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SDG 9 – Industry, innovation and infrastructure
Build resilient infrastructure, promote inclusive and sustainable industrialization and foster innovation. -
SDG 11 – Sustainable cities and communities
Make cities and communities inclusive, safe resilient and sustainable. -
SDG 13 – Climate action
Take urgent action to combat climate change and its impacts. -
SDG 3 – Good health and well-being
Ensure healthy lives and promote well-being for all at all ages. -
SDG 7 – Affordable and clean energy
Ensure access to affordable, reliable, sustainable and timely energy for all. -
SDG 8 – Decent work and economic growth
Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.
As of 06/2024
Background
The EU published the so-called EU Disclosure Regulation on 27 November 2019. The objective of this Regulation is, in particular, to reduce information asymmetries in the relationships between clients and agents with regard to the inclusion of sustainability risks, the consideration of adverse sustainability impacts, the promotion of environmental or social features and, in regard to sustainable investments, by obliging financial market participants and financial advisors to provide pre-contractual information and ongoing disclosures to end-investors when acting as agents on behalf of those end-investors (clients). This is mainly done against the background that the transition to a low-carbon, more sustainable, resource-efficient circular economy in line with the Sustainable Development Goals is considered one of the key issues for ensuring the long-term competitiveness of the Union’s economy. This is in line with the Paris Agreement concluded under the United Nations Framework Convention on Climate Change (“Paris Agreement”), which was approved by the Union on 5 October 2016 and entered into force on 4 November 2016. The Paris Agreement aims to act more decisively against climate change by, among other things, aligning financial flows with a pathway towards low greenhouse gas emissions and climate resilience.
PAI Statement
CEE Kapitalverwaltungsgesellschaft mbH manages alternative investment funds (“AIF”; hereinafter also referred to as “financial products”) that fall within the scope of Articles 6 and 9 of Regulation (EU) 2019/2088. In its investment decisions, CEE Kapitalverwaltungsgesellschaft mbH takes into account indicators to record material adverse impacts on sustainability factors. The relevant indicators are determined for CEE Kapitalverwaltungsgesellschaft mbH and the AIFs it manages and published in the form of PAI statements. The reports for the AIFs are made available to investors as part of ongoing reporting. The reports of CEE Kapitalverwaltungsgesellschaft mbH are listed below:
The following data relates to CEE Kapitalverwaltungsgesellschaft mbH. With regard to greenhouse gas emissions, there is currently no separation between the companies within the CEE Group. All greenhouse gas emissions are currently allocated to CEE Kapitalverwaltungsgesellschaft mbH. The figures are rounded to two decimal places. Greenhouse gas emissions are reported in metric tons of CO2 equivalent. The measures taken in relation to the reported indicators are shown in Table 2.
Table 1
Sustainable and future-proof investment – that is our claim. By investing in the development and generation of renewable energies, we not only generate attractive returns for our investors, but also secure our future in the long term. Our aim is to support and shape the expansion of the renewable energy market in the long term.
As an investment manager and operator of long-term renewable energy projects, we are committed to achieving a risk-adequate return that is in line with the objectives of our investors. We are convinced that the integration of ESG criteria has a real, positive impact on our environment and our business environment and thus on our actions.
CEE Kapitalverwaltungsgesellschaft mbH also takes sustainability risks into account in its investment decision-making processes, i.e. events or conditions in the environmental, social or corporate governance areas that could have a significant negative impact on the value of an investment if they occur.
The review of sustainability risks is based on the respective investment strategy of the mandates and the type of assets to be acquired and is carried out on the basis of qualitative and/or quantitative factors. The results are incorporated – as part of the risk assessment – together with the results of the other due diligence checks (including legal, technical and commercial) into the overall assessment of the project. Our asset managers accompany the projects right from the start of the due diligence process. This ensures a seamless transition from the acquisition to the operational management of the projects and direct integration into the operational risk processes.
The corresponding requirements are documented as part of the internal ESG, risk and asset management guidelines as well as further process descriptions.
In addition, the company has internal guidelines and specifications (in particular anti-corruption guidelines, code of conduct and ethics and employee remuneration guidelines) for taking sustainability factors into account in our actions and activities as a financial market participant.
Significant adverse effects on sustainability factors are taken into account as part of investment decisions and the underlying due diligence processes.
A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could have a significant negative impact on the value of the investment. Sustainability risks can therefore lead to a significant deterioration in the financial profile, liquidity, profitability or reputation of the underlying investment. If sustainability risks are not already taken into account in the investment valuation process, they may have a material negative impact on the expected/estimated market price and/or liquidity of the investment and thus on the fund’s return. Sustainability risks can have a significant impact on all known risk types and contribute as a factor to the materiality of these risk types.
