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Aksia

Service Providers Framework 2020

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.

Aksia's ESG Policy describes our approach to integrating ESG principles into our research and investment processes and the advice we provide clients. The ESG policy was developed by Aksia's ESG Committee in consultation with Aksia's advisory, investment due diligence ("IDD") and operational due diligence ("ODD") teams.

Aksia is committed to promoting the PRI's six principles within the investment industry and incorporating ESG analysis into our due diligence approach and processes.

Aksia seeks to evaluate ESG factors across the following areas:

  • Environmental: Factors affecting climate change, pollution, extinction risk and/or resource utilization
  • Social: Factors relating to discrimination, risk of physical harm, privacy violations and/or the exploitation of vulnerable populations
  • Governance: Factors relating to business ethics, company governance and/or board independence

Our approach to evaluating ESG factors is consistent with our value proposition to clients to offer our experience, expertise, and implementation capabilities in providing flexible solutions that aim to meet their specific needs and complement existing internal resources.

Aksia believes that by integrating ESG analysis into our due diligence and advisory services, we are able to:

  • Assess ESG considerations as a part of our research and evaluation process in a manner that is consistent with our overall differentiated approach to due diligence
  • Assist clients in developing investment programs that seek to invest in a manner that is consistent with clients' specific ESG objectives
  • Encourage greater awareness and adoption of responsible investment practices in the alternatives industry

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

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

          Work Environment: Aksia seeks to create an inclusive and diverse work environment where individuals feel supported and comfortable bringing their full selves to the workplace.
        
          Community Engagement: Aksia is actively engaged in supporting the communities we live and work in, and our global offices support various charitable initiatives.
        

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.

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.

Aksia’s services, including those related to ESG, are tailored to each client's needs and preferences and we are able to work with clients to develop customized investment policies.

At the outset of each advisory relationship with Aksia, the advisory team works with the client to understand their ESG guidelines, risk/return objectives, eligible strategies, investment process, and other ESG considerations, which may be incorporated in the client's policy. The advisory team leverages the resources of the investment due diligence and operational due diligence teams in order to inform the construction of these policies.

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

Investment Consultancy

How you include ESG/RI factors

Aksia seeks to incorporate ESG into our research, due diligence and advisory services by:

  • evaluating investment managers' approach to the adoption and integration of ESG factors into their investment processes and business practices;
  • identifying and evaluating positive and negative ESG considerations as part of our investment and operational due diligence processes; and
  • accommodating our clients' requests and needs regarding ESG, including sourcing of sustainability focused investment strategies, the implementation of ESG focused portfolios and the provision of custom ESG-related monitoring and reporting.

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

Please specify

          General Counsel, Partner (Advisory), Partner (IDD), Partner (ODD)
        
Other heads of department

Please specify

          MD/Strategy Head
        
Dedicated ESG/RI staff
Other role, specify (1)

Please specify

          ESG and Sustainability Officer
        
Other role, specify (2)

Please specify

          Senior Analyst (ODD), Portfolio Advisory
        
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.

          Aksia employees attend industry events, conferences and participate in ESG-related panels.
        
          Aksia supports employees with ESG/RI responsibilities in the pursuit of ESG certifications; for example, Aksia’s ESG Officer is currently completing the SASB’s FSA certification.
        
          Aksia integrates ESG as part of our services: we are committed to perform annual internal ESG training sessions
        
          Aksia has established an ESG Research Group to act as a knowledge sharing forum, regularly distributing ESG-related research content.
        

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.

In addition to a competitive base salary, each non-partner professional at Aksia is eligible for an annual bonus award, which is subjective and based on individual performance and contribution, as well as overall firm performance. The individual performance and contribution assessment for employees with ESG-related functions may take into consideration the employee's ESG related tasks and goals. As such, while Aksia does not offer ESG-linked incentives, considerations around ESG-related projects and tasks may be reflected in the annual bonus for employees with ESG-related functions.

04.7. Additional information [OPTIONAL]


SG 05. Outsourcing of services (Private)


SG 06. Providing training/education

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

          Aksia regularly speaks with managers and clients on ESG policies/integration.
        
          Aksia regularly hosts industry and client events, which in 2019 and 2020 included dedicated ESG panels and discussions.
        
          In 2019 and YTD 2020, Aksia employees attended more than 20 conferences which had ESG themes and spoke on 10 panels with ESG topics.
        

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.

Aksia has hosted a number of ESG related education sessions during our "Lunch and Learn" series. These sessions invite industry professionals and academics onsite to discuss frontline ESG topics and ESG policy integration. Sessions are open to all Aksia employees and clients to attend live or remotely.

In addition, we typically include ESG-focused panels and discussions at our Aksia-hosted events; these sessions are educational in nature and are aimed at encouraging greater awareness and adoption of responsible investment practices in the alternatives industry.

Aksia's ESG training focuses on sharing our definition of ESG with the firm, why we invest resources into ESG integration and how we approach ESG integration in our research process. It highlights the types of ESG considerations and issues we have previously addressed or flag in our reports. It also discusses our ESG oversight structure so that employees are informed about our structure and approach.

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

          There is no extra fee or commercial element for the ESG related discussions we have with our clients and managers.
        

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.

Aksia employees have spoken on panels at PRI and non-PRI events on the topic of ESG integration and responsible investing within the alternative asset management space. Aksia has also included ESG related content and panels at our own events.

Aksia is active in speaking with our fund managers in order to understand to the extent to which they have integrated ESG into their processes and to share best practices that we have identified in our due diligence of managers with similar strategies. Aksia actively monitors which fund managers are themselves signatories to the PRI.

