Since its inception, the Aescap investment team has taken Environmental, Social and Governance (ESG) factors into consideration by analyzing the sustainability impacts of its portfolio companies and potential new investments. By continuously doing so, we aim to encourage companies in our sector to act with the well-being of people and our planet in mind. The Aescap funds focus their investments in companies developing treatments that are aimed to significantly improve the life of patients and benefit society as a whole.

ESG at the Aescap funds

Our approach to ESG factors is twofold. Firstly, sustainability risks are monitored following the Materiality Map by the Sustainability Accounting Standards Board (SASB) to define ESG risks considered to be material in the Life Sciences sector.

Secondly, the Aescap investment team promotes social characteristics in line with Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR).

Both approaches are outlined in more detail below.

Sustainability risks

Considering the sector focus of the funds, the following sustainability risks have been identified to be likely material for the investments made by the Aescap investment team in the economic sector Biotechnology & Pharmaceuticals:

  • Safety and quality of clinical trials and participants.
  • Access to medicine, affordability & pricing.
  • Medicine safety, defects, inadequate disclosure of risks during pre-clinical studies and clinical trials.
  • Patient follow-up and support for marketed products and during clinical trials.
  • Ethical marketing to medical specialists and patients.
  • Employee engagement, diversity & inclusion.
  • Quality and safety of supply chain management.
  • Excessive pricing and uncompetitive behavior.

These risks are monitored continuously through engagement with portfolio companies as well as analyses of data either publicly available or provided to the fund. Material changes to the individual sustainability risks of an investment are not expected to occur often.

Measurement of social characteristics

The funds’ investments are contributing to the development, manufacturing and distribution of medicines worldwide. The Aescap funds invest in companies developing innovative treatments, often for diseases without any treatment available so far. It also champions best practices in the sector through engagement with the management of companies. The funds report annually on the following:

  1. Percentage of investee companies researching, developing or producing treatment for diseases with a high unmet medical need
  2. Percentage of investee companies researching, developing or producing treatment for rare diseases
  3. Progress on ESG best-practice engagement following a sustainable investment strategy

In addition to the above, the Aescap investment team monitors the alignment of portfolio companies and potential new investments with social characteristics based on the exclusion, inclusion and engagement criteria below.