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Swen Capital Partners

PRI reporting framework 2019

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

ESG issues in asset allocation

SG 13. ESG issues in strategic asset allocation

13.1. Indicate whether the organisation undertakes scenario analysis and/or modelling and provide a description of the scenario analysis (by asset class, sector, strategic asset allocation, etc.).

13.3. Additional information. [OPTIONAL]


SG 13 CC.


SG 14. Long term investment risks and opportunity

14.1. Some investment risks and opportunities arise as a result of long term trends. Indicate which of the following are considered.

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

Specify the AUM invested in low carbon and climate resilient portfolios, funds, strategies or asset classes.

Total AUM
trillions billions millions thousands hundreds
Currency
Assets in USD
trillions billions millions thousands hundreds

Specify the framework or taxonomy used.

Investment activities in funds

Funds that are labelised (TEEC french label) or whose investment strategy specifically aims at investing in companies or assets that contribute positively to the transition to a low-carbon world.

Direct investment activities

Companies or assets that generate more than 50% of their annual turnover in activities listed in the TEEC French label taxonomy.

other description

          Promote climate change integration by GPs.
        

14.3. Indicate which of the following tools the organisation uses to manage climate-related risks and opportunities.

14.4. If you selected disclosure on emissions risks, list any specific climate related disclosure tools or frameworks that you used.

SWEN Capital Partners strives to answer as fully as possible any of its clients’ request. Some of them require providing them with an estimation of the carbon footprint of their investment using their own template (usually an excel spreadsheet).

14.5. Additional information [Optional]


SG 14 CC.

14.6 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
Weighted average carbon intensity
          monitoring
        
          TCO2eq / M€
        
          SWEN CP and its partners have applied three main methods. The most appropriate/reliable method has been adopted for each underlying asset:
1.	Precise carbon footprint data: since the outset, SWEN CP has been collecting this information via its annual ESG data collection campaign. 
2.	Use of carbon footprint models: based on physical data, including energy consumption, this method was applied to infrastructure since this asset class is especially susceptible to climate change. For this reason, a specific and precise approach was justified.
3.	Use of market models (proxies): were used to compare an asset to other assets of the same type that had already published a reliable carbon footprint study. This method has been used for investments in private equity funds where it has been particularly difficult to obtain detailed information about each asset (volume issue).
        
Carbon footprint (scope 1 and 2)
          monitoring
        
          TCO2eq / € invested
        
          SWEN CP and its partners have applied three main methods. The most appropriate/reliable method has been adopted for each underlying asset:
1.	Precise carbon footprint data: since the outset, SWEN CP has been collecting this information via its annual ESG data collection campaign. 
2.	Use of carbon footprint models: based on physical data, including energy consumption, this method was applied to infrastructure since this asset class is especially susceptible to climate change. For this reason, a specific and precise approach was justified.
3.	Use of market models (proxies): were used to compare an asset to other assets of the same type that had already published a reliable carbon footprint study. This method has been used for investments in private equity funds where it has been particularly difficult to obtain detailed information about each asset (volume issue).
        
Portfolio carbon footprint
          monitoring
        
          TCO2eq
        
          SWEN CP and its partners have applied three main methods. The most appropriate/reliable method has been adopted for each underlying asset:
1.	Precise carbon footprint data: since the outset, SWEN CP has been collecting this information via its annual ESG data collection campaign. 
2.	Use of carbon footprint models: based on physical data, including energy consumption, this method was applied to infrastructure since this asset class is especially susceptible to climate change. For this reason, a specific and precise approach was justified.
3.	Use of market models (proxies): were used to compare an asset to other assets of the same type that had already published a reliable carbon footprint study. This method has been used for investments in private equity funds where it has been particularly difficult to obtain detailed information about each asset (volume issue).
        
Total carbon emissions
          
        
          
        
          
        
Exposure to carbon-related assets
          monitoring
        
          TCO2eq / M€
        
          SWEN CP and its partners have applied three main methods. The most appropriate/reliable method has been adopted for each underlying asset:
1.	Precise carbon footprint data: since the outset, SWEN CP has been collecting this information via its annual ESG data collection campaign. 
2.	Use of carbon footprint models: based on physical data, including energy consumption, this method was applied to infrastructure since this asset class is especially susceptible to climate change. For this reason, a specific and precise approach was justified.
3.	Use of market models (proxies): were used to compare an asset to other assets of the same type that had already published a reliable carbon footprint study. This method has been used for investments in private equity funds where it has been particularly difficult to obtain detailed information about each asset (volume issue).
        

