ESG Approach (environment, social and governance)
Our role as a responsible player is at the heart of SWEN Capital Partners’ strategy. All its decisions, both strategic and operational, are made on the basis of these responsibility challenges.
SWEN Capital Partners approaches all its investments by integrating environmental, social and governance (ESG) criteria systematically and thoroughly. From the very start, SWEN Capital Partners had committed itself to these topics by joining the Principles of Responsible Investment (PRI).
This all-inclusive approach is part of its original DNA and continues to evolve so that it is constantly at the cutting-edge in integrating extra-financial and sustainable finance criteria and maximising the impact of investments.
SWEN CP strives to make its contribution to transforming the world and meeting the challenges of tomorrow through sustainable and useful finance that is accessible for everyone.
- We integrate ESG issues into our decision-making and investment analysis processes.
- We are active investors and integrate ESG issues into our investment and management policies and procedures.
- We require that entities in which we invest be transparent with regard to ESG issues.
- We encourage the adoption and implementation of the Principles of Responsible Investment (PRI) in the investment world.
- We cooperate in more efficiently implementing PRIs
- We report on each of our activities and the progress we have made in implementing PRIs.
The Charter’s principles are then implemented operationally into SWEN CP’s activities in the form of its Responsible Investment Policy, a core document describing, business by business and asset class by asset class, how the Charter is deployed on a daily basis. The Sustainable Investment Policy includes SWEN Capital Partners’ sector exclusions. It is updated on a regular basis to integrate new challenges and to track commitments.
The Climate Strategy was devised in 2017 after two years of analysis and understanding of the impact of these challenges on SWEN Capital Partners’ investments. The Climate Strategy is also an ongoing commitment with regard to shifts in the climate emergency and research on these issues, which must be updated on a regular basis.
ESG macro markers
Deployment of the TCFD
Adoption of the NECi* (Net environmental Contribution)
Creation of the Impact Doctrine
Launch of a direct impact fund dedicated to renewable gas
Strengthening of the ESG team
Cooperation with the OECD on climate change
First Green Part set aside in our funds
Green Part: first investments
First measurement of the carbon footprint of private equity funds
First measurement of the carbon footprint of Infra funds
Swen CP’s carbon footprint
Front ESG solution co-developed with e-Front
First edition of ESG Best Practices Honours
ESG team expanded
First ESG data compiling campaign
First ESG report
Sustainable investment charter and policy
Integration of ESG criteria into the investment processes
ESG team set up
SWEN Capital Partners decided in October 2017 to completely exclude coal from its portfolios. In accordance with Article 173 of the French Energy and Environmental Transition Law (LTEE) and out of an awareness of the finance sector’s key role in transitioning the global economy towards a low-carbon model, SWEN Capital Partners committed itself to the energy and environmental transition.
With this in mind, it signed the Climate 2020 initiative in January 2016 and integrates climate challenges in its investment decisions, as it does with all environmental challenges.
It reports on ESG and climate challenges in its annual ESG reports of professional funds managed by SWEN Capital Partners and created after 2010, as well as in the LTEE annual report.
Given how challenging it is to measure environmental performance, SWEN Capital Partners rolled out a progress-based approach that in 2017 led to the formalisation of our Climate Strategy. We take a pragmatic approach in focusing on significant carbon challenges and dialogue with our counterparties to promote their inclusion, measurement and management for an alignment with the goal of limiting global warming.
SWEN Capital Partners exercises due diligence on physical and transition risks of each investment opportunity with regards to their materiality.
During the investment phase SWEN Capital Partners’ ESG teams hold climate-dedicated meetings with companies in which it invests.
Transition towards more sustainable growth
SWEN Capital Partners is convinced that transformation is necessary in meeting the social and environmental challenges now and in the future. For tomorrow’s leaders, it is urgent to act now and to commit to financing the strategic assets of tomorrow and accompanying transitional assets. SWEN Capital Partners assists energy, agricultural, industrial and other transitions that will make growth more sustainable for everyone.
In 2017, SWEN Capital Partners pledged to systematically direct a portion of its investments towards financing solutions for a transition towards a low-carbon world. SWEN Capital Partners’ institutional offerings include Green Part in all asset classes.
The intention to make a positive impact is not just a result of SWEN Capital Partners’ decision-making; it is actually what drives it. In its investments, SWEN Capital Partners researches the social, societal and/or environmental impact, both locally and in general alignment with the Sustainable Development Goals. SWEN Capital Partners is committed to a virtuous circular economy. A methodology of measurement, monitoring and reporting of extra-financial impacts is established, and ongoing research on how best to measure these externalities is at the heart of SWEN Capital Partners’ concerns.
Transparency and Reporting
Because it invests in private equity classes for which information is not publicly available, SWEN Capital Partners has always strived to maintain transparency in its actions and investments. As early as 2012, a systematic methodology was developed for compiling data annually, and for measuring, monitoring and reporting the financial and extra-financial impacts of its investments to clients. SWEN Capital Partners now possesses a unique ESG database in Europe in private equity infrastructure companies and assets going back more than six years. This ESG database allows it to design and calculate its own ESG benchmarks in private equity.
