How does your fund fulfill ESG and positive impact investing standards?

The Fund will target at least 60% of assets (based on net asset value of the Fund) that align with Environmental, Social and Governance (ESG) criteria and / or generate what we consider to be a positive direct and / or indirect societal impact.

Selection and Review Process

The Fund aims to invest in assets that are consistent with our focus on ESG and positive impact via positive screening.

Examples of ESG considerations include how a business, project or investment activity:

  • Safeguards the environment – for example, corporate policies addressing climate change, waste management, fossil fuel use, clean energy production, biodiversity conservation, and ecosystem preservation;
  • Enhances social outcomes – for example, relationships with employees, suppliers, customers, and the communities where they operate; or
  • Maintains effective governance – for example, the company’s leadership, executive pay, audits, internal controls, and shareholder rights.

Examples of scenarios where we select investments that align with the impact investment objectives (Impact Scenarios) include investing in notes, debt, financial instruments, or other investment mechanisms:

  • issued by micro, small or medium enterprises that seek to reduce poverty, create employment or generate economic growth by financing low-cost unsecured loans;
  • that increase the allocation of capital to micro, small or medium enterprises that are not sufficiently supported by available financing options; or
  • issued by businesses that are implementing socially beneficial practices such as safeguarding the environment, sustainable practices and ethical treatment of suppliers and value chain stakeholders.

Application of Standards

There is no single objective standard that we apply for evaluating ESG and impact investing. However, for at least 60% of the fund assets (based on net asset value of the Fund), positive screens are applied. We rely on frameworks such as the United Nations Sustainable Development Goals (UNSDGs) to positively identify whether an asset features ESG credentials and / or promotes a positive societal impact. In the case of following the UNSDGs, the primary test is whether the investment asset or underlying manager’s portfolio contributes to one or more of the 17 UNSDGs.

A few relevant UNSDGs that we prioritise include:

No Poverty

Zero Hunger

Good Health and Well-Being

Gender Equality

Affordable and Clean Energy

Decent Work and Economic Growth

Reduced Inequalities

You can read more about the United Nations Sustainable Development Goals here.

Sources of Information and Data

The Fund assesses ESG standards compliance and prospective direct / indirect societal impact for its investments using numerous sources, for example:

  • Literature review of the location or industry to ascertain potential theories of ESG alignment and impact from similar investments;
  • Review of the investee business, underlying investment manager, investment partner and general industry financial and operational reports;
  • Independent and third-party evaluations;
  • Third-party and proprietary case studies; or
  • Other sources of evidence and insight applicable to specific investment assets in investee locations.

Divestment

Compliance against the universe of investable securities will be reviewed annually. Where we identify that the net asset value of the Fund falls below the 60% threshold for compliance with ESG and impact, a proportion of the Fund’s assets will be sold as soon as reasonably practicable and re-allocated to meet the target threshold.