ESG

Environmental, Social and Governance

Private capital investments can make a positive contribution to today’s climate, environmental and social challenges. For this reason, FARO aims to promote a responsible growth model based on a virtuous network of portfolio companies, advisory firms and sector experts capable of creating synergies, generating impact and continuously improving ESG practices.

ESG criteria are fully integrated into FARO’s investment strategies, in line with the investment approach of each sub-fund and consistent with the UN Principles for Responsible Investment and the ESG policies of Faro General Partner. The investment vehicles promote environmental and social characteristics pursuant to Article 8 of the SFDR, in those sub-funds where ESG integration is more pervasive.

Policy ESG

ESG Investment Process

Pre investimento

Pre-Investment

Ensure the ESG suitability of the target company, assess sustainability risks and analyse how to improve ESG performance.

  • Negative screening: advisory firms propose investment opportunities that do not fall within exclusion criteria based on products and/or behaviours.
  • ESG due diligence: sustainability risks, good governance practices and the promotion of environmental and social characteristics are assessed through a preliminary ESG analysis, requiring the target company to complete an ESG questionnaire. The results form the basis of an ESG improvement plan (ESG IP) to be agreed with the portfolio company.
  • Investment decision: all ESG data and information collected are submitted to the Investment Committee to support the decision-making process.

 

Investment Period

Monitor ESG improvement plans and engage with portfolio companies to ensure the achievement of objectives.

  • Monitoring: ESG KPIs are monitored on an ongoing basis through direct interaction with the portfolio company.
  • Engagement & reporting: portfolio companies are actively engaged to ensure positive and effective ESG execution. Faro Value and the advisory firms provide the necessary support to help portfolio companies achieve their ESG objectives.
  • Regulatory reporting: ESG data are reported in line with regulatory requirements (SFDR periodic disclosures) and included in the SICAV’s annual ESG report.

Divestment

Illustrate the ESG progress of portfolio companies through the ESG Improvement Plan and include it in the divestment memorandum.

  • Data collection: all ESG information related to the portfolio company is collected to assess the evolution of ESG performance against the ESG Improvement Plan.
  • Divestment memorandum: ESG data are summarised in the divestment memorandum to highlight the efforts undertaken by Faro Value, the advisory companies and the portfolio company in the ESG context.
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Initiatives

FARO Forest in Faenza, Emilia-Romagna

The first ESG project promoted by FARO Value, aimed at addressing the effects of climate change in the local area and supporting the community affected by the May 2023 floods in Emilia-Romagna.

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

ESG Impact

0

Trees planted

0

kg of CO₂ absorbed*

0

Surface area

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

Environmental Impact

  • Restoration of soil fertility in flooded land
  • Preservation of local biodiversity
  • Creation of a resilient agricultural model capable of addressing territorial challenges and climate change

Social Impact

  • Support for the relaunch of a local agricultural cooperative affected by the May 2023 floods
  • Engagement of local residents through training activities and social inclusion initiatives

Get in Touch with FARO Value

We are available for further discussions and new opportunities.

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