Impact Report 2023 | Schroder BSC Social Impact Trust plc
Schroder BSC Social Impact Trust plc | Impact Report 2023
Environmental, Social and Governance Risk Management
A proportionate, credible and useful ESG risk management approach is integral to achieving SBSI’s objectives. This helps the portfolio manager identify and manage material risks that may affect impact or financial performance, as well as fulfilling SBSI’s responsibility to its stakeholders including end beneficiaries, employees, clients, shareholders and partners. These responsibilities are set out in Big Society Capital’s Responsible Business Principles, which act as the basis for SBSI’s ESG management approach.
Key SBSI processes for ensuring ESG alignment and performance
Portfolio status 2023
Clear signalling that ESG factors are important by publishing and sharing from the outset Big Society Capital’s Responsible Business Principles. Negative screen applied to ensure the investment opportunity will not invest in any excluded sectors. Investees are also required to provide an annual compliance certificate confirming that Big Society Capital’s negative exclusions have been adhered to or a carefully assessed equivalent. Risk-based assessment of the fund manager’s ESG approach to ensure it is appropriate and will identify and manage material ESG risk in frontline investees. Building trusted relationships with fund managers that enable us to influence their approach, including ESG risk management, and agreeing appropriate targets for ESG measurement. SBSI maintains an ongoing dialogue about ESG with fund managers and, where appropriate, monitors any ESG-related action plans that respond to material ESG risks.
All fund managers are signed up to the Responsible Business Principles or a carefully assessed equivalent.
Signal
No underlying investments within excluded sectors.
Screening
Initial risk-based assessments have been undertaken on all SBSI investments with no material ESG risks identified that are not being sufficiently managed. Established and trusted relationships with all fund managers in place. More specific engagement objectives are due to be developed in the coming year where appropriate. Clear frameworks for impact measurement within core portfolio. ESG management processes also applied across core portfolio and liquid investments in ethical Bond Funds and Renewables Funds. Annual impact conversations include open discussions of experience in implementing ESG management and alignment to evolving ESG regulatory frameworks. Big Society Capital response submitted to FCA Consultation Paper CP22/20 on Sustainability Disclosure Requirements (SDR). Contributed to roundtables and discussions hosted by Impact Investing Institute, Global Impact Investing Network, and BVCA. Continued sectoral engagement with the Equity Impact Project in social housing.
Assessment
Engagement and stewardship
Monitoring
Engage with peer organisations and wider sectoral bodies to share insights and support the development of standards and best practices.
Learning and market engagement
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