Policies and Procedures

EFG Hermes requires that all leadership, employees, representatives, independent contractors and consultants comply with an institutionalized code of conduct to provide general guidance regarding conduct and ensure the observance of corporate governance best practices throughout the firm. The code lays out the responsibilities of each person with regards to confidentiality, disclosure, protection and use of information and transparency. It serves as the foundation of the firm-wide commitment to international standard corporate governance practices.

We strictly prohibit the buying or selling of securities while in possession of material non-public “inside information,” as well as the communication of that information to others. We define inside information as material, non-public information about securities, activities or financial conditions of a corporation, public entity or other issuer of securities. Material, non-public information concerning market developments may also be construed to be inside information.

Information should be considered "non-public" unless it is clearly public. Information is deemed public once it has been publicly announced or otherwise disseminated in a manner that makes the information available to investors generally.

If our employees are aware of inside information,
Staff is strictly prohibited from the buying or selling of securities while in possession of material non-public “inside information,” as well as the communication of that information to others. Inside information is defined as material, non-public information about securities, activities or financial conditions of a corporation, public entity or other issuer of securities. Material, non-public information concerning market developments may also be construed to be inside information.

Information should be considered "non-public" unless it is clearly public. Information is deemed public once it has been publicly announced or otherwise disseminated in a manner that makes the information available to investors generally.

If employees are aware of inside information,
• They may not buy or sell securities that may be affected by that information, either for their own account or any account over which they exercise control, alone or with others.
• They may not pass along any inside information expressly or by way of making a recommendation for the purchase or sale of such securities based upon inside information.
These prohibitions are applicable no matter how inside information is acquired. They are applicable to the securities of EFG Hermes as well as other companies.

The firm’s compliance policy allows senior management to maintain best practice control standards and to fulfill regulatory requirements. More importantly, compliance safeguards the company against undue risk, whether reputational or financial. Compliance policies, procedures and controls are continuously updated, reviewed and communicated to all departments, branches and subsidiaries. Employees undergo annual anti-money laundering, anti-fraud and risk-awareness training, and additional ad-hoc trainings are held for new hires.

EFG Hermes is committed to maintaining a work environment with the highest standards of transparency and accountability. An important aspect of transparency and accountability is having a mechanism that enables employees to voice any concerns in a confidential, safe and effective manner. Employees should be empowered to share any information they may discover that highlights potential fraud and any failure to comply with a law, regulatory requirement, internal rule, regulation or policy, or any workplace malpractice without fear of being reprimanded. This policy is intended to assist employees who believe they have discovered fraud or malpractice; it is not designed to allow employees to question financial or business decisions made by the company.

Appropriate management of information is essential for EFG Hermes to maintain the trust of our clients and shareholders, and world-class systems are in place to manage personal and corporate information that we store for our business operations. EFG Hermes adheres to the highest international standards for information disclosure and protection of sensitive information, and we voluntarily choose to comply with stringent standards above and beyond those required by regulators in all our countries of operation. Our institutionalized disclosure and documentation procedures are reinforced by our commitment to raising awareness about the importance of these issues at the firm through employee training and information campaigns.

The firm is committed to safe guarding confidential information against conflicts of interest arising from unstructured interactions between the firm’s divisions. Chinese Walls (sometimes referred to as "information sharing barriers") are in place to prevent the flow of inside information from "insider" areas to "public” areas of EFG Hermes. The Chinese Wall policy prohibits anyone in an insider area from communicating inside information to anyone in a public area. A set of regulations and procedures is followed to regulate breaches of the wall, which are approved by a control room. Employee trading blackouts are strictly enforced during the lead up to major corporate announcements to prevent the improper use of confidential information. Any request for wall-crossing must be approved by compliance. Furthermore, all sensitive or potentially sensitive developments are shared on a strictly need-to-know basis to limit any risk of the spread of insider information.

We believe that having sufficient information about our clients is the best way to minimize the Firm’s risk of being used for illicit activities. Having this information also protects us against fraud and enables us to recognize suspicious activity. Our Anti-Money Laundering Policy is based upon strict adherence to the following procedures:

• Verification of the identity of new clients
• Receipt and payment of funds directly to / from clients (not from third parties)
• Reporting suspicious transactions using a specific system
• Maintaining complete and accurate records educating and training all employees on the AML manual and regularly sharing updates

The firm’s stringent due diligence processes, which apply to individual and corporate clients alike, ensure that investments are made in keeping with each client’s specific profile and that accounts are protected by strict access regulations and documentation standards.

