This report shows public data only. Is this your organisation? If so, login here to view your full report.

CDC Group plc

PRI reporting framework 2019

Export Public Responses
Pdf-img

You are in Strategy and Governance » Objectives and strategies

Objectives and strategies

SG 05. RI goals and objectives

05.1. Indicate if and how frequently your organisation sets and reviews objectives for its responsible investment activities.

05.2. Additional information. [Optional]

CDC has internal objectives to invest responsibly in relation to our direct investees (internally managed equity and debt) and our fund managers and their underlying portfolio. During the investment process, the ESG risks and opportunities associated with each potential deal are assessed at each stage of the cycle. The ESG performance of our portfolio is monitored on an ongoing basis by our Environmental and Social Responsibility (E&S) and Business Integrity (BI) teams, and on a quarterly basis at operational and board-level meetings, and to our shareholder. CDC also keeps its own policies and standard operating procedures under review to remain at the forefront of good industry practice and in line with our peers. Each year CDC sets team objectives to produce good practice guidance on topical ESG-related issues. For example, CDC co-authored guidance on modern slavery and produced practical tools on waste management and the PE industry’s approach to integrating the SDGs into their investment strategies. CDC also provided additional and updated guidance via its ESG Toolkit on resource efficiency and the circular economy, cumulative impacts, stakeholder engagement and several industry sector guides, among other areas. CDC continues to prioritise training, site visits and monitoring trips to its investments based on ESG risk and the quality of E&S management systems, and the commitments we make to deliver E&S 'additionality' beyond compliance.

During 2018, CDC made a corporate commitment to increase its focus on four strategic areas identified in the Strategic Framework 2017-2021, three of which are E&S issues: climate, job quality and gender. The aim is to leverage our knowledge outside the bounds of direct transaction support to increase CDC's role in market shaping and development to maximise our impact.


SG 06. Main goals/objectives this year

06.1. List the main responsible investment objectives that your organisation set for the reporting year.

Responsible investment processes

Key performance indicator

          In 2018, CDC supported over 200 individuals from funds and their portfolio companies to build ESG capacity through workshops across our geographies.
        

Progress achieved

CDC invites all of its fund managers and investees to regular E&S workshops that provide training on incorporating ESG into the investment cycle, as well as modules on specific ESG issues. CDC may also provide training on an ad-hoc basis to investees and partner institutions.

In 2018, three multi-day trainings were conducted in Nairobi, Johannesburg, and Dubai to GPs of funds to improve their capacity to incorporate ESG into investment decisionmaking and monitoring. This two-year programme has been the largest ESG capacity-building programme for GPs anywhere in emerging markets. The programme has seen six four-day events, featuring more than 60 individual workshops. There have been 500 attendees, more than 60 African and South Asian fund managers represented and more than 70 portfolio companies have participated. Norfund, who co-funded the programme, also used the events as an opportunity to train their own staff and direct portfolio.

Key performance indicator

          Workshops and training sessions given
        

Progress achieved

CDC invites all of its investees to regular ESG workshops to increase their engagement and understanding of various ESG practices. Over 2018, CDC hosted over 5 workshops for fund managers and investee companies across both the debt and equity portfolio.

For example, CDC's E&S and Development Impact (DI) teams held a Healthcare Workshop in India bringing together our direct investees and funds active in the healthcare sector to discuss challenges and share best practice in all matters related to ESG and DI.

CDC's Business Integrity team conducted a Financial Crime Prevention and Governance training to financial institutions in Pakistan; while the E&S team conducted training on infrastructure-specific E&S risks to companies there.

CDC also invites its investees to trainings and workshops that it believes will benefit them. For example, we encouraged healthcare investees to attend a Gender & Health Workshop run by IFU in India.

Key performance indicator

          Increased variety and frequency of ESG activity communication
        

Progress achieved

An E&S newsletter for internal and external stakeholders is sent quarterly. Articles on E&S are also included on an ad hoc basis on CDC's intranet and weekly internal newsletter. Over 2018, a series of videos and podcasts highlighting ESG across CDC's investments were also released, culminating in a video summarising the year's key ESG success stories, which was screened in the office. We have also organised company-wide "air and share" sessions on specific ESG topics such as gender and waste management.

