Symbiotics - Sustainability-Related Disclosures

Background

Symbiotics SA (Symbiotics) is a Swiss Asset Manager, licensed by the Swiss Financial Market Supervisory Authority (FINMA) and focused on microfinance and impact investment services. Symbiotics acts as both a financial market participant and a financial advisor to several Funds and sustainability is in the DNA of our company.

 

Symbiotics is committed to transparently communicating how we engage with Environmental, Social and Governance (ESG) standards and how we use targeted impact strategies in order to contribute to the sustainable impact of the funds and sub-funds we manage and advise (the Funds). Therefore, the Funds and Symbiotics are aligned with the requirements of the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (SFDR).

 

The Funds’ Sustainable Investment Objectives

All of the Funds have a sustainable investment objective in accordance with SFDR Article 9. The Funds aim to invest principally in sustainable positive impact investments as currently illustrated by the United Nations Sustainable Development Goals (SDGs), and aim to promote, among other goals, SDG 1 – No Poverty, SDG 5 – Gender Equality, SDG 8 – Decent Work and Economic Growth, and SDG 10 – Reduced Inequalities.

 

Each Fund with a sustainable investment objective aims to have a material positive impact on society and the environment through its business and operations. Detailed investment criteria to support each Fund’s sustainable investment objective are set forth in its prospectus.

 

Symbiotics, which has a specific expertise in relation to ESG-compliant investments, integrates ESG criteria and sustainability risk management into the core investment process of each Fund through its research, analysis and decision-making processes, principally via:

  • Interviews during our analysts’ due diligence process with the target investees (the “Investees”) to gain a good understanding of the strategy, services and culture of the Investees. During that same due diligence, our analysts evaluate the ESG risks and the procedures and practices in place to mitigate them on the basis of 7 dimensions and 100 indicators: social governance, labor climate, financial inclusion, client protection, product quality, environmental policy, community development.
  • On the basis of the information collected during this due diligence, our analysts prepare a report that includes a social responsibility rating from 1 to 5 stars, the best. Only institutions with a minimum of 2 stars are proposed to the relevant Portfolio manager
  • Portfolio managers receive a complete “Investment Advisory Report” that notably includes the description of the Investee’s social mission and social goals, indicators on its outreach and range of services, as well as the social responsibility rating. All of these elements are taken into account in the investment decision by their Credit Committee. The Credit Committee, as overseeing body of the analysis process, sanctions both the credit rating and social responsibility rating for each Investee.
  • The contractual documentation includes clauses relative to the social and environmental norms that our Investees shall abide by. These clauses are either “Use of Proceeds” covenants and “Exclusion Lists”. The Investees commit to use the note’s proceeds for selecting sustainability projects by lending to micro-, small or medium enterprises or to low- or middle- income households. In addition, the investees commit not to have a business relationship with companies active in certain prohibited economic sectors (weapons, gambling, casinos, etc.). The list of prohibited sectors used in our contracts is in line with the IFC exclusion list.
  • All our Investees have the contractual obligation to periodically report basic data about their performance and a more complete set of data each year. The annual data request notably includes social or green indicators allowing us to gauge whether the activities that are financed by our Investees are in line with the intended social impact that we identified before investing.
  • Investees are visited periodically and their credit rating and social responsibility ratings are updated according to the evolution of the practices and performance.

 

No index has been designated as a reference benchmark.

 

Integration of Sustainability Risks into the Symbiotics’ Investment Decision-Making Process

The sustainability risks to which the Funds may be subject are likely to have a limited impact on the value of the Funds’ investments due to (i) measures taken to avoid investments that do not meet ESG criteria and (ii) the monitoring performed to ensure that ESG criteria will be met on an ongoing basis. It shall be understood however that (i) the method used to identify, analyze and mitigate the sustainability risks are limited by the level of information currently available on the ESG criteria, (ii) that the monitoring of some criteria which refer to qualitative information make the assessment more subjective, (iii) there is no guarantee that the information will be systematically available for all target investees and (iv) the ESG criteria constantly evolves making more complex the comparison exercise between the different ESG assessment.

 

Statement on how Symbiotics’ remuneration is consistent with the integration of sustainability risks

Symbiotics’ focus on responsible finance and ESG-integration into its services also naturally flows into Symbiotics’ corporate culture. Thus, Symbiotics’ remuneration practices are no different, designed in a manner that delivers long term sustainability by (i) considering long-term interests of investors, employees and shareholders by focusing on pay equality, market rates, and risk management, and (ii) not encouraging risk-taking that is inconsistent with the risk profile of the Funds.

 

Compensation at an individual level employee consists of a fixed salary and possible additional financial incentives, such as bonuses at the sole discretion of the Company. The Company pursues salary and remuneration standards that preclude any conflict of interest between its employees and the investors. In particular, the Company refrains from providing any financial incentive for conducts that could damage the investors’ interests (e.g. bonus payments based on objectives that could lead to a conflict of interest). In addition, employees are required to comply with Staff Regulations’ clauses pertaining to gifts and other benefits received from third parties

 

Symbiotics is also compliant with the Swiss Federal Act on Gender Equality, meaning that men and women in a similar position are paid equally, as measured by an independent evaluator.