BIT Capital Sustainability

Organization

A Responsible Act Team and BIT Capital's management play a leading role in implementing these guidelines. The team consists of representatives from management, the investment team, and compliance.

The Responsible Act Team is responsible for developing the sustainable investing strategy and overseeing the processes. The team possesses the necessary skills to keep content related to the sustainable investing approach up-to-date and to further develop it.

Sustainability risks are considered in investment processes. BIT Capital's investment teams make all investment decisions for the funds and are also responsible for integrating ESG topics into these decisions.

BIT Capital provides resources for employee training to ensure a consistent understanding of ESG topics.

Investment Strategy

Sustainable investing is an integral part of BIT Capital's investment processes.
BIT Capital specifies how ESG topics are implemented in its investment strategy. BIT Capital also integrates various approaches to sustainable investing into the investment process of the following investment products: BIT Global Technology Leaders, BIT Global Leaders, BIT Defensive Growth, and BIT Global Multi Asset. These guidelines further define sustainable investing and determine its implementation by the investment team. 

The guidelines for sustainable investing are recognized as an additional risk management tool. BIT Capital is convinced that the inclusion of ESG criteria can positively influence the investment process and affect the risk-return profile. BIT Capital's long-term investment horizon further contributes to a positive risk-return profile.

a. Negative and Exclusionary Screening for the investment products BIT Global Technology Leaders, BIT Global Leaders, BIT Defensive Growth, and BIT Global Multi Asset:

BIT Capital excludes companies based on their business activities. Exclusions limit exposure to industries and companies that are subject to significant sustainability risks. The following MSCI screens 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 revenue from the extraction or distribution of thermal coal;
do not generate more than 5% of revenue from the production of tobacco products;
do not generate more than 10% of revenue from the production of conventional weapons;
do not generate revenue 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 Cluster Munitions ("Oslo Convention"), and B and C weapons under the respective UN Conventions (UN BWC and UN CWC);
do not acquire bonds from states classified as "not free" according to the Freedom House Index. 

BIT Capital's relevant funds may invest in securities for which data from the data provider is not yet available, and therefore it cannot currently be determined whether the aforementioned exclusion criteria have been violated. Once data becomes available for such securities, the stated exclusion criteria will be applied. They therefore apply to 100% of the securities that can be screened accordingly.
b. ESG Integration for the investment products BIT Global Technology Leaders, BIT Global Leaders, BIT Defensive Growth, and BIT Global Multi Asset:

ESG Integration Methodology

Investment Process
1. Research Analyses, Exclusion Criteria
2. Use of Third-Party ESG Data
3. Data Enrichment through Proprietary Research
4. Process Documentation

Monitoring
5. Risk Management and Monitoring
6. Monitoring and Continuous Improvement
To systematically ensure compliance with sustainability criteria, BIT Capital collaborates with MSCI ESG Research, a leading international provider of analyses and ratings in the environmental, social, and governance (ESG) sector. MSCI ESG Research data on sustainability risks are integrated into the investment process. All investment teams have access to MSCI's ESG database. 

BIT Capital has signed the United Nations-backed Principles for Responsible Investment. These principles oblige all members to consider environmental and social issues, as well as good corporate governance, in their investment strategy and to integrate active engagement as a shareholder. These objectives are in line with the guidelines for sustainable investing and are part of BIT Capital's DNA as an active, long-term-oriented investor.
 
c. Integration of sustainability risks for the investment products BIT Global Technology Leaders, BIT Global Leaders, BIT Defensive Growth, and BIT Global Multi Asset:

Sustainability risks are events or conditions in the environmental, social, or governance spheres that could, in fact or potentially, have significant negative impacts on the value of the fund assets. Sustainability risks can also influence other types of risks and contribute as a factor to their materiality.
 
The "Investment Strategy for Sustainable Investing" section of these guidelines lists sustainability-oriented exclusion criteria that BIT Capital observes. This prevents, for example, investments in securities whose issuers are involved in controversial business areas. 

Furthermore, at least 51% of the respective fund assets are pre-screened and evaluated for sustainability aspects by MSCI ESG Research. In addition, BIT Capital invests at least 51% of the value of the UCITS special funds managed by BIT Capital in equities and equity-equivalent securities, as well as interest-bearing securities and money market instruments, which are selected considering sustainability criteria and have been analyzed and positively evaluated under environmental and social criteria. Within this minimum quota of 51%, only securities with an ESG rating of at least BB are eligible for acquisition. This dedicated investment strategy reduces the sustainability risks contained within the fund assets, thereby lowering the overall risk for the respective funds.

Review

The implementation of these guidelines is reviewed at least once a year by the Responsible Act Team. This regular review assesses whether the guidelines:

are implemented as intended
comply 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 consistently applied. If an update becomes necessary, BIT Capital's management must officially approve it. Furthermore, BIT Capital continuously works to improve these guidelines in line with its long-term actions and responsible management of risks and resources. These guidelines are issued by management and apply to the entire company.