Sustainability-related disclosure

Consideration of sustainability risks in the investment decision-making process

New investment opportunities for Deutsche Private Equity (DPE) funds are checked against a negative list of sectors and business models that are outside DPE\\\\’s investment focus at the beginning of the decision-making process. According to this negative list, DPE will not invest in companies whose main activities are in the following areas:

• The manufacture or sale of offensive armaments, weapons or munitions used in acts of war or military conflict
  
• Hardcore pornography or the sex industry (including any activity in the field of prostitution)
  
• The manufacture or sale of tobacco
  
• The operation of casinos or other gambling establishments
  
• Activities involving the cloning of human cell material

Provided the target company does not violate the exclusion criteria, the company’s sustainability risks and opportunities are analyzed and assessed by means of dedicated ESG due diligence carried out by independent external consultants. This allows these risks and value creation potential to be identified right at the start of the investment process. The key findings of the due diligence are summarized in the draft resolution for the DPE Investment Committee and thus also formally taken into account in the investment decision.

No consideration of adverse effects of investment decisions on sustainability factors

Art. 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector ("SFDR") aims to create transparency with regard to the main adverse impacts of investment decisions on sustainability factors. To this end, financial market participants such as DPE must disclose certain information, taking into account the concretizing provisions of Commission Delegated Regulation (EU) 2022/1288 ("RTS") with regard to regulatory technical standards. Currently, DPE does not yet consider all of the key adverse impacts of investment decisions on sustainability factors as required by the RTS. This is because DPE is currently of the opinion that the information provided by the portfolio companies of the funds concerned is not sufficient to present the main adverse impacts as required by the RTS.

DPE will monitor developments with regard to the information available and will consider whether it makes sense to disclose the information required by Art. 4 SFDR (including the RTS) in the future.

Consideration of ESG aspects in the remuneration policy

DPE’s remuneration policy aims to promote sustainable growth and take sustainability risks and opportunities into account when making investments. The remuneration model for DPE professionals includes a long-term variable component that takes into account, among other things, the application of ESG principles in the investment process and the continuous monitoring and support of portfolio companies with regard to improving their ESG performance.