ESG Integration Framework
The ESG Investment Framework is applied to 100% of EUROFIMA’s investments and all financial transactions with counterparties.
Since the official signature of the United Nations Principles for Responsible Investment in January 2020, EUROFIMA has made significant efforts to foster its presence as a sustainable and responsible asset owner. EUROFIMA’s strict integration of Environmental, Social and Governance (ESG) considerations into its investment decision process has been based on the following three pillars:
The application of the first two pillars of the framework is conducted internally using ESG-related data provided by the third-party, i.e., Sustainalytics. The investment decision on lending to the issuer is made by the respective portfolio managers using the information prepared by the Middle Office. Daily responsibility of the portfolio manager is to ensure pre-trade conformity of the ESG metrics and their alignment with ESG portfolio targets. In meantime, the Middle Office fulfills the obligation of regular updates of the ESG data inside internal systems following the changes reported by Sustainalytics and passing on the relevant information about any such modifications to the portfolio managers. Therefore, any post-trade changes in the ESG metrics of investments are closely monitored, and in case of any violations, could trigger liquidation of the position by the portfolio manager.
To further enforce active sustainable assets owner role, engagement as third pillar of the ESG investment framework, EUROFIMA will start to publish the ANNUAL ENGAGEMENT REPORT.
The operational execution of the framework into daily activities is an important part of EUROFIMA’s commitment to ESG and plays a significant role in EUROFIMA’s holistic approach to sustainability.