Governance

Central SICAF S.p.A. (also referred to as the “SICAF” or the “Company”) has always been committed to promoting ethical principles of legality, integrity, and non-discrimination, as well as a commitment to sustainable development, in line with the philosophy of the Covivio Group, adopted by Central SICAF and accessible via the provided link.

As is well known, the sustainability factors to be considered are usually referred to as ESG, or Environmental, Social and Governance: as an example, with regard to real estate, from an environmental point of view best practices include the control of greenhouse gas emissions, waste, efficient use of energy and water (practices that often involve the essential collaboration between owners and users of individual properties), while from a social and governance point of view such best practices refer to aspects such as inclusion, collaboration with communities related to managed properties and corporate governance issues concerning the promotion of ethical codes of conduct and the better management of potential conflicts of interest.

This communication is made by SICAF in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability reporting in the financial services sector (the ‘SFDR Regulation’).

The SFDR Regulation now represents one of the main regulations on ‘sustainable finance’ to which, among others, the Board of Directors refers, with the adoption in March 2023 of its ESG action plan, which outlines its objectives and time horizons for implementation.

The aforementioned Regulation aims to reduce the information asymmetry between financial intermediaries and end investors by harmonising disclosure obligations concerning the application of sustainability factors in investment activities.

To this end, disclosure obligations have been introduced both at company level, concerning the integration of sustainability risks and the negative effects of investment decisions on sustainability, and at product level, which must be qualified on the basis of their environmental and social characteristics. Information is to be provided on websites, in pre-contractual information documents and in periodic reports.

In particular, the purpose of this communication is to provide, in accordance with the SFDR Regulation, information on the position taken by SICAF with regard to:

• policies on the integration of Sustainability Risks in decision-making processes related to investments (art. 3 SFDR Regulation);
• consideration of the negative effects of investment decisions on Sustainability Factors (art. 4 SFDR Regulation);
• consistency of remuneration policies with the integration of Sustainability Risks (art. 5 SFDR Regulation).

The Company, as a financial intermediary specialised in the real estate sector, has always made its operational decisions taking into account environmental and social implications to the best of its ability, and believes that a rigorous approach to so-called ESG issues is in the best interest of all stakeholders and the community at large.

In relation to the above, SICAF has adopted corporate policies that consider ‘Social and Governance’ aspects (among others, Code of Ethics, Conflict of Interest Management Policies, 231 Organisational Model), with the aim of promoting ethical behaviour by staff and suppliers and improving the working environment and protecting the health and well-being of employees.

As far as ‘environmental’ factors are concerned, compliance with environmental regulations, the improvement of the energy efficiency of assets and the related containment of C02 emissions to combat climate-environmental changes represent key aspects both (i) in the behaviour and measures adopted for the use of offices in terms of space consumption and management (optimisation of energy, reduction in consumption of paper, plastic, toner, etc.), and (ii) in the definition of strategies for the valorisation of SICAF’s real estate, taking into account and consistent with the characteristics, size and nature of the current real estate portfolio.

In this regard, as far as concerns sub-paragraph (ii), for all investment decisions, SICAF, in its capacity as owner and consistently with the provisions of internal procedures, carries out evaluations, also of an environmental nature, on possible solutions and interventions aimed at improving the energy efficiency of strategic assets, also in relation to sustainability, taking into account the circumstance that maintenance interventions pertain to the tenants and that, therefore, they must be shared and planned with them.

On this point, the Company informs that, currently, the management policy guidelines provide for investments to be made in agreement and shared with the tenant.

In particular, with regard to the management of climate and environmental risks, the Company analyses the following indicators with regard to its assets, using specialised third parties:

• Environmental Risk: this indicator is intended to measure the impacts, positive or negative, on the environment of the assets contained in the real estate portfolio managed by SICAF in terms of: energy efficiency, greenhouse gas emissions, consumption of natural resources, etc.
• Physical Risk: the ratio between the sum of climate VaR for Physical Risk at the asset level and the sum of the market value of the assets.
• Transition Risk: ratio between the sum of Climate VaR for Currency Transition Risk at the asset level and the sum of the market value of the assets.

SICAF, in accordance with Article 4 of the SFDR, concerning sustainability disclosures in the financial services industry, has decided to adopt an ‘explain’ approach to the consideration of the principal adverse impacts of its investment decisions on ESG sustainability factors.

Although SICAF considers it a priority to limit the consequences of the main negative impacts of its investment decisions on sustainability issues, considering the current management model and the characteristics of the portfolio, as well as the lack of structured data and of an established market practice in assessing the potential negative effects of investments on the applicable Sustainability Factors, it has decided not to declare itself ‘compliant’ for the time being, in accordance with art. 4, paragraph 1, letter b) of the SFDR.

It will be the responsibility of SICAF to provide timely updates on these issues and, in particular, on how the main negative effects will be taken into account in the future, if any.

The Company’s remuneration policy is a fundamental tool to support SICAF’s medium and long term strategies and is based on principles of fairness, enhancement of merit and performance and sustainability: this policy is consistent with SICAF’s medium and long term strategies and objectives and with its annual targets.

Central SICAF is committed to ensuring that its personnel take ESG aspects into account through the adoption of an incentive system that links remuneration also to sustainability objectives.

In particular, with regard to the issue of remuneration policies, SICAF has adopted a policy in which it is expressly provided that the objectives linked to the MBO variable remuneration structure must also include ESG objectives.

The policy has also been supplemented to represent that the determination and application of remuneration practices are gender-neutral and contribute to the pursuit of complete equality among staff.

At the same time, the competences and areas of intervention of the Remuneration Committee were broadened, with the task of verifying the integration of objectives connected or functional to sustainability issues as well as supporting the Board of Directors in verifying compliance with the aforementioned principles of gender neutrality.