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Ambienta SGR SpA

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.).

Describe Since 2019 we are implementing carbon footprint analysis and management of all our new portfolio companies. In addition, we publicly disclosed our support for the Task Force on Climate-related Financial Disclosures (TCFD), with the intention to implement a more direct approach towards climate-related risks and opportunities.

13.2. Indicate if your organisation considers ESG issues in strategic asset allocation and/or allocation of assets between sectors or geographic markets.

We do the following

          We consider ESG issues as a risk and opportunity management tool
        

13.3. Additional information. [OPTIONAL]

As a private equity investor with governance rights, ESG integration represents the opportunity to manage risk and catch opportunity rather than a strategic allocation tool. Nonetheless environmental issues are naturally included in our investment thesis therefore we can state that they are used in strategic asset allocation


SG 13 CC.

13.4 CC. Describe how the organisation is using scenario analysis to manage climate-related risks and opportunities, including how the analysis has been interpreted, the results and any future plans.

Describe

We analyse climate-related risks and opportunities using two tools:

 - Within the carbon footprint analysis and management, we define the position of our portfolio companies with respect to carbon emission. From this starting point we implement a carbon strategy.

 - The third step of our ESG In Action programme is called Materiality Analysis. This analysis is made to assess, under the point of view of different stakeholders, the main ESG related business risks and opportunities. Some of the risks analysed are directly related to climate change, such as extreme events and their impact on production facilities. The outcome of the Materiality Analysis is the ESG Action Plan which is implemented during the portfolio company holding period.

13.5 CC. Indicate who uses this analysis.

13.6 CC. Indicate whether the organisation has evaluated the impacts of climate-related risk, beyond the investment time-horizon, on the organisations investment strategy.

Describe

At Ambienta, we consider ESG management as a business risk mitigating tool. We require our portfolio companies to structurally undertake our ESG In Action programme, where we develop both carbon footprint analysis and Materiality Analysis. In addition, we implement ISO certifications to our portfolio companies according to their business needs. All the above is done in order to create a lasting legacy beyond our typical private equity investment period. We create solid companies that can withstand regulatory pressure and remain ahead of the pack in their sustainability mission.

13.7 CC. Indicate whether a range of climate scenarios is used.

Indicate the climate scenarios the organisation uses.
Provider
Scenario used
IEA
IEA
IEA
IEA
IEA
IRENA
Greenpeace
Institute for Sustainable Development
Bloomberg
IPCC
IPCC
IPCC
IPCC
Other
Other
Other

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.

Our whole investment strategy base its foundation on resource efficiency and pollution control.

other description

          Developed our own proprietary methodology to assess portfolio companies impact in improving environmental impact in terms of Resource Efficiency and Pollution Control Metrics
        

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

other description

          Developed our own proprietary methodology to assess portfolio companies impact in improving environmental impact in terms of Resource Efficiency and Pollution Control Metrics
        

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

We diclose to clients/beneficiaries more than emission risks. We disclose both company performance on relevant ESG issues through dedicated KPIs (like EFFAS ESG KPIs), including emissions when this is a material aspect for the company (i.e. company operates an heavy industrial operationals footprint). Moreover we have developed a proprietary methodology to assess and quantify the environmental impact of company products and services compared to reasonable technological alternative (i.e. the improved energy efficiency of an electric motor vs the previous generation). This methodology assess the environmental impact using 11 Metrics, 5 for resources efficiency and 6 for pollution control. One of the poluttion control metrics assess the CO2 reduction determined by company's products or services, but the others allow to captuer other pollutants release in air, soil and water or soil and biodiversity deterioration. We quantify this impact in a dedicated report for each portfolio company that we call the Environmental Impact Analysis. 

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
Carbon footprint (scope 1 and 2)
          Define GHG emissions for all our portfolio companies acquired by Ambienta III fund.
        
          Tonnes of CO2 equivalent (tCO2e), energy intensity (in gigajoules), and tCO2 per employee.
        
          The GHG reporting is based on the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, co-established by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
        
Portfolio carbon footprint
          Define GHG emissions for all our portfolio companies acquired by Ambienta III fund.
        
          Tonnes of CO2 equivalent (tCO2e), energy intensity (in gigajoules), and tCO2 per employee.
        
