Environmental

• Biodiversity conservation
  • Ibtikar shall invest in portfolio companies that do not engage in any activity that might lead or be linked to habitat loss, degradation and fragmentation, overexploitation, hydrological changes or related risks.
• Sustainable natural resource management
  • Ibtikar shall invest in portfolio companies that manage natural resources in a sustainable manner, through the application of industry-specific sustainable management practices and available technologies.
  • Sustainable use of resources, including energy and water, should be promoted.
  • This is even more important in regions that are heavily impacted by climate change and may therefore experience an acceleration and/or intensification of negative impacts.
• Pollution prevention and abatement 
  • Ibtikar shall invest in portfolio companies that avoid or minimize pollution from project activities in order to lower adverse impacts on human health and the environment. Project-related GHG emissions should be reduced.
  • Pollution prevention is defined as the use of materials, processes, or practices to reduce or eliminate the creation of pollutants or waste. It includes practices that reduce the use of toxic or hazardous materials, energy, water and/or other resources.
  • Pollution abatement refers to technology applied, or measures taken to reduce pollution and/or its impacts on the environment. The most commonly used technologies used in pollution abatement include filters, waste-water treatment facilities, composting, and the use of renewable energy sources.

Social

• Human rights
  • Ibtikar shall invest in portfolio companies that support and respect the protection of internationally recognised human rights and are not complicit in human rights abuses. This implies that portfolio companies shall:
    • avoid infringing on the human rights of individuals and
    • address adverse human rights impacts resulting from their own operations, supply chains or business relations.
• Land acquisition and involuntary resettlement
  • Ibtikar shall invest in portfolio companies that take all necessary measures to ensure that land acquisition does not lead to involuntary resettlement.
  • Involuntary resettlement can have adverse impacts on communities and persons that either live on the acquired land or depend on it for their livelihood.
  • Involuntary resettlement refers to:
    • physical displacement (relocation or loss of shelter)
    • economic displacement (loss of assets or access to assets that leads to loss of income sources or other means of livelihood)”
• Indigenous people
  • Ibtikar shall invest in portfolio companies that take all necessary measures to ensure that indigenous peoples’ rights are respected and that relations with indigenous communities are based on ongoing consultation and engagement.
• Cultural heritage
  • Ibtikar shall invest in portfolio companies that take all necessary measures to ensure that cultural heritage is protected and preserved.
  • In addition, portfolio companies shall promote the equitable sharing of benefits from the use of cultural heritage in business activities.
  • Cultural heritage refers mostly to tangible forms of cultural heritage, such as tangible property and sites having archaeological, paleontological, historical, cultural, artistic, and religious values, as well as unique natural environmental features that embody cultural values, such as sacred groves.
  • There are also intangible forms of culture, such as cultural knowledge, innovations and practices of communities embodying traditional lifestyles.
• Non-discrimination (employees and customers)
  • Ibtikar shall invest in portfolio companies that refrain from any form of discrimination concerning worker and consumer characteristics. Discrimination in employment and occupation implies treating people differently or less favourably because of characteristics that are not related to their merit or the inherent requirements of the job. Additionally, consumer discrimination occurs when consumers are treated less favourable due to certain characteristics.
  • Common discrimination grounds include: sex or gender, racial or ethnic origin, age, religion or belief, disability, sexual orientation and gender identity, language, political opinion, HIV/AIDS status.
• Non-discrimination (in Artificial Intelligence (AI))
  • Ibtikar investing in AI should be aware of the social and human rights risks that might arise in this context. portfolio companies whose products or services rely on AI applications including machine learning and deep learning are expected to be aware of actual and potential risks arising from algorithm biases and other inherently discriminatory models (the most common example being incomplete datasets resulting in the exclusion of women or ethnic minorities).
  • Health and safety (employees and communities)
  • Ibtikar shall invest in portfolio companies that provide a safe and healthy workplace environment and shall take effective steps to prevent potential health and safety incidents and occupational injury or illness associated with work.
  • portfolio companies are also expected to take into account the actual and potential health and safety effects of their operations on local communities.”
• Health and safety (customers)
  • Ibtikar and portfolio companies should broaden the scope of health and safety beyond employees and communities. They are expected to be aware of actual and potential health and safety impacts on consumers and end-users of their products.
  • Consumers need to be able to access non-hazardous products and services, offered to them through transparent and fair marketing practices.
  • Vulnerable and disadvantaged consumers should be protected.
• Working hours
  • Ibtikar shall invest in portfolio companies that are compliant with applicable law, collective bargaining agreements and industry standards on working hours, breaks and public holidays. The normal working week should not be excessive. Furthermore, any overtime should be voluntary and should not be requested on a regular basis. An acceptable standard working week should be a maximum of 48 hours, and a maximum of 8 hours per day, with a maximum of 12 hours of overtime per week. Deviations from these figures are possible, if it can be demonstrated that these deviations are in the best interest of the labourers involved.
• Remuneration (incl. living wage provisions)
  • Ibtikar shall invest in portfolio companies that are compliant with applicable law, collective bargaining agreements and industry standards on the right for personnel to receive a living wage.
  • Portfolio companies are expected to ensure that wages for a normal work week, not including overtime, always meet at least legal or industry minimum standards, and are in line with collective bargaining agreements.
  • Deductions from wages for disciplinary purposes are never acceptable.
• Freedom of association and right to collective bargaining 
  • Ibtikar shall invest in portfolio companies that respect and promote freedom of association and the effective recognition of the right to collective bargaining. Workers should be able to form and join a trade union of their choice without fear of intimidation or reprisal, in accordance with (inter)national law.
  • Portfolio companies are expected to have non-discriminatory policies and procedures regarding trade union membership and adequate union channels that allow workers’ participation in decisions on advancement, dismissal or transfer.
• Information privacy and data security
  • Ibtikar shall invest in portfolio companies that ensure that personal data is collected and used in a responsible manner, in line with (inter) national norms on privacy and security of data.
  • Portfolio companies are also expected to develop data security capacity and policies to limit digital and data-related threats, e.g. protection against hackers.
  • Personal data must be secured against unauthorised and unlawful processing and accidental loss, destruction or damage by means of appropriate technical and organisational measures. Measures must enable organisations to restore access and availability and where appropriate, organisations should look into measures such as pseudonymisation and encryption.

Governance

• Anti-corruption
  • Ibtikar and portfolio companies shall work against corruption in all its forms, including bribery, facilitation payments and extortion. DGGF defines corruption as the offering, requesting, giving or receiving of a financial or other advantage in order to induce or reward the improper performance of a role, duty or function.
• Responsible lending
  • Financial institutions (and Fintech platforms) that provide loans shall ensure that they do not lend more than a borrower can afford and that interest rates are reasonable.
• Complaints mechanism (access to remedy for all stakeholders)
  • Ibtikar shall implement a complaints mechanism at the fund level (i.e. complaints regarding the fund itself) as well as gathering complaints at portfolio company level (i.e. about the portfolio company).
• Politically exposed people 
  • Ibtikar shall address risks and take appropriate measures to prevent as well as detect the misuse of the financial system and non-financial businesses by PEPs.
  • PEPs are natural persons who are or have been entrusted with prominent political functions and immediate family members or persons known to be close associates of such persons.

Reporting/Complaints Mechanism

If you wish to report/issue a complaint in regards to the above ESG principles about Ibtikar or one of our portfolio companies, please email info@ibtikarfund.com and clearly label the email “ESG Report/Complaint.” We will do our best to confirm receipt of your email within five (5) working days and investigate any incidents within twenty (20) working days.