1. Introduction

GEF – SGOIC, S.A. (hereinafter the “Management Company”) is a management company of collective investment undertakings (“SGOIC”, Sociedade Gestora de Organismos de Investimento Coletivo) governed by Portuguese law, whose corporate purpose includes, in particular, the management of real estate investment funds.

In light of the current ESG (Environmental, Social and Governance) framework, the Management Company has adopted an ESG Policy (hereinafter the “Policy”), which sets out and discloses how ESG considerations are integrated into its investment strategy.

In preparing the Policy, the Management Company has complied with the applicable regulatory framework, and in particular Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 (Sustainable Finance Disclosure Regulation – “SFDR”) and Delegated Regulation (EU) 2022/1288 of 6 April 2022.

2.  Purpose

The criteria laid down in this Policy apply whenever the Management Company provides management services for collective investment undertakings.

It should be noted that, notwithstanding the relevance of this topic, the Management Company does not currently manage collective investment undertakings which promote, among other things, environmental or social characteristics (Article 8 of the SFDR), nor undertakings which have sustainable investment as their objective (Article 9 of the SFDR).

3. Strategy

The Management Company recognises that sustainability is assuming an increasingly important role in the development of its activities. Accordingly, the primary concern of the Policy is to acknowledge the importance of sustainability in the management of real estate collective investment undertakings, particularly in the duty to protect the interests of investors, both in terms of risks associated with the investments undertaken and in the identification of new opportunities and the added value these may generate for them.

The Management Company therefore considers that this strategic orientation enables, on the one hand, the identification of risks associated with future investments and, on the other hand, highlights new opportunities for investment and long-term value creation for its investors and clients.

The Management Company further recognises that the consideration of sustainable investment criteria is aligned with its values and mission, particularly in the areas of environmental and social sustainability and governance.

This Policy sets out the principal ESG action areas within the activities of the Management Company, namely:

a) corporate and product governance;

b) risk management;

c) investment policy;

d) remuneration policy and disclosure of information.

These action areas naturally follow the general principles that guide the Management Company’s conduct, as set out below.

4. General Principles

a. Commitment

The Management Company understands that sustainable investment criteria imply a commitment and obligation, and it publicly assumes their content and scope.

b. Adaptability

The Management Company addresses ESG considerations in a manner adapted to each collective investment undertaking, according to its specific characteristics, while respecting the provisions of its constitutive and contractual instruments.

This Policy nonetheless takes into account the evolving regulatory framework regarding its application to real estate collective investment undertakings. This results in certain fragmentation and asymmetry in the information made available by issuers, both within the European Union (where various ESG-related regulatory reforms remain underway) and outside the European Union (where binding measures comparable to those in force in the EU are not in place).

c. Proportionality

The Management Company considers sustainability risks in light of the nature, scale, and complexity of its activities.

It should be noted, however, that the Management Company does not meet the criteria defining larger institutions as set out in Article 4(3) and (4) of the SFDR.

d. Truth and Integrity

The ESG-related information disclosed by the Management Company must, at all times, be true, clear, and objective.

The Management Company does not accept or permit distortions or exaggerations in the information disclosed (commonly referred to as “greenwashing”). Any ESG-related approach must always be conducted in strict adherence to the principles of truth and integrity.

e. Currency and Consistency

The Management Company undertakes to keep information relating to this Policy and its implementation up to date.  Its marketing communications may not contradict the information disclosed under this Policy.

5. Impact on Investment Policy

a. Priorities

The ESG objectives to which the Management Company gives priority in its investment decision-making – without prejudice to the specific investment policy of each collective investment undertaking – are as follows:

I – Environmental sustainability

• sustainable use of resources;

• contributing to the elimination of various forms of pollution;

• transition to a circular economy.

II – Social sustainability

• prohibition of gender-based discrimination;

• respect for human rights;

• ensuring health and safety at work;

• freedom of association and expression;

• management of human capital and labour relations;

• diversity;

• relations with local communities;

• social integration and labour relations;

• investment in human capital or in economically or socially disadvantaged communities.

III – Governance of the Management Company

• prevention of corruption and money laundering;

• shareholder rights;

• remuneration structure;

• composition of the Management Company’s Board of Directors;

• independence and effectiveness of the supervisory body;

• compliance with tax obligations;

• data protection and privacy.

b. Excluded sectors

The Management Company avoids investing in any entity or company whose principal business activity involves the promotion, production, distribution, or commercialisation of products or services related to:

– weapons and ammunition;

– activities considered illegal under the laws or regulations of the host country or under international conventions and agreements, or those subject to progressive elimination or international prohibition;

– corruption, money laundering, and terrorist financing;

– radioactive materials (except for medical purposes);

– forced labour and child labour;

– pornography and prostitution;

– violations of human rights.

The Management Company likewise avoids investing in sovereign bonds or other debt securities issued by States that do not comply with the exclusions and values set out in this Policy.

c. Preferred investment criteria

The investment policy is defined in the management regulations governing each collective investment undertaking.

6. Impact on Overall Governance

a. Approval

Responsibility for approving and reviewing this Policy rests with the Board of Directors. In this way, the Management Company ensures the full integration of this Policy within its governance system.

b. ntegration of sustainability risks into the investment decision-making process

The Management Company seeks to incorporate sustainability risks into its investment decision-making framework.

c. Adverse impacts of investment decisions on sustainability factors

The Management Company does not meet the criteria for larger institutions as set out in Article 4(3) and (4) of the SFDR.

