Public HTML RI reports - PRI reporting framework 2017

Cordaid Investment Management B.V.

PRI reporting framework 2017

Basic Information [OO 01 - 09] Gateway asset class implementation indicators [OO 10 - 12]

Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Implementation not in other modules [SG 12 - 16] Innovation [SG 17]

Direct - Inclusive Finance

Context [IFD 01 - 06] PIIF Principle 1: Range of services [IFD 07 - 10] PIIF Principle 2: Client protection [IFD 11 - 13] PIIF Principle 3: Fair treatment [IFD 14 - 17] PIIF Principle 5: Transparency [IFD 25 - 27] PIIF Principle 6: Balanced returns [IFD 28 - 31] PIIF Principle 7: Standards [IFD 32 - 34]

Indirect - Inclusive Finance

Context [IFI 01] Selection [IFI 02] Contractual agreements and mandate design [IFI 03] Investment manager monitoring and reporting [IFI 04 - 05] Disclosure [IFI 06 - 07]

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You are in Direct - Inclusive Finance » PIIF Principle 4: Responsible investment

PIIF Principle 4: Responsible investment

IFD 18. Tools for social performance reporting

Possible action:

Negotiate terms and conditions that are transparent, fair and reasonable, including fair break-up clauses.

18.1. Indicate if you use the following tools for social performance reporting:

Externally developed tools

During due diligence.

Yes

We don’t track social performance

For monitoring and reporting purposes.

Yes

We don’t track social performance

Describe the approaches used and frequency of use.

During our due diligence at an MFI we use a tool to measure alignment with the Universal Standards of Social Performance Management. We used to work with a specific tool for Cordaid. This tool was a selection of questions used in the SPI4 (A tool developed by Cerise and SPTF to measure alignment with USSPM). In 2015 and 2016 Cordaid Investments and other investors decided to use the same tool (based on SPI4) that investors can use during their due diligence. This tool, ALINUS, was finalised in 2016. Cordaid Investments has started using this tool. Investment managers give additional comments on over-indebtedness and balanced return on this scorecard. The scorecard is part of our investment analysis.

Every two years the ALINUS tool needs to be updated. The tool therefore works as a monitoring tool as well.

In-house tools based on externally developed tools

During due diligence.

Yes

We don’t track social performance

For monitoring and reporting purposes.

Yes

We don’t track social performance

Describe the approaches used and frequency of use.

See above

Tools developed solely in-house

During due diligence.

Yes

We don’t track social performance

For monitoring and reporting purposes.

Yes

We don’t track social performance

Describe the approaches used and frequency of use.

18.2. Additional information. [Optional]

IFD 19. Retail institutions have independent financial/social rating and/or social audit

19.1. Indicate if you require the retail institutions in which you invest to have an independent financial rating.

Always

In a majority of cases

In a minority of cases

19.2. Indicate if you require the retail institutions in which you invest to have an independent social rating.

Always

In a majority of cases

In a minority of cases

19.3. Indicate if you require the retail institutions in which you invest to have an independent social audit.

Yes

19.4. Additional information. [Optional]

IFD 20. Due diligence on and monitoring and reporting of corporate governance among investees

Possible action:

Assist in developing appropriate references for corporate governance issues.

20.1. In relation to your due diligence on and monitoring and reporting of corporate governance among investees, indicate if you assess:

Compensation of the Board of Directors and Executive Directors (i.e. its transparency, the use of benchmarking)

Pre-investment

Yes

Not for all of our investments in inclusive finance

Post-investment

Yes

Not for all of our investments in inclusive finance

Describe what you look at and, if post-investment, the frequency of assessment. [Optional]

Composition of the Board (i.e. breadth and depth of experience, effective client representation, diversity)

Pre-investment

Yes

Not for all of our investments in inclusive finance

Post-investment

Yes

Not for all of our investments in inclusive finance

Describe what you look at and, if post-investment, the frequency of assessment. [Optional]

We look at the experience of the board in banking sector and developing/social sector. We also look at gender composition in a board.

Whether the Board receives social performance management-related information from the management team that is analysed and contributes to Board decision making.

Pre-investment

Yes

Not for all of our investments in inclusive finance

Post-investment

Yes

Not for all of our investments in inclusive finance

Describe what you look at and, if post-investment, the frequency of assessment. [Optional]

20.2. Additional information. [Optional]

IFD 21. Training or assistance for investees on corporate governance

Possible action:

Assist in developing appropriate references for corporate governance issues.

21.1. Indicate if you provide training or assistance for your investees on corporate governance.

Yes

21.2. Additional information.

We provide this kind of training occasionally, when the need is felt. Less than 10% of our investees receive training or assistance on governance annually.

IFD 22. Percentage of investees where board seats are held (Not Applicable)

IFD 23. Procedure to integrate environmental issues in investment decision processes

Possible action:

Assist in developing appropriate references for environmental issues.

23.1. Indicate if you have a procedure to integrate the consideration of environmental issues in your investment decision processes.

Yes

For all inclusive finance investments

For a majority of inclusive finance investments

For a minority of inclusive finance investments

23.2. Describe how your procedure to integrate the consideration of environmental issues in your investment decisions processes affect decisions pre-investment. [Optional]

Environmental issues are one of the focus issues that are screened in ALINUS tool. We look if the financial institution evaluates the level of environmental risk of its clients, the institution raises clients' awareness on environmental risks and if the institution provides specific green loan products.

23.3. Describe how your procedure to integrate the consideration of environmental issues in your investment decisions processes affect decisions post- investment. [Optional]

Environmental issues are reviewed post-investment when updating the ALINUS Tool (once every 2 years).

23.4. Indicate if you request your investees to comply with an environmental exclusion list.

Yes, for all investees

Yes, for a majority of investees

Yes, for a minority of investees

23.5. Additional information. [Optional]

Since the amount the MFIs give to their clients are so small, we do not request the MFIs to comply with our environmental exclusion list. This is only requested if the ESG scorecard shows that organisation has no environmental exclusion policy and it is relevant for the purpose of the financial products that they offer to their clients. Our SME investees must comply with our exclusion list.

IFD 24. Anti-corruption and whistle-blowing policies

Possible action:

Promote implementation of anti-corruption practices.

24.1. Indicate if you have anti-corruption policies.

Yes, published

Yes, but not published

24.2. Indicate if you have internal whistle-blowing policies.

Yes, published

Yes, but not published

24.3. Indicate if you review whether your investees have anti-corruption policies as part of your due diligence process.

Yes

24.4. Indicate if you review whether your investees have internal whistle-blowing policies as part of your due diligence process.

Yes

24.5. Additional information.

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