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SFDR Disclosures
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Sustainability-related disclosures pursuant to Regulation (EU) 2019/2088 (“SFDR”)

Date of publication: 18 March .2024

I. Sustainability risks

System.One Management GmbH & Co. KG (LEI: 391200PDJE06TPW9UQ85, “System.One Manager”) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. System.One Manager considers sustainability risks as part of its due diligence process prior to any investment. This also includes an assessment of sustainability risks. Such assessment is being conducted through an informal process as appropriate in light of the circumstances of the individual case. The results of such assessment are taken into account when the investment decision is being taken. However, System.One Manager remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case System.One Manager can also apply measures to reduce or mitigate any sustainability risks. At all times, System.One Manager will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

II. No consideration of adverse impacts of investment decisions on sustainability factors

System.One Manager does not consider any adverse impacts of its investment decisions on sustainability factors and, hence, does not use the sustainability indicators listed in Annex I of the Delegated Regulation (EU) 2022/1288 (as amended from time to time, “RTS”) to identify and assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery.

Given that the SFDR, the Regulation (EU) 2020/852 (“EU Taxonomy”) and the accompanying RTS, which determine the sustainability indicators to be used and provide details on mandatory processes to obtain the respective data at portfolio company level, are relatively new legislative acts, there is – as of now – only little practical experience with regard to the application of their respective provisions. Therefore, substantial legal uncertainties would remain when applying those provisions to the strategies pursued by System.One Manager. Moreover, the burden associated with considering adverse impacts on sustainability factors by using sustainability indicators is disproportionate in light of the very limited relevance that such impacts could have in the context of System.One Manager’s investment strategy: System.One Manager pursues an active venture capital strategy (early stage, including pre-seed, seed and series A rounds) focusing on business models within the technology sector. Such investments are unlikely to cause severe adverse impacts on sustainability factors and, as a result and due to the size of the portfolio companies, System.One Manager’s investment decisions are expected to hardly ever have an impact on sustainability factors. Furthermore, the consideration of principal adverse impacts will largely depend on the availability of the relevant data from the underlying portfolio companies. Especially on early-stage companies, the collection and provision of such data might put an undue burden. Given that the funds managed by System.One Manager will only hold minority interests in their portfolio companies which are generally not sufficient to encourage the companies to collect and report the relevant data, it is currently not foreseeable for System.One Manager whether the information for the identification and assessment of principal adverse impacts could be obtained from all portfolio companies on a regular basis as required by Art. 4 SFDR.

If and to the extent that the legal uncertainties will be resolved, a practicable market and administrative practice will evolve, and data availability can be ensured, System.One Manager will re-evaluate considering principal adverse impacts of its investment decisions in due course.

III. Remuneration disclosure

As a registered alternative investment fund manager within the meaning of section 2 (4) of the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”), System.One Manager does not have and does not need to have a remuneration guideline or policy in accordance with the requirements of the KAGB.