The Kartesia Impact Fund I scooped the European ‘ESG fixed income fund of the year’ award for its unique approach to developing bespoke ESG action plans for their borrowers, and directly tying sustainability-linked loans to a selection of ESG targets chosen.
Kartesia corporate social responsibility and ESG head Coralie De Maesschalck told Environmental Finance the fund has a “unique strategy” of setting up a full ESG improvement plan – including 10 targets split between social and environmental factors for each portfolio company.
Two of these targets are then tied to the ESG ratchet mechanism on the loan, where if met on an ongoing basis, results in a decrease in the margin.
Launched in early 2022, the fund has already closed two sustainability-linked loans with Spanish university Universidad Católica de Murcia (UCAM) and UK based RCI Group. Kartesia associate director Kamil Kapasi said the fund was also closing its third deal.
Not-for-profit UCAM aims to make education more accessible as well as promote sports and research, with scholarships and donations a critical part of this mission. The university provides primarily health-related degrees which are in high demand in Spain, and looks to promote social mobility by providing scholarship plans to drive higher education levels.
Meanwhile, RCI has a strong focus on improving health and wellbeing whilst also reducing inequalities when people look to access the public health, social care, and justice systems.
Whilst Kartesia provides the credit risk analysis of potential investments for the fund, the ESG due diligence is undertaken by Candriam with additional climate and carbon emission assessments conducted by ClimatePartner.
De Maesschalck said the approach of the fund means it is able to support both the financial and impact goals of the company. For example, she said the fund provides a bigger margin discount than they have seen in the sustainability-linked loan market to date to drive more impactful behaviours and effectively provide “free ESG consultancy work” for the companies through the action plan analysis and development.