When making investment decisions, the assets are valued on the basis of the applicable investment conditions of the AIF in conjunction with the applicable requirements of the risk management strategy and the company’s investment and ESG strategy. This also includes the consideration of ESG risks, which are assessed as part of the project-specific reviews. In the case of ESG risks, the company assesses those risks that are considered material for the renewable energies asset class, in this case plants for the generation and storage of electricity from wind and solar energy. The ESG risks are assessed and taken into account in the overall risk assessment with regard to their severity.
With regard to the strategies for determining and weighting the main adverse sustainability impacts and sustainability indicators in accordance with Art. 4 (2) a) of Regulation (EU) 2019/2088, the procedure is as described below. In this context, the assessment of the most significant adverse sustainability impacts includes qualitative and quantitative assessment criteria in relation to energy, water and wastewater management, the handling of residual materials, potential climate risks and risk factors in the areas of ecology, human rights, occupational safety and corporate governance. In principle, the factors identified as part of the risk processes are weighted equally. In the case of acquisition audits, the materiality is reviewed in the respective overall context of the transaction. Appropriate measures are identified for material adverse sustainability impacts in order to avoid, limit or mitigate the risk if it occurs. A traffic light system is generally used here. In the case of the climate risk and vulnerability analyses carried out for the renewable energy plants, a traffic light categorization is made into five categories (excluded, not relevant, low, medium and high). If a corresponding risk is identified in the medium category, action plans are defined. The risk assessments are an integral part of all investment decisions. After acquisition, risks are continuously monitored as part of the Group-wide risk management process. The risk is determined on the basis of the expected amount of loss and the expected probability of occurrence. The overall risk then results from the sum of the individual risks.
For the relevant disclosures on the main adverse sustainability impacts at product level within the meaning of Article 7 of the EU Disclosure Regulation, please refer to the product-specific disclosures of the respective funds in accordance with the EU Disclosure Regulation.
The most important adverse sustainability impacts at the level of the AIF are generally recorded in the context of the following indicators:
Table 2
If individual indicators are not applied at AIF level or additional indicators are used, this is explained to investors in the relevant fund-specific documents.
AFM’s AIF mandates invest in renewable energies, in this case solar and wind power plants in Europe and the associated infrastructure, including energy storage , thereby making an important contribution to climate protection. We are thus actively supporting the achievement of the 2030 energy transition and the implementation of the Paris Climate Agreement. The investments therefore make a fundamentally positive contribution to a sustainable economy. Incorporating ESG criteria into our processes helps us and our investors to create social and economic value over the term of our investments and to mitigate the reputational, financial and operational risks that would otherwise result from poor environmental, social and corporate governance practices.
With regard to the main adverse sustainability impacts, AFM has implemented the following measures (information in accordance with Art. 4 (2) b) Regulation (EU) 2019/2088)
Greenhouse gas emissions
For the individual investments, the AFM determines the expected greenhouse gas emissions that arise in the case of investments in renewable energies, in this case solar and wind power plants in Europe and the associated infrastructure including energy storage, primarily as part of the construction of the plants. The construction and operation of the plants makes a significant contribution to the transition to low-greenhouse gas electricity production, i.e. renewable energy sources (here: electricity from wind and solar energy) are used instead of fossil energy sources. By using renewable energies, a net avoidance of greenhouse gas emissions is achieved. In this respect, the investments aim to reduce the greenhouse gas emissions of the European energy industry as a whole. In addition, care is taken at investment level to ensure that, as far as possible, the investments themselves obtain their own energy requirements exclusively from renewable sources.
The mandates managed by the AFM do not currently invest in any other asset classes.
Biodiversity
As part of the investment, the necessary environmental impact assessments are carried out at the respective plant location in accordance with the applicable regional and national standards. This also includes the implementation of any compensatory measures, i.e. measures that reduce any adverse effects or achieve compensation elsewhere.
Water
As part of the investments, the necessary tests are carried out with regard to environmental compatibility at the respective plant location and compliance with the technical specifications for the proper operation of the plants in accordance with the applicable regional and national standards. Care is also taken to ensure that the technical maintenance concepts of the facilities and occupational safety requirements in relation to the service providers are suitable for preventing the release of harmful and potentially water-polluting substances or, in the event of such substances leaking, for preventing, containing or reducing their entry into the ground and soil – and thus, if necessary, into surrounding bodies of water or groundwater.
