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Swen Capital Partners

PRI reporting framework 2018

You are in Strategy and Governance » ESG issues in asset allocation

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

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

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

13.3. Additional information. [OPTIONAL]


SG 14. Long term investment risks and opportunity

14.1. Describe the process used to identify short, medium and long-term risks and opportunities that could have a material impact on your organisation and its activities.

The short, medium and long term ESG risks are identified during the investment analysis. These ESG risks are assessed by the investment team, based on their experience and their relationships with the GPs. The investment team is also backed by the ESG team who complete the analysis in providing its expertise. This analysis depends on the type of investment case (Primary, Secondary and Co-investment) but also its sector or geographic location. Furthermore, ESG incidents research are systematically carried out. (see SG 04.1)
ESG risks are also adressed in the due diligence and annual ESG questionnaires for both asset management companies and co-investments.

14.1 CC. Describe the processes used to determine which climate-related short, medium and long-term risks and opportunities could have a material impact on your organisation and its activities.

Climate risks are included throughout the ESG risks analysis for each investment opportunity, especially since the implementation of SWEN CP' climate Climate Strategy. The main risks that could be identified are of two kinds: physical and transitional risks.

As the assets in the portfolio are inherently illiquid, the reduction of climate risks can take two complementary forms: selection of GPs which have themselves committed to reduce their exposition to climate risks, and selection of funds or assets in line with energy transition objectives. SWEN CP takes also into account in his due diligence process the ability of the asset management team to analyze climate risks of a new asset, to encourage underlying assets to improve their environmental performance and to provide a clear reporting to investors for on climate issues (carbon footprint). Moreover, SWEN Capital Partners is supported in the implementation of its Climate Strategy by an independent climate expert. The latter is solicited on an ad-hoc basis, depending on the materiality level of climate-related risks and opportunities of any given investment opportunity, to provide SWEN CP with specific highlights.

14.2. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following you act on.

14.2a cc. Please describe how you define “short”, “medium” and “long term”, and describe your material climate-related issues over these time horizons.

Definition
Description of material climate-related issues
Short term
          Less than one year
        
          "Exposure to litigation
Stigmatization of sector
Increased stakeholder concern"
        
Medium term
          Less than 10 years
        
          "Enhanced emissions-reporting obligations
Increased cost of raw materials
Increase severity of extreme weather events such as cyclones and floods
Substitution of existing products and services with lower emissions options
Shift in consumer preferences" (source: I4CE)
        
Long term
          Over than 10 years
        
          "Changes in precipitation patterns and extreme variability in weather patterns
Rising mean temperatures
Rising sea levels" (source: I4CE)
Risk of stranded assets
        

14.3. Indicate which of the following activities you have undertaken to respond to climate change risk and opportunity

other description

          Promote climate change integration by GPs.
        

14.4. Indicate which of the following tools you use to manage emissions risks and opportunities

14.4a CC. Please provide further details on these key metric(s) used to assess climate related risks and opportunities.

Metric Type
Coverage
Purpose
Metric Unit
Metric Methodology
Metric Trend
Limitations / Weaknesses
Weighted average carbon intensity
          
        
          
        
          
        
          
        
          
        
          
        
Carbon footprint (scope 1 and 2)
          
        
          
        
          
        
          
        
          
        
          
        
Portfolio carbon footprint
          
        
          
        
          
        
          
        
          
        
          
        
Total carbon emissions
          
        
          
        
          
        
          
        
          
        
          
        

14.6. Additional information [Optional]

14.7 CC. Describe your risk management processes for identifying, assessing, and managing climate-related risks.

Please describe

Climate-related risks are identified/assessed upstream throughout investment case analysis and thereafter during the monitoring phase by the investment team and the ESG team. Our ambition is to formalize the inclusion of climate-related risks into our overall risk management, performed by our risk control team in a near future

14.8 CC. Describe your processes for prioritising climate-related risks.

14.9 CC. Do you conduct engagement activity with investee companies to encourage better disclosure and practices around climate-related risks?

Please describe

SWEN CP attaches great importance in assisting investee companies to improve their overall practices and to provide clearer and specific disclosure about climate-related risks.

SWEN CP can put in place a dialogue to managers of their funds in their portfolio that contribute the largest carbon footprint. The aim is to raise awareness of these issues, to promote best practices in this field, and to encourage the actors concerned to implement action plans.

SWEN CP also shares best practices with its stakeholders :

  • Constant dialogue with investors in SWEN CP managed funds and its shareholders on climate issues, in particular integration of these issues into all the reports transmitted to investors.
  • Highlighting “best practices” at the ESG Best Practices Honors annual ceremony, the flagship event for the entire profession.

14.10 CC. Describe how you use data from climate-related disclosures.


SG 15. Allocation of assets to environmental and social themed areas

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

15.1. Indicate if your organisation allocates assets to, or manages, funds based on specific environmental and social themed areas.

15.2. Indicate the percentage of your total AUM invested in environmental and social themed areas.

10 %

15.3. Specify which thematic area(s) you invest in, indicate the percentage of your AUM in the particular asset class and provide a brief description.

Area

Asset class invested

15 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP is invested in assets that produce renewable energy.

Asset class invested

100 % of AUM

Brief description and measures of investment

SWEN CP main investment strategy is to provide financial services to small-and medium-sized enterprises. Moreover, SWEN CP has developed an investment product, retail local investment funds, whose final purpose is to invest in funds which hold stakes in regional small and medium-sized enterprises in France.

Asset class invested

1 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP is invested in “impact investing” funds. These funds aim at investing in companies with the intention to generate a positive social impact alongside a financial return.

Asset class invested

1 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP holds stakes in schools, universities or is invested, for instance, in companies that develop or commercialise e-learning solutions.

Asset class invested

9 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP holds stakes in medical-social establishments, hospitals or is invested, for instance, in companies specialised in healthcare equipment and/or services.

Asset class invested

1 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP holds stakes in dams, wastewater treatment plants, etc.


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