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Quilvest & Partners

PRI reporting framework 2019

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

Pre-investment (selection)

PE 05. Incorporating ESG issues when selecting investments

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

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

For all its new investments as lead investor, Quilvest:

- Screens new investment opportunities against its restrictions lists (Black and Grey Lists)

- Carries out an ESG initial assessment of new investment opportunities to identify potential ESG risks and opportunities.

- Where potential ESG risks are identified, Quilvest evaluates management’s commitment, capacity and tracks record in addressing ESG issues and whether specialist due diligence is required.

- Where our due diligence identifies actual material ESG risks, Quilvest may require the potential company to commit to implementing appropriate measures to mitigate those risks. Such measures may include meeting relevant International Standards (over a reasonable time frame) where these are more stringent than Applicable Laws. 

As a co-investor, Quilvest mainly focuses on the partner (lead investor) by assessing his ESG policies and reviewing the relevant reporting and achievement in terms of RI.

Investment Decision process

Pre-screening: Black and Grey lists

The investment due diligence incorporates a Black and a Grey lists to ensure Quilvest is not involved in any investment activities that do not meet the standard of our ESG guidelines, both to support socially responsible investment and limit reputational risk for Quilvest.

- The Black list reports activities in which Quilvest is not allowed to invest.

- The Grey list reports sensitive activities requiring Quilvest to conduct an enhanced ESG due diligence prior to any investment.

The Group Compliance function represented by its Group Chief Compliance Officer will monitor and update the Black and Grey lists. The Compliance function will also assess that the Investment Team has appropriately classified the target ESG risk in the initial screening performed by the Investment Professionals.

ESG Questionnaire and Scoring

For investment accepted (Grey list with satisfactory enhanced due diligence and investment on the White list), an ESG questionnaire will be filled in by the Investment team leading to an ESG score according to ESG profile of the target (Quilvest as Lead investor) or of the partner (Lead Investor / Fund Manager).

The Compliance function acts as an independent controller by giving an opinion on the basis of these questionnaires and integrates it to the Global Due Diligence Questionnaire communicated to the Investment Committee (IC).

 

 

 

 

05.3. Additional information. [Optional]


PE 06. Types of ESG information considered in investment selection

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

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

An ESG questionnaire is to be filled in by the Investment team, leading to an ESG score according to the ESG profile of the target (Quilvest as Lead investor) or of the partner (Lead Investor / Fund Manager). 

The Compliance function acts as an independent controller,  giving an opinion on the basis of these questionnaires and integrates it to the Global Due Diligence Questionnaire communicated to the Investment Committee (IC).

In 2018 the quantitative scoring of the portfolio companies is still in progress. During the year, Quilvest asked its French portfolio companies to be assessed by a third party (EcoVadis  https://www.ecovadis.com/)  and to measure the improvement in terms of ESG standards. We are considering to extend this assessment to all our direct investments as Lead Investor.


PE 07. Encouraging improvements in investees (Private)


PE 08. ESG issues impact in selection process (Private)


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