ESG

Investments in private capital can positively contribute to the current climate and social challenges. For this reason, FARO aims to foster a responsible growth model that relies on a virtuous network of portfolio companies, Advisory Companies, consultants, technical and industry experts able to synergize, generate an impact and deliver ESG best practices continuous implementation.

ESG criteria are thoroughly integrated into FARO investment strategies according to the investment style of each sub-fund, in line with the UN Principles for Responsible Investment and the ESG Policy of FARO General Partner. Environmental and social characteristics are promoted, pursuant to Art. 8 of SFDR, by the sub-funds which envisage a higher degree of ESG pervasiveness.

ESG INVESTMENT PROCESS

Pre-investment
.

Ensure the suitability of the target company under ESG perspective, evaluate sustainability risks and investigate how ESG performance can be improved

  • NEGATIVE SCREENING: the Advisory Companies propose an investment project that must not meet any product and/or conduct based exclusion criterion

  • ESG DUE DILIGENCE: Sustainability risks, good governance practices and the promotion of the E/S characteristics are evaluated by means of a preliminary ESG analysis conducted by requiring target companies to fill in a questionnaire. The results will be the baseline for an ESG Improvement Plan (ESG IP) to agree with the portfolio company

  • All ESG data and information gathered are submitted to the Investment Committee to inform the decision-making process

Investment
Period

Monitor the data relevant to the ESG Improvement Plan and engage with the companies to ensure that the objectives are being met

  • MONITORING: the ESG IP is implemented and monitored on an ongoing basis with direct interaction with the portfolio company

  • ENGAGEMENT & REPORTING: the portfolio company is regularly engaged to ensure an efficient and positive execution of the ESG IP – Faro Value and the Advisory Companies will provide necessary support to the portfolio company for achieving its ESG goals

  • Reporting ESG data information into the regulatory templates (periodic SFDR disclosure) and the Annual ESG Report of the SICAV

Divestment
.

Outline the progress of the portfolio company throught the ESG Improvement Plan and include it in the divestment memorandum

  • DATA RECOLLECTION: all ESG information regarding the portfolio company are gathered to display the evolution of the ESG performance with respect to the ESG Improvement Plan

  • DIVESTMENT MEMORANDUM: the dataset is summarized into the divestment memorandum to enhance the efforts made by Faro Value, Advisory Companies and the portfolio companies in the context of ESG

INITIATIVES

FARO FOREST in Faenza, Emilia Romagna

The first ESG project promoted by FARO Value, to counteract the effects of climate change on the territory and support the local community affected by the floods happened in Emilia-Romagna region in May 2023.

Projects financed by FARO Value and developed in collaboration with ‘ZeroCO2’ and ‘Fattoria Podere Cimbalone’ in Faenza, Italy.

ESG IMPACT

250
TREES PLANTED

93k
KG Co2 ABSORBED*

5.000 mq
PLANTED

ENVIRONMENTAL IMPACT

  • Regenerate fertility of flooded land
  • Rebuilding local biodiversity
  • CreaCreation of an agricultural model resilient to the critical issues of the territory and climate change

SOCIAL IMPACT

  • Support for the relaunch of a local agricultural cooperative affected by the floods of May ’23
  • Involvement of +100 volunteers from the area through training and social inclusiveness activities/li>

*Estimated during the first 15 years of life. Source: ZeroCO2