Compliance with EU Sustainable Finance Disclosure Regulation (2019/2088) (“SFDR”)
Cabot Properties, Inc. (“Cabot”) makes the following disclosures in accordance with Articles 3(1), 4(1)(a), 4(2) and 5 of the SFDR. This disclosure applies to Cabot’s risk management across all funds it manages, and applies to all content on this website and any materials provided herein.
Sustainability Risk Policies
A sustainability risk means “an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of the investment.” For Cabot, sustainability risks are risks which, if they were to crystallize, would cause a material negative impact on the value of the portfolios of its funds.
Cabot considers these risks as part of its risk management process for the funds it manages, starting with an overall assessment of the likely risks associated with investments pursuant to the relevant fund’s investment policy and objectives. Supplemental due diligence may also be conducted by external advisors or third parties, when deemed necessary. This leads to the submission of investment proposals to the investment committee, along with the material ESG findings.
The relevant investment committee assesses all identified risks alongside other relevant factors set out in the proposal. Following its assessment, investment decisions are made having regard to the fund’s investment policy and objectives. Once an investment has been made, Cabot continues to monitor the ESG related factors throughout the investment cycle in an effort to continuously mitigate material ESG risks and create value through ESG opportunities.
Principle Adverse Impacts Statement
Article 4 of the SFDR requires fund managers to make a clear statement as to whether they consider “principal adverse impacts.”
Although ESG and sustainability risks are important to Cabot and taken seriously, the principal adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4 of the SFDR are not taken into consideration. This is because Cabot is not, in its view, currently in a position to obtain and/or measure all the data which SFDR would require it to report to clients and investors, or to do so systematically, consistently and at a reasonable cost with respect to all its investment strategies. This current position will be kept under review and may change in the future.
Cabot pays its staff a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration for relevant staff takes into account performance and a number of other factors, such as ESG and compliance with our policies and procedures, where appropriate. Cabot considers this appropriate, as it aligns the interest of investment teams with its investors and incentivizes consideration of longer-term risk-reduction and value-creation ESG factors alongside financial performance.