Sustainability Risks Policy

Through Sciens Water UK group entities, Sciens Water is required to maintain a Sustainability Risk Policy in accordance with its regulatory obligations in the UK with its regulated investment managers authorised by the Financial Conduct Authority (“FCA”) and marketing an Irish-domiciled investment vehicle within the scope of EU requirements. For these purposes, “sustainability risk” is defined in the Sustainable Finance Disclosure Regulation (“SFDR”) as an environmental, social or governance (“ESG”) event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment.

Sustainability risk is a core consideration in the investment due diligence process and is assessed alongside other financial risk factors when evaluating the expected risk-adjusted returns of the Sciens Water Funds’ investments. This approach is consistent with applicable UK regulatory expectations regarding the identification and management of ESG-related risks. Such risks may arise across a range of ESG factors and can be particularly acute where they materialise in an unforeseen or abrupt manner, potentially impacting asset valuations and performance.

As part of the Sciens Water group, Sciens Group Risk Services Limited (“SGRS”), in its capacity as a regulated Alternative Investment Fund Manager operating in the UK and Ireland, and in accordance with the Sustainable Finance Disclosure Regulation (“SFDR”), makes the following determinations:

• SGRS currently does not consider the adverse impacts of investment decisions on sustainability factors due to its size, nature and the scale of activities that it undertakes. This approach may be reconsidered at a future date.
• SGRS considers sustainability risks as a factor when carrying out due diligence on the expected returns of the Sciens Water Funds’ investments. Assessment of sustainability risk requires subjective judgements, which may include consideration of third party data that is incomplete or inaccurate. There can be no guarantee that SGRS will correctly assess the impact of sustainability risk on the Sciens Water Funds’ investments. All investments are exposed to sustainability risks to a varying degree.
• Due to the nature of its operations, SGRS deems such risks as having a low to negligible impact on its investments.

UK Sustainable Disclosure Requirements

As part of the Sciens Water group, Sciens Capital Limited (“SCL”), a regulated investment adviser in the UK and SGRS are subject to the UK Sustainable Disclosure Requirements (“UK SDR”). Both entities operate in accordance with the UK FCA’s Anti-Greenwashing Rule (the “Rule”). The Rule mandates that all FCA-authorised firms must ensure that sustainability-related claims in communications about financial products and services in the UK are “clear, fair, and not misleading”, and align with the sustainability profile of the product/service. All communications made by SGRS and SCL (or refer to SGRS and SCL) about financial products or services where they refer to environmental and/or social characteristics of those products and services are in accordance with the Rule. This includes the provision of any statements, assertions, strategies, policies, and images made in the information disseminated.

This Rule applies to any firm, irrespective of whether it engages in sustainability-focused business, that:

• Communicates with a client in the United Kingdom regarding a product or service, or
• Communicates a financial promotion to, or approves a financial promotion for communication to, an individual in the United Kingdom.

None of the products/financial services that SGRS and SCL manage or advise fall in scope of the UK SDR sustainability labelling requirements.

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