Waste
As part of the investment, during construction, operation and dismantling/recycling, the necessary checks are carried out and taken into account with regard to waste management at the respective plant location and compliance with the (technical) specifications for the proper handling of hazardous waste in accordance with the applicable regional and national standards. Care is also taken to ensure that the technical maintenance concepts of the facilities and occupational safety requirements in relation to the service providers are suitable to ensure proper waste management and to avoid, contain or reduce any significant negative impacts. In addition, care is taken when making investments to ensure that appropriate waste management regulations are included in the contracts wherever possible.
Social affairs and employment
As part of the investments and the ongoing management of the mandates, appropriate screenings are carried out via suitable data providers with regard to relevant violations of the corresponding standards of the UN Global Compact and the OECD guidelines with regard to multinational companies. In the case of investments in renewable energies, priority is also given to acquiring companies that do not have their own employees, in particular plants for generating electricity from wind and solar energy. The AFM and its parent and sister companies themselves have company-wide standards and regulations in place to ensure compliance with the aforementioned frameworks, standards and principles.
Information pursuant to Art. 7 of Regulation (EU) 2019/2088 in relation to the financial products managed by the company is provided in the pre-contractual information. The timing and scope of the respective information depends on the respective product category and classification in relation to Regulation (EU) 2019/2088.
The company is subject to the regulatory requirements applicable to capital management companies with regard to the structure of its remuneration system. The documentation takes place within the framework of a corresponding remuneration guideline. The company’s Supervisory Board is responsible for the adoption and maintenance of the remuneration policy and oversees its implementation by the Executive Board.
The remuneration policy is geared towards not encouraging disproportionate risk-taking, particularly in comparison to the investment policy of a mandate.
The remuneration comprises both fixed and variable components. When determining variable remuneration components, the achievement of sustainable business development, the protection of the company and the protection of the mandates and investors under management, including with regard to relevant ESG factors, are also taken into account in the assessment when determining target achievement as part of the personal performance assessment.
Information pursuant to Art. 6 of Regulation (EU) 2019/2088 in relation to the financial products managed by the company is provided in the pre-contractual information. The timing and scope of the respective information depends on the respective product category and classification in relation to Regulation (EU) 2019/2088.
Disclosures pursuant to Art. 10 of Regulation (EU) 2019/2088 in relation to the financial products managed by the company that pursue sustainable investments.
CEE Renewable Fund 7 S.C.S., SICAV-RAIF
Name of the financial product: CEE Renewable Fund 7 S.C.S, SICAV-RAIF (“CEE RF7”)
Status of the information: June 30, 2024
Information on the way in which sustainability risks are included in investment decisions and the results of the assessment of the expected impact of sustainability risks on the return of the financial product.
To ensure that the investments do not result in significant harm to one or more of the environmental objectives set out in Article 9 of the Taxonomy Regulation, the criteria set out in Section 4.1 and Section 4.3 of Annex I to Delegated Regulation (EU) 2021/2139 to the Taxonomy Regulation are observed and implemented and indicators for adverse impacts on sustainability factors are taken into account.
The financial product invests in renewable energy plants. The investment focus is on onshore wind energy and solar energy plants. Renewable energy plants refers to one or more plants for the generation of electricity and/or heat by converting onshore wind and/or solar energy into electricity and any associated exploitation and/or usage rights as well as infrastructure plants and facilities associated with such plants, e.g. for the conversion and transportation of electricity as well as supply facilities for such plants. The investment spectrum is accordingly limited to this area, i.e. the acquisition of assets from other, potentially critical asset classes is not part of the investment objective.
Description of the sustainable investment objective
The investments of the financial product contribute significantly to climate protection by investing in plants for the generation of electricity from renewable energies and related infrastructure (“renewable energies”). Renewable energies are an essential element in the transition to a low-carbon, more sustainable, resource-efficient circular economy in line with the Sustainable Development Goals to ensure the long-term competitiveness of the European Union’s economy. Renewable energy contributes directly to the reduction of CO2 emissions by acting as a substitute for conventional sources of electricity generation, such as gas and coal-fired power plants. By generating electricity from renewable energies, the increasing demand for electricity is met in a climate-friendly manner. In this context, renewable energies represent a sustainable investment within the meaning of Article 2 No. 17 of Regulation (EU) 2019/2088.
