How we move money to meaning

Sustainability Strategy Framework and ESG Principles

Good governance and servant leadership are our key corporate values. They not only define our shared goals, but are also the foundation on which our mission and vision to move money to meaning in a world where investment empowers people and embraces the planet are built on. These values are also at the core of our sustainability strategy.

Our sustainability strategy is one of the outcomes of the participatory and collective efforts of our ESG Committee which is comprised of several members from the Senior Management, Risk, Operations, Investments and Marketing teams, who came together in 2022 to form an interdisciplinary ESG working group.

This group was then tasked with defining and documenting our sustainability strategy so as to mainstream it throughout the organization, and effectively apply it to our operations, and product offerings. The group started this project by conducting a thorough materiality analysis of our existing ESG approach, including the tools utilized to measure the E, S and G components. This was to help us accurately identify and prioritize the most relevant elements, and the areas in need of improvement. This in turn helped us gain a better understanding of our sustainability strategy, so as to identify the pillars as have been listed below:

To live by our key corporate values of good governance and servant leadership. We abide by the principles of transparency, accountability, fairness, and responsibility in our daily business activities. We believe in building partnerships based on integrity and respect and to lead by example, so as to live up to the same standards to which we hold our investees and partners.

To minimize the ESG risks of our investments. At EQ, we make sure that our investment decisions are not only guided by financial expectations, but that they also factor in ESG considerations, so as to reduce any and all risk of harm towards the people we serve, the environment and to prevent unethical business practices. Through serving by example, we encourage our investees to follow good governance practices, as we educate them on mitigating ESG risks.

To promote sustainable development in emerging and developing markets and contribute towards the achievement of the United Nations Sustainable Development Goals (SDGs). To ensure regulatory compliance, including but not limited to the Sustainable Finance Disclosure Regulation (SFDR), and the industry’s social and environmental performance standards. In order to ensure that all funds advised by Enabling Qapital are aligned to our corporate values and to the principles spelled out in our sustainability strategy, each fund shall have its own sustainability policy and a clear framework to implement it.

Our sustainability strategic framework embraces Environmental, Social, Governance (ESG) principles and the United Nations (UN) Sustainable Development Goals (SDGs).

Sustainability

ESG	Impact
EQ screens investments by assessing each investee’s ESG performance and potential risks, using a proprietary rating methodology.	EQ investments are made with the intention of promoting sustainable development in underserved markets and progress towards the achievement of SDGs.

We built our Theory of Change (ToC) at the company level (i.e., EQ) and product level (i.e., EMF and Spark+), in line with this framework. Our ToC as described in more detail in the upcoming pages of this report, also helps to provide a better understanding of the underlying impact of our work. The EQ ToC not only delineates the strategies and actions that facilitate the achievements of our company, but our products’ desired ESG and impact objectives as well, describing how these actively contribute to the SDGs. While EQ aims to address all 17 SDGs through its product offering, it currently actively addresses 15 of them through the EMF and Spark+ funds. For each SDG, we have selected the key ESG and impact performance indicators and are in the process of revising specific measurable strategic targets to monitor progress and alignment with stated intentions. We are also upgrading our ESG and impact data tracking and reporting capacity to further integrate ESG and impact considerations into our decision-making processes when it comes to product development, fundraising and fund structuring, and investments. To ensure our investment decisions are aligned with our sustainability strategy, the working group is also upgrading our proprietary ESG rating tool. The ESG rating is an integral part of every due diligence and monitoring process and is used to analyze the integrity and sustainability of each investment, as well as the investee’s abilities and ambitions for ESG integration into their business.

Ensuring that we leave no stone unturned, we also performed a review of our data collection and monitoring processes, while taking into consideration our sustainability strategy and SFDR 9, so as to better understand our impact. The aim of this approach is to foster and ensure clarity and transparency. It is for this reason that it is essential that ESG measures are considered in each of our investments and tracked throughout the entire collaboration. Additionally, we are working tirelessly towards rolling out a tested and proven enhanced data collection method in Q1 2023. This report also contains more detailed information on all the work we carried out in 2022 to enhance our ESG and impact strategy, which also include client stories that give a much needed voice to those who have and are benefitting from our investments. We are proud of all the work we have done as a team over the past year to enhance our ESG and impact strategy and reporting. Though we might only be at the beginning of our journey, we are committed to staying true to our mission to “Move Money to Meaning”.

”As EQ invests for impact and the achievement of the Sustainable Development Goals, we have built a corporate culture that embraces the concept of leadership as an act of service. This philosophy is not only embedded throughout our corporate governance and decision-making processes. but is one that we strive to embrace in all our internal and external stakeholder relationships.
Xavier PierlucaCo-Founder & Managing Partner