Oquendo’s sustainability approach is embraced through-out its whole investment process. Oquendo’s Responsible Investment Policy is the mainstay when integrating environmental, social and governance issues in its making decision processes
In the asset allocation process, Oquendo operates an “exclusions and concerns” dynamic filter. The investment committee has established some exclusion criteria such as alcohol, pornography, gambling and tobacco manufacturing.
During the investment selection stage, Oquendo carries out a broad, all-encompassing materiality assessment. This materiality assessment aims to appraise a potential investment’s performance in a series of ESG criteria, in order to evaluate what ESG risks the investment poses. Moreover, an ESG report is always requested from external advisors including situation assessment, areas of improvement and potential deal breakers.
At the execution stage of the investment process, Oquendo’s team monitors potential ESG controversies during company visits, management interviews, etc. If they identify that a company has a high potential impact or issue in terms of Human Rights, Labour, Environmental or Corruption they carry out a more meticulous due diligence and close monitoring. A management plan will be drawn up to include actions to solve non-severe ESG issues and to improve key metrics. The Investment Committee takes into the account all this information when submitting an investment recommendation. If the results of this process end up with a negative conclussion, the investment will be dismissed.
During the holding period, Oquendo’s strategy is based on the triple action of systematically assessing ESG performance, engaging with its investees and managing eventual controversies. Oquendo carries out a yearly
ESG Portfolio Review in order to collect up-to-date in- formation on ESG risks and its investees’ performance against these. In parallel, Oquendo seeks to engage with its investees to influence company’s board behaviour towards ESG best practices. Quarterly, the CFO reviews the Responsible Investment assessment and make changes if applicable.