SFDR Article 8 website product disclosure summary for financial products that promote environmental or social characteristics

Based on Articles 23 to 36 SFDR Delegated Regulation (EU) 2022/1288

01 July 2024

Financial Product: RoboCap UCITS Fund

Legal entity identifier (LEI): 6354007SDEPHWQ3WNA95

Manager: RoboCap Asset Management Ltd

The following products do not fall within Article 8:

Robocap Partners Funds (Cayman-Delaware)
Robocap AI Cyber Security Basket Certificate (Actively Managed Certificate))

Investment strategy

Since our foundation in 2015, one of our core tenets has been the fundamental alignment between our investment theme (our “Theme”) of robotics, automation and AI technologies and ethics, which now find are close to the UN Sustainable Development Goals (SDGs), due to the significant SDG co-benefits of our investment portfolio.

Sustainability-related disclosures

No Sustainable Investment Objective

This financial product promotes environmental or social characteristics but does not have sustainable investment as its objective.

The Product does commit to making a minimum of 75% of its investments in sustainable investments, as a percentage of the Product’s Net Asset Value. The definition of sustainable investment here is alignment with at least one of UN’s Sustainable Development Goals (SDGs). In order to:

Ensure that such investments do not significantly harm any environmental or social objectives, we carry out various levels of screening and analysis which includes Exclusion Screening & Controversies Rating.
Ensure that such investments align with at least one SDG, we also carry out various levels of analysis which include our inhouse proprietary SDG alignment analysis.

Environmental or social characteristics of the financial product

The Product aims to maximize risk-adjusted total return through a portfolio of financial instruments that promote environmental and/or social characteristics through their economic activities. As mentioned above, the Product uses the UN’s Sustainable Development Goals (SDGs) as the basis for defining environmental and social characteristics.

ESG at Robocap – Our Approach

1. Exclusion screening at the beginning: We have defined a list of controversies like weapon manufacturing (negative social impact), and fossil fuel extraction and production (negative environmental impact), which are material to ESG analysis and can lead to exclusion from our investment universe.

2. Alignments with UN SDGs: The vast majority of the stocks in our investment portfolio should have significant co-benefits and alignments with UN SDGs. As most of the stocks we invest in are high-tech companies, we see that they naturally contribute to SDG 9. Industry, Innovation and Infrastructure.

3. Integration of ESG into our investment process: ESG has become one of the key parameters that we consider alongside the financial and fundamental analysis in our investment process. We have built up an internal ESG rating system, with the help of 3rd party research and data providers like Refinitiv, to achieve a fair and objective judgement.

4. Disclosure with transparency: Our monthly newsletter reports ESG parameters of our investment portfolio (e.g. number of companies aligned with at least one UN SDG. Number of companies making vow on greenhouse gas (GHG) emission reduction with concrete targets, action plans and results), so that the evolution of the SDG alignments and ESG ratings of our investment portfolio can be made transparent to investors.

5. Engagement with the companies in our investment portfolio: We exercise our voting rights attached to the securities we hold. We see it as an integral part of our role as a responsible investor.

6. Our ESG Committee, which includes an external independent ESG expert, periodically reviews our ESG approach to constantly improve it and make sure it stays on top of the latest regulations. We also hold ESG Committee meetings at least semi-annually to discuss on latest ESG topics and regulations.

Proportion of investments
The objective of the product is not sustainable investment. However, the product is committed to holding a minimum of 75%, based on the Product’s Net Asset Value, in sustainable investments.

Monitoring of environmental or social characteristics
Ongoing monitoring of investees’ ESG quality and the sustainability of their economic activities is carried out on a monthly basis, which includes news feeds, corporates’ disclosures (annual and sustainability reports, and voluntary announcements) and also ESG reports from 3rd party research institutions.

Data sources and processing
Various third-party data sources are then used in combination with corporate disclosures, calls and meetings throughout our ESG analysis process from exclusion screening at the beginning.

Limitation of Methodologies
Our judgement depends, to a certain degree, on:
1. Companies’ audited Sustainability Reports (which normally include information such as their SDG alignment description, and also GHG emission data and reduction targets).

2. Companies’ audited Annual Reports (which normally can provide data such as their R&D expenses/ total sales, and also some further details of their R&D and new products, to support their alignment with SDG 9).

3. Major third-party research institutes (e.g. companies’ market share to support their alignment with SDG 9).

4. Our communication with the company.

Therefore, we do not have a full control over the quality of all the data contained in the abovementioned sources. We can only make our best efforts in obtaining the data from highly reliable sources (e.g. audited reports) but are still exposed to risk of erroneous calculations.

Due diligence
We have illustrated a mechanism of our ESG approach at the section of ‘ESG at Robocap – Our Approach’, and ongoing monitoring practices at the section of ‘Monitoring of environmental or social characteristics’.
As mentioned in the section of ‘Limitation of Methodologies’, our judgement depends, to a certain degree, on corporate disclosures, and 3rd party data, we will execute cross-checking. We also communicate with industry experts and end users as a reference. E.g. a company’s technological moat in certain product and/or area to see if it is aligned with SDG 9. SDG 9. Industry, Innovation and Infrastructure.

Engagement policies
Exercising voting rights attached to securities held in the portfolios we manage is an integral part of our approach as responsible investors. This commitment reflects the importance we place on quality corporate governance as a driver of company’s sustainable development.

As of January 2024, this ESG Policy/Disclosure was last updated and is subject to modifications as deemed necessary or advisable by the firm. A review of this policy will be normally conducted on an annual basis.