Due diligence processes are implemented across all business lines at EFG Hermes to ensure that its investment platforms are not used for illegal transactions. Potential clients are required to fill out a detailed questionnaire, and investor names are checked against international sanction lists like the Office of Foreign Asset Control and United Nations lists to protect the firm from entering into business with sanctioned individuals. Politically sensitive clients undergo a strict screening process, and their accounts are subjected to stringent requirements to ensure compliance with international best practices in all areas.

EFG Hermes has invested time and money into developing a disaster recovery and business continuity plan that will protect the Firm’s data and IT infrastructure from fires, natural disasters and other unforeseeable events. All our regional offices have business continuity policies and procedures for notification and recovery. The business continuity plan will enable full operation of all lines of business in the event of natural or manmade disasters including accidents, sabotage and burglaries. A special Crisis Management Team composed of senior management and a Business Risk Coordinator responsible for all internal communication are also in place to implement disaster recovery procedures in a smooth and efficient manner.

KSA Pillar III Disclosure 

For more information about EFG Hermes’ KSA Pillar III Disclosure, click here.

1. Introduction

1. 1.1 Objective
   1. EFG Hermes believes that integrating ESG considerations into its investment processes enhances business and financial performance over the medium and long-term. It assists investment professionals in reducing exposure to non-financial risks, and therefore enhancing risk-adjusted returns.
      The objective of this Policy is to bring leading practice in integrating ESG risks into EFG Hermes’ day-to-day operations and investment practices. This will enable EFG Hermes to lead by example amongst its peers by maintaining the highest standard of care in its investment approach.
      EFG Hermes is a signatory to the UNPRI, and as such is committed to act in accordance with the following Principles:
      
      • Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
      • Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
      • Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
      • Principle 4: We will promote acceptance and implementation of the principles within the investment industry.
      • Principle 5: We will work together to enhance our effectiveness in implementing the principles.
      • Principle 6: We will each report on our activities and progress towards implementing the principles.
2. 1.2 Background

   1. EFG Hermes is a premiere financial services corporation that offers diverse investment banking services including securities brokerage, investment banking, asset management and private equity.
      As responsible investment is part of EFG Hermes’ corporate strategy, EFG Hermes is committed to integrating Environmental, Social and Governance principles into its investment approach and practice, wherever applicable.

Commonly adopted frameworks and publications such as the IFC performance standards, the UNPRI, the UNGC and the ICGN were consulted during the development of this Policy.

2. Governance and Compliance

1. 2.1 Policy scope
   1. This Policy applies to all investments made and/or managed by EFG Hermes and all investment related services and activities across public and private markets and in all geographic locations. The Policy must be applied in coordination with other EFG Hermes’ existing policies and procedures.
2. 2.2 Governance, approval and responsibility of this Policy
   1. The CSR department is the owner of the ESG Policy and is responsible for distributing the Policy to all EFG Hermes employees and other relevant stakeholders. The CSR department should ensure that the Policy is updated to reflect changes in business priorities at the corporate level. The Policy should be reviewed on an annual basis or, as and when required, whichever occurs earlier.
      The Board of EFG Hermes is responsible for the approval of this policy, and for approving any updates or changes to this Policy. This Policy is valid until withdrawn by the Board.
      The Executive Committee is tasked with the implementation of this Policy across EFG Hermes, and to ensure the effective development and continuous improvement of this Policy.
      The Risk & Compliance departments, in collaboration with Internal Audit, are responsible for enforcing this Policy and related procedures as well as implementing independent control processes. Every business line in scope of the Policy should identify ways to integrate ESG considerations into its day-to-day operations. Tools & procedures should be updated to reflect the integration of ESG analysis and industry best practice.
      The degree of ESG integration within business lines will be considered during performance appraisals of respective department heads by the senior management of EFG Hermes.
      This publicly-available policy is complemented by its corresponding EFG Hermes-internal version, which contains additional information on document control, definitions and certain internal administrative procedures and responsibilities.
3. 2.3 Regulatory compliance
   1. EFG Hermes’ operations extend from Egypt to the Middle East, Africa, Asia, Europe and North America. EFG Hermes is committed to complying with applicable laws and regulations covering environmental impacts, labour rights, social issues and corporate governance, nationally and globally. In case of conflict between the legal framework and the requirements of this Policy, the legal framework in which EFG Hermes operates prevails.
      Since ESG requirements continuously evolve over time, EFG Hermes monitors ESG requirements from relevant laws, regulations, and standards in the jurisdictions where it operates. The CSR department should hold a record of all applicable ESG requirements that are relevant to EFG Hermes’ operations. Responsibility for the continuous monitoring of ESG-related laws and regulations that affect EFG Hermes’ operations rests with the relevant business partner department within EFG Hermes.

