiency

Energie

Water

Overige schaarse grondstoffen

Environmental Compliance

Milieuvergunningen

Milieurichtlijnen

Social

Human Capital

Diversiteit & inclusiviteit

Trainingen

Gezondheid & veiligheid werknemers

Governance

Organisation, Implementation, Control

Transparantie processen & verantwoordelijkheden

Bedrijfsbeleid

Controlesysteem

Business Integrity

Code of ethics (beloningen, anti-corruptie)

CDD

ESG vision

ESG integratie

ESG disclosure

Extern

Pollution control

Broeikasgassen

Water / grond vervuiling

Niet-herbruikbaar afval

Supply Chain Effects - Environmental

Milieuimpact van de supply chain

Physical climate risks

Effect van klimaat op de onderneming

Negative Social impact

Klanten

Omgeving

Supply Chain Effects - Social

Mensenrechten

Stakeholder Management/Communication

Transparantie stakeholders

Relatie met stakeholders

Communicatiebeleid

Supply Chain Effects - Governance

Transparantie in de supply chain

Reputatierisico supply chain

Overig

Other (future) risk - Environmental

Other (future) risk - Social

Other (future) risk - Governance

No consideration of adverse impacts on sustainability at entity level (Article 4 SFDR)

Borski Fund currently does not consider the principal adverse impacts of its investment decisions on sustainability factors (Principal Adverse Impacts or PAIs) at entity level, as referred to in Article 4(1)(a) of the SFDR. Borski Fund therefore makes use of the explain option referred to in Article 4(1)(b) SFDR and does not publish a PAI statement at entity level.

A significant proportion of the companies and projects in which Borski Fund invests are smaller companies or companies at an early stage of development. Due to their size, not all portfolio companies are required to report audited ESG data. As a result, sufficiently reliable, consistent and verifiable information is not available for all relevant PAI indicators. In addition, such data is often not publicly accessible and only available to a limited extent through external data providers. Borski Fund is therefore currently unable to ensure that the data required for full reporting in accordance with Article 4 SFDR is sufficiently complete, consistent and of the required quality.

Borski Fund will assess annually whether developments in the availability, quality and reliability of ESG data provide grounds to consider PAIs at entity level after all.

Although Borski Fund currently does not consider PAIs at entity level within the meaning of Article 4 SFDR, potential negative sustainability impacts are taken into account in the investment process. This is done, among other things, through ESG screening, ESG due diligence, monitoring of portfolio companies and active dialogue with the companies and projects in which investments are made.

In addition, Borski Fund may, depending on their SFDR classification, fund documentation and investment strategy, take PAI indicators into account at product level in accordance with Article 7 SFDR. In that case, this will be reported in the relevant fund documentation and periodic reports.

Remuneration policy in relation to the integration of sustainability risks (Article 5 SFDR)

Borski Management applies a remuneration policy that is in line with Article 5 of the SFDR. The remuneration policy is designed to align the long-term interests of the company, its employees, investors and other stakeholders and does not contain incentives to take excessive risks, including sustainability risks.

The remuneration policy supports controlled and sound business operations and promotes careful consideration of financial, operational and sustainability-related risks when making investment and financing decisions. Variable remuneration, where applicable, is moderate in size, discretionary in nature and dependent on both individual performance and the financial position and continuity of Borski Management. It is not linked solely to commercial or financial objectives.

As an impact-driven fund manager, Borski Management has the statutory objective of making a significant positive contribution to people, the environment and society through its business operations and activities. The remuneration policy is therefore designed in such a way that employees are not encouraged to take irresponsible sustainability risks or ignore adverse effects on sustainability factors in order to achieve financial objectives.

Investment and financing decisions take into account relevant ESG risks and sustainability factors in accordance with Borski Management’s ESG policy and internal decision-making processes. Results achieved by taking irresponsible sustainability risks do not form a basis for awarding variable remuneration.

Through this link between remuneration, risk management and ESG integration, the remuneration policy contributes to long-term sustainable value creation and supports Borski Management’s objectives, mission and statutory obligations.

Carried Interest

For each portfolio company, Borski Fund II defines at least two impact KPIs linked to the UN Sustainable Development Goals: one related to SDG 5 (Gender Equality) and one related to another relevant SDG aligned with the company’s business model. Progress against these predefined targets is measured throughout the holding period and aggregated at portfolio level through a Portfolio Impact Multiple. This impact performance is directly linked to the Fund Manager’s carried interest, ensuring that financial incentives are aligned with the achievement of both financial and impact objectives.

Website fund disclosures (Artikel 10 SFDR)

In addition to the sustainability policy, the key aspects of sustainability information are briefly set out below for each fund. These overviews are in accordance with Articles 45 to 57 of Delegated Regulation (EU) 2022/1288 (SFDR RTS). In addition, the periodic disclosures from the annual reports of the funds, as described in Annex V of the SFDR RTS, are linked.

Borski Fund I

SFDR Article 10 – Website disclosure (link)
SFDR RTS Annex V – Periodic disclosure (link)

No pre-contractual SFDR information available; fund established before the SFDR entered into force.

Borski Fund II

SFDR pre-contractual information (link)
SFDR Article 10 – Website disclosure (link)

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