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Sustainable Value Investors

Service Providers Framework 2019

You are in Strategy and Governance » Policy on ESG beliefs

Policy on ESG beliefs

SG 01. Responsible investment policy

01.1. Describe how your organisation’s philosophy incorporates environmental, social and governance factors, and the link to your business offerings.

Our organization philosophy believes that the integration of ESG factors reduces risks in the portfolio of investors and increases revenues opportunities. We support the integration of ESG factors as a risk assessment as well as a source of innovative business opportunities. We offer investors advisory on RI Policy and ESG integration, research, due diligence and engagement services.

You can see our business offer at the following link:

www.sustainablevalueinvestors.com

 

01.2. Indicate whether you have policies that formalise the incorporation of your ESG beliefs in your business offerings.

01.3. Indicate the components/types of your internal policy and provide the URL and/or an attachment of the document/s if they are publicly available.

Policy components/types

Public availability

Attachment

Public availability

Public availability

Public availability

Public availability

Public availability

01.4. Indicate how these are put into practice internally across the organisation.

01.5. Additional information [OPTIONAL]


SG 02. Norms used to develop policies

02.1. Indicate what frameworks and guidelines you have used to develop your organisation’s policies. Tick all that apply.

          The United Nations Declarations on the Rights of Indigenous People
        
          The Rio Declaration on Environment and Development
        

02.2. Additional information. [OPTIONAL]


SG 03. Policy offerings to clients

03.1. Indicate whether you offer standard, off the shelf, policies to clients as part of your product offerings, and/or whether you create tailored versions for individual clients.

Off the shelf
Tailored
Asset class-specific RI guidelines
Sector-specific RI guidelines
Screening/exclusions policy
Engagement policy
(Proxy) voting policy
RI guidelines set out within the Investment Policy Statement (IPS)
RI guidelines set out in a freestanding RI policy
Multi-year RI implementation project plan
Conflict of interest management policy
Stockbroker allocation policy
Securities lending policy
Other, please specify (1)
Other, please specify (2)
Other, please specify (3)
None of the above

03.2. Provide a brief description of the key elements, any variations, or exceptions applying to these policies.

We advise clients on RI Policies which integrate ESG into the investment framework and processes already in place, while building up step by step capabilities in ESG monitoring and reporting. We also offer ESG education programs and capability building.

When advising clients on policies, we conduct a first assessment of the organization culture, values, missions and stakeholders. We then design a framework of ESG integration in each asset class of activity, as the basis to redact a business plan to implement the PRI Principles.

We propose both a general and an asset-class based approach, in consideration of client's commitment, strategy and resources.

03.3. Additional information. [OPTIONAL]


SG 04. ESG/RI in business offerings

04.1. Briefly describe how you include ESG/RI factors as part of your business offerings.

Business area

Reporting

How you include ESG/RI factors

We conduct ESG Reporting of the holdings of our GPs clients, when we analyse their invested companies in portfolio. We have developed a proprietary model to integrate ESG KPIs into the evaluation models of SMEs.

Active Ownership Services

How you include ESG/RI factors

We support engagement activities of clients including ESG/RI factors, providing ESG research and portfolio monitoring, developing engagement strategy and plan with priority goals. We can conduct engagement in outsourcing as well as monitor and measure the results.

Investment Consultancy

How you include ESG/RI factors

We offer advisory and consultancy services to support clients to effectively and efficiently integrate ESG factors into their business model and investment process

Research and Data Provision

How you include ESG/RI factors

We conduct qualitative and quantitative researches, screening and due diligence with ESG KPIs, which are sector and asset-class specific. When it is possible, we conduct peers analysis and use a best-in-class approach. We focus on ESG factors integration into financial analysis of each asset class

04.2. Indicate the roles in your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for ESG/RI within the organisation.

Roles present in your organisation
Oversight/accountability for ESG/RI
Implementation of ESG/RI
Board
Directors
Chief Executive Officer (CEO), Chief Financial Officer (CFO)
Chief Operating Officer (COO), Chief Information Officer (CIO)
Other chief-level staff
Other heads of department
Dedicated ESG/RI staff
Other role, specify (1)
Other role, specify (2)
Other role, specify (3)
None of the above

04.3. Indicate how you ensure ESG/RI expertise for the roles where there are RI oversight/accountability or implementation responsibilities.

04.4. Indicate whether your organisation has any ESG/RI linked incentives for its employees.

04.6. Describe how you ensure that your employees incorporate ESG/RI into services through other mechanisms than ESG/RI linked incentives.

Our business model is focused on ESG integration, we don't need specific ESG/RI linked incentives for our employees

04.7. Additional information [OPTIONAL]


SG 05. Outsourcing of services

05.1. Indicate whether you outsource some of your services. Report percentage of services outsourced as percentage for that specific business area.

