Disclosures of information on sustainability and adverse sustainability impacts in accordance with Regulation (EU) 2019/2088 (SFDR)

In the context of achieving the objectives of the Paris Agreement, the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector, as in force,seeks to achieve more transparency regarding how financial market participants integrate sustainability risks in their processes on their investment decisions and investment advice and lays down rules on the assessment of adverse sustainability impacts and the provision of sustainability‐related information with respect to financial products.
ALPHA TRUST (hereafter the “Company”) recognises the importance of material environmental and social related information in the formulation of relevant corporate governance rules («ESG», or Environmental, Social, Governance), and in order to comply with the requirements of the above European Regulation, which applies from March 10th 2021, follows a sustainable approach to its investment processes and makes the following disclosures:

ALPHA TRUST considers the relevant sustainability risks in the research, analysis, and its investment decision‐making process. Investment decisions may create, contribute or be directly associated with adverse impacts on sustainability factors (Adverse Sustainability Impacts). The sustainability factors include, inter alia, environmental and social factors, as well as factors regarding corporate governance.

Integration of sustainability risks in the investment process

Α sustainability risk is the risk associated with an ESG event or condition, ie in the environmental or social or governance sector, that, if it occurs, could cause a material negative impact (actual or potential) on assets and liabilities of the companies investing, with a consequent negative impact on the value or return and the value of the investments. The assessment of sustainability risks that might have a relevant material impact on the value of the investment is our duty to stakeholders and our investors, with the objective of the transition to a more sustainable future.

The integration of ESG factors in a company's process policy aims at the stable operation of the company and the minimization of adverse impacts on stakeholders, the environment and the society.
The sustainability risk in the investment decision-making process is assessed by the Company, taking into account the adverse impacts that may cause on a particular asset. Such impacts may stem from:

i. regulatory changes (e.g. emission caps/taxes, governance requirements);
ii. technology cost and uncertainty of new technology efficiency and effectiveness;
iii. reputational damage from non-compliance with sustainability best practices;
iv. behavioral changes of market participants (e.g. investors, consumers);
v. the adverse effects from the manifestation of climate change (such as floods, fires, snowstorms, rainfall, sea level rise, etc.).

The focus of sustainability risk management in ALPHA TRUST lies in the transition to a more sustainable future, in accordance with the objectives of the Paris Agreement.This approach is in accordance with the European Supervisory Authorities’ Final Report on draft Regulatory Technical Standards.

For this purpose, the methodology of ALPHA TRUST towards a more sustainable future is based on the identification of risk measurements of the three pillars of the ESG: Environment, Society and Governance. In this way, the Company can better assess the readiness of each issuer to its move to a more sustainable future based on the objectives of the Paris Agreement. In addition to the use of an extensive list of sustainability indicators by data providers, it is at the discretion of the fund managers to review any available sustainability risk information.
The Company starts with ex-ante risk assessment of the investment opportunities. The due diligence and investment selection, accounts for a series of risks, among which, is sustainability. In addition, relevant risk indicators have been added to the existing reporting framework and the results at the portfolio level under the management of the Company, as well as at the security level, are communicated to the fund managers.

ALPHA TRUST has defined the framework of sustainability risk appetite, in order to create a watch list of securities with a high risk index and to activate a relevant escalation process in case of exceeding the materiality thresholds, while in addition on a systematic basis relevant reports are made available to the involved bodies.

However, the Company states that it does not consider adverse impacts of investment decisions on sustainability factors.

The reason for adopting this approach currently, is the lack of necessary data on these factors.
It is the Company's intention to modify the above approach to recognize the adverse impacts of the investment decisions on sustainability factors, once the data become available and assessed as reliable.

Transparency of Remuneration Policy and of Voting Rights Policy in relation to the integration of sustainability risks

ALPHA TRUST has established and maintains Remuneration Policy in accordance with the provisions of Directive 2009/65/EU on UCITS and the Regulation supplementing Directive 2011/61/EU on AIFMs. Τhe remuneration policy is consistent with and promotes sound and effective risk management – explicitly including sustainability risk – and does not encourage excessive risk‐taking and/or risk-taking which is inconsistent with the risk profiles, funds’ rules or instruments of incorporation of the UCITS and AIFs that the Company manages. Details regarding the Remuneration Policy are disclosed on the Company's website.

Furthermore, ALPHA TRUST has established and maintains a Voting Rights Policy in which – inter alia – accepted corporate governance issuers’ practices are declared and provisions in relation to the handling of any conflict of interest issues that may arise, as well as to the relevant record-keeping and to the provision of additional details regarding the actions taken under this policy, are included. Details regarding the Voting Rights Policy are disclosed on the Company's website.

ALPHA TRUST supports the Principles of Responsible Investment

ALPHA TRUST, recognising the importance of responsible investment decisions based on ESG criteria, joined the "Principles for Responsible Investment" (PRI) initiative as "Investment Manager Signatory" in 2020.

As a PRI signatory, ALPHA TRUST adopts the following principles of responsible investment:

• Incorporation of ESG issues into investment analysis and decision-making processes.
• Active ownership and incorporation of ESG issues into our ownership policies and practices.
• Seeking of appropriate disclosure on ESG issues by the entities in which the company invests.
• Promotion of acceptance and implementation of the Principles within the investment industry.
• Collaboration for the enhancement of the corporate effectiveness in the implementation of the principles.
• Submission of a Transparency Report regarding the activities and implementation progress of principles.

ALPHA TRUST has established and maintains ESG Investment Policy on environmental, social and governance issues, related to the Company's business activities.

ALPHA TRUST Sustainability Report 2021 is available here