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ESG

Transparency of risk strategies for Sustainable Development

MOUNT TFI

Mount TFI incorporates ESG factors into the investment process

Mount TFI S.A., as a responsible entity in the capital market, actively seeks to engage with environmental, social, and corporate governance (ESG) aspects regulated by the SFDR Regulation.

We are aware that through our investment activities at Mount TFI S.A., primarily in the sector of Polish small and medium-sized enterprises, we contribute to the development of these issuers and the entire economy. On the other hand, we are conscious of the threats arising from human interference and business actions in the natural environment, climate change, and their impact on the quality of life and human health.

ESG Integration

Incorporating significant environmental, social, and corporate governance (ESG) aspects into the investment process for the purpose of identifying risks and opportunities, including, where applicable, due diligence, decision-making, and managerial practices.

Engagement

Collaborating with portfolio companies to enhance the management of critical ESG issues in order to create long-term value.

Education

As part of our investment activities, we aim to educate our partners on ESG factors and their impact on company performance over the long term.

We perceive ESG as part of our mission to provide clients with high and consistent returns. Mount TFI leverages its capabilities and expertise to manage risks related to environmental, social, and corporate governance issues and to educate the companies in which we invest, strengthening our firms, assets, and the communities in which they operate.

Mikołaj Motz
CEO of Mount TFI

ESG risk analysis is part of our mission, which is to create long-term value for our investors. It is an integral part of our investment process and philosophy of operation.

Michał Ferenc
CIO / Head of Private Debt w Mount TFI

We are convinced that the sooner we incorporate ESG factors into our investment process, the greater value we will be able to deliver to our investors, portfolio companies, and, ultimately, the communities we serve.

MOUNT TFI

ESG in Practice

At Mount TFI, we are enhancing our ESG competencies. Our employees participate in numerous training sessions and obtain recognized certifications to validate their acquired knowledge. Additionally, Mount TFI is in the process of joining international organizations such as PRI (Principles for Responsible Investment) that promote the ESG concept.

MOUNT TFI

Partner Organizations

Mount TFI S.A. is currently in the process of developing standards, including data disclosures necessary for proper risk management related to sustainable development. The company also plans to become a signatory and apply the Principles for Responsible Investment (PRI) supported by the United Nations and this organization.

Mount TFI aims to become a UNPRI signatory and was one of the first fund management members in Central and Eastern Europe. Since then, we have progressively implemented an ESG policy at every stage of the investment process. We adhere to SFDR regulations and additional ESG requirements from our investors.

MOUNT TFI

We invest consciously

We are aware that through our investment activities at Mount TFI S.A., primarily in the sector of Polish small and medium-sized enterprises, we contribute to the development of these issuers and the entire economy. On the other hand, we are conscious of the threats arising from human interference and business actions in the natural environment, climate change, and their impact on the quality of life and human health.

Investment funds managed by Mount TFI do not invest in companies whose activities are related to:

  • Manufacturing, processing, or marketing of tobacco, tobacco products, and electronic cigarettes.
  • Production or marketing of alcoholic beverages (if such activity constitutes the issuer’s main business).
  • Production or marketing of pornography.
  • Trade in explosives, weapons, or ammunition.
  • Gambling, mutual betting, slot machines, and low-prize gaming.
  • Production or marketing of narcotics, psychotropic substances, or precursors.
  • IT in cases where applications and other IT solutions support or facilitate activities specified above (if such activity constitutes the issuer’s main business).
  • Other types of activities that flagrantly violate the applicable laws of the Republic of Poland and/or the European Union.

One of our strategic initiatives that we aim to pursue as part of the company’s mission is EDUCATION in the broad scope of ESG topics. Our goal is to increase awareness among companies in the sector of Polish small and medium-sized enterprises and individual investors regarding sustainable development.

At the same time, we believe that companies whose strategy is built on ESG practices can be considered entities with increased investment attractiveness. According to data collected by Barclays, it’s clear that the bond portfolios of companies with high ESG ratings outperform those with low ratings.

PROCES INWESTYCYJNY

Investment Process with ESG Considerations

ESG Analysis plays a significant role in the investment process carried out within the funds managed by Mount TFI.

The analysis of sustainable development factors (ESG analysis) is a part of the pre-investment analysis of investment funds managed by Mount TFI. It aims to estimate the impact of sustainable development risks on company performance. To achieve this, potential investment companies are required to complete a relevant questionnaire containing detailed ESG information. At this stage, meetings are also held with the management of these companies, during which the fund managers gain in-depth knowledge of the company’s activities, its business model, and receive answers to any questions. The Fund Management Team assesses the significance of different areas of sustainable development risk and how the company manages these risk categories based on the information obtained from the companies.

ESG scoring is assigned based on the questionnaire and collected data. Any adjustments are made to the business models, meaning that all risks associated with the company’s operations, including ESG risks, are included in the financial forecasts of the company. This, in turn, significantly influences the final decision regarding the investment in a particular company. Alternatively, selected funds managed by Mount TFI also have the option to use ESG ratings provided by foreign institutions. However, this situation typically applies to large foreign enterprises. One of our strategic initiatives as part of the company’s mission is EDUCATION in the broad field of ESG topics. Our goal is to increase awareness among companies in the sector of Polish small and medium-sized enterprises and individual investors regarding sustainable development.

Examples of ESG Factors

Investing with consideration of ESG factors relies on the correct identification, measurement, and assessment of risks associated with sustainable development factors, with a focus on the long-term perspective of a company’s operations.

“E”

(Environmental): Environmental factors related to the natural environment

„S”

(Social): Social factors

„G”

(Governance): Governance factors
climate change Human rights Board structure
Circular economy Decent working conditions Cxecutive compensation
Biodiversity Diversity, equality, and inclusivity Tax strategy
Forest protection Employee relations Abuse policy, and anti-corruption policy.

ANALIZA

Types of Financial Instruments and ESG Analysis

The method of analyzing sustainable development factors is adjusted to the nature of each planned investment. For example, when it comes to debt instruments with shorter investment periods, the greatest emphasis is placed on areas of activity that may be significant during the investment period and which may impact the company’s ability to meet its obligations. In the case of equity instruments, where the investment horizon is significantly longer, the focus is on factors that will affect the company over the long term.

IMPLEMENTACJA

Challenges in Implementing ESG

The main challenges in implementing ESG among Polish SMEs include a lack of ESG knowledge, issues related to data (availability, completeness, comparability), and the costs associated with data collection and analysis. In our activities, we have often encountered situations where a company had no knowledge of sustainable development factors and did not have the necessary data to assess the company. Collaborating with Mount TFI allowed us to familiarize ourselves with ESG topics and initiate actions, including data collection and analysis in this area.