The Sustainable Finance Disclosure Regulation (”SFDR” or “the Regulation”) applied from 10 March 2021. This Remuneration Policy (Sustainability Risks) specifically addresses the obligation in Article 5 of the Regulation:
“Financial market participants and financial advisers shall include in their remuneration policies information on how those policies are consistent with the integration of sustainability risks, and shall publish that information on their websites.”
A “Sustainability Risk” as defined in Article 2(22) of the Regulation is: “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”.
Sustainability Risks include (but are not limited to) the following:
- environmental risks such as the impacts of environmental events such as increased flooding risks on operations of portfolio companies;
- social risks such as impact of non-compliance with anti-slavery or working conditions laws and regulations by a portfolio companies; and
- governance risks such as inadequate management oversight of portfolio companies.
Remuneration and sustainability risks
Isomer Capital LLP (the “firm”) does not currently have a remuneration policy that is consistent with the integration of sustainability risks, except to the extent described below.
Remuneration is generally provided on a fixed basis and may include participation in the firm’s client funds’ carried interest. Remuneration levels are justified according to performance of the individual concerned. This will be reviewed as appropriate on a regular basis.
The firm’s general remuneration policy promotes sound and effective risk management with respect to business risks, ensuring that the structure of remuneration does not encourage excessive risk-taking. The firm also considers the effect of potential conflicts of interest on remuneration in a way that is consistent with the integration of business risk, including (but not limited to), any activities that give rise to misselling, or misrepresentation of investment strategies.