What are responsible investments?

Responsible Investments are defined as the strategy and practice of integrating environmental, social and corporate governance (ESG) criteria when making investment decisions.

This practice explicitly acknowledges the importance of ESG factors, as well as the long-term health and stability of the market as a whole, when making investment decisions.

By incorporating ESG criteria, investors are evaluating at more than traditional financial metrics.

Responsible investment is based on a different and expanded system of evaluating the performance of investments in both the private and public sectors. This system takes into account, in principle, risks and opportunities that until now have not been sufficiently investigated and evaluated, resulting in the loss of financial and physical resources and the reduction of performance opportunities.

In this context, the process of making investment decisions becomes more strategic by examining more parameters over time and evaluating risks and the potential impact on business results in the medium and long term.

It also becomes more resilient to risks caused by exogenous factors such as the pandemic but which have a significant and immediate impact on both business continuity and investment performance.

Finally, it becomes safer and more efficient over time by directing investments in products and services that are formed in terms of overall sustainability, i.e. on an economic, social and environmental level, contributing to securing the resources needed for future development.

By incorporating ESG criteria, investors are looking at more than traditional financial metrics.

In this direction, PRI (Principles of Responsible Investing) organization comes to help, which encourages investors to implement responsible investments in order to achieve returns with more effective risk management by setting 6 criteria.

We actively participate for a better future

At 3K Investment Partners we operate in accordance with the principles and standards imposed by the institutional sustainability framework, but above all and beyond these we seek to fulfill our mission with reliability, responsibility, transparency and respect for the needs of customers and of all those affected by the operation of our company.

We also align ourselves with international standards and best practices, both in applying criteria to evaluate our products and investments, and in partnering with our stakeholders in the context of transitioning to a sustainable business model.

After all, from 1/1/2022 the European Taxonomy for the climate crisis is applicable mandatorily. In addition, based on the Regulation (EU) 2019/2088 (SFDR), the company is obliged to inform its clients about the inclusion of sustainability risks in the process of making investment decisions and providing investment advice.

We apply a specific methodology to evaluate investment options

3K Investment Partners has developed its own comprehensive methodology for evaluating and classifying companies and issuers of financial instruments in terms of sustainability.

This methodology is called "3KIP SRS" (3KIP Sustainability Rating System) and is applied to companies and in general to issuers of financial instruments that are included or are being considered for inclusion in portfolios and mutual funds managed by 3K Investment Partners. In general includes the following four stages:

1

The exclusion and avoidance of investments that do not meet the minimum conditions in order not to cause irevocable damage to humans and the environment (principal adverse impact). Among others, this category includes activities such as the production of weapons, drug trafficking, and the production of tobacco products

2

The evaluation of the criteria regarding compliance with the regulatory framework, but also the integration of sustainability in the companies' strategy for making relevant investment decisions

3

The consultation with the companies and in general the issuers of financial instruments included or considered to be included in the portfolios

4

The participation in the General Assemblies of the companies whose shares and securities are included in the managed portfolios.

A FEW WORDS ABOUT THE UN PRI

PRI is the world's leading advocate of responsible investing. It acts in benefit of the long-term interests of its signatories, the financial markets and economies in which they operate, and ultimately the environment and society as a whole. It encourages investors to use responsible investing to improve returns and manage more effectively the risk, but it does not operate for its own profit. It works with policy makers globally, but it is not affiliated with any government and is supported by the United Nations.

According to the UN PRI, the six Principles for Responsible Investment offer a menu of possible actions for integrating ESG issues into investment practice. The Principles were developed by investors, for investors. In implementing them, signatories contribute to the development of a more sustainable global financial system

What are the Principles for Responsible Investment? | PRI Web Page | PRI (unpri.org)

A FEW ABOUT THE EU NFRD DIRECTIVE

EU law requires some large companies to make public information about how they operate and manage social and environmental challenges.