Nevertheless, and notwithstanding the relevance of this matter, the Management Company has adopted the statement entitled “Non-consideration of adverse impacts of investment decisions on sustainability factors”. This statement is set out later in this Policy and is also published on its website, in accordance with Article 12(1) of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022.

d. Integration of ESG risks into product governance

As part of its product governance policy, the design and development of financial products are subject to the identification, assessment, and monitoring of environmental, social, or governance risks, particularly (though not exclusively) where such products are classified as ESG products for the purposes of Articles 8 and 9 of the SFDR.

e. ESG Officer

The Board of Directors may appoint an ESG Officer, with an advisory role in the Management Company’s ESG framework.

The ESG Officer supports the Board of Directors in the following tasks:

i. implementing the Management Company’s ESG strategy;

ii. monitoring compliance with this Policy;

iii. defining specific procedures for the implementation of this Policy;

iv. monitoring the ESG implications of the Management Company’s activities;

v. collecting and reporting ESG-related information;

vi. promoting best practices and fostering an internal culture aligned with ESG criteria.

This role may be combined with other functions performed within the Management Company.

7. Impact on Risk Management

a. Integration of ESG risks into the risk framework

The Management Company recognises that the management of collective investment undertakings is exposed to environmental, social, and governance risks that may affect the performance of the investments made.

Accordingly, in defining, approving, and implementing the policies, procedures, and mechanisms for managing risks associated with its activities, the Management Company duly takes into account potential environmental, social, or governance events or conditions whose occurrence could materially affect the value of the assets held in its portfolio at any given time.

The integration of sustainability risks into the investment policy has implications throughout the entire investment cycle, from investment decision-making to asset valuation and, where applicable, divestment decisions.

b. Identification, assessment, and management of ESG risks

Based on the information available, the Management Company identifies, assesses, and manages, over the short, medium, and long term, the risks arising from any environmental, social, or governance event or condition that may affect the investments made.

The functions of identifying, assessing, and managing risks fall primarily to the Risk Management function, without prejudice to the involvement of other departments or divisions for this purpose.

The Management Company’s internal and external risk management reports include an analysis of environmental, social, or governance risks that may affect the investments made.

8. Impact on Remuneration Policy

a. Integration of ESG factors

A central element of the Remuneration Policy is a governance framework that ensures the effective adoption of best practices in this area.

Accordingly, the Management Company recognises that its remuneration policy is a key instrument for aligning interests. It must therefore take into account sustainable investment objectives, aligned with the interests of unit-holders, while also ensuring conditions for fair remuneration that is capable of attracting, retaining, and motivating directors and employees.

b. Remuneration structures

The Management Company acknowledges that there is a risk of non-compliance with ESG obligations if the variable component of remuneration consists predominantly of payments made without deferral or without any mechanism for ex post risk adjustment.

A similar risk may arise where the variable component is linked to current-year revenues rather than to risk-adjusted results. Accordingly, the performance criteria used to calculate the variable component of remuneration must incorporate appropriate adjustments.

c. Prudent risk management

Recognising the need to balance metrics designed to reduce exposure to risks with those that promote sustainable growth, the Management Company integrates into its Remuneration Policy both risk-mitigating factors and objectives that incentivise business development.

9. Disclosure of Information

Disclosure on the Company’s website

NON-CONSIDERATION OF ADVERSE IMPACTS OF INVESTMENT DECISIONS ON SUSTAINABILITY FACTORS

Article 4 of Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (SFDR) requires financial market participants to ensure transparency as to whether or not they take into account the adverse impacts of their investment decisions on sustainability factors. The Regulation establishes a “comply or explain” principle, depending on whether such impacts are considered, and requires participants to be able to measure the scale of those impacts and disclose the relevant information.

For the purposes of the SFDR, “sustainability factors” include environmental, social, and governance matters, respect for human rights, the fight against money laundering, terrorist financing, the proliferation of weapons of mass destruction, corruption, and bribery.

In carrying out its activities, GEF SGOIC S.A. has approved an Environmental, Social, and Governance (ESG) Policy, which forms part of its Internal Procedures Manual.

Notwithstanding its recognition of the importance of this matter, GEF SGOIC S.A. does not yet take into account the adverse impacts of investment decisions made on behalf of the collective investment undertakings under its management, although it expects to be in a position to do so in the short to medium term.

This declaration of non-consideration of adverse impacts on sustainability factors is therefore issued in compliance with Article 4(1)(b) of the SFDR and Article 12 of Commission Delegated Regulation (EU) 2022/1288.

For further information on our Sustainability Policy, please refer to the relevant document available at www.gef.pt.

10. Approval, Oversight, and Review

This Policy was approved by the Board of Directors on 2 July 2024 and entered into force on that date.

The Compliance Officer of the Management Company is responsible for monitoring compliance and preparing the annual reports on its application.

This Policy is reviewed on a regular basis, in light of experience gained in its application and of any legislative changes, with proposals for revision being submitted to the Board of Directors by the Risk Management Department.

11. Publication

This Policy is available for consultation on the Management Company’s website at www.gef.pt.