BIT Capital is an asset manager that invests exclusively in the world’s best technology companies. BIT Capital’s focus has always been and will continue to be on how technological innovation can drive sustainable and future-oriented development of companies. Therefore sustainable development and BIT Capital’s investing approach have essential things in common: a long-term focus together with the sustainable use and handling of resources.
The sustainable investing guidelines are intended to demonstrate how BIT Capital applies ESG-relevant criteria as part of the investment process for the following investment products:
- BIT Global Internet Leaders 30
- BIT Global Leaders
and to discuss BIT Capital’s approach to ESG in its investments.
A Responsible Act Team and the BIT Capital management play a leading role in implementing these guidelines. The team is comprised of representatives from management, the investment team and compliance.
The Responsible Act Team is responsible for developing the strategy for sustainable investing and monitoring the processes. The team has the necessary skills to keep content relating to the sustainable investing approach up to date and to develop it further.
Sustainability risks are considered in investment processes. BIT Capital’s investment teams make all investment decisions for the investment funds and are also responsible for integrating ESG issues into the decisions.
BIT Capital allocates resources for training employees to provide them with a consistent knowledge of ESG issues.
Sustainable investing is an integral part of BIT Capital’s investment processes. BIT Capital specifies how ESG issues are implemented in the investment strategy. BIT Capital also integrates various approaches to sustainable investing into the investment process of the following investment products: BIT Global Internet Leaders 30 and BIT Global Leaders. With the help of these guidelines, sustainable investing is further defined and its implementation is determined by the investment team.
The sustainable investing guidelines are recognized as an additional risk management tool. BIT Capital believes that incorporating ESG criteria can positively impact the investment process and have an impact on return risk. BIT Capital’s long-term investment horizon further contributes to a positive risk-return profile.
a. Negative and exclusionary screening for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:
BIT Capital excludes companies based on their business activities. Exclusions are used to limit exposure to industries and companies that are exposed to material sustainability risks. The following MSCI grids are applied for this purpose.
- do not violate the 10 principles of the UN Global Compact network (https://www.unglobalcompact.org/what-is-gc/mission/principles);
- do not generate more than 30% of sales from the mining or distribution of thermal coal;
- do not generate more than 5% of sales from the manufacture of tobacco products;
- do not generate more than 10% of sales from the production of conventional weapons;
- do not generate sales from the production and/or distribution of weapons under the Convention on the Prohibition of the Use, Stockpiling, Production and Transfer of Anti-Personnel Mines and on their Destruction (“Ottawa Convention”), the Convention on the Prohibition of Cluster Munitions (“Oslo Convention”), and biological and chemical weapons under the respective UN conventions (UN BWC and UN CWC);
- do not acquire bonds from states classified as “unfree” according to the Freedom House Index.
BIT Capital’s relevant funds may invest in securities for which so far no data is available from the data provider and thus cannot be determined whether the above exclusion criteria have been violated. As soon as data is available for such securities, the exclusion criteria mentioned above will be met. They therefore apply to 100% of the titles that can be screened accordingly.
b. ESG integration for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:
ESG integration methodology
|Investment process||1. research analysis, exclusion criteria.|
|2. use of third party ESG data|
|3. enrichment of data by own research|
|4. documentation of processes|
|Monitoring||5. risk management and monitoring|
|6. monitoring and further development|
To systematically ensure compliance with sustainability criteria, BIT Capital works with MSCI ESG Research, a leading international provider of environmental, social and governance analysis and ratings. MSCI ESG Research data on sustainability risks is incorporated into the investment process. All investment teams have access to MSCI’s ESG database.
BIT Capital is a signatory to the United Nations-backed Principles for Responsible Investment. They require all members to consider environmental, social and governance issues in their investment strategy and to act as a shareholder.
Corporate governance issues in their investment strategy and to integrate active participation as shareholders. These goals are in line with the guidelines of sustainable investing and are part of BIT Capital’s DNA as an active, long-term investor.
c. Inclusion of sustainability risks for the BIT Global Internet Leaders 30 and BIT Global Leaders investment products:
Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the fund’s assets. Sustainability risks can also impact other risk types and contribute as a factor to their materiality.
