Azvalor and Sustainability
While the previous section of the report develops the sustainability risk integration policy in investment decision making, the following paragraphs review the various corporate governance, social or environmental initiatives and measures that Azvalor develops as an entity.
Skin in the game
Nassim Nicholas Taleb (author of the famous book The Black Swan) compares the attitude of bankers to that of pilots in risk taking. Airline pilots do not take unnecessary risks for obvious reasons. Azvalor’s employees and partners are, jointly, the largest investor in its funds, aligning interests with its co-investors, and sharing both risks and returns (“co-investment”). Azvalor does not offer investors any investment products in which its own employees and partners do not invest.
Reinforcing this skin in the game objective, the remuneration policy requires partners to invest at least 50% of their annual variable remuneration in funds managed by Azvalor and, in the case of other employees, at least 25%.
Remuneration policy and sustainability risks
Azvalor Asset Management SGIIC, S.A. has a remuneration policy for its employees approved by its Board of Directors, in accordance with current regulations. The remuneration policy is composed of a fixed remuneration, depending on the functional level and responsibility assigned to each employee, and a variable remuneration, linked to the achievement of individual, departmental and company objectives. This remuneration policy is in line with rational risk management and does not induce the assumption of risks incompatible with the profile of the vehicles managed. This remuneration policy is reviewed at least once a year to ensure that it is properly updated where necessary.
Azvalor’s remuneration system takes into account the financial implications of an adequate management of the factors that may have an impact on the Company’s reputation, variables that are increasingly tangible in today’s environment. The Company, as established in its Sustainability Risk Integration Policy, has included sustainability risk among the risks to be considered, more explicitly than in the past. Therefore, the evaluation of the performance of those employees with an impact on risk control will incorporate those ESG metrics that are considered particularly relevant for Azvalor’s investments.
Financial education and communication
One of Azvalor’s objectives is to encourage or promote the improvement of society’s financial education, which is considered essential for better investment decision making.
In an attempt to bring value investing closer to universities, the firm organizes the annual Azvalor Summer Course, which is part of the Summer Courses offered by the Complutense University of Madrid. This course stems from the need to improve the financial education of people interested in the world of investment and as a complementary educational alternative for those students who have decided to pursue a degree in Economics, Finance or Business Administration.
In this environment of dissemination and financial education, the Club del Lector Value (Readers Club) has also been created as a repository of those books that are considered essential reading on value investing, the Austrian School or general thinking. With the same purpose, Azvalor uses other means of dissemination such as the Azvalor You channel and other social networks.
ESG impact initiatives in Azvalor
Around 10% of the Azvalor team has some certification in ESG Investing, a training that guarantees the necessary knowledge for the proper professional development of ESG in all areas of the company.
The Certificate in ESG Investing, issued by the CFA Society United Kingdom, delivers the benchmark knowledge and skills required by investment professionals to integrate ESG factors into the investment process. It has been developed by practitioners for practitioners, in consultation with leading firms and supported by the UN PRI.
Expert Certificate in Collective Investment Institutions (Funds Expert Certificate), which includes an extensive module where the various aspects of ESG Investment are studied from a professional point of view.
Social impact initiatives
Davalor is a joint project with the NGO África Directo which finances, through donations, projects with high social impact in Africa. On Azvalor’s website you can find out more about this initiative and about the projects and African countries receiving 100% of the donations made (with zero administration costs).
Since its foundation in 2015, Azvalor’s employees, partners and co-investors have contributed over 2 million euros to initiatives related to education, healthcare, assistance to vulnerable groups, agricultural developments and microfinance. In addition, Azvalor’s founding partners donate through Davalor/África Directo approximately 10% of the annual dividends received.
On the other hand, Azvalor also makes donations to other NGOs such as the Pablo Horstmann Foundation, an independent, non-profit entity, with a clear purpose of social assistance and development cooperation, inspired by the principles of social justice and Christian values.
Collaboration with the NGO Auara, which dedicates 100% of its dividends to developing clean water access projects for those who need it most. This NGO has provided more than 70 million liters of water to developing countries and has developed 94 infrastructures in 17 different countries. Each liter of Auara consumed in Azvalor guarantees 4 liters of drinking water in developing countries. In addition, the packaging is 100% recycled and 100% recyclable.
Madrid Down – Stella Maris Foundation
Azvalor has an agreement with the Stella Maris Foundation which has allowed it to hire, since 2016 and for an indefinite period, a person who demonstrates day after day the importance of integrating people with disabilities into the labor market.
Azvalor: Great Place to Work
Following the launch of the Company and for two consecutive years, we received the support of the Great Place to Work Institute which, after an analysis of the organization, guided the Azvalor team in creating policies and practices that would contribute to the excellence of the firm’s corporate culture and enable us to outline our business strategy.
Azvalor also encourages the professional development of its employees through training initiatives that complement and strengthen their skills, thus enabling them to perform to the highest standards and adapt to a constantly evolving industry.
Corporate governance initiatives
Skin in the game
Remuneration policy and sustainability risks
Environmental impact initiatives
A few years ago, Azvalor launched the internal EcoValor project, for a more efficient use of material resources and better waste management in the workplace. In addition, in 2020 it incorporated the possibility of completing the entire subscription process for new investors as well as the regular communication process online, thus avoiding the unnecessary printing of paper and allowing the entire process to be completed digitally.
Choice of building (Azvalor office)
The building in Paseo de la Castellana 110 in Madrid where Azvalor has its main office is ISO 50001 certified, which guarantees maximum energy efficiency, integrated waste management and adequate workplace security. In line with this objective, a number of internal policies have also been defined, such as encouraging employees to use public transport to commute to work.