Disclosure under Section 7 of the InstitutsVergV
As a securities institution, we are subject to the Regulation on Supervisory Requirements for Remuneration Systems of Institutions (InstitutsVergV). This regulation differentiates between “non-significant” and “significant” institutions. Since our total assets have not reached or exceeded EUR 10 billion in any of the past three financial years, nordIX AG is not considered a significant institution. Nevertheless, in accordance with Section 7 of the InstitutsVergV, we are required to publish information regarding the structure of our remuneration systems and the total amount of remuneration. Employees as defined by the regulation include our two managing directors as well as salaried staff. Remuneration consists of a fixed component and, for positions with greater responsibility, a variable component. The variable portion may not exceed 100% of the fixed salary.
This structure reflects our dual objective: to provide employees with predictable income streams while also aligning their interests with the company’s success. Variable remuneration elements are intended to incentivize high performance while maintaining financial stability, as overall personnel expenses rise and fall in line with company earnings. Remuneration is determined based on role, responsibility, experience, and performance, and is benchmarked against comparable roles in the market. Variable compensation is linked to company performance and, where applicable, the profitability and client satisfaction of the respective business areas. The remuneration system is reviewed annually and adjusted as necessary. To protect the privacy of individual employees, we refrain from disclosing specific figures at this time, as doing so could allow conclusions to be drawn about individual compensation levels due to the current size of the institution.
Explanation on Adverse Impacts on Sustainability
Our Strategy for Integrating Sustainability Risks
We are pleased to comply with our obligations under Articles 3 and 4 of Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector (Sustainable Finance Disclosure Regulation – SFDR). Transparency in the Integration of Sustainability Risks (Art. 3 SFDR)
In the context of our discretionary portfolio management services, we do not offer standardized strategies. Therefore, sustainability considerations are agreed upon and defined individually for each client. Accordingly, we do not promote environmental or social characteristics in a standardized way. However, for the fund mandates we manage, sustainability risks are incorporated into the investment decision-making processes. The specific implementation is outlined in the mandatory disclosures of the individual funds.
Transparency of Adverse Sustainability Impacts at Entity Level (Art. 4(1)(b) SFDR) We do not currently consider adverse impacts of investment decisions on sustainability factors.
The legal framework for sustainable investment strategies — especially the reporting obligations associated with promoting environmental or social characteristics — is currently complex and, in many areas, not yet standardized in its implementation.
Since our founding in 2009, responsible and sustainable thinking and action have been core elements of our corporate culture and the foundation of how we collaborate within our team and with clients and partners. In our own business operations, we strive to reduce our ecological footprint wherever possible — for instance, by minimizing air travel and using environmentally friendly modes of transportation. We are convinced that investors and fund managers bear a particular responsibility to consider not only risk and return expectations but also the nature of the activities supported or enabled by their investment decisions — and whether these align with environmental responsibility. This conviction stems from the belief that sustainable returns are only achievable when environmental and social factors are adequately considered and the associated risks carefully evaluated.
As such, we see ourselves as responsible investors and have committed to this understanding since 2017 by signing the United Nations-supported Principles for Responsible Investment (UN PRI). We are committed to integrating Environmental, Social and Governance (ESG) factors into our investment processes and portfolio construction. We pledge to maintain transparent reporting on ESG impacts and strive to engage in close dialogue with issuers of acquired financial instruments to continuously improve ESG performance.
We view sustainability and socially responsible investing not as abstract goals but as a long-term commitment and a process of continuous development. We believe that ESG integration helps us mitigate fundamental risks within our portfolios and our company while creating long-term value for our clients and team.
As a company, we aim to contribute to a more sustainable and resource-efficient economy, with the goal of mitigating the risks and consequences of climate change. In addition to pursuing sustainability goals within our own organization, we also see it as our duty to raise awareness among our clients regarding sustainability aspects within the framework of our business relationship.
In portfolio management, we inquire about clients’ individual preferences and expectations regarding sustainability and implement them accordingly. Environmental conditions, social disruptions, or poor corporate governance can negatively impact the value of client investments in multiple ways. These so-called sustainability risks may directly affect the financial position, earnings, and reputation of the investment assets. Since such risks cannot be entirely excluded, we have developed portfolio management strategies to identify and limit sustainability risks.
To mitigate these risks, we aim to identify and, where possible, exclude investments in issuers with heightened sustainability-related risk potential. By applying specific exclusion criteria, we are able to align investment decisions and recommendations with environmental, social, or governance-related values. The weighting of individual factors is based on the specific requirements of each investor. Key adverse sustainability impacts we consider include environmental effects such as climate change and global warming, reduction of water and resource consumption, and loss of biodiversity. We strive to avoid or deprioritize securities issued by entities that do not sufficiently address these impacts. For this, we typically rely on data and evaluation methods from well-established providers — in particular, the databases of MSCI.
ESG Analysis and Scoring: For both existing positions and potential acquisitions, ESG risks and factors are systematically and regularly assessed. This includes the use of ESG standards and key performance indicators (KPIs), as well as MSCI ESG ratings provided by MSCI ESG Research. Independent analyses are also incorporated into our assessments.
Best-in-Class Approach: When faced with equivalent investment alternatives, we select issuers that demonstrate higher standards in environmental, social, and governance (ESG) areas relative to their industry peers. We do not invest in financial instruments issued by entities where there are reasonable doubts about their commitment to upholding human rights, assuming social responsibility toward the environment, society, and fellow human beings, or acting responsibly with regard to climate, nature, and resources.
Mindest MSCI ESG Rating: Where appropriate, we define ESG minimum criteria, exclusion reasons, and MSCI ESG-based target thresholds for specific parameters. These are integrated into our investment process and are consistently applied in investment decisions. Identifying suitable investments may involve selecting securities or funds from issuers with ESG ratings or using a recognized sustainability filter to reduce ESG-related risks. It may also involve using ratings from recognized agencies to guide product selection in portfolio management or investment advice. Specific details are defined through individual agreements. Our company’s strategies for integrating sustainability risks are also reflected in our internal organizational guidelines. Compliance with these guidelines is a key factor in evaluating employee performance and has a direct impact on future compensation development.
The remuneration of employees at nordIX AG, including the Management Board, typically consists of fixed components and, in certain cases, variable components, as well as additional benefits. Variable compensation is determined based on qualitative and/or quantitative performance targets. Our remuneration policy does not create incentives to take excessive sustainability risks and ensures that no remuneration structures arise that might lead to such incentives. As such, our remuneration policy is fully aligned with our sustainability risk integration strategies.
