Does this financial product have a sustainable investment objective?

Yes. It will make a minimum of 100% sustainable investments with an environmental objective/ in economic activities that qualify as environmentally sustainable under the EU Taxonomy.

What is the sustainable investment objective of this financial product?

All our investments work towards improving the environmental sustainability of the global agrifood supply chain (reduction in GHG emissions, increase in biodiversity, reduced water usage etc.). Therefore, we believe that 100% investments made by Yield Lab Europe qualify as sustainable investments with an environmental objective (‘climate change mitigation’) as referred to in the EU Taxonomy Regulation (“TR”).

What sustainability indicators are used to measure the attainment of the sustainable investment objective of this financial product? How do sustainable investments not cause significant harm to any environmental or social sustainable investment objective?

  • How have the indicators for adverse impacts on sustainability factors been taken into account?

As an impact investor, Yield Lab Europe is focused on assessing and measuring the positive impact, as well as potential negative externalities, of its investees. To this end, Yield Lab Europe considers the principal adverse impacts of its investment decisions on sustainability factors throughout all major steps of the investment and portfolio management process. Yield Lab Europe will take the necessary preparations to gather, monitor and report the fourteen (14) mandatory principal adverse impacts on sustainability factors as set out in Table 1 of Annex I of the Regulatory Technical Standards of the SFDR RTS.

 

In addition to taking the PAIs into account we will also actively work with our investments to understand and measure their impact. We will define environment /sustainability metrics that will be monitored over the lifetime of the investment. All of our investments must address a minimum of one Sustainable Development Goal (SDG), all of investments will provide services supporting multinational businesses in acting responsibly in face of the climate crisis, as defined by the OECD guidelines. For example, our investments might provide MRV services for global food companies to be able to reach their net zero targets.

With regards to the UN Guiding Principles on Business and Human Rights, in general our investments are promoting a more sustainable agrifood system, which often goes hand-in-hand with greater supply chain transparency, and hopefully a more equitable industry. Our due diligence process involves thorough exploration of how our potential investee companies function and should unearth any problematic human rights issues prior to investment. This is continued throughout our investment period, thanks to our involvement on Company Boards, in addition to support establish strong internal policies and practices with regards to their own employees, as relatively new companies.

Does this financial product consider principal adverse impacts (PAIs) on sustainability factors? Yes (see above)

What investment strategy does this financial product follow?

  • What are the binding elements of the investment strategy used to select the investments to attain the sustainable investment objective?

All investments go through an initial screening of whether they “positively impact the future of food and agriculture”. In addition to the screening and monitoring of ESG risk (or ‘internal’ sustainability risk), this process ensures that any external sustainability vulnerabilities of the companies are identified and considered. Sustainability risk, both internal and external, is therefore integrated from the beginning of the investment decision process by means of the positive and negative screening process as described. It is also incorporated into the individual valuations of Yield Lab Europe products.

 

  • What is the policy to assess good governance practices of the investee companies?

 

Yield Lab Europe has two governing bodies that oversee the investment process and screen for risks: the Investment Committee (IC) and the BThe IC makes the decision to progress with a prospective investment into the due diligence phase and makes the final investment, follow-on investment, and divestment decision. The independent Board reviews and advises on the setting of impact targets (pre-investment). Consideration of sustainability risks occurs at every stage of the investment process.

 

  • 100% of the investments are made in line with the exclusion policy (e.g. excluding investments in illegal activities, weapons, tobacco, palm oil, fossil fuel, nuclear power, gambling and adult entertainment)
  • All companies have an inherent requirement to have a positive impact on food and agricultural supply chains
  • All investments are measured by environmental impact targets which are approved by the YLE Limited Partner Advisory Committee and reported on in an annual Impact Report. Investments are only made in companies that incorporate and are willing to (further) improve on their ESG capabilities as based on an ESG Action Plan.
  • The sustainability objective and impact indicators are monitored on a regular basis as part of the investment process. All of YLE’s investments are measured on a periodic basis against environmental impact KPI’s that were determined at the time of investment.

What is the asset allocation and the minimum share of sustainable investments? 100% allocation to sustainable investments.

How does the use of derivatives attain the sustainable investment objective? NA

To what minimum extent are sustainable investments with an environmental objective aligned with the EU Taxonomy?

All our investments work towards improving the environmental sustainability of the global agrifood supply chain (reduction in GHG emissions, increase in biodiversity, reduced water usage etc.). Therefore, we believe that 100% investments made by Yield Lab Europe qualify as sustainable investments with an environmental objective (‘climate change mitigation’) as referred to in the EU Taxonomy Regulation (“TR”).

Is a specific index designated as a reference benchmark to meet the sustainable investment objective? NA

Do we have an Impact Board?

No