3. ESG guidelines for business lines

1. 3.1 Overview
   1. As a responsible premiere financial services corporation, EFG Hermes understands that ESG issues can affect investment performance and expose the bank to potential investment risks.
      EFG Hermes believes it is important for its investment professionals to integrate ESG factors within their investment processes.
      Appendix E of this Policy includes a non-exhaustive list of ESG considerations that may be relevant to investment professionals as they undertake ESG risk assessments as part of their investment screening purposes. As a diversified financial institution with a range of investment services, the implementation of ESG considerations in EFG Hermes may vary and specific guidelines apply to the Private Equity, Asset Management, Investment Banking and Research business lines,
      as outlined in Section 6.2. ESG guidelines for the Security Brokerage business line have not been prescribed due to the transactional nature of the services provided and the limited practical ability to influence decisions concerned with ESG practices and outcomes of underlying transactions. As part of the ongoing review of this Policy, EFG Hermes will monitor these guidelines to ensure they reflect exposure to ESG risks and opportunities and industry best practice.
2. 3.2 EFG Hermes’ ESG Guidelines
   1. 3.2.1 Private Equity
      1. Private Equity must take ESG factors into account at all stages during the investment cycle, including the initial screening, due diligence, transaction structuring, investment agreements, monitoring and reporting stages.
         To allow for an effective and consistent identification and management of material risks and opportunities, while providing the flexibility to concentrate on what matters most to individual deal or investee company, EFG Hermes has developed an ESG Framework of common areas. All potential investments shall go through a rigorous review in two phases. The first phase is a screening against the Exclusionary Criteria (Appendix D).
         A fund’s capital must not be invested in any activity deemed illegal under the applicable local laws and regulations nor any activity that is banned by international agreements. The second phase involves a risk review against the ESG framework as part of the due diligence process, where support from external specialist firms may be sought.
         All potential investments are assigned an ESG risk rating. This helps the Private Equity team to develop an informed opinion as to whether to proceed with the investment, and if so how to structure the transaction and what improvements may need to be implemented post acquisition.
         EFG Hermes investment professionals shall be proactive in integrating ESG within investee companies by assisting the companies in developing mitigation plans to address their material ESG related risks and opportunities. As and when appropriate, the Private Equity team should encourage investee companies to enhance their sustainability performance using frameworks and management systems outlined in Appendix B and C.
         The ESG practices and performance of all investee companies are monitored annually. The outcomes help inform further areas of engagement and improvement and enable the Private Equity team to share best practice across the portfolio. In cases where EFG Hermes has limited ability to control the integration of ESG factors in investee companies, or in circumstances where it is a minority shareholder, the fund manager, to the best of its ability, should encourage portfolio companies to consider relevant ESG-related principles. Every investee company’s annual expenditure plan should allocate financial resources to support the implementation of ESG in the investment process, using appropriate means such as staff training and development, or consultation with external specialists.
   2. 3.2.2 Asset Management
      1. EFG Hermes believes that a proactive focus on material ESG factors by companies is an indication of best practice corporate strategy and business model. On this basis, EFG Hermes considers the approach taken by current and prospective investment entities on their material ESG factors as part of the overall analysis for potential investment, and ongoing valuation. This is in line with the EFG Hermes Asset Management business line’s objective of achieving long term capital appreciation and effectively managing downside risks and opportunities.
         EFG Hermes Asset Management professionals must be proactive in integrating ESG within the due diligence component of the investment process. This applies to EFG Hermes’ bottom-up investment approach in which the fundamental analysis of industries is complemented with analysis of ESG considerations, as well as the top-down approach where investment professionals should include ESG factors in their analysis of countries and/or regions. The analysis of ESG factors by Asset Management professionals should be incorporated into the overall risk profile and valuation of prospective investments.
         ESG analysis revolves around EFG Hermes’ proprietary evaluation methodology, which includes tailored scorecards for each of our key investment sectors. Information is collated through a combination of primary research and engagement with the current or potential investee company. The resulting ESG score is considered as part of the investment decision, and informs future engagement focus and proxy voting, should an investment be made.
         Every fund’s annual expenditure plan should allocate financial resources to support the implementation of ESG in the investment process, using appropriate means such as staff training and development, or consultation with external specialists. Negative screening via the exclusion list set out in Appendix D should also be applied with respect to all potential investments.
   3. 3.2.3 Investment Banking
      1. The investment banking team seeks to take into account ESG considerations whenever an ESG issue may have a material impact on the financial performance of its advised transactions, both buy and sell side; as we believe this is in the best interest of our clients.
         In the first instance, ESG issues form part of the Know Your Client (KYC) process we carry out for any new client, which also covers screening against EFG Hermes Exclusionary Criteria (Appendix D).
         When advising on transactions, the investment banking professionals utilise a proprietary framework of critical questions and best practice guidance to identify and carry out an assessment of material ESG considerations, on a sector-by-sector basis. The outcomes of the assessment help determine relevant ESG risks and opportunities which are incorporated into the overall transaction documentation.
         Expenditure plans should allocate financial resources to support the implementation of ESG in investment banking, using appropriate means such as staff training and development, or consultation with external specialists.
   4. 3.2.4 Research
      1. The Research team at EFG Hermes provides macroeconomic, equities and index research with a focus on MENA and frontier markets for clients. This business line offers a tailored ESG overview to clients on material ESG risks and opportunities wherever these have a financially material impact on the research analysis decision-making process or the company’s financial/stock performance. Evaluation of material ESG risks and opportunities is carried out using EFG Hermes’ proprietary ESG research methodology across key sectors.
         This research includes, but is not limited to, ESG considerations, outlined in Appendix E, which are utilised to guide the research team’s analysis on ESG aspects.
         Expenditure plans should allocate financial resources to support ESG capability development in the Research business line, using appropriate means such as staff training and development, or consultation with external specialists.

