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CDC Group plc

PRI reporting framework 2019

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

Outputs and outcomes

SAM 08. Percentage of externally managed assets managed by PRI signatories

08.1. Describe how you ensure that best RI practice is applied to managing your assets

Measures

          In addition to CDC’s ESG training programme and regular monitoring, we encourage fund managers to update their ESG management systems on a regular basis. Indeed, a requirement to review a fund’s ESG management systems is typically included in legal agreements. When a GP is raising a new fund, the ESG management system for older funds is also often updated. CDC’s ESG Toolkit for Fund Managers and quarterly E&S newsletter also helps to keep fund managers up to date with the latest trends.
        

Measures

          It is very unusual for one of CDC’s fund managers to be replaced. In the rare occasions when this happens, ESG is a key consideration in the appointment of a new manager.
        

08.2. Additional information. [Optional]


SAM 09. Examples of ESG issues in selection, appointment and monitoring processes

09.1. Provide examples of how ESG issues have been addressed in the manager selection, appointment and/or monitoring process for your organisation during the reporting year.

Topic or issue
          Building capacity at an established GP
        
Conducted by
Asset class
Scope and process

During our E&S due diligence we identified that the fund manager had made good progress on meeting international E&S standards in their previous fund and had a robust E&S management system. To support the fund manager in achieving continuous improvement, we appointed an expert local E&S consultancy to identify opportunities for E&S value add in four key portfolio companies. CDC’s Environmental and Social Responsibility team attended the site visits with the consultant and the fund manager’s full-time ESG officer. The fund manager’s ESG officer also attended a four-day ESG workshop delivered by CDC in Johannesburg in 2018. As part of our commitment to the follow-on fund, we supported the GP in hiring a second dedicated ESG officer to help manage a growing portfolio.

Outcomes

The fund was able to identify opportunities for E&S value addition and potentially enhance their options for exit. Despite a growing portfolio in one of the most challenging markets in sub-Saharan Africa, the additional ESG capacity should help ensure that the fund manager remains a top performer on E&S.   

Topic or issue
          Support to new VC fund manager
        
Conducted by
Asset class
Scope and process

During E&S due diligence on one of the first African venture capital funds in CDC’s portfolio, the E&S team completed a site visit to the GP and an associated accelerator. We worked with the fund manager to develop an E&S management system that was tailored to the nuances of venture capital. A representative from the fund manager attended an ESG workshop delivered by CDC in Dubai in 2018. Upon close, the fund manager also committed to hiring a dedicated ESG resource.

Outcomes

The fund manager received significant support to understand and develop its approach to E&S issues. CDC was able to adapt its approach for a new asset class.

Topic or issue
          Closing compliance gaps and capacity building a new fund manager
        
Conducted by
Asset class
Scope and process

When considering a commitment to a new fund manager, CDC identified during a site visit that the GP had not completed E&S due diligence on a warehoused asset for the new fund. As a condition of CDC’s commitment, we required the GP to commission an external assessment of the warehoused asset by a respected E&S consultancy. We also supported the fund manager in updating their E&S management system, appointing a full-time E&S officer and provided ESG training to the team at workshops in Tunis and Dubai.

Outcomes

E&S risks and opportunities associated with the warehoused asset were identified early on. The fund manager’s capacity to manage E&S issues was significantly increased.

09.2. Additional information.


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