Optimum Asset Management S.A.
Disclosures for the Sustainable Finance Disclosure Regulation (SFDR)1

This disclosure is made for the purposes of Articles 3(1), 4, 5 and 7(2) of EU Regulation 2019/2088, known as the Sustainable Finance Disclosure Regulation or SFDR1. It is made by Optimum Asset Management S.A. (Optimum or we), a société anonyme established in Luxembourg, which has legal entity identifier (LEI) code 222100574S4D6G4H2S43.

Disclosure for the purpose of Article 4 and Article 7(2) of SFDR

No Consideration of Sustainability Adverse Impacts

Optimum does not consider the adverse impacts of its investment decisions on sustainability factors at the present time. “Sustainability factors” are defined by SFDR as environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.

In terms of the reasons why we do not do so:

  • in the absence of regulatory guidance, it is not clear precisely what regulators will expect of firms that elect to consider such matters at this time; and
  • it is also not clear that there is sufficient data, and data of a sufficient quality, to support firms that do so, across all of the types of asset classes, industries and sectors in which investments may in theory be made.

In terms of whether we intend to consider such adverse impacts in the future:

  • we confirm that we intend to monitor the industry position closely and update our approach in due course as the position evolves and further regulatory guidance is made available; and
  • our present intention is to issue an update on our position on or before the end of 2021, should further regulatory and industry guidance be made available before that time.

Disclosure for the purpose of Article 3(1) of SFDR

Information about policies on the integration of sustainability risks in the investment decision‐making process

Article 3(1) of SFDR requires relevant firms to publish on their websites information about their policies on the integration of sustainability risks in their investment decision-making process. “Sustainability risk” is defined in SFDR as “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of [an] investment”.

We would like to draw your attention to the following key information about our policies on the integration of sustainability risks in our investment decision-making process:

  • Optimum has a robust process in place to ensure that relevant and material risks are identified and considered in the due diligence process before making an investment decision. This includes the consideration and assessment of sustainability risks and their potential impact on the value of an investment.
  • In particular, alongside more traditional financial criteria, we consider, to the extent possible, whether and to what extent financially material sustainability risks might have a meaningful impact.
  • This does not mean that all sustainability factors and sustainability risks will be relevant in relation to each potential investment. The relevance and materiality of such matters will depend on a range of factors, including the nature of the investment, the asset class, the likelihood of the sustainability risks arising and the likely scope and scale of impact. As such, whilst Optimum attaches importance to these factors during the decision-making process, these matters are not afforded the most weight, nor are they determinative, in considering whether to proceed with a particular investment or not. They are rather considered in an integrated way with other factors.
  • The specific sustainability risk-related data or information obtained, and the specific process used, varies depending on the asset class, i.e., the type of investment being contemplated. By way of example:

    (A) Real estate
    Information about environmental risks may be obtained as part of the general due diligence and review process of an investment that considers the possible impact of physical, legal and transition risks linked to climate change. All information obtained during or resulting from the general due diligence process, including all information in relation to sustainability risks, will be reviewed prior to proceeding with an investment by the relevant fund or sub-fund. If a decision is made to proceed, a monitoring and management strategy will be put in place to ensure all relevant risks, including identified sustainability risks, are detected, monitored, managed and mitigated to the extent possible.

    (B) Other asset classes
    To the extent that potential acquisitions are considered in relation to other types of investments, a similar process is followed, but on a proportionate basis as appropriate based on the value of the relevant asset.

  • Sustainability risks are potentially relevant to the funds in respect of which Optimum makes investment decisions, having regard to the types of investments that may be made in accordance with each fund’s investment policy and objectives. Notwithstanding the above, it is recognised that sustainability risks may not be relevant to certain non-core activities undertaken in relation to a particular fund (for example, hedging).
  • The impacts following the occurrence of sustainability risks may be numerous and vary depending on the nature of the sustainability risks, together with the region and asset class concerned. In general, where a sustainability risk crystallises in respect of an investment, there could be a negative impact on, or even entire loss of, its value, whether on a temporary or permanent basis.

Disclosure for the purpose of Article 5 of SFDR

Information about policies on the integration of sustainability risks in the remuneration policy

This disclosure is made for the purposes of Article 5 of SFDR by Optimum. Article 5 requires relevant firms to:

  • include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks, meaning “an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of [an] investment”; and
  • publish that information on their websites.

This disclosure comprises such information. Accordingly, it is being published on Optimum’s website, and included in our remuneration policies and procedures as relevant.

Optimum has a risk governance framework in place to provide oversight of our monitoring and management of risks, ensuring that our risk profile is well documented and managed. We also have robust policies and procedures in place on remuneration. These remuneration policies and procedures are consistent with the integration of sustainability risks based on the following:

  1. Alignment of long-term interests – A key element of our overall approach to compensation is to align compensation structures and decisions of key employees with stakeholder interests and take a long-term strategic approach. This better links the interests of key employees to long-term sustainable value creation, enhances alignment with risk outcomes and discourages them from taking unduly risks that may arise from a short-term perspective.
  2. Balanced scorecard – Employees are assessed based on financial and non-financial criteria that take into account their approach towards compliance with internal policies and procedures – including those relating to sustainability issues. In particular, employees are encouraged to perform their duties with the maximum respect for the environment and key social and governance values, and are encouraged to suggest improvements to our operations, business conduct and management of relationships with third parties to reflect sustainability considerations.
  3. Risk function – Optimum’s Board of Directors oversees our remuneration policies and practices, with input from the control functions, including risk management. This structure ensures that the risk function is able to contribute to the overall approach Optimum takes towards remuneration, providing comfort that key risk inputs are properly taken into account. This includes ESG, and climate change risk in particular, to the extent they become increasingly key risk inputs from the perspective of asset managers.
  4. Values – Our compensation philosophy is closely linked to our fiduciary duty towards Optimum’s stakeholders aimed at creating sustainable growth and wealth preservation over the long-term.

Overall, these values and principles create an environment in which:

  • to the extent sustainability risks are material risk inputs from time to time, and in particular, as climate change presents an increasing risk over time to the value of investments, they are considered in our approach to remuneration; and
  • to the extent that ESG factors are recognised as increasingly important risk inputs from a systemic perspective, they will be taken into account appropriately.

Review and monitoring

We recognise that climate change and sustainability are amongst the defining issues of our time, and the subject of increasing focus by regulators, governments, and central banks. For these reasons, Optimum is keeping the matters set out in this disclosure (and related policies) under review, recognising that the integration of sustainability risks is an evolving and dynamic area. As such, this disclosure may be edited from time to time to ensure it accurately reflects our practices. This disclosure is therefore likely to be updated periodically.


This page was last updated on 10 March 2021.2

(1) 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.

(2) Optimum reserves the right to update this disclosure from time to time at our discretion.