Aksia has created a Diversity and ESG Questionnaire which gathers diversity and inclusion statistics, as well as information regarding ESG policies, practices and products. We circulated the questionnaire to the managers in our database (including those that we do not actively cover), and we ask every new manager we establish a relationship with to complete the same questionnaire. The responses we receive from the managers are then recorded and included in our analyses. In addition, as part of this exercise, we encourage managers to share their ESG policies.

Through Aksia's due diligence process, we collect data on ESG integration relating to each manager we cover and include an ESG synopsis in our reports which are shared with clients. Further, we highlight and flag ESG considerations with respect to the Fund's governance, exposures, strategy or the manager in our reviews.

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

Aksia would like to host the PRI for a session of our "Lunch and Learn" series to discuss ESG integration in the alternative investment industry. Representatives from Aksia have submitted a request to participate in the PRI's Hedge Fund Advisory Committee.


SG 08. Actions taken to promote responsible investment

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

08.2. 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.

Aksia's research teams assess various non-financial factors, including ESG factors, which have the potential to impact the risk and return profile of each investment opportunity considered. Generally, when evaluating the impact of ESG factors and trends, our teams may review various scenarios, which may include the implications of changing demographics.

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

Aksia's research teams assess various non-financial factors, including ESG, which have the potential to impact the risk and return profile of each investment opportunity considered. Generally, when evaluating the impact of ESG factors and trends, our teams may review various scenarios, which may include the implications of climate change and the transition to a low-carbon economy.

In addition, Aksia seeks to identify and evaluate positive and negative ESG considerations as part of our investment and operational due diligence processes. Such considerations, both positive and negative, encompass potential material impact on the environment, including climate change.

Aksia factors in climate change in our due diligence reports. For example, we have previously highlighted funds/strategies that have substantial exposure to industries and sectors which are significant emitters of carbon dioxide and pollutants known to impact climate change.

Aksia has also worked with advisory clients to assist with sourcing and conducting due diligence on various climate change-related investment opportunities, including resource efficiency, sustainable infrastructure and renewable energy.

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

Aksia's research teams assess various non-financial factors, including ESG factors, which have the potential to impact the risk and return profile of each investment opportunity considered. Generally, when evaluating the impact of ESG factors and trends, our teams may review various scenarios, which may include resource utilization trends, and extinction risk.

In addition, Aksia seeks to identify and evaluate positive and negative ESG considerations as part of our investment and operational due diligence processes. Such considerations, both positive and negative, include potential material impact on the environment and the availability of scarce resources in the short- and long-term.

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

Aksia's research teams assess various non-financial factors, including ESG factors, which have the potential to impact the risk and return profile of each investment opportunity considered. Changing technology is viewed as a significant disrupter across a number of sectors and strategies and is addressed and highlighted by our research team as part of the due diligence process.

In addition, Aksia seeks to identify and evaluate positive and negative ESG considerations as part of our investment and operational due diligence processes. Such considerations, both positive and negative, include potential material impact of technological development on the environment and the society.

Regarding factoring in technological developments in our due diligence, we have previously highlighted issues related to privacy and cyber security and also potential investment opportunities which may benefit from technological developments, such as investment managers operating in the farmland space, using agricultural technology for yield/crop enhancement or resource efficiency.


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

          The frequency of meeting attendance, education sessions, and communication methods is typically determined at the beginning of the relationship depending on the client's preferences.
        

Frequency

          The frequency of meeting attendance, education sessions, and method of communication is typically determined at the beginning of the relationship depending on the client’s preferences.
        

Frequency

          The frequency of meeting attendance, education sessions, and method of communication is typically determined at the beginning of the relationship depending on the client’s preferences.
        

Frequency

          The frequency of meeting attendance, education sessions, and method of communication is typically determined at the beginning of the relationship depending on the client’s preferences.
        

Frequency

          The frequency of meeting attendance, education sessions, and method of communication is typically determined at the beginning of the relationship depending on the client’s preferences.
        

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.

Our approach to ESG is consistent with our value proposition to clients to offer our experience, expertise, and implementation capabilities in providing flexible solutions that aim to meet their specific needs.

Aksia recognises that there is no one size fits all approach to ESG. Our advisory team seeks to identify each client's unique needs and requirements at the onset of the relationship, as well as through ongoing dialogue. Our services are then tailored to help each client meet to meet their goals.

Aksia applies this philosophy to the coverage of ESG factors in our research by thoughtful evaluation of issues on a case-by-case basis.

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.

One of Aksia's core principles and goals is to provide proactive and unbiased investment advice to clients. Our research team expresses views and opinions on the investment and operational quality of an investment opportunity (which may include ESG considerations).

In the context of an advisory relationship, these views and opinions are used by our advisory team to inform investment recommendations which are specific to each client, based on their investment objectives and goals, including their ESG preferences.

Clients who only utilize Aksia's research services do not receive Aksia’s advice on their investment decisions, and therefore decide if and how to incorporate our recommendations into their investment decision making process. Research clients continue to receive our reporting on ESG integration and ESG considerations, which are detailed in our due diligence reports.

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.

As part of our ongoing dialogue with clients, we speak about their ESG needs and how we can provide ESG/RI services, solutions and reporting that meet their requirements. Certain clients provide ad hoc feedback on our ESG services which Aksia utilizes as an opportunity to improve and develop our approach.


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.

As a Registered Investment Adviser, Aksia is required to disclose and mitigate potential conflicts of interest. As such, Aksia has adopted policies and procedures that both identify and address potential conflicts, which are described in our Form ADV Part 2A, found on the SEC’s website.

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.

Aksia has a formal Compliance Manual and a Code of Ethics that follows standards of practice similar to the CFA Institute's Code of Ethics and Standards of Professional Conduct and to which all staff are required to adhere, which includes provisions on confidentiality and protection of proprietary/firm collected information during our work processes.

14.4. Additional information. [OPTIONAL]


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