Sustainability linked financing

COSEF invests through climate and gender linked mezzanine and flexible debt structures to incentivize investees to achieve pre-agreed climate and gender related targets, such as (i) number of women using sustainable energy and or mobility solutions; (ii) number of women benefitting from climate smart and resilient products and technologies; (iii) number of women in direct and indirect employment; and (iv) milestones in addressing gender issues and human rights impacts within the company and among end beneficiaries.

ESG practices

COSEF complies with international practices regarding Environmental, Social and Governance (ESG) standards. We consider critical ESG matters in the course of our due diligence and ongoing management of portfolio investments to the extent reasonably practical in a given circumstance. The matters are; Environmental-energy use and efficiency, carbon emissions, pollution, and waste and water management; Social-human rights, equality, health and safety, community impacts; and Governance-management and board structure, bribery, anti-money laundering and conflicts of interest. We seek to;

• Consider environmental, governance, safety and social issues associated with potential investment opportunities in evaluation of the potential investment and the ongoing management of the investment.
• Continually engage with relevant stakeholders, including, but not limited to, local communities, national governments, either directly or through representatives of portfolio companies, as appropriate, to communicate on ESG matters and priorities.
• Actively develop and improve the long-term sustainability of portfolio investments for the benefit of multiple stakeholders.
• Promote transparency and timeliness in communication with stakeholders and our limited partners on ESG matters.
• Follow strict guidelines that prohibit bribery and other improper payments to public officials and follow anti-money laundering laws and regulation globally.

Our investment team always review ESG elements that might affect a potential investment, and compile formal reports which outline the merits of the transaction and disclose potential risks. The Investment Committee only recommends for investment companies that have committed to comply with our ESG policy, and are willing to work with our team and partners in managing ESG risks, monitoring risk management strategies and reporting quarterly, including regular KPI reporting. Our team and partners take board seats and work with management teams of investees to effectively manage ESG risks and hence promote adoption of sustainable practices across our businesses.

We integrate ESG factors into our internal reporting as well as reports to our investors.

We don’t invest in any company or activity involving;

• Cross-border trade in waste and waste products.
• Destruction of conservation areas i.e. fauna and flora.
• Any product or activity deemed illegal under national laws or regulations or international conventions and agreements such as: Hazardous pesticides/herbicides or chemicals; Wildlife or products regulated under the Convention on International Trade in Endangered Species; Unsustainable fishing methods.
• Radioactive materials. This however does not apply to the purchase of medical equipment, quality control (measurement) equipment or any other equipment where the radioactive source is understood to be trivial and/or adequately shielded.
• Pornography or prostitution.
• Racist and anti-democratic media.
• Weapons and munitions, tobacco, gambling and casinos.