Business area

SG 06. Providing training/education

06.1. Indicate whether you provide training/educational services on ESG/RI. Tick all that apply.

06.2. Describe the main components of your training/educational services on ESG/RI and any variations depending on the group you provide training/education to.

We offer different ESG/RI training packages on how RI/CSR-Sustainability and on ESG KPIs and how to integrate them into financial analysis

06.3. Describe whether these training/educational services include any commercial elements.

          No, they are part of a wider Advisory and Consultancy offer. We also promote educational programmes in cooperation with the Financial Analysts Society and Universities, such as the Bologna University and the Bologna Business School.
        

06.4. Additional information. [OPTIONAL]


SG 07. Applying, advancing and promoting the PRI principles

07.1. Describe how your organisation applies, advances and promotes the PRI Principles.

We write research and publish articles on Corporate Governance, ESG and Sustainable Development. We promote education and spread knowledge about the UN PRI among clients and prospects. We are also member of ICGN, EFFAS ESG Commission, Ned Community and AIAF (the domestic Analyst Society). Our founding partner is member of the Board of the Network for Sustainable Financial Markets (NSFM).

07.2. Highlight whether there are any ways that your organisation would like to engage further with the PRI. [OPTIONAL]

Yes, we would be happy to engage more on corporate governance, ESG research and lobbying activities


SG 08. Actions taken to promote responsible investment

8.1. Indicate which of the following actions your organisation has taken to promote responsible investments during the reporting year, independently of collaborative initiatives.

8.2. Additional information. [OPTIONAL]


SG 09. Long term trends

09.1. Indicate which of the following long-term trends are addressed in your product outputs.

09.2. Explain how this long-term trend affects your product outputs.

We are developing engagement activities on climate change and we encourage clients to engage on this topic. We have shared views with other investors on how to tackle stranded assets.

We are also starting to calculate the CO2 emissions in the ESG due diligence of private companies. 

09.2. Explain how this long-term trend affects your product outputs.

Water and waste management are relevant indicators in our ESG assessment. We develop specific ESG policy on resource scarcity

09.2. Explain how this long-term trend affects your product outputs.

In our ESG Analysis we take into consideration how technology influences ESG factors. We have also focused our attention on how Artificial Intelligence influences business and economic patterns and have an impact on the environment, social and community life. 


SG 10. Interaction with asset owners

10.1. Indicate whether you interact with asset owner clients.

10.2. Indicate the typical frequency and type of interactions with your asset owner clients.

Type of interaction

Frequency

Frequency

10.3. Additional information. [OPTIONAL]


SG 11. Aligning approach with investor goals

11.1. Describe how you typically align your organisation’s philosophy and approach to ESG/RI with your investor clients’ goals.

The purpose of our organization is to support investors to fulfil their fiduciary duties and become fully responsible investors. With this objective in mind, we offer standard and tailor-made services which effectively integrate ESG/RI into investors' goals and activities.

11.2. Additional information. [OPTIONAL]


SG 12. ESG recommendations not aligned with investor goals

12.1. Describe what steps you take, if any, when your ESG recommendations are not in line with your investor clients’ goals.

We focus exclusively on ESG mandates. Our effort is to make investors aware that it is in their ultimate interest to pursue full ESG integration, because it is in line with the present need and effort to create more sustainable financial markets.

12.2. Additional information. [OPTIONAL]


SG 13. Seeking feedback from clients

13.1. Indicate whether you seek feedback from clients on your RI/ESG services and product offerings

13.2. Describe how you use this feedback in your RI/ESG services and product offerings.

To improve our service offer and make it more useful and accountable to final clients


SG 14. Managing conflicts of interest

14.1. Indicate whether your organisation has a policy for managing potential conflicts of interest.

14.2. Describe how you manage potential conflicts of interest.

We are very sensitive to conflicts of interests, also because we offer corporate governance analysis where conflicts of interest are thoroughly assessed in our evaluations.

From the very beginning, we have separated any advisory activity to companies from the advisory activity to investors. At Sustainable Value Investors we work exclusively for the interest of investors and on behalf of investors.  For example, we don't release any solicited rating to companies. We only work for companies, if requested by the investors, e.g. for the holding of LPs.

Our partner, Sustainable Equity Value, offers advisory to companies.

14.3. Describe how you ensure that company employees do not derive any personal gain from the use of information collected during your work process.

Employees need to respect information confidentiality and commit to client's interest. Sensitive information are only processed by senior partners who are signing confidentiality agreement. No junior analyst has access to fully confidential information. 

14.4. Additional information. [OPTIONAL]


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