Investing for future generations

Norm-based exclusions

We exclude companies that manufacture or distribute anti-personnel mines from all of our portfolios according to the Ottawa Treaty (enforced in 1999).

We exclude companies that manufacture or distribute cluster munitions from all of our portfolios in accordance with the Convention on Cluster Munitions (enforced in 2010).

We exclude companies that do not comply with fundamental ethical standards (UN Global Compact), such as violation of individual rights, non-respect of human rights, major environmental damage, etc.

We exclude companies domiciled in controversial “Call to Action” jurisdictions (e.g. Iran and North Korea) identified by the Financial Action Task Force.

Sector exclusions

We have decided to exclude some sectors and practices from our entire fund range, and not to invest in companies facing one of the following cases:

Weapons sector

•  The company is active in the production, sales and distribution of non-conventional weapons. It involves cluster bombs, anti-personnel mines, biological, chemical or depleted uranium weapons, as well as white phosphorus and nuclear weapons;
• Production, sale or distribution of conventional weapons (war material) represents more than 5% of revenues;

Energy sector

• The revenue from coal mining activities (thermal coal, metallurgical coal, coke) exceeds 10% of total turnover or its production exceeds 20 million tons per year;
• The coal-fired electricity generation represents more than 10% of turnover, or the generation capacity exceeds 10,000 MW;
• Production, sale or distribution of nuclear-based power generation exceeds 5% of turnover. This includes uranium extraction, uranium concentration, refining, conversion and enrichment, the production of nuclear fuel structures, construction and use of nuclear reactors. It also includes treatment of spent nuclear fuel, nuclear decommissioning and radioactive waste management ;
• If the sum of activities related to unconventional oil and gas, such as oil sands extraction, shale oil, shale gas and Artic drilling represents more than 5% of revenues.

Tobacco sector

• The production of traditional tobacco or related tobacco (such as e-cigarettes, new generation tobacco/nicotine products) exceeds 5% of sales;
• Tobacco sale or distribution represents more than 5% of total turnover.

Biodiversity

• The production of pesticides, palm oil or genetically modified organisms (GMOs) represents more than 5% of turnover.

Other sectors

– Income from activities related to:

• Gambling exceeds 5% of sales;
• Alcohol represents more than 20% of the turnover;
• Non-medicinal drugs exceeds 5% of the turnover;
• Adult entertainment (pornography) represents more than 5% of turnover.

ESG controversies monitoring and risk control

We have supplemented our existing daily-risk policy with criteria related to ESG reputational risks.

Indeed, business conduct risks related to human rights, labour, environment and corruption can result in risks to a company’s reputation and finances, and therefore in a risk for the end investor.

Chahine Capital has set up an SRI voting policy with ISS as a partner. 

We therefore vote at all shareholders’ meetings of the companies held in the Digital Funds and apply by default the SRI voting recommendations provided by ISS research.

An ESG activity report is produced every quarter and contains:

• The list of excluded companies and the detailed reasons for their exclusion;
• The average RRI of each fund and each benchmark, for comparison. The RRI (RepRisk Index) is a quantitative measure that dynamically captures a company’s reputational risk related to ESG issues;
• The distribution of RepRisk ratings of each fund and each benchmark, for comparison.
  This report is available below.

A report on the exercise of voting rights is produced every quarter as well.
This report is also available below.

This responsible investment policy is specific to four of our funds: Digital Stars Europe, Digital Stars Europe Ex-UK, Digital Stars Europe Smaller Companies and Digital Stars US Equities. A specific policy is applicable to our Digital Stars Eurozone fund. All these policies are available below.

The Management Company does not currently consider the adverse impacts of its investment decisions on ESG factors. The main reason is the lack of information and data available to adequately assess such principal adverse impacts considering that the regulatory technical standards of SFDR which will include the detailed principal adverse impacts disclosure requirements have not yet been adopted. Should this change, this will be disclosed on this website.