4. Stewardship and Engagement

EFG Hermes sees engagement with investee companies as a key aspect of ESG integration as it enables the proactive management of ESG factors. It is through supportive and constructive dialogue with the management of investee companies that EFG Hermes can exercise its stewardship responsibilities and encourage organisational change where warranted. We continually seek to exercise the highest standards of stewardship across all our investment activity and as such we draw on internationally accepted best practice principles, including of the revised UK Stewardship Code (2020), to guide our approach.
EFG Hermes believes that our investment professionals are in the best position to evaluate the potential impact that ESG issues or the outcome of a given proposal will have on long-term shareholder value. As such, responsibility for our engagement activities rests with our investment professionals, and they are fully integrated into our investment processes. Thus, our engagements focus on issues that could have a material financial impact with priority given to the largest holdings of a particular strategy and/or investments facing a material ESG concern, as determined by investment professionals and the outcomes of the respective ESG Scorecard.
In regard to voting practices, EFG Hermes will exercise its ownership rights by voting at company meetings. The voting decision is made with the objective to reduce material ESG risks while protecting the best interest of investors. When voting is sub-contracted, then the respective business line shall encourage the sub-contractor to adopt voting practices that help reduce ESG risks.

5. Capacity building

Training on sustainability, including ESG factors, should be provided to all EFG Hermes staff, across all business lines and supporting functions on an annual basis.
Additional advanced training, with a focus on ESG integration, should be provided to select investment professionals.

6. Reporting

In line with the UNPRI requirements for reporting and the Egyptian Exchange (EGX) model guidance for reporting on ESG performance, EFG Hermes aims to be transparent about its ESG activities and will make publicly available the following information:

• The EFG Hermes Public ESG Policy; and
• Disclosures on EFG Hermes ESG integration efforts on an annual basis in the EFG Hermes sustainability report.

Appendices

Appendix A: ESG Policy governance framework

As part of EFG Hermes’ commitment to the successful integration of this ESG Policy, an ESG governance framework has been developed. The ESG Policy’s governance framework is summarised below.

ESG policy governance	Relevant department	Governance responsibilities
ESG Policy approver	Board of Directors	Approval of ESG Policy Approval of updates to the ESG Policy Amend, revoke and/or supplement resolutions passed by the Executive Committee
ESG Policy owner	CSR department	Owner of ESG Policy with responsibility to communicate Policy throughout EFG Hermes
ESG Policy implementation	Executive Committee	Identify ESG matters that affect the operations of EFG Hermes Ongoing monitoring of ESG integration throughout EFG Hermes Pass ESG resolutions, and suggest updates to the ESG Policy for Board approval as necessary

Appendix B: Applicable sustainability frameworks for ESG integration

An overview on the sustainability frameworks that can be adopted to improve sustainability performance is provided below. This list is only indicative and not comprehensive. It shall be updated regularly by the CSR department.