Because a company’s reputation and brand image is crucial to its value, and because investors place their trust in that company when they entrust it with managing their money for the long term, SWEN Capital Partners has from the start been extremely alert to controversies and issues that may affect a company, its managers, its products and its sector. Its goal is to constantly anticipate, monitor and react in preserving value for everyone. SWEN Capital Partners has set up a robust “Controversy Mechanism” allowing it to detect, alert and monitor this reputational risk in portfolio assets for both negative and positive factors.
Because SWEN Capital Partners is confident that social and environmental challenges are intertwined on a global basis, it believes that collective action is the key to producing a real impact. Its commitment to getting things to move collectively is part of its collaborative approach with its entire ecosystem (institutions, partners, other financial professionals, entrepreneurs, regulators, and so on). SWEN Capital Partners is actively involved in several initiatives in France and internationally promoting the integration of ESG criteria in private equity. Since 2014, SWEN Capital Partners has held the ESG Best Practices Honours, a conference focusing on the world’s ESG challenges while featuring testimonials from company managers and institutional investors who are taking action in these areas. The ESG Best Practices Honours is also an annual opportunity to recognise private equity and infrastructure investment firms for integrating ESG into their investment and management decisions.
SWEN Capital Partners has formalised its commitment to sustainable finance in its private-equity-dedicated Responsible Investment Charter and Responsible Investment Policy.
These documents are part of the sustainable development policy of its main shareholders, OFI AM and Arkea Investment Services, alongside the UN’s Principles of Responsible Investment (PRI), the Charter des investisseurs en capital de France Invest (a private equity professional association), the ESG Disclosure Framework and the Initiative Climate 2020. SWEN Capital Partners also supports the TCFD’s recommendations, which it is currently deploying.
SWEN Capital Partners is also actively involved in several initiatives in France and internationally in promoting the integration of ESG criteria in private equity.
- A signatory of PRI
- A contributor to several working groups (LP ESG DDQ, Private Debt ESG Guide, etc.)
- An elected member of the Infrastructure Advisory Committee of PRIs, which defines and advocates PRI strategy in integrating ESG in infrastructure investments
- A signatory of the Charte d’Investissement Responsable de France Invest
- A member of the steering committee of the Commission ESG de France Invest since 2012
- A contributor to several local research initiatives, including co-authorship of the Guide Reporting ESG of 2014, as well as regular updates; harmonisation of ESG questionnaires of institutional private equity investors in 2019 and others
- A member of the Operating Committee of France Invest’s Initiative Climate 2020
- A founding member and sponsor of the Impact Investing Committee of France Invest, and a contributor to producing and regularly updating France Invest’s White Paper on Impact Investing
- A signatory of the « Initiative Climate International »
- A member of the “Responsible Investment Round Table” of Invest Europe, which works to promote responsible investment in private equity on a European level
- A member of the working group on impact investing of the Forum pour l’Investissement Responsable (FIR)
The findings from the implementation of SWEN Capital Partners’ Sustainable Investment Policy are sent to all its stakeholders in several forms.
SWEN Capital Partners produces annual ESG reports for most of the funds it manages, and for its clients and portfolios under management or advisory mandates. These reports are sent to SWEN Capital Partners’ investors.
Reporting on ESG controversies
SWEN Capital Partners monitors ESG incidents that affect its direct investments, as well as the main underlying investments of the funds that it selects. ESG controversy reports are produced each quarter and sent to investors in funds or portfolios managed or advised by SWEN Capital Partners, which are covered by this monitoring system.
SWEN Capital Partners’ annual reply to the PRI questionnaire is available at: https://www.unpri.org/signatories/swen-capital- partners/1827.article.
Article 173 reporting
Each year, in accordance with French regulations, SWEN Capital Partners releases a report produced under Article 173 of the French Energy and Environmental Transition Law (LTEE).
Financial and marketing meetings
Regular meetings with representatives of unit-holders and investment management firms are an opportunity for SWEN Capital Partners’ investment teams to disclose the Group’s sustainable investment position and strategy. This is also a special opportunity to hear about our stakeholders’ current and future needs.
Special institutional investor reports
Institutional investors ask SWEN Capital Partners each year for tailored reports on the responsible investment approach used in their private equity allocation. Such reports are in various formats, depending on the institutional investors’ specifications, including video testimonials on an outstanding asset, a contribution to the institutional investor’s Article 173 report, an assessment of the carbon footprint within a specific parameter (Green Part, Brown Portion, carbon footprint scopes 1, 2 and 3, etc.), special annual ESG questionnaires, and others.
Since its debut in 2014, this annual conference on sustainable investment in private equity has brought together all of SWEN Capital Partners’ international stakeholders, with more than 480 professionals connected during the 7th and last edition in November 2020, maintained in 100% digital & live, including institutional investors, infrastructure management companies, private equity and private debt firms, entrepreneurs, consultants, international organisations, professional associations, media, and others.
The conference focuses on the world’s ESG challenges while featuring testimonials from company managers or institutional investors who are taking action in response to the urgent challenges facing all of us.
Each year since 2014, this has also been an opportunity for SWEN Capital Partners to promote and recognise the private equity and international infrastructure firms that have been most outstanding in their ESG practices.