Responsible Investing
Five Arrows has an investment philosophy that includes the belief that results are maximised when approached as long-term investments. As such, we perceive sustainability factors to being intrinsically rooted in a company’s value.
Our strategy is built on three pillars – Our Teams, Our Investments and Our Ecosystem.
Five Arrows Sustainability Strategy
Our Sustainability report summarises our sustainability vision and outlines the way we have approached the main sustainability-related risks and opportunities that we faced in 2022
Compliance of ESG-related regulations
As stated in the SFDR as at 1 January 2023, Five Arrows is required to publish sustainability-related information regarding its Article 8 and 9 products on its website. Given that these funds are not marketed towards individual private investors, the product-specific information related to the SFDR are shared with potential investors in the data room, or with investors via eFront Investment Cafe when the fundraising is closed:
https://icx.efrontcloud.com/Rothschildandco
Our Five Arrows Managers SAS report, responding to the Article 29 of the French Law on Climate and Energy, outlines the general approach, the internal resources, the consideration of ESG criteria and the alignment strategies of Five Arrows Managers SAS, management company regulated by the French Market Authority (AMF), in terms of responsible investment.
Our commitments and partnerships
Five Arrows collaborates with other thought leaders to set the standards for sustainability and predict market evolutions that could impact our investment practices.
Our main collaborations are described below:
2012
We started in 2012 when we decided to adhere to the United Nations Principles for Responsible Investment. For 2022, we achieved a 3-star score for the UN PRI "Investment & Stewardship Policy"; “Private Equity”; “Fixed income – Private debt”; “Fixed income – Corporate” and “Fixed income – Securitised” modules.
2014
In 2014, we committed to the Charter of the French Private Equity Association (France Invest), which focuses on the growth and long-term development of companies, and promotes the establishment of best practices in the areas of human capital management, environment and governance.
2018
In 2018, we became a signatory to Initiative Climat international (ICi) to contribute to the fight against climate change by aiming to reduce greenhouse gas emissions in our portfolio companies and ensure sustainability of performance.
2020
In 2020 we became a member of the Global Impact Investing Network, and joined the ESG Committee of the European Leveraged Finance Association (ELFA).
We have signed up to the France Invest Charter for Diversity and have committed to having:
- 40% of women in the investment teams by 2030
- 25% of women in investment committee by 2030
- 30% of women in Executive Committee of majority-owned companies with >500 employees by 2030
2022
In 2022, we adhered to the ESG Data Convergence Initiative (EDCI) to access benchmarks for ESG metrics specifically in private equity.
Our Direct Lending team collaborated with other leaders in the financial markets, along with France Invest, to standardise Sustainability-linked loans, instruments issued with contractual commitments to achieve sustainability performance objectives. We believe further market harmonisation practices should be developed and we are playing an active role to help make this happen. As a result of this working group, France Invest has shared a “Best practice Guide for Private Debt Sustainability-Linked Financing” aimed at promoting good practices among all stakeholders involved in the implementation of sustainability-linked financing and strengthening the integrity of these transition tools to avoid "green washing" or "impact washing".