SFDR Disclosures

Sustainability-Related Disclosures

As an integral part of our business principles, Invision (along with its subsidiaries and controlled affiliates, „Invision„) is committed to promoting responsible investment practices for the benefit of society. Sustainability is a core component of our business strategy and underscores our approach as a long-term investor. As such, we recognize the importance of environmental, social and governance („ESG„) considerations in protecting value and enhancing financial returns for our investors, whilst also creating a net benefit for society and the environment in which our portfolio companies operate. Invision’s investment strategy is to support growth through targeted development including (i) talent, (ii) operational excellence, (iii) integration of ESG considerations, (iv) new products, (v) new geographics, (vi) digitalization and (vii) add-ons.

Responsible investment principles are an integral part of Invision’s investment process, pre-investment (during origination, screening and due diligence), and subsequently throughout our ownership and at exit (realization). We are committed to responsible, environmentally sound business practices. As such, we encourage our portfolio companies to consider ESG factors in the pursuit of their business objectives.

 

ARTICLE 3 SFDR[1]

Sustainability Risks

„Sustainability Risks“ include those linked to events resulting from climate change (i.e. physical risks) or to the society’s response to climate change (i.e. transition risks), which may result in unanticipated losses that could affect the investments made by Invision. Social events (e.g. inequality, inclusiveness, labour relations, investment in human capital, accident prevention, changing customer behaviour, etc.) or governance shortcomings (e.g. recurrent significant breach of international agreements, bribery issues, products quality and safety, selling practices, etc.) may also translate into Sustainability Risks that could negatively impact the value of the investments. Sustainability Risks could arise at any stage of the investment lifecycle.

Integration of Sustainability Risks in the investment advisory decision-making process

Invision assesses and monitors Sustainability Risks as part of the ESG investment process as follows:

Pre-Investment:

• Screen the portfolio company against certain exclusions (described below) and the Invision Responsible Investment Policy;
• Perform an initial assessment of the portfolio company’s sustainability status to identify Sustainability Risks and opportunities based on desktop research and available information;
• Perform ESG due diligence including involvement of external specialists (as necessary) as well as corresponding documentation and reporting; and
• Discuss and consider overall sustainability status of the portfolio company (Sustainability Risks and opportunities) identified in the ESG due diligence by the Invision investment committee as part of the investment advisory decision-making process.

Ownership:

• Define an ESG action plan based on company-specific key priorities (relying on ESG due diligence findings) for the portfolio company as part of its value creation agenda (the „ESG Action Plan„);
• Implement the ESG Action Plan by the deal teams together with the portfolio company management and support from the Invision ESG team;
• Discuss the ESG Action Plan and status of initiatives as part of the regular portfolio company board meetings;
• Regularly monitor the progress on ESG topics, compare against the ESG Action Plan and actively address any deviations from the ESG Action Plan with the portfolio company;
• Conduct surveys and collect data on company-specific ESG KPIs, ESG policies and ESG initiatives at the portfolio company; and
• Report periodically on the performance of the portfolio company against the ESG Action Plan to investors (including mandatory disclosures under SFDR).

Exit:

• Demonstrate the ESG track record and achievements during the ownership period in sell-side documentation based on the ESG Action Plan and company-specific ESG KPIs;
• Provide relevant ESG information (including the ESG Action Plan and performance measured using the company-specific ESG KPIs) to potential buyers during the due diligence phase; and
• Consider ESG aspects when selecting the buyer universe in order to promote continued good practices under new ownership.

Exclusions:

Invision will avoid investments in companies:

• that Invision is aware are involved in criminal activities;
• whose principal business is the manufacturing, distribution or sale of arms or ammunition;
• whose principal business is the manufacturing, processing, distribution or sale of tobacco products or hard spirits;
• whose principal business is the direct investment in real estate;
• whose principal business is the manufacturing, distribution or sale of pornography;
• whose principal business is the exploration for oil, gas or other natural resources; or
• whose principal business is the operation of casinos or other gambling facilities.

Invision has amended its existing set of exclusions. From the date of publication of version 2 of these disclosures, Invision will also avoid investments in companies:

• which significantly violate environmental laws, as determined by a final judgement of a competent court or a final order of a competent authority; or
• which are involved in violations of recognized international standards (UN Global Compact, UN Guiding Principles on Business and Human Rights and OECD Guidelines for Multinational Enterprises); or if directors or employees acting for the portfolio company have been finally found guilty by a competent court or authority of a tax offense or a willful violation of material tax laws.

 

ARTICLE 4 SFDR

No consideration of adverse impacts

Article 4 SFDR requires Invision to make a „comply or explain“ decision whether to consider the adverse impacts of its investment advisory decisions on sustainability factors, in accordance with a specific regime outlined in Article 4 SFDR and the SFDR Delegated Regulation[2]. Invision has opted not to comply, meaning that it does not consider the adverse impacts of its investment advisory decisions on sustainability factors.

Invision has carefully evaluated the requirements of Article 4 SFDR and the SFDR Delegated Regulation relating to the consideration of adverse impacts (the „PAI Regime“). Invision is supportive of the policy aims of the PAI Regime, which are to improve transparency to clients, investors and the market, as to how financial market participants integrate the consideration of the adverse impacts of investment decisions on sustainability factors into their investment decision-making process.

However, Invision currently sees limited added value in considering the pre-defined set of PAI indicators set out in the SFDR Delegated Regulation for all its investment advisory decisions made in the context of various financial products. Instead, for certain financial products Invision has chosen to use its own ESG key performance indicators which also relate to adverse impacts on sustainability factors (such as climate, resource efficiency, working conditions or diversity). This permits Invision to tailor its ESG key performance indicators to each financial product and to each portfolio company. Invision will keep its decision not to consider adverse impacts of its investment advisory decisions on sustainability factors under the PAI Regime under regular review and reconsider its position when the PAI Regime permits a more tailored approach.

 

ARTICLE 5 SFDR

Consistency of remuneration policies with the integration of Sustainability Risks

Invision has established a remuneration policy (the „Policy“) applicable to all Invision entities. The Policy is developed, approved, implemented and monitored by a series of bodies within the Invision structure. The Policy applies to all employees of Invision, save for limited exceptions.

The Policy has been developed with the aim of supporting Invision’s business strategy, corporate values and long‐term interests, including by facilitating the identification, assessment and management of sustainability risks when determining individual remuneration packages. The key principles of the Policy include fostering appropriate risk culture (including with respect to the management of actual and potential conflicts of interest) and compliance with applicable law and regulation.

The performance management and rewards framework envisioned by the Policy has been designed to promote effective risk management, including in particular by:

• Ensuring that assessment of performance takes full account of adherence to risk management requirements, covering all relevant types of current and future risks, including sustainability risks;
• Implementing deferral arrangements using co‐investment and carried interest arrangements for senior personnel, facilitating alignment of interests between staff‐members and third-party investors. If the value of the relevant underlying investment portfolio should decrease (whether arising as a result of a Sustainability Risk or otherwise), the value of the employee’s holdings will be reduced accordingly; and
• Providing for reduction of deferred variable remuneration awards to senior personnel in certain circumstances, such as in the event that the entity in which the relevant employee works suffers a significant failure of risk management, or experiences a significant downturn in its financial performance (as determined in the sole discretion of Invision), including in connection with a Sustainability Risk concerning an investment.

[1] „SFDR“ means Regulation (EU) 2019/2088 (Sustainable Finance Disclosure Regulation).

[2] Commission Delegated Regulation (EU) 2022/1288.