Since its inception, Aescap has taken Environmental, Social and Governance (ESG) factors into consideration by analyzing the sustainability impacts of its portfolio companies and potential new investments. By continuously doing so, Aescap aims to encourage companies in our sector to act with the well-being of people and our planet in mind. The fund focuses its investments in companies developing treatments that are aimed to significantly improve the life of patients and benefit society as a whole.

ESG at Aescap

The approach to ESG factors at Aescap is twofold. Firstly, sustainability risks are monitored following the Materiality Map by the Sustainability Accounting Standards Board (SASB) to define ESG risks considered to be material in the Life Sciences sector.

Secondly, Aescap promotes social characteristics in line with Article 8 of the EU Sustainable Finance Disclosure Regulation (SFDR).

Both approaches are outlined in more detail below.

Sustainability risks

Considering the sector focus of the fund, the following sustainability risks have been identified to be likely material for the investments made by Aescap in the economic sector Biotechnology & Pharmaceuticals:

  • Safety and quality of clinical trials and participants.
  • Access to medicine, affordability & pricing.
  • Medicine safety, defects, inadequate disclosure of risks during pre-clinical studies and clinical trials.
  • Patient follow-up and support for marketed products and during clinical trials.
  • Ethical marketing to medical specialists and patients.
  • Employee engagement, diversity & inclusion.
  • Quality and safety of supply chain management.
  • Excessive pricing and uncompetitive behavior.

These risks are monitored continuously through engagement with portfolio companies as well as analyses of data either publicly available or provided to the fund. Material changes to the individual sustainability risks of an investment are not expected to occur often.

Measurement of social characteristics

The fund’s investments are contributing to the development, manufacturing and distribution of medicines worldwide. Aescap invests in companies developing innovative treatments, often for diseases without any treatment available so far. It also champions best practices in the sector through engagement with the management of companies. The fund reports annually on the following:

  1. Percentage of investee companies researching, developing or producing treatment for diseases with a high unmet medical need
  2. Percentage of investee companies researching, developing or producing treatment for rare diseases
  3. Progress on ESG best-practice engagement following a sustainable investment strategy

In addition to the above, Aescap monitors the alignment of portfolio companies and potential new investments with social characteristics based on the exclusion, inclusion and engagement criteria below.