Sustainability framework	Purpose
BREEAM	Building Research Establishment Environmental Assessment Methodology
BS 8903	Guide for sustainable supply chain and procurement
Carbon Disclosure Project	A voluntary based organisation and mechanism to help organisations report on their carbon emissions and develop mitigation strategies
Equator Principles	A risk management framework for financial institutions to assist in the assessment of environmental and social risks of project financing
Global Sustainability Assessment System (GSAS)	Green building certification system developed by the Gulf Cooperative Council
GRI Standards	GRI is an international independent organisation that helps businesses, governments and other organizations understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others
Integrated Reporting	A concept for institutional reporting that combines financial with non-financial (i.e. environmental, social and governance) disclosures
LEED	Leadership in Energy & Environmental Design
Sustainable Development Goals	UN-sponsored set of 17 aspirational sustainable development goals developed to provide guidance to UN members, the private sector and non-governmental organisations
SSEI	Peer-to-peer learning platform to explore how exchanges, in collaboration with investors, regulators, companies can improve corporate transparency and performance on ESG investment
UNGC	United Nations initiative to encourage businesses to adopt universal sustainability principles in the areas of human rights, labour, the environment and anti-corruption
UNPRI	UN-backed framework for investors to assist in the implementation of responsible investment criteria in investment decision making

Appendix C: Applicable management systems for ESG integration

An overview on the management systems that can be adopted to improve sustainability performance is provided below. This list is only indicative and not comprehensive. It shall be updated regularly by the CSR department.

Management systems	Purpose
ISO 9001	Quality Management System ISO
ISO 14001	Environmental Management Systems
ISO 50001	Energy Management ISO
OHSAS	Occupational Health and Safety Management Systems

Appendix D: Exclusionary criteria

EFG Hermes‘ Exclusion criteria seek to screen investments on three levels:

1. Country Exclusion: exclude investing in companies that are registered in and/or derive more than 30% of total revenue from activities in countries that are subject to sanctions i.e. economic or financial sanctions or trade embargoes imposed, administered or enforced from time to time by one or more Sanctions Authorities¹ ,
2. Company Exclusion: exclude companies that have a history of persistent and serious violations of one or more Principles of the U.N. Global Compact and have not implemented any measures to reduce the risks for further violations. For companies that fall under this criterion, we review their practices as part of our annual universe screening and would allow a company to become part of the investment universe should we see significant progress towards rectifying the original instances that excluded them in the first instance, and
3. Sector or activity Exclusion: exclude investments in certain sectors based on their substantial long-term ESG tail-risks and our internal standards as a responsible investor. Unless specifically noted in terms of revenue threshold (in parentheses), these sectors are automatically excluded from our investment universe:
   • Production or distribution of alcoholic beverages (5%);
   • Production of, or trade in, any product or activity deemed illegal under applicable local or national laws or regulations or subject to internationally agreed phase-outs or bans as defined in global conventions and agreements such as certain:
     1. hazardous chemicals, pharmaceuticals, pesticides and wastes²,
     2. ozone depleting substances³;
     3. endangered or protected wildlife or wildlife products⁴; and
     4. unsustainable fishing methods such as blast fishing and drift net fishing in the marine environment using nets in excess of 2.5 kilometres in length;
   • Production of, or trade in, arms including but not limited to cluster munitions, anti-personnel mines, biological weapons, chemical weapons, depleted uranium munitions and non-detectable fragments, incendiary and blinding weapons, primarily designated for military purposes;
   • Production of, use of, or trade in, unbonded asbestos fibres. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.;
   • Production of, or trade in, radioactive materials⁵; or
   • Gambling, gaming casinos and equivalent enterprises (5%)
   • Adult entertainment including prostitution and pornography.
   • Coal Mining (30%)⁶

Appendix E: ESG Considerations

ESG factors and issues may vary significantly between different companies, industry sectors, and geographical regions. The following non-exhaustive list provides some examples of potential ESG issues that EFG Hermes may consider, where material and relevant to the companies assessed for potential investment.

Environmental	Social	Corporate Governance
Climate change policy and strategy	Community relations and support	Accounting and disclosure
Ecosystems, biodiversity, and habitat protection	Customer satisfaction	Auditor independence
Environmental impact and related risks	Employee training and development	Board structure and independence
Energy consumption and efficiency	Employee compensation and benefits	Business ethics and integrity
Greenhouse gas emissions	Health, safety and wellbeing	Compensation and remuneration policies
Pollution to air, land and/or water	Human rights	Data protection and privacy
Pollution to air, land and/or water	Labour standards and practice	Management protocols
Waste management and recycling	Product/services responsibility and innovation	Government relations
Water management	Staff recruitment and retention	Risk management
	Supply chain management	Shareholder rights
	Transparency and accountability	Transparency and accountability

1. Policy Statement

Wellbeing is one of the essential beliefs of EFG Hermes. Having this commitment in mind, the firm establishes this corporate health and safety policy. EFG Hermes believes that health and safety of our employees, visitors and customers is essential to our sustainable success. The Group’s commitment to the effective implementation of its Health and Safety Policy and related management systems will help the Group create a healthy and safe work environment.

