No sustainable investment objective

This financial product promotes environmental and social characteristics, but doesn’t have a sustainable investment objective.

Ecological or social characteristics of the financial product

Sector exclusion list

Juno excludes certain sectors by definition. To this end, Juno uses a sector exclusion list. This is a list of sectors in which Juno will not invest. For each sector, it looks at sub-sectors that fall under an industry sector, in order to distinct which specific activities are, and which are not, excluded by Juno.

Juno's sector exclusion list is based on activity level of “The Refinitiv Business Classification (“ TRBC ”)”. The activities per sector in which Juno does not invest are:

ESG-principles

In addition to this exclusion list, Juno applies seven additional minimum ESG principles that a company must meet before it can be admitted to the investment universe:

• Not active in sector on exclusion list
• No systematic involvement in lasting environmental damage
• Compliance with fundamental human rights
• Compliance with fundamental labour rights
• No involvement in controversial weapons, no production and sale of civilian firearms and no supply of military equipment to military regimes
• Compliance with international sanctions
• No wilful involvement in fraud, corruption and tax evasion
• Structural compliance with transparent operations/external information provision
• Level of engagement by Juno when incidents have occurred on the above criteria

Engagement

Juno actively monitors for signals indicating incidents at companies in the product with respect to the above (or other) ESG criteria and follows up these signals or incidents through engagement. Juno reports annually on incidents and the extent to which these incidents have been followed up in the periodic disclosure (SFDR) of the product.

Principle advsere impacts

Juno will at the level of the product and at entity level take into account the adverse effects of investment decisions on the mandatory (18) PAI sustainability factors from Table 1 of Annex I of Delegated Regulation (EU) 2022/1288. In addition, it has chosen to take into account the adverse effects on the following sustainability factors:

• Investments in companies without water management policies
• Operations and suppliers at siginificant risk incidents op child labour
• Number of identifies cases of severe human rights issues and incidents
• Cases of insufficient action taken to address breaches of standards of anti-corruption and anti-bribery

It will measure (the development of) these impacts on an annual basis and use this information, among other things, to monitor its own ESG policy and attainment of its promotion of E/S characteristics with respect to the product. It will report on these impacts no later than June 30, 2023.

Detailed information on the main adverse effects on the above indicators will be included in the product’s periodic disclosure (SFDR) and the PAI statement of Juno Investment Partners B.V.

Investment strategy

Investment strategy to promote E/S characteristics

Companies are only admitted to Juno's investment universe if they do not operate in sectors on the sector exclusion list and if they meet Juno's seven minimum ESG principles. After admission to the investment universe, Juno evaluates at least annually whether the companies still meet these criteria. If incidents occur, Juno follows them up through engagement or by proceeding to sell the position (and/or removal from the investment universe).

Good governance assessment policy

Juno considers sound and transparent corporate governance essential. In doing so, Juno looks at both the risks and opportunities resulting from governance structures. The composition of the supervisory board is a primary focus. From this, Juno tries to form an opinion regarding the degree of independence of the supervisory board. After all, an independent supervisory board is better able to form an objective opinion on management decisions and communicate about them. The composition of- and responsibilities within the board of directors are also a focus of attention. As a rule, Juno views repeated management changes as risk-increasing. Staff turnover, related to the sector in which a company operates, is an important indicator regarding the working conditions and terms of employment as perceived by employees. A persistently high turnover rate is a cause for concern, as it may indicate below-average remuneration, a corporate culture that leaves much to be desired or future prospects that employees perceive to be better elsewhere. Good governance takes into account customers, employees, shareholders but also the wider society. Hence Juno expects its companies to have an acceptable minimum tax rate. High profits due to low taxes may be good for shareholders in the short term but are also a risk for the business in the longer term and thus for all stakeholders.

Share of investments

With its investment strategy, the product aims to align 80% to 100% of its investments with the environmental and social characteristics it promotes. These investments do not take into account the EU taxonomy criteria for environmentally sustainable economic activities. A maximum of 20% of investments fall into the 'other' category. For example, to hold (part of) the assets in cash, as short-term interest-bearing deposits with a reputable bank, or to invest directly in (government) bonds or mutual funds that invest in money market products or bonds.

#1 Aligned with E/S characteristics includes the investments of the financial product used to attain the environmental or social characteristics promoted by the financial product.

#2Other includes the remaining investments of the financial product which are neither aligned with the environmental or social characteristics, nor are qualified as sustainable investments. 

- The sub-category #1B Other E/S characteristics covers investments aligned with the environmental or social characteristics that do not qualify as sustainable investments.

Monitoring ecological or social characteristics

Juno evaluates at least annually whether the companies included in the investment universe still meet its ESG criteria. Juno also continuously monitors whether incidents with regard to these criteria occur.

Methodologies used for measurement promote E/S

Juno annually determines in retrospect whether the companies in which it has invested have met the ESG criteria. In addition, it determines the occurrences related to these ESG criteria and describes what follow-up Juno has performed and/or other discussions it has had with companies in which the ESG criteria have been discussed. Finally, Juno measures the main adverse effects of its investment decisions on the sustainability indicators, both at the product and entity level.

Data sources and processing for measurement promote E/S

Juno uses the following data sources and providers to measure the achievement of the E/S characteristics it promotes:

• Annual reports and other relevant ESG reporting, such as sustainability reports
• Contact moments with the companies in which it invests or intends to invest
• Press releases
• ESG reports from brokers
• Third Bridge
• Refinitiv

Methodological and data limitations

The reporting of Juno’s investee companies is still evolving. The lack of ESG reporting places a limitation on the availability of historical and current data that Juno uses as a benchmark. Juno expects this limitation, prompted in part by legislation that companies must comply with in their reporting, to decrease significantly over time.

Due diligence carried out on the investments

As part of its investment policy, Juno performs an analysis on all companies before including them in its investment universe. Part of this analysis is a test of whether the company is active on Juno's sector exclusion list and whether the company meets its seven ESG criteria. In principle, a visit to the company is part of the due diligence (see engagement).

Description of Engagement Policy

Engagement is an essential component within Juno's selection and monitoring process. A visit to the company's management is part of the screening process that takes place before a company is included, with a clear preference at the company's premises.

In addition, Juno is in contact with its investee companies several times a year, including personal meetings with management. In this way, Juno builds a steady and good relationship with the company's management and family shareholders. Juno takes a critical stance in these contacts focusing on the long-term sustainable development of the company. This includes compliance with Juno's ESG principles.

Juno will additionally exercise its statutory voting rights as a shareholder in principle. If opportune, this vote may furthermore be used to make clear to the management of the companies how the capital made available by Juno can be (better) used to create (economic) value within the organisation concerned. It is not ruled out that in this process, taking into account the legal framework, other shareholders will be actively approached, consulted and joined, in order to obtain more votes to support our beliefs about value creation.

Juno has a very strict selection policy. Should a company no longer meet these investment criteria, Juno engages with the company's management, or if necessary with the Supervisory Board. Should engagement not lead to the desired results, we will in most cases offer our position for sale.