NOVIS' Sustainability‐related Disclosure

Legal Background

This information is based on 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 („SFDR“)

Introduction

NOVIS acknowledges the challenges that mankind faces in relation to climate change. The extent of changes in our environment and pace of these changes is endangering our way of life and may make it impossible to live in certain parts of Earth. There are many ways how individuals, companies or governments, and government institutions can act to reduce the negative impacts of climate change and we in NOVIS appreciate the initiative of the European Union focused on more transparency of sustainability factors used in decision making in the capital market.

We understand that one of the main action plans to reduce the risks and impacts of climate change is the Paris Agreement with its global target to hold the increase in the global average temperature to well below 2 °C above pre‐industrial levels and to pursue efforts to limit the temperature increase to 1,5 °C above pre‐industrial levels. It also seeks to strengthen the response to climate change by, inter alia, making finance flows consistent with a pathway towards low greenhouse gas emissions and climate‐resilient development.

NOVIS is currently preparing its strategy focusing on alignment of its activities with the Sustainable Development Goals (SDGs) as defined in the 2030 Agenda for Sustainable Development approved by the UN General Assembly and within this strategy wants to focus not only on the number of SDGs addressed by our activities but also on its impact on our organization and its stakeholders.

Sustainability risk policies

Based on Article 3 (1) of the SFDR, we would like to inform you about policies on the integration of sustainability risks in our investment decision‐making process:

Investment decisions are performed by our investment committee based on all available information about financial instruments which are either already used as underlying assets of our internal funds or which are being considered as potential additions. Such available information also includes the instruments' alignment with environmental, social and governance ("ESG") factors and sustainability criteria.

Our investment decisions are mainly oriented on delivering investment return to our clients while adopting wide risk diversification. In order to achieve wide diversification of assets, we use investment funds for majority of our investments. However, indirect investing via investment funds weakens our ability to evaluate sustainable risks and we need to rely to a large extent on methodology and investment decisions of asset managers of these investment funds. Therefore, ESG and sustainability risks generally are not a dominant factor in making our investment decisions.

To specifically address sustainability risks while maintaining our investment philosophy based on indirect investments, we launched NOVIS Sustainability Insurance Fund, an internal insurance fund under Slovakian law which invests in underlying financial instruments. In NOVIS Sustainability Insurance Fund, adherence with strict corporate governance rules, environmental and social criteria (ESG) according to the Principles of Responsible Investment created under the auspices of the United Nations is one of the eligibility criteria for underlying financial instruments. By way of example, we evaluate the documentation provided by asset managers or issuers of financial instruments to assess, whether and with what extent the underlying investment funds include investment into companies:

  • focused on resolution of environmental problems;
  • that operate in areas such as efficient energy, environment, health and improvements social and demographic problems;
  • which demonstrate long-term growth prospects and good stewardship, i.e long-term management of companies in the interests of all stakeholders and broader society. This includes not only environmental, social and governance issues faced by a company, but also whether the company will add value to society over the long run and if it exhibits a responsible culture.


For more information on the NOVIS Sustainability Insurance Fund, please see the document "Sustainability-related pre-contractual information". 

No consideration of sustainability adverse impacts

Based on Article 4(1)(b) of the SFDR, we would like to inform you that we currently do not consider adverse impacts of our investment decisions on sustainability factors. Our main goal is to ensure the best interest of our clients based on the long-term positive investment return, appropriate investment diversification and risk mitigation.

NOVIS re-evaluates its internal policies on yearly basis and will consider adoption of the considerations of principle adverse impact of investment decisions on sustainability factors.

Remuneration policy

Based on Article 5 (1) of the SFDR, we would like to inform you that as part of our remuneration policy, we use individual Key Performace Indicators (KPIs) and long-term performance criteria, which mainly impact the variable component of the remuneration of our employees and management members. 

When setting individual KPIs and long-term performance criteria, we currently do not specifically consider sustainable risks as a separate Key Performance Indicator. Nonetheless, though not individually monitored and evaluated, sustainable risks are an inherent part of risk management, so they are indirectly included in other Key Performance Indicators focused on the management of investment risks.

NOVIS re-evaluates its internal policies on yearly basis and will consider the introduction of a separate Key Performance Indicator linked to the achievement of the sustainability risk objectives.