2. Scope

The Health and Safety Policy must be observed across the entire EFG Hermes Group. This policy applies to Group offices and people who carry out work under the direction of the Group.

3. Purpose

The purpose of this policy is to ensure fulfillment of corporate and legal health and safety responsibilities by implementing and maintaining policies, procedures and practices to provide a healthy and safe environment for all employees, visitors and customers.

4. Commitments

The firm is committed to fulfilling all corporate and legal health and safety responsibilities by implementing and maintaining policies, procedures and practices that provide a healthy and safe environment for all employees, visitors and customers.

The Group will meet its commitment to health and safety by:

• Acknowledging legislative requirements and ensuring compliance as our minimum acceptable standard;
• Holding all levels of management accountable for the health, safety and wellbeing of people under their leadership;
• Promoting and encouraging a healthy and safe work environment;
• Conducting inspections to ensure that the working environment is healthy and safe;
• Ensuring that responsibilities for health and safety are effectively assigned and fulfilled at all levels of the group;
• Ensuring that decisions that affect health and safety are made transparently;
• Ensuring that adequate resources are provided to safeguard the health and safety of all employees, visitors and customers;
• Ensuring that all necessary information, instructions, training and supervision are provided to enable all employees, visitors and customers to work safely and carry out their duties and responsibilities in a way that aligns with the policy;
• Ensuring risk assessments are undertaken where appropriate;
• Ensuring that health and safety performance is regularly measured and monitored and that audits of health and safety are carried out at appropriate intervals;
• Managing accidents and incidents as well as seeking to mitigate risks to avoid reoccurrence;
• Ensuring adequate resources and expertise are provided for the implementation of this policy.

Commitment

EFG Hermes complies with the UN Guiding Principles on Business & Human Rights, acknowledges its corporate responsibility towards the principles articulated within the framework and ensures the principles are captured in all its policies and rules governing employees at EFG Hermes.

EFG Hermes is a signatory of the UN Principles for Responsible Investment, an active participant in the UN Global Compact and a Co‐Founder for the UN Global Compact Network Egypt.

Approach

The EFG Hermes Statement on Human and Labour Rights extends to all EFG Hermes employees in all locations.

EFG Hermes acknowledges the definition of human rights as rights inherent to all human beings, regardless of race, sex, nationality, ethnicity, language, religion, political beliefs, or any other status.

EFG Hermes complies with the laws and regulations of the countries it operates in. The firm is guided by international and local laws for human rights and labour standards ensuring compliance and adherence with these laws. Where the internal standards supersede what is mandated by law, we will always apply what provides enhancement to employees' rights and entitlements.

Commitments to Employees

EFG Hermes adopts policies and procedures that protect the basic human rights of employees, and hires individuals based on expertise and competence, ensuring equal opportunities, diversity of experience, background, and skills to ensure a diverse workforce. The firm is committed to providing working conditions that meet accepted health and safety standards, fair and equitable wages in line with job scope, generous health benefits, a workplace free of discrimination, harassment and fair disciplinary practices.

EFG Hermes does not tolerate human trafficking, modern slavery or child labour. The firm employs individuals recognized as adults by the law and on a purely voluntary basis.

EFG Hermes reviews and revises internal policies where and when relevant to ensure they are always sustainable and in tune with our employees' rights, and articulates these policies clearly in the Employee Handbook, which is accessible to all employees in all locations.

Commitments Expected from Customers, Clients and Vendors

EFG Hermes is committed to the highest standards of social responsibility, environmental protection and ethical conduct. In its efforts to become a sustainable company, EFG Hermes' Supplier Code of Conduct requires its suppliers to uphold the principles listed herein and with all applicable laws and regulations regarding labour and human rights, health and safety, environmental protection and ethical practices wherever they make products or perform services for EFG Hermes.

EFG Hermes believes all workers in our supply chain:

• deserve a fair and ethical workplace where the highest standard of human rights, dignity and respect are upheld.
• deserve a safe and healthy working environment where the highest standard of an employee’s wellbeing is upheld.
• expects its suppliers, in their capacity as active members in the community.
• to operate in accordance with environmentally responsible business practices.
• to always be ethical in every aspect of the business.

Commitments to Communities

EFG Hermes is committed to leveraging our financial expertise and capitalizing on our human talent to create sustainable value for our stakeholders and the communities we serve.

