Ion Pacific Limited acknowledges that climate change is emerging as a major driving factor affecting the global economy. While climate change poses a systemic risk to the global economy, the impacts on specific markets, regions, communities, and investments are complex, dynamic, and uncertain.
As an SFC licensed corporation, we take our fiduciary responsibility to consider and disclose material factors that may impact the risk-adjusted returns of our investments, including climate-related financial risks and opportunities.
As an investor in the global economy, the scale and multi-faceted nature of climate change presents a systemic risk to our portfolio. Climate change impacts investors like us in two main ways:
- Physical impacts (e.g. wildfires, extreme weather, sea-level rise, drought) can affect and disrupt portfolio companies’ supply chains and operations. Climate change’s acute and chronic physical impacts can affect people’s health, food security, migration, water supply, and other ecosystem services in ways that can bring heightened volatility to financial markets and harm economic growth.
- Transition risks, or shifts in policies, technologies, industries, and customers, due to changed climate norms or movement toward a lower-carbon economy can affect the financial success of existing business models and industries. Our portfolio companies’ long-term success depends on the degree to which they can successfully navigate the transition.
Given our investment portfolio and investment scope, we take climate-related risks into account in our investment and risk management process. In light of this, we are taking action to account for such risks, as explained below.
Firstly, we do not invest in companies that belong to environmentally sensitive industries including metal mining, oil and gas extraction and services. Rather, we invest in technology-oriented companies that are generally better aligned with UN Sustainable Development Goals. We collect climate data and climate-related risk controls disclosure from our portfolio companies. However, understanding that this information is particularly limited in private equity investments in technology, we request our portfolio companies to complete climate-related risk assessment questionnaires and provide any information the portfolio company may have on climate-related risks, ESG policies and monitoring procedures.
Therefore, Ion Pacific Limited considers climate-related risks in the investment philosophy and investment strategies, along with ESG data into the research and analysis process.
In light of the above, Board members are informed at least annually on climate-related risks and opportunities and how these may influence decisions in relation to risk management, strategy setting, implementation and monitoring. This will include provision of ESG scorecards of portfolio companies and a review of the overall portfolio overview for all funds.
We seek to understand the financial risks to our portfolio and prepare for the long-term changes that will accompany climate change through our research and integration efforts.
We will continue to take reasonable steps to assess the impact of the aforesaid risks on the performance of the Company’s underlying investments to ensure compliance with the Hong Kong SFC’s related requirements on management and disclosure of climate-related risks by fund managers. Our Board will also continue to oversee the progress against goals for addressing climate-related issues.
Should you have any queries, please do not hesitate to contact us at InvestorRelations@ionpacific.com.
Sincere Regards,
Ion Pacific Limited
Disclaimer: This disclosure statement is intended to provide information to stakeholders and by its nature may involve risk and uncertainty. This document may contain forward-looking statements. Any statements that may express forecasts, expectations and projections are not guarantees of future performance given the current uncertainties on this front.