Key performance indicator

          Engagement with investees on ESG
        

Progress achieved

CDC closely engages with its investees on the management of ESG issues. The intensity of monitoring is based on the risk associated with each investee. ESG action plans are typically included in the legals with investees to ensure effective management systems are put in place. With higher-risk companies on our direct equity book, or those that require closer oversight, we will often institute an ESG Committee that meets on a quarterly basis to raise ESG issues and monitor ESG KPIs.

Key performance indicator

          Integration of ESG into each step of the investment process
        

Progress achieved

ESG is integrated into each step of the investment process. Members of the responsible investment teams contribute to all investment committee papers and provide verbal input to investment committees, as well as carrying out due diligence (often including site visits) and help negotiate legal agreements. 

          Improved ESG monitoring of portfolio companies
        

Key performance indicator

          Annual monitoring reports received from companies
        

Progress achieved

CDC's E&S, DI and BI teams receive annual monitoring reports (AMRs) from portfolio companies every year to facilitate year on year monitoring of key issues and indicators.

Financial performance of investments

Key performance indicator

          Consider ESG factors in value addition
        

Progress achieved

CDC considers and regularly implements ESG improvements with the goal of creating operational efficiencies, improving exits, and adding value (and encourages its fund managers to do the same). This was achieved across the portfolio in areas including health and safety, anti-corruption activities, renewable energy, and skills development.

ESG characteristics of investments

Key performance indicator

          Factor ESG risks and opportunities into investment decisions
        

Progress achieved

CDC factors ESG risks and opportunities into all investment decisions, and has rejected deals due to ESG factors. 

Key performance indicator

          Improved ESG performance of portfolio
        

Progress achieved

CDC closely tracks the ESG performance of its portfolio and reports internally on the inherent risk associated with each investment and management capacity within each investee.

Other description (1)

          Improvement of portfolio resource efficiency
        

Key performance indicator

          Energy savings (associate carbon savings) and water efficiency
        

Progress achieved

When possible, CDC identifies opportunities for resource efficiency within potential investees and includes these in the E&S Action Plan. CDC has a financing facility to support resource efficiency measures - focusing on energy, water and waste - in portfolio companies and also provides expert support and, when applicable, grant funding to achieve resource efficiency goals. Progress of each company and fund is monitored through AMRs and ongoing engagement.

Other activities

Key performance indicator

          Actively engaging in responsible investment initiatives.
        

Progress achieved

As highlighted above, CDC is a member of, and participates in, a number of responsible investment initiatives, including engagement with PRI.

Key performance indicator

          Promoting PRI with CDC’s portfolio and pipeline.
        

Progress achieved

CDC's ESR team often discusses participation in responsible investment initiatives with its portfolio and pipeline. A number of the fund managers in CDC's portfolio have joined PRI.

Key performance indicator

          Production of case studies demonstrating good practice
        

Progress achieved

CDC collates case studies on good practice and makes them available internally and externally. Examples of good practice are regularly elicited from the team for inclusion in good practice notes and workshops.

Key performance indicator

          Dissemination of case studies to CDC’s portfolio
        

Progress achieved

CDC disseminates good practice case studies on its ESG Toolkit for Fund Managers. CDC also highlights case studies via its quarterly E&S newsletter and through training workshops. There are further case study videos, blogs and articles available on the CDC website.

other description (1)

          Contributing to research on ESG topics
        

Key performance indicator

          Resources committed to ESG research and publications
        

Progress achieved

CDC regularly contributes financial and human resources to research on ESG topics that are under-explored. In 2018, this included engagements with other DFIs and financial associations to produce research and practical products for investors and companies to improve their integration of ESG issues such as modern slavery. CDC is co-chair of EMPEA’s SDG Working Group and was closely involved in the development and publication of EMPEA’s report on “Private Equity’s Role in Delivering the SDGs Current Approaches and Good Practice”

06.2. Additional information.


Top