Basic needs are defined as all those needs that are fundamental to a person's life, that enable the individual to carry on a healthy existence, and that are the basis of human self-realization.

There are still billions of people who do not have access to basic services, grouped in this category: being able to access adequate food resources and drinking water, basic health facilities, being able to send their children to school, having housing and living safely while supporting their families with a working occupation.

In Europe, we have long implemented social policies for the purpose of achieving these goals. Yet 2.6 million households (10 percent of Italian households) live below the poverty line and are at risk of marginalization. Yet we observe that this issue is significantly less addressed by mutual funds than other social issues.

To positively impact basic needs, the funds can act both in Europe and in developing countries where demographic trends and economic growth lead a portion of the poor population to have opportunities to move out of their socially distressed condition.

Some investment themes are related to the activities of producing and distributing quality food at affordable prices, and creating social housing, as well as services dedicated to people's safety.

Funds can also invest in different types of projects: that focus on concrete and uniform distribution of education, equitable and inclusive in order to facilitate access to the labor market, including in mixed private/public forms;

Very often in Emerging Countries, there is a strong focus on housing and sanitation issues , both through infrastructure (water, electricity) and by facilitating local trade sometimes using microcredit.

Sustainable investors use different management strategies:
The Exclusionary Approach: this is specifically reference to labor exploitation, and non-compliance with children's rights (ILO and Global Compact labor regulations).
The Thematic Approach: Many of the funds that are concerned with basic needs funds invest exclusively in issues related to food, water, security, social housing , and microcredit.

There are relatively few funds that specifically address the area of basic needs, and we are actively seeking positive examples for inclusion.

Currently, we have identified 55 criteria to assess the importance of the basic needs theme in mutual funds. We note, at the level of ESG Impact a strong prevalence of thematic funds that invest in the topic, as the social share devoted to this topic is often reduced in generalist funds. In addition, funds that are interested in basic needs are often those that carry out close Screening on human and labor rights violations.

Adverse indicators regarding the issue of basic needs are difficult to conceive of, because many times these are actions of public authorities.

Thus, there are no mandatory indicators for sustainable mutual funds. However, criteria related to children's rights and forced labor have been brought to the attention of funds, which are the only indicators related to this issue:

• Operations and suppliers at significant risk of using child labor:
  The Share of Investments in Society investees exposed to operations and suppliers that have a significant risk of incidents of minors being exposed to hazardous labor in terms of geographic area or type of operation.

• Operations and suppliers at significant risk of using forced or compulsory labor:
  The Share of Investments in Society investees exposed to operations and suppliers at significant risk of incidents of forced or compulsory labor.