          The GHG reporting is based on the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, co-established by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
        
Total carbon emissions
          Define GHG emissions for all our portfolio companies acquired by Ambienta III fund.
        
          Tonnes of CO2 equivalent (tCO2e), energy intensity (in gigajoules), and tCO2 per employee.
        
          The GHG reporting is based on the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard, co-established by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).
        
Other emissions metrics
          Define the environmental impact of our portfolio companies acquired by Ambienta II and Ambienta III funds.
        
          Resource Efficiency Metrics:
1.	Energy Saved: amount of energy consumption avoided/reduced   
2.	Water Saved: amount of water consumption avoided/reduced   
3.	Materials Saved: amount of material consumption avoided/reduced 
4.	Land(fill) Saved: amount of space left untouched and not used for human purposes
5.	Food Saved: amount of food no longer wasted or additionally produced 
Pollution Control Metrics:
6.	CO2 Emissions Reduced: amount of CO2 emissions reduced 
7.	Air Cleaned: volume of air cleaned
8.	Pollutants Avoided: amount of pollutants reduced or not discharged
9.	Water Cleaned: amount of water cleaned
10.	Materials Recycled: amount of materials reused at end of life 
11.	Biodiversity Preserved: amount of species or space protected
        
          Developed a proprietary methodology for Environmental Impact Assessment.
        

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

Climate-related risks are integrated into two steps of our ESG In Action programme. First, the ESG due diligence, executed by a verified third party, aims to identify and evaluate liabilities and opportunities that are also related to climate. Examples are non-conformity of machinery, disruption to production due to extreme weather events, and resiliency of energy sources. The ESG due diligence is executed before committing to the investment. Second, portfolio company management and all relevant stakeholders perform a Risk Materiality analysis. This step is related to the identification and prioritization of all ESG business related risks, in order to mitigate or eliminate them through the ESG Action Plan.

In addition, starting in 2019, we perform a carbon footprint analysis and management of all new companies acquired by Ambienta III fund. The analysis is performed after acquisition and its outcomes are integrated into the decision-making process of the Risk Materiality.

 


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.

100 %

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

30 % of AUM

Brief description and measures of investment

Our fund Rules specify that we can only invest into companies that currently or prospectively concentrate on products or services that improve resource efficiency or pollution control regardless of the underlying sector. This obviously encompasses any renewable energy related product or services, any sustainable transport business, any storage, any water treatment any waste treatment or any other business/sector conventionally grouped under the "Clean Technology" definition. Within our current portfolio (as of end of december 2016) we have indsutrial filters distributors and waterbased coating manufacturer, for example

Asset class invested

10 % of AUM

Brief description and measures of investment

Alongside previous answer, any products or services that promotes energy or water efficiency within buildings, or promote reduced impact of building construction, maintenance or usage on the environment or human health

Asset class invested

0 % of AUM

Brief description and measures of investment

Any business promoting usage of forestry resources in a sustainable way.

Asset class invested

0 % of AUM

Brief description and measures of investment

Any products or services that enable improved yields or reduced environmental impact of agriculture from seeding to harvesting phases.

Asset class invested

0 % of AUM

Brief description and measures of investment

Ambienta III committed an amount at least equal to the two thirds of the amount drawn down from the Total Commitment of all Investors for the purpose of investments in entities which qualify as micro, small or medium-sized companies as defined in accordance with the Recommendation of the European Commission.

Asset class invested

0 % of AUM

Brief description and measures of investment

Coherently with our overarching Fund Rules described here above, we can invest into products or services that fulfill our resource efficiency and pollution control within the Healthcare sectors like for example radiation reduction or control systems within nuclear medicine sector.

Asset class invested

10 % of AUM

Brief description and measures of investment

Water efficiency or Water pollution control are key areas of focus of our mandate since water is a primary resource of this planet. All companies whose product or service aim to optimize water consumption or reduce water pollution fit with our Fund Rules.

          Other Resource Efficiency or Pollution Control
        

Asset class invested

50 % of AUM

Brief description and measures of investment

Ambienta invests into companies that currently or prospectively concentrate on products or services that improve resource efficiency or pollution control regardless of the underlying sector.

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



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