Integration of sustainability Risks
Prologis Management II S.à r.l. (the "Management Company") acts as the manager of Prologis European Logistics Fund (“PELF”), FDR PELF SCA, SICAV-RAIF (“FDR PELF”) and FDR PCCLF SCA, SICAV – RAIF (“FDR PCCLF”), and together with PELF and FDR PELF hereinafter referred to as the “Funds”). In addition to the Funds, the Management Company is also the manager of Prologis Italy II REIF (“REIF”), a wholly owned subsidiary of PELF.
Pursuant to the EU Sustainable Finance Disclosure Regulation (2019/2088) (“SFDR”) , the Management Company is required to disclose the manner in which Sustainability Risks are integrated into the investment decision making.
"Sustainability Risk" means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the properties owned or acquired by the Funds.
Before any investment decisions are made on behalf of PELF, the Management Company will identify the material Sustainability Risks associated with the proposed investment. These risks and the assessment of the risks form part of the overall investment proposal reviewed and approved by the Management Company prior to being submitted to the investment committee. The investment committee further assesses the identified risks alongside other relevant factors set out in the proposal. Following its assessment, the investment committee makes relevant investment decisions having regard to PELF’s investment policy and objectives. During this process, Sustainability Risks are identified and assessed using the same process as is applied to other relevant risks affecting PELF.
The specific investment decision-making on behalf of PELF is part of the Management Company’s wider policies and procedures regarding the integration of Sustainability Risks in its decision-making process in relation to its Funds generally.
Sustainability Risks will be integrated into the investment decision making and risk monitoring of PELF to the extent that they represent potential or actual material risks to PELF’s investments. As part of that process, the Management Company has determined that Sustainability Risks are potentially relevant to PELF having regard to the types of investments that may be made in accordance with PELF’s investment policy and objectives. The identification and assessments of risks, including Sustainability Risks, will take place on an investment-by-investment basis in accordance with the above policy. PELF is exposed to certain potential Sustainability Risks as, among others, reflected in VII Risk Factors, section E of its Offering Memorandum.
The Management Company will follow its procedures to identify and mitigate Sustainability Risks with respect to PELF, although there can be no guarantee that it will successfully identify and mitigate all material risks.
For completeness, the integration of sustainability risks at the level of REIF is included in the integration of sustainability risks at the level of PELF, since REIF is a wholly owned subsidiary of PELF.
Environmental and Social Characteristics promoted by the Fund
The relevant characteristics promoted by the Fund consist of investing in, and scaling, solutions with positive societal impact and promoting sustainable practices in the portfolio companies of the Fund.
With respect to FDR PELF, FDR PELF invests all of its assets in PELF as a master-feeder structure and follows the same investment objective and strategy of PELF. The Management Company is responsible for ensuring that the investment objective and strategy of FDR PELF are aligned at all times with those of PELF. Investment decisions at the level of the PELF are made by the Management Company in its capacity as management company of PELF (and not by the Management Company in its capacity as management company of FDR PELF). For more details, please refer to VII E.U. Regulatory and Other Matters, Section C of FDR PELF’s Offering Memorandum.
With respect to FDR PCCLF, FDR PCCLF invests all of its assets in Prologis China Core Logistics Fund (the “Master Fund”) as a master-feeder structure and follows the same investment objective and strategy of the Master Fund. The Management Company is responsible for ensuring that the investment objective and strategy of FDR PCCLF are aligned at all times with those of the Master Fund. Investment decisions at the level of the Master Fund are made by its general partner (a non-EU AIFM). For more details, please refer to VII E.U. Regulatory and Other Matters, Section C of FDR PCCLF’s Offering Memorandum.
No consideration of adverse impacts of investment decisions on sustainability factors
The Management Company does not consider the adverse impacts of its investment decisions on sustainability factors, as the availability and reliability of PAI-related data cannot be reasonably ascertained, particularly considering the geographical focus of some of the Funds. However, the position will be kept under review as the availability of reliable data increases over time.
The Management Company pays its employees a combination of fixed remuneration (salary and benefits) and variable remuneration (including bonus). Variable remuneration for relevant employees takes into account compliance with all policies and procedures, including those relating to the integration of Sustainability Risks on the investment decision making process. In this regard, the Management Company’s remuneration policy does not encourage risk-taking which is inconsistent with its internal risk limits or with the risk profile of the Funds that the Management Company manages, and this includes Sustainability Risks.
To access the Fund-specific information under the Sustainable Finance Disclosure Regulation, please visit the links below:
Prologis European Logistics Fun (PELF) - dated 1-1-2023