Policy for Integration of Sustainability Risks in Selected Car Investment Management ApS

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1.0 Introduction

Selected Car Investment Management ApS manages alternative investment funds in the form of companies where investors can purchase a share. The correct terminology for such investment companies is AIF (Alternative Investment Fund), but in everyday language, this type of investment is commonly referred to as a pooled investment. Selected Car pooled investment companies exclusively invest in very rare and exclusive car models with a long-term investment horizon.

Selected Car Investment Management ApS is a responsible company, and we aim to identify, address, and improve ESG factors in the pooled investment companies. ESG factors refer to sustainability risks, such as environmental, social, and governance events or circumstances that could potentially have a relevant and significant negative impact on financial returns.

Additionally, we are obligated to disclose our policy. This is in accordance with Article 3, Section 1 of the Disclosure Regulation[1], which states that financial market participants must disclose information about their policies for integrating sustainability risks into their investment decision-making process on their websites. [1] Regulation on sustainability-related disclosures (Regulation (EU) 2019/2088 of the European Parliament and of the Council of November 27, 2019. https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32019R2088&from=EN

2.0 The Business Model from a Sustainability Perspective

Selected Car Investment Management ApS selects investment objects in the form of rare and exclusive car models. The cars are stored for several years before being sold. From a sustainability perspective, this business model is relatively simple. Potential impacts on environmental, social, and governance aspects are assessed as follows:

2.1 Environmental Impacts:

  • Upstream emissions from the production of the cars
  • Heating and electricity associated with storage.

2.2 Social Impacts:

  • Working conditions and human rights for individuals involved with the cars throughout their lifespan, including manufacturers and their supply chain, the investment team, and other staff involved during the storage period.

2.3 Governance Impacts: Selected Car Investment Management ApS (SCIM), as a manager of alternative investment funds, is subject to extensive regulation. Notable regulations include the AIFM Act, the Anti-Money Laundering Act, and GDPR, as violations of these laws can result in sanctions such as warnings and fines. SCIM is supervised by the Danish Financial Supervisory Authority and the Data Protection Agency in these areas.

3.0 Selected Car Investment Management ApS Works to Minimize Negative Impacts

3.1 Mitigating Environmental Impacts:

  1. As part of the Selected Car Group, Selected Car Investment Management ApS works continuously on measures to reduce emissions, for example, through energy efficiency initiatives.

3.2 Mitigating Social Impacts: Selected Car Investment Management ApS is part of Selected Car Group, which has implemented a personnel policy that supports employee well-being and enables the maintenance of an appropriate work-life balance. Employees have options for remote work, rights to time off in various situations, and favorable conditions for caring for sick children or family members. Employees are offered good health and pension plans. The workplace is designed to ensure safety and health, and there are written procedures for handling emergencies. The list is not exhaustive.

3.3 Mitigating Governance Impacts:

  • Selected Car Investment Management ApS has appropriate compliance procedures to ensure adherence to the Danish laws and EU regulations to which the company is subject.
  • Risks associated with financial transactions, such as the risk of money laundering or terrorist financing, are mitigated by investigating and documenting the car’s history, including ownership, throughout the car’s lifespan before it is included in the investment pool. Selected Car Investment Management has written policies that effectively address the risks of trading vehicles that have been traded through identified high-risk countries, meaning high-risk countries as per Annex 3 of the Anti-Money Laundering Act, the European Commission’s list of “high-risk third countries,” and the FATF’s so-called gray list of “jurisdictions under increased monitoring.” At the time of writing this policy, pool cars are only acquired from EU/EEA countries.
  • Selected Car Investment Management is subject to the Anti-Money Laundering Act, which means, among other things, that mandatory customer due diligence procedures are carried out, written policies are in place, and controls and training for staff and management are conducted. Employees have access to an anonymous whistleblower scheme.

The risk that pooled investments could be misused for money laundering or terrorist financing can never be completely eliminated. However, due to the long investment horizon, pooled investments are unlikely to be suitable for money laundering. Overall, the risk of misuse for money laundering or terrorist financing is considered low to medium.

Risks of violating GDPR are primarily mitigated by identifying and mapping how SCIM can legally process personal data. SCIM has appropriate policies, controls, and training for employees regarding the rules and principles in the field of data protection law.

4.0 What Selected Car Investment Management ApS Commits to Going Forward

The integration of sustainability risks is one of many initiatives. At Selected Car Group, of which Selected Car Investment Management ApS is a part, there is ongoing focus on integrating sustainability risks into both investment processes and business operations in general. The goal is to create long-term returns for investors while ensuring that the companies in the group contribute positively to society and the environment.

5.0 Responsibility for This Policy

2th of may 2023
Responsible:                                 CEO, Selected Car Group – Jens Christian Tangbæk
Contact information:                  [email protected]  Phone: +45 30 58 41 31
Approved by:                                Chairman of the Board Mikkel Hammershøj