Access' ESG approach in infrastructure investment selection
For fund selection, Access' ESG due diligence articulates around the following points:
Pre- investment stage / Step 1: For each investment under due diligence, Access undertakes an Environmental, Social and Governance assessment with a view to identifying potential issues.
A SRI engagement questionnaire is sent to each fund manager under due diligence to find out whether and how ESG criteria are taken into consideration when investing in private companies or assets. Informal discussions with the fund management team are carried out during onsite visits to further assess the degree of recognition of ESG issues through the importance of non-financial criteria when analysing a potential acquisition, the existence of responsible investment policies (sector exclusions, audits, etc.), and the willingness to provide ESG related disclosure during the life of the fund / during the holding period of the asset for co-investments. Reviews include on-site visits, interviews with senior management and operational staff and examination of records, policies, handbooks on specific items (environmental policies, governance, health and security for employees, etc.). Whenever necessary, Access would commission ESG-related specialists to carry out independent reviews of ESG.
Further, in the legal documentation, Access seeks a written engagement from the underlying fund manager to use reasonable best efforts to incorporate ESG criteria in the management of its portfolio companies and to report annually on the ESG performance and progress in a portfolio company and to provide Access with an update if significant ESG issue arises in a portfolio asset.
For co-investment selection, Access' ESG due diligence articulates around the following points:
During the due diligence process, an analysis is carried out by Access to identify the ESG issues which are likely to have a material impact on the financial and operational performance of the target company. This analysis is based on Access’ in-house internal ESG materiality assessment framework.The investment team carries out the ESG due diligence by :
- relying on the environmental, social and governance diligences carried out by the sponsor / partner manager: Access completes and reinforces these diligences when they are considered insufficient.
- A dialogue can then be initiated with the majority investor / co-investor partner and / or the management team of the company.
- assessing the level of ESG integration in the lead investor’s due diligence / documentation. Access also identifies, through a specific Access’ ESG checklist and discussions with the management team, the potential ESG issues borne by the target investment. Through the ESG’ assessment, the Investment team highlights the main ESG risks and opportunities, notably by considering climate change and sustainable development related issues. In the event of Access being an existing investor in a fund managed by the lead-sponsor (most of the cases), Access would have already analysed how ESG criteria are taken into consideration when the fund manager is investing in private companies.
Access Investment's teams are involved upstream in the due diligence phase of the majority investor, which enables them to optimize the sharing of information, and to point out issues or points requiring further study from the beginning. of the process.
The identification of risks requiring enhanced ESG vigilance during this phase revolve around a certain number of control points systematically reviewed.
A summary of the ESG analysis pre-investment stage is inserted in the due diligence documentation submitted to the Access Investment Committee.