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Swen Capital Partners

PRI reporting framework 2019

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Innovation

SG 18. Innovative features of approach to RI

18.1. Indicate whether any specific features of your approach to responsible investment are particularly innovative.

18.2. Describe any specific features of your approach to responsible investment that you believe are particularly innovative.

As a responsible investor, SWEN CP is committed taking into account ESG criteria in its process in analysing and selecting portfolio’s asset and partner management companies. To this end, the management companies' funds that SWEN CP subscribes to are surveyed yearly based on a specific ESG questionnaire.  The same applies to the underlying holdings of these funds and direct investments. Thus the ESG analysis is completed on the basis of answers to  “management company”, “participations” and “infrastructure assets” questionnaires completed online, via an ESG data collection and management tool. It should be noted that in 2018, SWEN CP actively participated with other French LPs in several workshop aimed at harmonizing some of these ESG questionnaires. The reported data enables the implementation of numerous ESG performance indicators that are presented in an aggregated manner in the annual ESG reports of the institutional funds and mandates managed by SWEN CP.  A follow-up of these indicators is then carried out over time for each stakeholder (management company, funds, underlying funds) and makes it possible to fully assess the management companies’ responsible investor practices  (benchmarking), particularly with regard to proprietary ESG benchmarks. Thanks to a substantial extra-financial database that has accumulated more than 6 years of history, SWEN CP is able to calculate benchmarks for these same indicators and track them over time. In addition, SWEN CP's investment team systematically integrates in its monitoring a particular attention to the material ESG issues and necessary action plans implemented within the companies and financed assets.

Moreover, to express our gratitude to portfolio management companies for the seriousness and diligence with which they answered our questionnaire, SWEN CP decided in 2014 to organise its first edition of the ESG Best Practices Honours. A fifth edition of the event took place in 2018. SWEN CP wanted to give market players a view of outstanding ESG practices in Private Equity and Infrastructure among over 200 management companies, both within its portfolio and across its potential investment universe. Furthermore, since 2015 SWEN CP has expanded its scope of analysis to the entirety of its investment universe. During the ESG BPH conference,  the most outstanding of the management companies who contributed to SWEN CP's annual ESG data collection campaign are awarded on the basis of their integration of ESG criteria, among other factors, indicated in their responses to the ESG questionnaires. These honoured management companies are determined by a jury composed of external members (PRI, the OECD, MAIF, FRR, MACIF, OFI Asset Management, FIR, Federal Finance Gestion, EthiFinance and le Magazine des Affaires ). In 2018, 30 management companies were short-listed according to a series of selective criteria and key considerations in the areas of CSR and responsible investing. The jury decided to honour six of them in different categories (brownfield, greenfield and renewables, mezzanine debt, mid-large cap, small cap and venture capital) for their outstanding integration of ESG criteria from the beginning to the end of the investment process, the quality of their ESG reporting and the consideration of climate risk in their portfolios.

In early 2016, SWEN CP joined the Initiative Climat 2020 (IC20). In line with the COP 21 objectives of limiting global warming, IC20 signatories commit to consider the issue of climate change in their investment process. Since then, SWEN CP commissioned several external providers to assess and estimate the carbon footprint of its funds.. This first carbon assessment exercise (renewed in early 2018 and currently ongoing in 2019) has been a key element to start understanding SWEN CP’s exposition to climate risks. It led to the development and formalization of SWEN CP’s Climate Strategy in 2017. According to SWEN CP, the reduction of risks linked to the climate necessarily entails the selection of asset managers that commit to be vigilant about the climate issues pertaining to each asset in their portfolio, the investment in “virtuous” funds or assets in line with the energy transition and the exclusion of coal.

Finally, SWEN Capital Partners has set up a monitoring system for controversies that allows daily reporting of information, most often "extra-financial, on the main positions of portfolios managed and / or advised by SWEN Capital Partners. The objective of this daily monitoring is especially to better manage the reputational risk of the main investments indirectly and directly financed, but also, as a resulting consequence, better manage the reputation of SWEN Capital Partners and its own institutional investors.


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