Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.
We require our Fund Managers to have or develop a Policy for Sustainable Development including a commitment to ESG matters and demonstrate the commitment by nominating responsibility of ESG in the Board and/or Senior Management.
We require our Fund Managers to exclude acitivties according to EDFI Harmonised Exclusion List (https://www.swedfund.se/media/1122/harmonized_edfi_exclusion_list_2012.pdf)
Swedfund requires all of our portfolio companies (regardless the asset class) to implement an environmental and social management system including the following components, as applicable:
• Policy for Sustainable Development: Must be established and adopted by the management of the portfolio companies.
• Identification of risks and impacts: A system/routine must be established in order to identify ESG risks and the areas that are affected.
• Performance Management: Results within identified risks and impact areas must be monitored and evaluated in order to measure and improve results over time.
• Responsibility and competence: A member of the company’s management team must have overall responsibility for sustainable development issues.
• Emergency preparedness plan: In the case of fixed installations, action plans must have been established for accidents and disaster situations.
* Reporting must take place regularly and at least annually both to the management and to the Board of the portfolio company, as well as to Swedfund.
• Stakeholders: Internal and external stakeholders must be identified and consulted in situations that affect them and be given relevant information at appropriate times and intervals.
Swedfund has possibility to provide Technical Assistance (TA) funding to its portfolio companies to improve quality of the investments e.g. within ESG matters. For example, in 2018, Swedfund cooperated with one of our Fund Managers, TLG, to provide a TA funding to Snapper Hill Clinic in Liberia (that is one of TLG's portfolio companies) to improve quality of healthcare.
Based on ESG due diligence findings Swedfund creates an ESG Action Plan that forms a part of investment agreement. The ESGAP includes specific activities that aim to improve the ESG management, minimise risks and leverage on opportunities of the Fund Manager.
Swedfund requires its Fund Managers to commit to several ESG standards and principles, such as ILO Fundamental Principles and Rights at work and IFC Performance Standards. the complete list of requirements is included in our Policy for Sustainable Development (https://www.swedfund.se/media/1643/swedfund-policy-for-sustainable-development-2015-09-02.pdf).
Provide additional information relevant to your organisation's appointment processes of external managers.
Swedfund assess the Fund Manager's performance against Swedfund's strategic sustainbility goals (#1 Compliance with ILO conventions; #2 Implementation of environmental and social management system; #3 Financial viability; and #4 Anti-corruption management system) as a part of due diligence process and monitor the performance annually.