Sustainability-Related Disclosures

Regulation 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (SFDR) came into force on 10 March 2021. This webpage is intended to comply with articles 3 to 5 SFDR and takes into account the draft regulatory technical standards supplementing SFDR that are expected to come into force on 1 January 2022 (the Draft RTS). We will monitor further legal and regulatory developments with respect to SFDR, the Draft RTS, the environmental, social and governance as well as sustainable requirements, factors, objectives and risks in accordance with article 12 SFDR, so that this webpage may be subject to further changes and investors are invited to consult this webpage from time to time.

This webpage covers all alternative investment funds which are managed by SouthBridge Advisors AIFM (the AIFs).

No consideration of sustainability adverse impacts

Although we generally seek to review and assess sustainability risks, and to take sustainability impacts into consideration, as part of our decision-making processes, we have taken the decision not to consider the adverse impact of investments decisions on sustainability factors as we have taken the view that sustainability risks are “not relevant” (within the meaning of SFDR) in respect of the activities and investments of the AIFs we manage for the following reasons:

1. the small size of the targeted investee companies, as well as, the nature, limited scale and limited complexity of their activities, would imply that the potential adverse environmental and/or social impact of the investments of our AIFs is likely to be negligible. Where such potential impacts exist, they will be typically site specific, and/or readily identified and addressed through effective mitigation measures; and
2. that the investments underlying the financial products of our AIFs do not take into account the EU Taxonomy regulation criteria for environmentally sustainable economic activities;

• we do not qualify for mandatory disclosures under the criterion set in article 4.4 of regulation 2019/2088.

However, we always monitor risks that could materially affect the value of the investments of the AIFs we manage and comply with the following European Bank for Reconstruction and Development (EBRD) policies and procedures, which are available on the following website: Environmental and Social Policy (ebrd.com):

1. The following sections of EBRD’s environmental and social policy:
2. Performance Requirement 2 (Labour and working conditions), Performance Requirement 4 (Health and Safety) para. 12 to 16 and Performance Requirement 9 (Financial intermediaries);
3. EBRD’s environmental and social exclusion list; and

• EBRD’s list of environmentally or socially sensitive business activities subject to referral to EBRD;

1. EBRD’s Procedures for Environmental and Social Appraisal and Monitoring: Active Equity Investment;
2. EBRD’s List of Ineligible Entities being a list of individuals and entities which EBRD considers ineligible to become an EBRD counterparty, due to such individuals or entities (or their Associates’) involvement in fraudulent, corrupt, coercive or collusive practices; and
3. EBRD’s Integrity Due Diligence and Monitoring Guidelines for Private Equity Funds.

Consistency of remuneration policy with integration of sustainability risks

SouthBridge Advisors AIFM applies a remuneration policy that is consistent with effective risk management and does not encourage excessive risk-taking. This principle applies to sustainability risks as it applies to financial risks. The content of SouthBridge Advisors AIFM’s remuneration policy is in line with the requirements of the AIFM Directive and article 5 SFDR, taking into account the size, complexity and the nature of the activity of SouthBridge Advisors AIFM and the AIFs under its management.

Product-related SFDR disclosures
SouthBridge Europe Mezzanine II SCA SICAR

Although SouthBridge Advisors AIFM generally seeks to review and assess sustainability risks, and to take sustainability impacts into consideration, as part of its decision making processes, SouthBridge Advisors AIFM has taken the view that sustainability risks are “not relevant” (within the meaning of regulation 2019/2088 on sustainability-related disclosures in the financial services sector) in respect of Southbridge Europe Mezzanine II SCA SICAR activities and investments for the following reasons: (i) the small size of the targeted portfolio companies, as well as, the nature, limited scale and limited complexity of their activities, would imply that the potential adverse environmental and/or social impact of Southbridge Europe Mezzanine II SCA SICAR’s investments is likely to be negligible. Where such potential impacts exist, they will be typically site specific, and/or readily identified and addressed through effective mitigation measures; and (ii) that Southbridge Europe Mezzanine II SCA SICAR does not take into account the EU taxonomy regulation criteria for environmentally sustainable economic activities in deciding whether or not to make its investments.

The investments underlying this financial product do not take into account the EU criteria for environmentally sustainable economic activities.

Compliance with EBRD ESG and Integrity Procedures

SouthBridge Europe Mezzanine II SCA SICAR complies with the following EBRD policies and procedures, as amended from time to time (and compliance with such policies and procedures by the general managing partner of the Company will be monitored from time to time by SouthBridge Advisors AIFM):

1. The following sections of EBRD’s environmental and social policy:
2. Performance Requirement 2 (Labour and working conditions), Performance Requirement 4 (Health and Safety) para. 12 to 16 and Performance Requirement 9 (Financial intermediaries);
3. EBRD’s environmental and social exclusion list; and

• EBRD’s list of environmentally or socially sensitive business activities subject to referral to EBRD;

1. EBRD’s Procedures for Environmental and Social Appraisal and Monitoring: Active Equity Investment;
2. EBRD’s List of Ineligible Entities being a list of individuals and entities which EBRD considers ineligible to become an EBRD counterparty, due to such individuals or entities (or their Associates’) involvement in fraudulent, corrupt, coercive or collusive practices; and
3. EBRD’s Integrity Due Diligence and Monitoring Guidelines for Private Equity Funds.