The guidelines for sustainable investing section of these guidelines lists exclusion criteria aligned with sustainability aspects that BIT Capital observes. This prevents, for example, investing in securities whose issuers are involved in controversial business areas.
In addition, at least 51% of the respective fund assets are screened and evaluated in advance by MSCI ESG Research for sustainability aspects. In addition, BIT Capital invests at least 51 % of the value of the UCITS funds managed by BIT Capital in equities and equity-equivalent securities as well as interest-bearing securities and money market instruments that are selected under consideration of sustainability criteria and have been analyzed and positively assessed under environmental and social criteria. Within the scope of this minimum quota of 51%, only securities with an ESG rating of at least BB can be held. This strategy reduces the sustainability risks contained in the assets of the funds, so that the overall risk for the respective funds is also reduced.
The implementation of these guidelines is reviewed at least once a year by the Responsible Act Team. This regular review will assess whether the guidelines:
- are being implemented as intended, and
- are consistent with national and international regulations, principles and standards applicable to the sector in which BIT Capital operates.
Where no update is required, these guidelines are applied consistently. When an update is required, BIT Capital management must formally approve it. BIT Capital also works continuously to improve these guidelines in line with its long-term focus and responsible management of risks and resources. These guidelines are issued by management and apply to the entire company.
BIT Capital is a signatory to the Principles for Sustainable Investment endorsed by the United Nations. These principles are part of BIT Capital’s DNA as an active, long-term investor.
Disclosure requirements under Regulation (EU) 2019/2088 (“SFDR”).
According to SFDR, there is an obligation for financial market participants and financial advisors to provide information on certain sustainability topics as defined by SFDR. This information obligation is fulfilled in the following paragraphs.
The English translation of the BIT Capital GmbH Disclosure requirements under Regulation (EU) 2019/2088 (“SFDR”) is for convenience purposes only. For any legal purposes, including the interpretation, only the German version shall prevail.
Sustainability risks within the meaning of the SFDR are events or conditions in the environmental, social or corporate governance areas, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. Sustainability risks are part of the already known risk types such as market risk, liquidity risk, counterparty risk and operational risk and can influence the materiality of these risks.
Taking sustainability risks into account can have a significant impact on the performance of an investment in the long term. Environmental, social or governance risks can also have an impact on the market price. Issuers with poor sustainability standards may be more vulnerable to event, reputational, regulatory, litigation, and technology risks. These sustainability risks may have an impact on operations, brand or company value, and the continued existence of the company or investment, among other things. The occurrence of these risks may result in a negative valuation of the investment, which in turn may impact the funds’ return.
Information on strategies for dealing with sustainability risks
Art. 3 SFDR
A stand-alone sustainability strategy is not pursued. Investment decisions at BIT Capital are made on the basis of a fundamental research process. Sustainability risks are taken into account in investment decisions by principle, but they are not decisive for the investment decision. An anchoring of sustainability risks in investment decisions cannot be guaranteed in every case.
No consideration of adverse sustainability impacts
Art. 4 SFDR
BIT Capital does not currently consider adverse sustainability impacts of investment decisions at the corporate level. The relevant data that must be used to determine and weight adverse sustainability impacts is currently not available in the market to a sufficient extent. BIT Capital commits to provide information on whether and how the most significant adverse impacts of investment decisions on sustainability factors are considered by December 30, 2022.
Information on the remuneration policy in connection with the consideration of sustainability risks.
Art. 5 SFDR
Compliance with the guidelines is not determinative for the evaluation of BIT Capital’s employees’ job performance and remains without influence on future salary development. The remuneration of BIT Capital’s employees and partners is not based on potential sustainability risks.
Transparency when advertising environmental or social features in pre-contractual information
Art. 8 SFDR
Insofar as an investment product has been classified as an Article 8 product within the meaning of the SFDR, relevant information on environmental and social features shall be published in the sales prospectuses and on the fund pages.
October 15, 2021