14.8 CC. Indicate whether climate-related risks are integrated into overall risk management and explain the risks management processes for identifying, assessing, and managing climate-related risks.

Please describe

SWEN CP has been implementing its Climate Strategy in all its institutionnal investments for around 2 years now.

  1. The first step was to train everyone on Climate-Related risks : over the last 3 years, SWEN CP has organised regular trainings about climate change for the Executive Committee and SWEN’s team members. Trainings are planned for 2019 : SWEN CP (with its shareholder Arkea Investment Services) has launched a tender offer to select advisors for 2019 training process on Climate Change and TCFD recommendations. The aim is to train SWEN’s team members and its board directors in order to increase the level of knowledge. It’s part of the TCFD implementation for our own governance. 
  2. New fund lauch process : since Q4 2017, SWEN CP must commit to allocate a part of the fund to « green assets ». The level of this part depends on each fund and is defined during the launching process by SWEN CP ‘s Executive Committee: it’s a strategic decision and it’s part of our governance product process. It is integrated in the by-laws of our funds and part of the communication during the fund raising process. It’s a strong commitment monitored by the risk management team during the lifetime of the fund.
  3. Into the deal flow and investment process : There are no investments realised since Q4 2017 without taking into account the climate-related risks and opportunities. It has become part of our overall investment process. The ESG team attends every Monday the « Monday Meeting » during which the deal flow is reviewed. For 2019, our front tool (efront) will integrate an « automatic validating workflow » that necessitate 3 mandatory "Go" (from ESG, risk management and compliance teams) to enter into a deeper analysis.
  4. Monitoring process : the investment team monitors the ESG progress over the holding period in the same time of the financial performances.

  • The ESG team is in charge of measuring and monitoring the ESG and climate related risks and opportunities during the lifetime of the investment. The exercice is performed annually thanks to the ESG data campaign. It allows SWEN to produce its ESG reports and its Art 173 reports for its own funds but also for its clients. SWEN measures its « green part » exposure fund by fund and its carbon footprint, helped by external consultants. For its infrastructure funds, SWEN measure and monitors its "brown part" in order to map its risks and engage dialogue with the relevant underlying assets.
  • Clause de rendez-vous climat : it has been added in side letters of each funds subscribed since Q4 2017. This clause consists on committing the GPs to set up a dedicated meeting with SWEN’s ESG team to present their own climate approach. This process will start in may 2019.

The aim is to add in SWEN risk committee a dedicated « climate risk analysis ». SWEN in currently hiring a senior ESG/Climate specialist to be responsible for implementing the TCFD recommendations and improving our risk management process.

14.9 CC. Indicate whether the organisation undertakes active ownership activities to encourage TCFD adoption.

Please describe

For each type of investment, SWEN engages with investees GPs or companies/Assets on climate change issues : with the GPs, thanks to the promotion of the iC20 and the Clause de rendez-vous Climat and their carbon data, with the underlying portfolio assets or companies, with their carbon footprint, their climate physical and transition risks due diligences and by the dialogue during the due diligence process and the holding period. The SWEN investment team is key on this active ownership approach as they will be the best promotors of this climate related sensibility : all SWEN investment directors and associates are responsible for being cautious and engage actions with their counterparts on these issues in order to contribute to the transition to a lower carbon world and to improve by the same time the long term financial performance of these companies / assets, allowing them to be among the leaders tomorow.

SWEN is engaged with different stakeholders on Climate Change and specifically in 2018, worked on a study with the Green Departement of the OECD of how integrating better Climate Change Issues into institutionnal investment decision process.

SWEN promotes actively once a year during its annual ESG Conference for non listed asset classes, the « ESG Best Practices Honours by SWEN », climate change and ESG issues. The aim is to share best practices around these topics in front of more than 450 professionals from the private investment industry and institutionnal investors and major stakeholders of the responsible investment practice (PRI, OECD, FIR….).


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

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.

9 %

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

1 % of AUM

Brief description and measures of investment

Through its fund of funds activity, SWEN CP is invested in clean tech funds or funds that invests in energy efficiency projects.

Asset class invested

1 % of AUM
17 % of AUM

Brief description and measures of investment

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

Asset class invested

100 % of AUM

Brief description and measures of investment

SWEN CP's 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.

15.4. Please attach any supporting information you wish to include. [OPTIONAL]



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