Consolidated impact of the investees financed per ODD in 2019
INCO has created investment analysis tools based on more than 800 economic and social impact indicators. They take into account in equal shares the potential for financial return on investment on the one hand, and social and environmental performance on the other hand.
INCO has designed 2 leading impact evaluation methodologies : INCO Ratings and, in partnership with BNP Paribas and Caisse des Dépôts et Consignations, the MESIS methodology which is dedicated to the Social and Solidarity Sector.
These methodologies are already applied for the evaluation and monitoring of more than a hundred businesses, cooperatives, nonprofits and foundations. This generates a consolidated impact report on the global SDGs at fund level for our investors, and helps our investees better monitor and foster their social and environmental performance.
INCO Ventures has also a breadth of experience in Social Impact Bond investments involving leading NGOs, nonprofits and impact businesses such as Médecins du Monde, Fondation d’Auteuil, Cravate Solidaire and Wimoov.
A deep commitment at all levels
INCO VENTURES aims to deliver a long-term social, environmental and financial performance for investors and institutions all over the world. To do so, our team is committed to include ESG characteristics and impact objectives throughout our entire organization.
Resources dedicated to ESG and sustainability risk
INCO Ventures is a management company that only manages funds dedicated to social and/or environmental impact. Therefore, companies financed by Inco Ventures managed funds consider the search of impact as a part and parcel of their strategy.
All team members are made aware of ESG and sustainability issues and each member of the investment team is experienced in impact issues. In fact, each due diligence performed on all alternative investment funds (AIF) managed by Inco Ventures includes a complete analysis of the company from an SRI and impact perspective (Inco Ratings).
In addition, the personnel involved in the management or control of financial products with sustainable investment objectives will include qualitative and quantitative elements related to the achievement or non-achievement of the sustainable investment objectives set in the collective and individual evaluations.
Since sustainability and ESG criterias are part and parcel of the AIF investment thesis, Inco Ventures has developed its own SRI and impact filter, INCO Ratings (see dedicated paragraph).
Portfolio construction and management
The results of the analyses conducted according to the methodology described above are considered in the investment decisions and in the management policy of the managed/advised portfolios.
Monitoring of relevant extra-financial risk indicators
Once Inco Ratings' analysis of the target company is completed during due diligence an "impact roadmap" is established in collaboration with the project owner(s) at the time of the investment closing.
Impact objectives are set with the company on 5 to 10 indicators, the most significant in terms of the social or environmental needs addressed.
These objectives are set for a five-year period.
Evaluate the positive impacts of the process
ESG and sustainability performance of portfolio assets is monitored and communicated to investors via ad hoc reports or meetings.
As part of this monitoring, Inco Ventures has developed tools to aggregate the achievements of the companies in a fund's portfolio in terms of impact; the monitoring of the achievement of the impact objectives allows us to establish each year a social and environmental impact report for each FIA, with a classification by SDG (Sustainable Development Goals developed by the UN).
Focus: main environmental risks
Climate change risk is incorporated into the Inco Ratings analysis and is analyzed for all cases reviewed. If applicable, further analysis may be performed to determine the extent of the company's exposure to physical, transition, and liability risks.
Short-, medium- and long-term physical risks. For example: risk of pollution, loss of biodiversity;
Transition risks related to energy or climate change regulations;
Liability risks related to activities presenting a risk of litigation.
Action plans will then be defined during the holding phase to determine the materiality of the issue.
Focus : main social and poor governance risks
Social and poor governance risks are also included in the Inco Ratings analysis and are analyzed for all cases reviewed. If applicable, more in-depth analyses can be performed to determine the extent of the company's exposure to these risks.
Short-, medium- or long-term social risks. For example: risks related to the company's policy or lack of policy on diversity and equal opportunities for all.
Poor governance risks; for example, risks related to the structure of governance, or to the remuneration of executives.
Action plans are then defined during the holding phase in order to determine any corrective measures implemented, reflecting the materiality of the consideration given to the issue.