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PRI reporting framework 2020

You are in Direct - Fixed Income » ESG incorporation in actively managed fixed income » Implementation processes

Implementation processes

FI 01. Incorporation strategies applied

Indicate (1) Which ESG incorporation strategy and/or combination of strategies you apply to your actively managed fixed income investments; and (2) The proportion (+/- 5%) of your total actively managed fixed income investments each strategy applies to.
Corporate (non-financial)
00 Screening alone
0 Thematic alone
0 Integration alone
100 Screening + integration strategies
0 Thematic + integration strategies
0 Screening + thematic strategies
0 All three strategies combined
0 No incorporation strategies applied

01.2. Describe your reasons for choosing a particular ESG incorporation strategy and how combinations of strategies are used.

As a subsidiary of Eurazeo Group, Idinvest and Eurazeo share the same vision of responsible investment. Idinvest is convinced that strong and sustainable growth cannot take place without considering non-financial aspects and integrates ESG-criteria across all of its activities and throughout the lifecycle of its investments. Idinvest's responsible investment approach in private debt investments is adapted to the specificities of this asset class and uses a combination of screening and integration strategies:

  • ESG screening is used as a negative/exclusionary filter, to exclude investments in banned sectors and in companies with unethical practices (Idinvest's exclusion policy also includes a watchlist of sectors with high environmental or social-related risks).
  • ESG integration is used to assess and include ESG factors in investment decisions. It aims at identifying potential ESG-related risks and/or opportunities of target companies, including climate-risk mapping.

Idinvest implements plans for ensuring continuous progress throughout the investment lifecycle.

01.3. Additional information [Optional].

The Group's private debt business line is managed by Idinvest Partners.

Having signed the PRI and IC International (former Initiative Climate 2020) , Idinvest is convinced that solid and sustainable growth can only be achieved by taking into account the impacts of economic activities throughout the company. This is the reason why at Idinvest, ESG (the three pillars of extra-financial reporting) have become Sustainability and Impact. The difference is not purely semantic but reflects a change in mindset. Whilst ESG can have a passive dimension, Idinvest wishes to be active, an agent of change that makes a positive contribution to confronting the long-term challenges faced by society.

With its Sustainability & Impact philosophy, Idinvest is one of the pioneers in measuring the impact of its portfolio in relation to the United Nations Sustainable Development Goals (SDG) and is working towards making improvements day after day. As a result of this pioneer approach, Idinvest contributed to the development of an impact mapping tool and conducted an assessment of its portfolios' exposure to the SDGs in 2019. The assessment consisted of an analysis of the potential contribution and/or obstruction of its portfolio companies to the achievement of the SDGs and allowed for the identification of portfolio companies presenting high risks and opportunities for the transition towards a more sustainable and inclusive society. The impact mapping tool will be reviewed and improved in order to reconduct the assessment in 2020.

FI 02. ESG issues and issuer research (Private)

FI 03. Processes to ensure analysis is robust

03.1. Indicate how you ensure that your ESG research process is robust:

03.2. Describe how your ESG information or analysis is shared among your investment team.

03.3. Additional information. [Optional]

In light of the specificities of this asset class, Idinvest Partners has defined a tailored procedure to ensure the quality of the execution of the ESG process.

  • A comprehensive ESG assessment is conducted during due diligence phase and when appropriate, through an external ESG Due Diligence. The results of this initial assessment are included in investment documents and discussed with the investment committee.
  • An ESG clause is included within direct lending legal documentation.
  • ESG KPIs are reviewed on an annual basis through an ESG reporting sent to all portfolio companies, allowing for the identification of potential improvements or degradations of extra-financial performance.
  • In addition, an ESG and climate-risk mapping is made at portfolio level on an annual basis.
  • Idinvest Partners provides feedback to portfolio companies and improvement recommendations. Idinvest Partners provides dedicated support to portfolio companies when requested.
  • The results of the annual monitoring exercise are consolidated and publicly disclosed in the annual S&I report.