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Swedfund International AB

PRI reporting framework 2019

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Asset class implementation gateway indicators

OO 10. Active ownership practices for listed assets

10.1. Select the active ownership activities your organisation implemented in the reporting year.

Fixed income Corporate (non-financial) – engagement


OO 11. ESG incorporation practices for all assets

11.1. Select the internally managed asset classes in which you addressed ESG incorporation into your investment decisions and/or your active ownership practices (during the reporting year).

Fixed income - corporate (non-financial)

Private equity

Select the externally managed assets classes in which you and/or your investment consultants address ESG incorporation in your external manager selection, appointment and/or monitoring processes.
Asset class
ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes
Private equity

Private equity - ESG incorporation addressed in your external manager selection, appointment and/or monitoring processes

11.4. Provide a brief description of how your organisation includes responsible investment considerations in your investment manager selection, appointment and monitoring processes.

 

As a development finance institution, Swedfund has a special role to play both within Swedish aid and as a catalyst for achieving Agenda 2030. We invest in shares, provide loans and utilise funds as instruments to reach out to more small and medium-sized enterprises. Our business model is based on three pillarspillars:  Impact on society, Sustainability and financial viability. By establishing development targets and working closely with our portfolio companies, we can monitor developments and ensure that they evolve in the right direction.

Impact on society - Swedfund aims to help create jobs with a good working environment and good employment conditions.

  • Job creation
  • Tax
  • Share of women in senior management
  • CO2e emissions
  • Additionality
  • Overall impact/benefit

Sustainability - Swedfund aims to help create sustainable enterprises in the world's poorest countries.

  • Environment/climate
  • Human rights and working conditions
  • Business ethics and anti-corruption

Financial Viability - Swedfund aims to help create enterprises that are profitable in the long-term and therefore financially viable in the world's poorest countries.

  • Growth
  • Profitability
  • Return on equity

Regarding the selection, appointment and monitoring of investment managers Swedfund sets similar criteria as those for internally managed investments:

Investing in countries with less developed economies and enterprises brings with it major risks, particularly financial risks. We endeavour to manage these risks through a comprehensive investment process. The investment proposals that we receive are first reviewed, and those which match our investment strategy and criteria are then analysed in more detail.

Investment managers and analysts, working alongside experts in ESG, law and impact, conduct a thorough analysis. Business plans, investment partners, sustainable development (environment, employment conditions and anti-corruption) and impact on society are all analysed. The analysis is then reviewed by Swedfund’s Investment Committee and the process is concluded with a decision by the board of directors. Each investment must achieve the goals set in our three pillars: impact on society, sustainability and financial viability

Swedfund encourages the following:

  •  Adhere to internationally recognized standards for
    • sustainability;
    • business integrity
    • anticorruption;
    • corporate governance; and
    • human rights, for example: UN GC, IFC Performance Standards, OECD-guidelines for MNE
  •  Adopt and implement a whistleblowing service in order to make it easy to anonymously report serious irregularities.

Swedfund requires the following:

  • Comply with legal and regulatory requirements.
  • Comply with ILO's Core Conventions and ILO's Basic Terms and Conditions of Employment.
  • Comply with the Harmonized EDFI Exclusion List.
  • Adhere to applicable IFC Performance Standards.
  • Adhere to Swedfund's requirements on anti-corruption.
  • Provide ESG information (including human rights) and on development results, as requested by Swedfund.
  • Comply with Swedfund's requirements with respect to Swedfund's monitoring of its investments.

For the detailed requirements, please find Swedfund's sustainability policy (SG 02.1). In addition to the above mentioned norms our RI policy also includes: EDFI Exclusion List, EDFI Guidelines for OFCs, EDFI Harmonized Environemental and Social Standards

For additional information on Swedfund's investment principles, overall investment strategy, and responsible investment approach please see SG 01.4 and SG 01.5. 


OO 12. Modules and sections required to complete

12.1. Below are all applicable modules or sections you may report on. Those which are mandatory to report (asset classes representing 10% or more of your AUM) are already ticked and read-only. Those which are voluntary to report on can be opted into by ticking the box.

Core modules

RI implementation directly or via service providers

Direct - Fixed Income

Direct - Other asset classes with dedicated modules

RI implementation via external managers

Indirect - Selection, Appointment and Monitoring of External Managers

Closing module

12.2. Additional information. [Optional]

In addition to the above listed activites, Swedfund also engages in the following:

Swedpartnership

Swedprtnership offers financial support to small and medium-sized Swedish enterprises to establish their business in a development or growth market where Swedfund operates. Swedpartnership is a separate entity from Swedfund’s investment organisation. The aim with the financial support for establishment is to contribute to the creation of sustainable and profitable local businesses. The funds can be used for two activities: capacity building and investments in equipment and machinery. All activities that are funded must be aimed at the staff and operations of the local collaborating business. The funding helps to reduce the level of risk in the project and gives the Swedish SME company an opportunity to set aside the resources that are necessary to ensure a successful partnership. The funding takes the form of a loan that is written off after the project has been completed and approved. Swedpartnership evaluates and monitors the development results of the projects.

Project Accelerator 

The project accelerator is a vital tool in our work to implement Agenda 2030 by contributing to the development and implementation of more sustainable projects in developing countries. The need is linked to the fact that too few projects are currently being developed, and the fact that the procurer sometimes lacks appropriate expertise or motivation and therefore fails to take into account sustainability considerations in procurement. Using the funding that Swedfund contributes, external expertise can be hired to support the local project owner. This way, the project accelerator helps to prevent countries from developing and building in expensive solutions and dependencies that are unsustainable in the long term, and contributes to better business opportunities for enterprises that offer sustainable and long-term profitable solutions.

Twelve projects have been initiated and are at various phases of commitment and levels of activity. Projects are generally preceded by extensive anchoring and preparation, and the actual initiative that Swedfund funds usually lasts between six and twelve months. During 2018, a project concerning the public transport system in Abidjan, the largest city in the Ivory Coast, was concluded. Efficient public transport is good for the environment and promotes economic development.


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