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PRI reporting framework 2017

You are in Direct – Private Equity » Pre-investment (selection)

Pre-investment (selection)

PE 07. Incorporating ESG issues when selecting investments

07.1. During due-diligence indicate if your organisation typically incorporates ESG issues when selecting private equity investments.

07.2. Describe your organisation's approach to incorporating ESG issues in private equity investment selection.

•Before an offer is made to acquire a business we consider whether there are any ESG risks. This forms part of due diligence and the overall risk assessment of the business.
•Assurance is sought that the company is fully compliant with relevant ESG laws and regulations. An ABC risk assessment is also carried out.
•If an ESG issue is raised during due diligence, we fully consider whether it is unacceptable or simply a risk to be addressed.
•Independent analysis and expert advice is sought from specialist third party consultants, for instance environmental consultants, as required.
•Where any ESG risks are identified, we develop a plan, agreed with management, to address and remedy the issues raised.
•Legal advice is sought. This can lead to decisions on whether further obligations or warranties are appropriate, for instance in the purchase documents or as on-going obligations.

There is also now an ABC covenant in all shareholder agreements.

07.3. Additional information. [Optional]

PE 08. Types of ESG information considered in investment selection

8.1. Indicate what type of ESG information your organisation typically considers during your private equity investment selection process.

8.2. Describe how this information is reported to, considered and documented by the Investment Committee or similar.

IC papers

PE 09. Encouraging improvements in investees (Private)

PE 10. ESG issues impact in selection process (Private)