ESG Risk Management

We are committed to investing our client’s assets responsibly. As signatories to the UN Global Compact and the UN-supported Principles for Responsible Investment (PRI), we have embedded responsible investment policies and procedures in our investment processes.

Throughout our portfolio, we aim to generate positive social & environmental impact while mitigating the risk of negative impact. Bamboo’s risk management process includes the management of Environmental, Social and Governance (ESG) risks.

ESG Requirements

Bamboo’s investments should align with Bamboo’s impact thesis and the specific impact thesis of each Fund. They should also be consistent with:
• The exclusion list of the Fund (by default, Bamboo uses the IFC Exclusion List as reference);
• Applicable national laws and regulations on labor, environment, health, safety and social issues;
• Specific ESG standards and requirements defined at fund level;
• Additional client Protection principles and fair consumer treatment standards applicable to the investment’s sector, such as the Smart Campaign principles for the financial inclusion sector.

Process

Bamboo integrates environmental, social and governance (ESG) risks into decision-making and investee engagement throughout the investment process. Each Fund has an exclusion list of harmful sectors that the Fund is prohibited from investing in. The Fund’s investment evaluation of investees includes an ESG risk assessment, leading to an ESG risk score according to the level of ESG risks. The ESG risk assessment, conducted during the due diligence phase, is customized according to the profile of the investee. If the ESG risk assessment leads to a high-risk categorization where ESG-related risks cannot be mitigated to a satisfactory extent, the investment will not proceed. If the ESG risks are considered low to medium, the results of the ESG due diligence are included in the Investment Memorandum presented to the Investment Committee whose investment decision is informed by the review of ESG factors. Where significant sustainability risks are identified as a result of the ESG due diligence of an investee but the level of risk remains overall low or medium, a clear ESG risk mitigation strategy may be requested as a prerequisite for investment, and regular updates related to the ESG risk mitigation strategy and/or ESG Action Plan as a reporting requirement. Mandatory incident reporting further facilitates our ESG risk management. Finally, our Fund’s engagement with investees, including on ESG matters, is an integral component of Bamboo’s investment cycle and contribution to positive development impact.

Potential adverse impacts

Bamboo invests in businesses operating in emerging and frontier markets. Bamboo targets businesses that have a high potential to deliver impact at scale and improve the lives of underserved communities, in sectors that include financial inclusion, access to clean energy, smallholder farming and agriculture, access to healthcare, access to education, and local infrastructures. Across these sectors, Bamboo’s funds are exposed to sustainability risks in the form of environmental, social or governance (ESG) events and conditions that can have negative impacts on the assets, financial and/or earnings situation, or the reputation of the Fund. Bamboo considers principal adverse impacts of investment decisions on sustainability factors, however Bamboo’s investments are selected for their high potential for positive social and/or environmental impact, and the risks of negative impacts are mitigated through Bamboo’s ESG policy.

Funds’ Disclosures