Environmental, Social and Governance (ESG) Statement

Introduction:

Responsible investment is a key priority for The FSE Group (FSE). FSE is fundamentally committed to supporting long-term, sustainable businesses, which will grow, provide employment and generate economic benefit in an environmentally and socially responsible manner. FSE consider ESG factors throughout all stages of our involvement in an investment, which requires proper analysis, judgement and mitigation of risk.

We promote diversity, including supporting underrepresented groups and areas, and we have a proven track record of successfully recycling smaller funds to generate continuous and sustainable economic impact. We have a real passion and successful history in deploying and managing impact market gap funds to support the growth of SMEs. We are a community interest company and we always strive to build a real relationship with the companies we help.

Our Core Principles:

  1. Ensure that our investment and lending process takes a responsible approach to investing, and recognises the potential impact of businesses on the environment, workers and society,
  2. Protect the environment and promote sustainable use of natural resources,
  3. Always be non-discriminatory, and seek equality and diversity in our investing, lending and hiring practices,
  4. Ensure there is no bribery or corruption in any of our dealings,
  5. Provide safe and healthy working conditions for all,
  6. Implement policies and procedures to identify, manage and report on ESG risks.

ESG Procedures:

  1. Our investment and lending policies specifically preclude us from providing finance to businesses in industries considered environmentally or socially harmful, such as arms and ammunition or tobacco.
  2. Before investing in or lending to a business, Fund Managers identify whether there are any ESG-related risks or opportunities. Any material risks are discussed with relevant senior team members at FSE.
  3. ESG considerations are included in Investment/Credit Committee papers, and considered by the Investment/Credit Committee, in line with Fund-specific ESG policy.
  4. Proposals approved by the Investment/Credit committee are reviewed by Risk and Portfolio Management team to ensure that proposals are in-line with Fund ESG policy, and to ensure that prospective investee/borrower companies have policies in place to mitigate ESG risk.
  5. Post-investment, we maintain regular dialogue with our portfolio companies through formal Board meetings, or ad-hoc meetings and calls.
  6. All portfolio companies are regularly reviewed by Fund Managers to monitor ESG impact, including job creation.

Responsibility & Oversight:

The CEO of The FSE Group is responsible for implementing ESG policy within FSE. The Head of Commercial is responsible for implementing ESG policy within FSE investments, and Fund Managers are responsible for implementing individual fund investment and ESG policies, ensuring that recommendations to Investment and Credit Committees comply with the requirements. Investment and Credit Committees have oversight over these individual fund policies. Overall accountability for ESG policy lies with the Board of FSE C.I.C.

For more information contact Tom Clarke, tom.clarke@thefsegroup.com