esg
focused on Sustainable & Responsible Investment
We believe that it is incumbent upon us to respond to the environmental and social challenges facing the world and that, as investors, very exciting opportunities will emerge as the global economy responds to these challenges.
As a specialist investor, sustainable investment in the resources sector is therefore a key focus for Eden Partners. The Eden Global Natural Resources UCITS Fund is classified as a Light Green Fund under Article 8 of the EU Sustainable Finance Disclosure Regulation (“SFDR”).
Our approach to sustainable investment is:
to weight our portfolio towards sustainable investments within the resources sector;
exclude investments which do not meet our sustainability objectives; and
to give preference to businesses which, whilst they may not have a directly sustainable objective, can demonstrate that sustainability considerations are implemented in the operation of their business over those that do not.
ESG is an extremely important consideration to our investment strategy.
Through our partnership and alignment with Digbee ESG, Parvate ESG & Treety, we are able to meaningfully incorporate ESG into our investment strategy. Whilst the Funds objective is not sustainable investment, effective ESG-conscious investing in the global resources sector will be a key determinant of performance for strategies in our sector.
Fully incorporating ESG considerations in our portfolio construction process will therefore significantly contribute to delivering risk-adjusted returns, and the Fund promotes environmental and social characteristics and invests in companies that apply good corporate governance.
Active investors in the global resources sector can materially influence the behaviour of companies in making responsible decisions regarding ESG matters. We believe that global resources companies have a central role to play in making the transition to a low carbon economy, both in terms of more sustainable means of energy generation, reducing emissions and other environmental impacts from their own operations and in delivering the raw materials which will be required to deploy cleaner technologies.
environment
Consideration for risks to the climate, scarcity of natural resources, waste/pollution.
social
Consideration for labour conditions, community reputation/involvement and shareholder engagement.
governance
Consideration for effectiveness and quality of the management of a company at board level.
As resources investors, environmental considerations are the most obviously prominent of those covered by ESG, but Eden believes that effective delivery of environmental objectives is not possible without companies having strong social and governance policies which are rigorously practiced. Risk is materially increased in companies which lack a social licence to operate or for which appropriate governance procedures, including incentivisation structures for management and anti-corruption and bribery measures, are not followed.
ESG analysis and research are fully integrated into our investment process.
ESG reporting is not yet subject to universal and accepted standards. Whilst ESG data is available from a range of sources, the quality of and basis for this data has been subject to significant change over recent years as the focus on ESG factors has sharpened. For this reason, we expect that the application of ESG data in our investment process will also be subject to change over time. Through our partnership with Parvate ESG, we keep up to date with the latest expectations and requirements for ESG standards.
Eden’s approach to ESG considerations is to incorporate screening processes in both: our top-down analysis of our potential investment universe, applying internally generated ESG ratings to negatively screen for companies which do not meet our required ESG standards and to give preference to investments which either have sustainable characteristics or best-in-class ESG practices in place; and our bottom-up analysis of individual stocks, including those resources companies for which no commercially supplied ESG rating is available (usually due to a smaller market capitalisation).
We will only invest in companies which have progressive ESG policies and screen for those which do not meet required ESG operating standards. Ongoing monitoring of ESG performance a commitment to continual improvement is an expectation of companies the Fund invests in.
Investment Policy
Eden Global Natural Resources UCITS Fund
As investment manager of the Eden Global Natural Resources UCITS Fund, Eden employs the following investment processes in support of its ESG policy.
Exclusions
The Fund’s investment universe is the resources sector, which includes the sub-sectors of mining, energy and agriculture. Companies which undertake certain activities which the Investment Manager considers do not meet the Fund’s ESG criteria, but which might otherwise be classified as part of the Fund’s investment universe, will be excluded from consideration for investment by the Fund. These activities include:mining, processing and generating energy from thermal coal;
engagement in or association with child or slave labour; and
manufacture of tobacco.
ESG due diligence
All companies in which an investment by the Fund is being considered by the Investment Manager will be subject to an ESG due diligence process carried out internally. All companies in which an investment has been made by the Fund will be subject to ongoing monitoring of ESG considerations and ESG training for the Board.ESG ratings
Where coverage on a proposed investment is available, Eden will compile the ESG ratings provided by its principle external financial data providers (Bloomberg and S&P Market Intelligence) (“Data Providers”). The rating for each proposed investment will be compared with the industry benchmark data; where the ESG rating falls materially below the industry benchmark, Eden will exclude the proposed investment from consideration for investment by the Fund.
The ESG ratings and the underlying data which comprise the scores provided by the Data Providers will be analysed, together with each company’s own public disclosures, for specific ESG-related risks or significant past events. Companies for which these specific risks and past events have been identified, and for which the Investment Manager considers represent evidence that the company and its underlying assets are not being operated to appropriate ESG standards, will be excluded from consideration for investment by the Fund.Company due diligence
Companies for which no ESG rating is available from the Data Providers (typically companies with a smaller market capitalisation within the Fund’s investment universe) will be subject to a due diligence exercise, conducted by the Investment Manager, in relation to ESG policies and reporting. Due diligence will aim to identify key risks in relation to ESG, including in relation to environmental risk for which development-stage companies are required to commission external reporting in order to meet licencing requirements.
Companies for which material key risks are identified in relation to ESG considerations will be excluded from consideration for investment by the Fund.
Portfolio construction
Whilst sustainable investment is not the investment objective of the Fund, the investment policy of the Fund is to give additional weighting within the portfolio to investments within the Fund’s investment universe which have sustainable characteristics, such as: renewable energy generation; mining and processing of the minerals required to enable the transition of the global economy to a more sustainable basis; sustainable food production; and carbon capture / sequestration.
Preference will also be given to investments which, whilst not directly classified as sustainable investments, are operated with sustainable objectives (such as the substitution of clean energy generation for hydrocarbon-derived energy generation) as a priority.
Digbee ESG
helping mining companies successfully measure, manage and disclose ESG ratings
Digbee's ESG frameworks have been rigorously designed, iterated, tested, and endorsed by a consortium of advisors, consultants and stakeholders from the ESG, risk management, mining and financial worlds.
They are designed specifically for the mining industry to be Right-sized, Future-looking and aligned to global standards.
Digbee ESG is ISO certified and implements its own “ESG Certified” emblem holder program that conducts robust, impartial ESG due diligence on many natural resource companies globally
other third- party ESG providers
Parvate esg
PARVATE are a full service leader in ESG transformation solutions
Providing practical, accessible solutions to complex, real issues.
ESG Literacy & Awareness
ESG Assessment & Reporting
Strategy, Education & Training
Treety
Treety makes measuring, tracking, and reporting your impact easy!
Treety's mission is to create a world where the economy is driven by purpose and measured by impact. Treety help funds and investors quantify their sustainability efforts by simplifying the process of getting important data - whether it comes from portfolio companies or third-party sources. They then take this data and transform it into practical insights, dashboards, and compliance reports that meet local regulations.
By creating comprehensive impact reporting solutions, Treety make it easy for investors to allocate capital towards impactful projects globally. With clients such as Google and Privium, Treety’s global customer network trusts them to measure and manage the impact of their investments.
