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CDC Group plc

PRI reporting framework 2019

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You are in Indirect – Manager Selection, Appointment and Monitoring » Appointment

Appointment

SAM 04. Appointment processes (listed equity/fixed income)

04.1. Indicate if in the majority of cases and where the structure of the product allows, your organisation does any of the following as part of the manager appointment and/or commitment process

04.2. Provide an example per asset class of your benchmarks, objectives, incentives/controls and reporting requirements that would typically be included in your managers’ appointment.

Asset class

Benchmark

          International Finance Corporation Performance Standards  
International Labour Organisation Core Conventions  
World Bank Environmental, Health and Safety Guidelines  
SMART Campaign’s Client Protection Principles 
CDC also recommends sector-specific ESG standards, such as Forestry Stewardship Council certification, Roundtable on Sustainable Palm Oil, etc.
        

ESG Objectives

          CDC requires fund managers to have an environmental and social management system (ESMS) appropriate to the scale and nature of risks associated with their activities. An ESG policy / strategy should be captured in an ESMS, typically as the first section.
        
          CDC's Code of Responsible Investing, including schedule 6 (the exclusion list), is included in legal agreements with fund managers.
        
          CDC works closely with fund managers to ensure that ESG is integrated into their investment process in a similar way to CDC’s own process.
        
          CDC encourages fund managers to have an active investment style, which involves regular engagement on ESG issues. To fulfil their legal obligations to CDC, a fund needs to do effective ESG due diligence on the pipeline / portfolio and put in place action plans to close gaps against international standards. Funds must also ensure that they have regular reporting and visiting rights with their portfolio.
        
          CDC includes its Code of Responsible Investing in all investments made.
        
          ESG is a consideration in all investments. CDC works with investees to improve practices over time, including Environment and Social Action Plans for example, in legal agreements.
        
          CDC's Code of Responsible Investing also stipulates a requirement for our fund managers to ensure all portfolio companies work towards compliance with IFC Performance Standards within a reasonable timeframe.
        

Incentives and controls

Reporting requirements

04.3. Indicate which of these actions your organisation might take if any of the requirements are not met

          CDC reserves the right to require fund managers to commission an independent review of the fund's ESG performance. In cases where the manager is found to be in major non-compliance with ESG requirements, CDC also may refuse further drawdowns.
        

04.4. Provide additional information relevant to your organisation's appointment processes of external managers. [OPTIONAL]

          
        

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