1. Summary
Sub-Fund 1 promotes environmental and social characteristics in accordance with Article 8 SFDR. It invests in short-term trade finance transactions supporting small and medium-sized enterprises (SMEs) active in commodity trading. Through its investment strategy and exclusion lists, the Sub-Fund aims to promote inclusive economic growth (SDG 8), poverty reduction (SDG 1), and food security (SDG 2).
The Sub-Fund does not aim to make sustainable investments as defined under Article 2(17) SFDR. These characteristics are attained via ESG due diligence, commodity-level impact analysis, governance assessments, and monitoring in line with ICC sustainable trade finance guidelines.
2. No sustainable investment objective
The Sub-Fund promotes environmental and social characteristics but does not pursue a sustainable investment objective and does not commit to making sustainable investments within the meaning of Article 2(17) SFDR.
3. Environmental and social characteristics promoted
The Sub-Fund promotes:
Social & Development Characteristics
- Access to finance for SMEs in commodity trading
- Promotion of job creation and inclusive growth (SDG 8)
- Contribution to poverty reduction (SDG 1)
- Contribution to food security (SDG 2)
Environmental & Social Responsibility Characteristics
- Avoiding financing activities that undermine sustainability
- Screening of commodities with elevated environmental or social risks
- Limiting exposure to harmful sectors (e.g. fossil fuels)
4. Investment strategy
The strategy focuses on short-term secured trade finance for commodities and essential goods. ESG integration includes:
- Lists of sectors and countries with high ESG risk.
- Borrower ESG due diligence based on ICC Guidelines for Sustainable Trade Finance.
- Review of internal sustainability policies, certifications, and governance.
- Commodity-level ex-ante impact analysis, based on NGO reports, academic papers, and industry sources.
Good governance is assessed through questionnaires, verification of compliance with standards, and supporting documentation.
5. Proportion of investments
| Category | Expected share |
|---|---|
| Aligned with E/S characteristics | At least 51% |
| Other investments | Maximum 49% |
| Sustainable investments (Art. 2(17)) | 0% |
6. Monitoring of characteristics
Monitoring includes:
- Annual ESG due diligence updates
- Monitoring compliance with exclusion lists
- Monitoring origins of trades and associated geographic risks
- Ongoing review of controversies and governance issues
- Verification of adherence to ICC standards
7. Methodologies
- Internally developed ESG due diligence on each borrower following ICC Sustainable Trade Finance guidelines.
- Ex-ante environmental & social commodity assessment based on NGO, academic and industry sources.
- Sector and country limitations lists.
8. Data sources and processing
Data sources include:
- Borrower questionnaires
- ESG documentation
- Independent certifications (when available)
- NGO reports, academic literature, and industry data
- Sanctions lists & international compliance databases
- Country-level ESG indices (Global Risk Profile ESG Index)
All data is qualitatively assessed by the investment team.
9. Limitations to Data and Methodology
- SME borrowers often publish limited ESG information
- Commodity-level data varies by product and region
- ESG Index indicators depend on third-party availability
- Reliance on qualitative and external sources (NGO reports, literature)
- Limited formal sustainability reporting in emerging markets
10. Due Diligence
Due diligence includes:
- ESG questionnaires
- KYC / AML / sanctions checks
- Commodity impact analysis
- Verification of compliance with exclusion lists
- Review of sustainability policies
- Independent certifications when obtainable
11. Engagement Policies
The Sub-Fund does not exercise voting rights (credit strategy). Engagement occurs through:
- Information requests
- ESG improvement discussions
- Potential non-renewal of facilities in case of severe ESG breaches
- Imposing stricter documentation or standards when necessary
12. Designated Reference Benchmark
None.