Sustainability: what is it and how do you measure it?

Explanation using the European SFDR Regulation

We draw our inspiration for sustainability from the principle of stewardship: working in connection with the earth, caring for each other and from an expectant basic attitude.

What exactly is sustainability? Sustainability is a broad term, but in short it means that in a sustainable world, people, environment (planet) and economy (profit) are in balance, so that we do not deplete the earth or exploit people. So sustainability has an ecological and a social dimension, which are closely intertwined.

But as an investment fund, when can you say you are 'sustainable'? How do you measure it and what indicators and definitions do you use to do so? This is where the European Sustainable Finance Disclosure Regulation (SFDR) comes in.

The regulation distinguishes three categories of funds and requires fund providers to indicate which category their fund falls into. These funds are classified as ''grey'' funds (funds without a sustainability strategy), ''light -green'' funds (funds with a sustainability strategy aimed at limiting negative impact), and ''dark -green'' funds which aim to create positive impact. This can involve both environmental and social impact.

Fair Factory Development Fund falls into the latter category, the so-called ''Article 9 funds''. To comply with the SFDR rules for Article 9 funds, we publish a number of documents.n. Here findt you the Sustainability Information prepared in accordance with the SFDR. And our SFDR sustainability report for the year 2023 can be found here.

Our fund manager Incluvest Management Services B.V. issues a Principal Adverse Impact Statement annually. This statement explains how adverse sustainability impacts are taken into account in the investment process. Here vindthe most recent version of this document.

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