Tackling Environmental,
Social & Governance
Challenges

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Our Environmental, Social & Governance Principles

Kimura puts the importance of people and sustainable business practices at the heart of its business today and into the future through the application of ESG principles.

The application of ESG principles throughout the investment process and within the firm provides Kimura with greater insight to business risk, allowing it to create sustainable returns for investors whilst mitigating ESG risk. By embedding ESG practices into the firm, Kimura aims to promote responsible investment within the SME’s it finances and sets ESG precedents within the trade finance industry.

Application of Kimura’s ESG principles

  • Kimura has created a scorecard to assess ESG criteria prior to execution of a transaction:
    • ESG risk factors relevant to a transaction are determined by the commodity, its country of production and the borrower’s country of domicile.
    • Kimura addresses these risks directly with the borrowers through its due diligence process.
    • Kimura then considers the impact and highlights potential risks to management so that appropriate risk decisions can be made.
  • ESG scorecard allows Kimura to assess the positive impacts borrowers are having at a portfolio level.
  • Potential to work with borrowers to minimise risks in their commodity and industry/country, lessening the impact in the future.
  • Working with the wider industry to promote ESG within the trade finance space.
  • Kimura is a full signatory of the UN PRI and is a member of the ICC.

ESG
with Kimura

Kimura has an integrated approach to sustainable investment. The ESG principles at the heart of our business:

  • Commitment to investors in creating a sustainable return across the Funds.
  • To assess ESG within our investments using a tailored methodology that is proportionate to the business and risks that are encountered.
  • Kimura will be active owners and incorporate ESG into our policies, operations and employee practices.
  • To enact a strong and transparent governance process throughout the Investment Manager and Funds we manage that is demonstrated by senior management and all employees.
  • To continue to enhance and improve the ESG processes to ensure they are best in our investment class.
  • To guide and improve borrowers’ ESG standards where possible.
  • To define and monitor key performance indicators.
  • Through the PRI Reporting Framework, report on our ESG and Investment activities in a transparent and standardised format.
  • Commitment to working with the trade finance community to improve and ESG practices within the Commodities sector.

Environment

  • Reduction in waste
  • Reduction in energy usage
  • Reduction in Carbon Emissions

Social

  • Promotion of diversity and equality
  • Promotion of Staff health and wellbeing
  • Reduction in poverty and supporting charities
  • Align our internal practices to relevant employment laws and health and safety standards
  • Promote staff development and education

Governance

  • Clear delineation of responsibilities
  • Transparent governance structure
  • Process and procedures aligned to the market and regulation
  • Undertake Independent Audit
  • Clear Whistleblowing guidelines

Steps Taken by the Manager

Can a "Responsible
Investor" Invest in
Commodities?

Managers need to consider various associated risk factors and adjust their parameters for each investment, by commodity type, geography and yield target.

Environmental.
Be considerate of:
  • Biodiversity impacts
  • Supply chain sustainability
  • Emissions
  • Water and land pollution
  • Resource scarcity and degradation
  • Climate change
Social.
Be considerate of:
  • Health and safety standards
  • Stakeholder management and community relations
  • Labour standards & rights
  • Indigenous impact
  • Local social and healthcare needs for workers
Governance.
Be considerate of:
  • Alignment of interest with shareholders
  • Accessibility and social inclusion
  • Board independence
  • Management of conflicts
  • Fair tax treatment
  • Diversity and discrimination
  • Bribery and corruption

Kimura
Engagement

Encouraging borrowers to disclose information on the ESG factors that do or could affect them:

1

Understand stakeholder management and community relations

2

Understand diversity and anti-discrimination

3

Understand supply chain sustainability

  • Monitoring overall ESG risk within the investment portfolio.
  • Promoting wider acceptance and use of responsible investment within the investment industry.

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White Paper

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