Use of an index as a reference value for sustainable investments
No EU reference value is used to measure the investment target. Renewable energy plants – in this case wind and solar power plants and the associated infrastructure – have a comparatively small and immaterial carbon footprint during their construction and ongoing operation. They produce electricity from non-fossil, sustainable energy sources (wind and solar), so that a corresponding expansion and operation of such plants leads to a corresponding CO2e avoidance compared to conventional power plants that rely on fossil fuels. In this respect, renewable energies are a direct substitute for otherwise climate-damaging conventional power plants. The investment goal of CO2 avoidance can be determined and measured directly via corresponding CO2e factors.
Investment strategy of the financial product
Sub-fund I aims to achieve a long-term stable investment portfolio through a balanced diversification of renewable energy investments (as defined below) in relation to individual energy generation technologies and possible investment locations and regions. The financial product invests in renewable energy plants. The investment focus is on onshore wind energy and solar energy plants.
Renewable energy installations refers to one or more installations for the generation of electricity and/or heat by converting onshore wind and/or solar energy into electricity and any associated utilization and/or usage rights as well as infrastructure installations and facilities associated with such installations, e.g. for the conversion and transport of electricity as well as supply installations for such installations. The financial product does not make any other investments, with the exception of those that serve ongoing liquidity management.
Asset allocation of sustainable investments
The assets of the financial product are invested exclusively in assets in the renewable energy sector, in this case onshore wind energy and solar energy plants. In addition, the funds of the financial product are invested exclusively and to a limited extent for liquidity management and hedging purposes.
The relevant investment criteria apply as described in the issue document of the financial product. In accordance with the investment strategy, at least 75% of the assets are to be invested in the Sustainable – Ecological – Taxonomy-compliant category.
Review of the sustainable investment objective and any impairments of the sustainable investment objective
The investments of the financial product are made taking into account corresponding sustainability factors, which are regularly reviewed and evaluated by the capital management company.
With regard to the main adverse impacts on the sustainability factors, the focus is primarily on the factors listed in Annex I of Delegated Regulation (EU) 2022/1288, here the categories (1) greenhouse gas emissions, (2) biodiversity, (3) water, (4) waste and (5) social and employment.
The factors are reviewed prior to the acquisition of an investment object and form part of the corresponding acquisition due diligence. The investment objects are continuously monitored over the investment period and the achievement of the set investment targets is reviewed.
By operating the plants, we achieve a reduction in CO2e emissions compared to the operation of conventional, fossil-based power generation sources (including coal and gas). In this respect, renewable energies are an essential element in the transition to a low-carbon, more sustainable, resource-efficient circular economy in line with the sustainable development goals to ensure the long-term competitiveness of the European Union’s economy. Renewable energy contributes directly to the reduction of CO2 emissions by acting as a substitute for conventional sources of electricity generation, such as gas and coal-fired power plants.
It is true that the production of individual components and the construction of state-of-the-art wind and PV systems also necessarily cause greenhouse gas emissions. However, the reduction in greenhouse gas emissions through the operation of the renewable energy plants significantly exceeds the emissions caused during production and construction. In this respect, the greenhouse gas emissions caused do not restrict the achievement of the sustainable investment objective of the financial product.
Methods for determining sustainability factors
The main measurement criterion is the determination of CO2e avoidance through the operation of renewable energy plants compared to the operation of conventional, fossil-based electricity generation sources. In this context, the amount of electricity produced is determined for each investment object. Using appropriate emission factors, the avoided greenhouse gas emissions (as CO2 equivalents) are then calculated and the greenhouse gas emissions according to Scope 1, Scope 2 and Scope 3 as defined by the Greenhouse Gas Protocol are determined.
Emissions from investments are determined using data from public sources, such as the German Federal Environment Agency and Fraunhofer ISE, as well as production data from CEE’s wind and PV portfolio. In line with the methodological principles of life cycle analysis, both the direct emissions caused during the conversion of primary energy sources, e.g. during the combustion of fossil or biogenic fuels, and the indirect emissions generated outside the conversion processes in the so-called upstream chains, e.g. during the manufacture of energy conversion plants or the extraction and provision of primary and secondary energy sources, are taken into account. In addition, emissions from externally sourced auxiliary energy that are directly linked to the generation path are also taken into account.
In the aforementioned methods for determining CO2e avoidance or CO2e emissions, third-party data is used in addition to our own data. In addition, comparative or estimated values are used in the event of missing or incomplete data. The data sources and methods used are therefore subject to uncertainties and may also be subject to change in the future.
Annual reports in accordance with Art. 11 of Regulation (EU) 2019/2088
The annual reports can be accessed via the investor portal at https://cee-group.odoo.com/web/login.
- Extension of the definition of sustainability risks
- Adjustment regarding the technical regulatory standards (Delegated Regulation (EU) 2022/1288)