This helps investors, civil society organizations, consumers, policy makers and other stakeholders to assess the non-financial performance of large companies and encourages these companies to develop a responsible approach to business.

Directive 2014/95/EU, also called the Non-Financial Disclosure Directive (NFRD) — sets the rules for the disclosure of non-financial and diversity information by certain large companies.

The Directive on the Mandatory Disclosure of Non-Financial Information (EU NFRD) mandates the mandatory disclosure of documents such as the annual corporate report, the integrated report, the sustainability report concerning at least the following individual issues:

Business model and materiality assessment outcomes
Environmental issues recognized as essential and their treatment (policies and objectives)
Social and labor issues recognized as essential and their treatment (policies and objectives)
Respect for human rights and the impact of business activity (policy and objectives)
Tackling corruption and bribery (impact, policy and objectives)
Diversity at senior management level (policy and objectives)

The Directive follows the "comply or explain" rule, i.e. if for some reason the above matters are not included in the relevant public documents of the company, the company must explain the reason for not making this information public.

Corporate sustainability reporting | European Commission (europa.eu)

A FEW WORDS ABOUT EUROPEAN TAXONOMY

In December 2019, the European Council and the European Parliament reached a political agreement on the text of a proposed regulation establishing a framework for the facilitation of sustainable investment – the so-called “Taxonomy Regulation”. The Regulation was published in the Official Journal of the EU on 22 June 2020, after being approved by the European Parliament on 18 June 2020 and entered into force on 12 July 2020.

The EU Classification Regulation describes a framework for the classification of 'green' or 'sustainable' economic activities carried out in the EU. Previously, there was no clear definition of a green, sustainable or environmentally friendly economic activity. The EU classification regulation creates a clear framework for the concept of sustainability, defining exactly when a company or business operates sustainably or environmentally friendly. The legislation aims to reward and promote environmentally friendly business practices and technologies.

The European Taxonomy focuses on the following six environmental objectives:

Mitigation of climate change
Adaptation to climate change
Sustainable use and protection of water and marine resources
Transition to a circular economy
Pollution prevention and control
Protection and restoration of biodiversity and ecosystems

EU Taxonomy Overview (eu-taxonomy.info)

A FEW WORDS ABOUT SASB

The Sustainability Accounting Standards Board (SASB) is a non-profit organization, established in 2011 to develop sustainability accounting standards. Investors, lenders, insurers and other financial service providers are increasingly attuned to the impact of environmental, social and governance (ESG) factors on companies' financial performance, driving the need for standardized ESG reporting. SASB's mission “is to establish industry-specific disclosure standards on ESG issues that facilitate communication between companies and investors about economically relevant information that is useful for decision-making. This information should be relevant, reliable and comparable across companies on a global basis."

SASB has developed a complete set of 77 Standards. In November 2018, SASB published these Standards, providing a comprehensive package of globally applicable industry-specific standards, which specify the minimum set of economically material sustainability issues and the method of their measurement.

Standards Overview - SASB

A FEW WORDS ABOUT INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS)

The IFRS Foundation is a non-profit organization established to develop a single set of high-quality, understandable, applicable and globally accepted accounting and sustainability disclosure standards—IFRS Standards—and to promote and facilitate the adoption of those standards.

The standards are developed by the two standard-setting boards, the International Accounting Standards Board (IASB) and the newly formed International Sustainability Standards Board (ISSB). The IASB sets accounting standards and the ISSB sets Sustainability Disclosure Standards. Accounting Standards specify how a company prepares its financial statements, while Sustainability Disclosure Standards specify how a company discloses information about factors related to sustainability.

https://www.ifrs.org/

Α FEW WORDS ABOUT SFDR

The Sustainable Finance Disclosure Regulation (SFDR) is a European regulation introduced to improve transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by financial market participants.

It imposes comprehensive sustainability disclosure requirements covering a broad range of environmental, social & governance (ESG) metrics at both entity- and product-level.