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Ethos Foundation

PRI reporting framework 2017

You are in Strategy and Governance » Implementation not in other modules

Implementation not in other modules

SG 12. ESG issues in strategic asset allocation

New selection options have been added to this indicator. Please review your prefilled responses carefully.

12.1. Indicate if your organisation executes scenario analysis and/or modelling in which the risk profile of future ESG trends at portfolio level is calculated.

12.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

12.3. Additional information. [OPTIONAL]

Ethos is a dedicated SRI Foundation that is committed to the integration of ESG criteria in all its investment decisions. Ethos excludes from the investable universe companies that produce goods and services that are considered as not sustainable such as armament, thermal coal, GMOs in the agribusiness, gambling, nuclear energy, adult entertainment and tobacco. In 2016, Ethos has introduced strict investment restrictions on the energy sector by excluding Oil & Gas companies active in unconventional extraction such as oil sands, shale gas and shale oil. Based on ESG considerations, the above sectors are excluded or significantly underweighted in Ethos' investment universe.

SG 13. Long term investment risks and opportunity (Not Completed)

SG 14. Allocation of assets to environmental and social themed areas (Private)

SG 15. ESG issues for internally managed assets not reported in framework (Not Applicable)

SG 16. ESG issues for externally managed assets not reported in framework

16.1. Describe how you address ESG issues for externally managed assets for which a specific PRI asset class module has yet to be developed or for which you are not required to report because your assets are below the minimum threshold.

Asset Class

Describe what processes are in place and the outputs or outcomes achieved

Private equity

Unigestion - Ethos Environmental Sustainability L.P. is a private equity fund of funds that provides investors a unique opportunity to responsibly participate in the global evolution towards a sustainable economy. With regard to the fund, Ethos is responsible for ESG related analysis prior to commitments in fund managers and during the investment period as well as for the engagement with fund managers and investee companies. Ethos works closely with the external manager to integrate and promote ESG factors in the investment process and operations.

16.2. Additional information.

As part of the pre-investment due diligence process, fund managers have to respond to a set of questions related to sustainability. Ethos systematically conducts a preinvestment sustainability assessment of fund managers. The assessment checks their ability to incorporate sustainability factors into investment analysis and decision-making processes, as the fund aims at investing in companies with a long term contribution to sustainability, to promoting and monitoring ESG factors in their portfolio companies and reporting to limited partners on sustainability related topics.
Ethos thereby determines whether an investment in the proposed fund managers is consistent with the mission statement, which clearly places sustainability at the heart of the investment strategy. The mission statement requires the fund to contribute to the emergence of products and services with a lasting positive environmental impact and to avoid investments in companies whose long term contribution to the environment is considered not significant. It also requires the fund to seek to back underlying funds whose portfolio companies are mindful of all of their stakeholders and respectful of their surrounding communities. Portfolio companies are expected to fully monitor and adequately control matters relating to business ethics, labour relations, community relations, human rights, supply chain management and corporate governance. Ethos monitors fund managers' sustainability practices and risk management over the life of the fund and engages with them on ESG best practices every year. The fund of funds reports on a regular basis to investors on the environmental contribution of the underlying portfolio companies as well as the ESG practices of the fund managers and portfolio companies.