The EFG Hermes Foundation supports poverty alleviation, disease prevention and youth development. The Foundation focuses on achieving the maximum sustainable impact not only by investing our resources wisely, but also by proactively engaging the communities in each project. EFG Hermes Foundation collaborates with existing community leaders at early stages of project planning, fully involving them in decision‐making processes and assists people and institutions to overcome the financial, educational and health‐related challenges facing society.

Governance

EFG Hermes promotes ethical and behavioural standards among its employees. The EFG Hermes Code of Conduct clearly articulates the expected behaviour of employees. The Whistleblowing policy ensures employees can raise necessary business–related flags without fear of retribution. “Voice It” ensures employees have an avenue to voice concerns regarding anything that impacts them within the scope of the workplace, knowing that their suggestions, complaints and concerns will be dealt with confidentially, with respect, and in a timely manner.

EFG Hermes' commitments and policies apply to all employees in EFG Hermes's businesses and operations where we have management control and where permitted by national laws and regulations. In countries where local legislation conflicts with certain human rights, EFG Hermes strives to act in the spirit of these principles while respecting and adhering to local legislation.

Climate change is perhaps the most significant threat facing our planet today. It poses severe threats to food security, coastal and rural communities, and economies as a whole. Nowhere is this more apparent than in Egypt, where the Nile Delta—the country’s fertile breadbasket—is facing water scarcity, increased soil salinity and rising sea levels. Economic sectors across the country, from agriculture and fishing to tourism and manufacturing, are all being forced to adjust to dwindling resources and harsh new realities. Not to mention the toll on human health and wellbeing.

In 2016, world leaders came together to ratify the Paris Agreement, a pact sponsored by the United Nations to unite countries in the fight against climate change. A call to action was issued for governments, business leaders, investors and communities to forge new partnerships to curb greenhouse gas emissions and limit global warming.

EFG Hermes believes it is vital for leading financial institutions to make a firm commitment to the sustainable development goals and to the support of climate change mitigation efforts. Investors around the globe are increasingly aware that environmental risk has become a major factor affecting the future of their investments. As the foremost provider of financial solutions for retail, high-net-worth and institutional clients across MENA and Frontier Emerging Markets (FEM), EFG Hermes recognizes its influence and role in minimizing portfolio exposure to environmental risk while also identifying opportunities that actively contribute to reducing emissions and shifting to a low-carbon global economy.

Since 2011, EFG Hermes has been on a resolute journey to integrate sustainability into all aspects of its operation and corporate culture. From joining the United Nations Global Compact (UNGC) to becoming a signatory to the United Nations Principles for Responsible Investment, we have made it a priority to take purposeful and deliberate steps to continuously strengthen our commitment to sustainability in tandem with corporate growth. The time has now come to turn our attention more fully to climate change issues. The following highlights our key areas of engagement:

Policy:

EFG Hermes is committed to expanding its environment, social and governance (ESG) policy, adopted in 2017, to more specifically address climate change considerations.

Investment:

EFG Hermes is committed to expanding its responsible investments, particularly in the area of clean and renewable energy, while at the same time continuing to offer attractive returns for shareholders and investors. Concomitantly, we are introducing training modules to improve the ability of our investment professionals to recognize climate risk and identify sustainable market opportunities. We are also committed to helping our clients limit their exposure to environmental risk utilizing our award-winning research capabilities and our in-depth knowledge of on-the-ground conditions in environmentally vulnerable FEMs.

Operation:

EFG Hermes is committed to continuing to minimize our carbon footprint across our premises worldwide and to expanding our initiatives to conserve energy, minimize waste and increase the efficiency of our supply chain.

Advocacy:

EFG Hermes is committed to encouraging and promoting the acceptance and implementation of climate change measures within the investment industry by engaging with peers, government agencies and the wider community through several forums. On an internal level, EFG Hermes continues to engage with employees to prioritize climate change considerations.

Citizenship:

EFG Hermes, through its philanthropic arm, the EFG Hermes Foundation for Social Development, is committed to incorporating climate change mitigation measures in its integrated development initiatives in rural Egypt and elsewhere.

EFG Hermes realizes that a commitment to climate change mitigation brings with it profound challenges and responsibilities, but we cannot afford to be complacent. We have responsibilities towards our shareholders, towards the communities where we do business, and, most of all, towards future generations. There is still much to do, but we look forward to meeting each challenge head-on

EFG Hermes recognizes its responsibility to support the protection and advancement of human rights and to ensure that modern slavery and human trafficking and their associated outcomes, such as the laundering of illicit gains, do not take place within our sphere of influence. EFG Hermes has been a participant in the United Nations Global Compact (UNGC) since 2011 and became a signatory of the United Nations Principles for Responsible Investment (PRI) in 2018. EFG Hermes’ goal is to uphold the UNGC principles on human rights by engaging with stakeholders and committing to policies that minimize risk on human rights issues and improve living standards in the communities where it operates. Key areas of engagement are as follows.

