The Responsible Investment, Operational Due Diligence and Legal teams work closely with the infrastructure investment managers in the Private Markets Group to undertake enhanced due diligence as described previously. External research covering some, if not all ESG considerations, will generally be commissioned by the vendor, the owners of the asset or their advisors, or by USS itself.  The scheme will specifically employ its own external advisors / consultants to assess ESG issues and the legal and technical implications for the deal, where ESG is material for the asset under investigation. This is seen as an important part of the due diligence process:  specialist environmental and related consultants provide detailed assessments of E/S risks to enable the USS team to make better informed decisions.

With these processes we are trying to identify what ESG risks exist, how they are being mitigated, and rank whether residual risk remains high, medium or low.  These data are then fed into the USS infrastructure investment decision making process. 

The sources and availability of data, and access to the management team, vary significantly deal by deal. However, all of the above could be within the scope of information sought - either through consultants, or through USS's desk based research, or through site visits/ management discussions with the asset.

In many cases, particularly those which are larger or more complex or where we are taking a direct ownership stake, specialist environmental due diligence will be undertaken using external consultants. Legal due diligence is typically commissioned to review employment matters, the regulatory framework and environmental matters for example.

The enhanced due diligence (EDD) process will always include online research into the asset, the potential impacts of the asset (or similar assets) to identify any risks which may be present.

The EDD process feeds into the investment decision making process, with risks and mitigating factors highlighted in a Private Markets Investment Committee (PMIC) investment memo, upon which the final investment decision is taken.