The assessment and mitigation of environmental, social and governance (ESG) risks are an integral and necessary consideration of our due diligence processes for each investment and go beyond simply complying with the applicable environmental laws and other permitting procedures. Our Investment Committee must approve all potential investments against our ESG-parameters and any breach prevents us from making an investment.
1. Environmental. These considerations are a key factor for renewable energy projects. A thorough environmental impact assessment (EIA) is typically required in order to procure the permits/licences to build and operate wind, solar and other renewable projects in all European jurisdictions. We have undertaken to comply with the EU EIA Directive and apply it to investments in the EU and as applicable outside the EU as well. We are particularly sensitive to potential impacts on the habitat, air and water. Assessments generally cover the following areas;
- Flora and fauna
- Birds and bats
- Soil and Water
2.Social. We take due consideration of social issues involved in our investment decisions and management of portfolio companies. Local communities are closely involved in the permitting phase of the projects we invest in and under EU-standard permitting procedures local citizens have a right to participate in the procedure. Most of the projects in which we invest do not have employees. We tend to outsource operations, which are typically contracted competitively under international, project-finance standard terms. When we outsource operations or engage contractors, we ensure local employees are engaged when possible and as appropriate, for instance in operations and maintenance and security of the projects we invest in. We always insist that all applicable employment laws and health and safety regulations are duly observed. Moreover, in corporate investments, where the investee company has employees, we closely monitor that such investee company adheres to all applicable employment laws and health and safety regulations and all employee rights are respected.
3. Governance. We seek to address and resolve any material governance issues prior to investing. Our preferred approach is to acquire 100% of the ownership interest in our targets so that we are able to implement straight forward oversight and governance systems. We will abandon discussions over a prospective transaction if we have any doubts over the integrity or practices of a counterparty and we may initiate a forensic review as a safeguard in this regard.