Labour

EFG Hermes believes that protecting the rights of its employees is of paramount importance. In line with the UN Guiding Principles on Labour & Human Rights, EFG Hermes articulated two statements to complement its existing policies: A Statement on Human and Labour Rights affirming compliance with the laws and regulations of the countries we operate in and a Statement on Health and Safety which aims to fulfil all corporate and legal health and safety responsibilities and provide a healthy and safe environment for all employees, visitors and customers. Where our internal standards supersede what is mandated by law, we will always apply what enhances employee rights and entitlements. Where local laws may stand in the way of the application of our standards for human rights, we will ensure we comply with the laws while having conversations with the related organizations to find ways of ensuring adherence to our human rights standards.

Compliance and Risk Management

EFG Hermes believes that having sufficient information about our clients is the best way to minimize the Firm’s risk of being used for illicit activities such as the processing of funds gained from human trafficking or modern slavery. It also protects EFG Hermes against fraud and enables EFG Hermes to recognize suspicious activity. EFG Hermes anti-money laundering (AML) policy is based upon the strict adherence to the following procedures:

• The verification of the identity of new clients.
• The ongoing screening of clients against international sanctions lists and media sources.
• The receipt and payment of funds directly to / from the client (not from third parties).
• The reporting system of suspicious transactions.
• The maintenance of complete and accurate records.
• The ongoing training of all employees on the AML policies and procedures.

EFG Hermes’ thorough due diligence processes, which are applied to individual and corporate clients alike, ensure that no new businesses are undertaken prior to compliance scrutiny, verification and approval. Our due diligence processes are implemented across business lines at EFG Hermes to ensure that our investment platforms are not used for illegal transactions. Potential clients are required to fill out a detailed questionnaire, and investor names are checked against domestic and international sanctions lists like the Office of Foreign Assets Control (OFAC), European Union and United Nations lists to protect the Firm from entering into business with persona non grata individuals. Our due diligence documents are protected by strict access regulations and documentation standards.

EFG Hermes Anti-Fraud and Corruption Policy aims to educate EFG Hermes employees on fraud and corruption, set the framework for fraud prevention and anti-corruption actions, and define each employee’s role in fighting any potential fraud and corruption within EFG Hermes. This policy applies to all employees irrespective of their position with the Firm and should be read in conjunction with the EFG Hermes Code of Conduct. Compliance with this policy is mandatory and non-compliance may lead to disciplinary action including dismissal.

Minimum Wage

EFG Hermes ensures all salaries fulfil any legal minimum wage requirement in all the countries we operate in.

Training

EFG Hermes conducts five mandatory training courses for all employees on Anti-Money Laundering (AML), Anti-fraud, General Data Protection Regulation (GDPR), Cybersecurity, and Responsible Investment on an annual basis.

Supply Chain

EFG Hermes’ Supplier Code of Conduct requires its suppliers to uphold all applicable laws and regulations regarding labour and human rights, health and safety, environmental protection, and ethical practices wherever they make products or perform services for EFG Hermes. This Code goes beyond mere compliance with the law by drawing upon internationally recognized standards to advance social and environmental responsibility. Any violations of the code jeopardize the supplier’s business relationship with EFG Hermes.

EFG Hermes is also committed to mitigating the socio-economic factors that may trigger vulnerability to human trafficking or modern slavery. The International Labour Organization (ILO) identifies issues such as income shocks and poverty as the main economic factors that push individuals into forced labour. Other reasons contributing to risk and vulnerability include lack of education, illiteracy, gender and migration. EFG Hermes’ approach to tackling these root causes involves two lines of attack:

Corporate Social Responsibility

The EFG Hermes Foundation for Social Development is committed to implementing sustainable integrated development projects in rural areas to provide economic opportunities, education and decent living standards for those most vulnerable to forced labour.

Financial Inclusion

EFG Hermes is committed to serving underprivileged communities by offering comprehensive microfinance solutions to owners of very small businesses across Egypt who would otherwise have no access to growth capital or banking sector services and who might resort to abusive lending or indenture, both gateways to forced labour.

EFG Hermes will continue to combat modern slavery and human trafficking wherever appropriate within its sphere of influence and operation as part of its commitment to uphold human rights and to create a better world for future generations.