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Zouk Capital

PRI reporting framework 2019

You are in Direct - Infrastructure » Post-investment (monitoring and active ownership)

Post-investment (monitoring and active ownership)

Overview

INF 11. ESG issues in post-investment activities

11.1. Indicate whether your organisation and/or operators consider ESG issues in post-investment activities relating to your infrastructure assets.

11.2. Indicate how your organisation, and/or operators, considers ESG issues in the following post-investment activities relating to your infrastructure assets.

11.3. Describe how your organisation, and/or operators, considers ESG issues in post-investment activities related to your infrastructure investments. [Optional]

Zouk will primarily look to be the majority or sole investor in portfolio companies without excluding minority investments. Zouk looks to have control over the investee company. Zouk seeks control over various matters including the business plan, ESG issues, major contracts signed by the company and future capital increases among others.

Following investment, ESG remains a key focus throughout Zouk’s ownership. Zouk seek to monitor all the key impact criteria that were identified through due diligence and documentation. It is often the case that the ESG performance criteria are closely correlated with some of the key performance indicators (“KPIs”) for a business.

Zouk monitors portfolio companies closely and will typically have a board seat. Through its investment agreement, Zouk will ensure it has information or consent rights over all material contracts and agreements that the company enters into. Zouk’s documentation will also ensure the company is well governed, with independent representatives on the board where required to enhance risk mitigation. 

Zouk’s ESG Process –Monitoring

  • Monitoring exists to ensure companies deliver on their impact potential and continue to implement high ESG standards post investment
  • The investment team selects the most appropriate / meaningful impact metrics for tracking, based on the ESG due diligence and Investment Committee recommendations
  • Because sustainable impact is inherent to the value proposition of Zouk’s portfolio companies (and not merely a matter of compliance), these metrics tend to be identical or closely correlated to the business’s core operating KPIs
  • This strong alignment simplifies the monitoring exercise and lessens the administrative burden on both the investment team and management
  • Monitoring sustainability metrics through board meetings and discussions helps to position to companies well for exit from a sustainability angle

Infrastructure Monitoring and Operations

INF 12. Proportion of assets with ESG performance targets

12.1. Indicate the proportion of infrastructure assets for which your organisation and/or operators included ESG performance in investment monitoring during the reporting year.

 (in terms of number of infrastructure assets)

12.2. Indicate ESG issues for which your organisation, and/or operators, typically sets and monitors targets (KPIs or similar) and provide examples per issue.

List up to three example targets per issue

          We monitor the waste that is not put to landfill and the amount of "green" kWh generated
        
          CO2 emissions reduced
        
          Green electricity generated
        

List up to three example targets per issue

          Community Benefit contribution to the local area
        
          Allow university research visits, and school trips for educational purposes
        
          
        

List up to three example targets per issue

          Health and Safety is continually monitored and reported to the Board
        
          Where required we include an independent Chairman on the board to oversee proper board independence
        
          Establishment of audit and remuneration committees the Board of all our investee companies that make recommendations to the Board
        

12.3. Additional information. [Optional]

For our operational companies all investee company have an ESG policy in place and we monitor their performance according to the specific KPIs for each company. Plase note that for SPVs projects that we invest we do not ask for a formal ESG policy in place as there are no people to manage this within the SPVs. However, for our project investments we seek to manage this through our contracts.

 

 


INF 13. Proportion of portfolio companies with ESG/sustainability policy

13.1. Indicate whether you track the proportion of your infrastructure investees that have an ESG/sustainability-related policy (or similar guidelines).

13.2. Indicate the proportion of your infrastructure investees that have an ESG/sustainability-related policy (or similar guidelines).

(in terms of number of infrastructure investees)

13.3. Describe how your organisation, and/or your operators, contribute to the infrastructure investees’ management of ESG issues. [Optional]

Following investment, ESG remains a key focus throughout Zouk’s ownership. Zouk seek to monitor the performance of ESG throughout the investment horizon.

Zouk actively monitors progress on ESG matters and describes the management of ESG matters in its quarterly reports. The team also looks at the board packs and reviews ESG related information. Furthermore, the team ensures that investee companies are engaging with ESG issues identified during due diligence and clearly encourage the investment companies as to develop internal ESG policies to help monitor ESG considerations

We take advise from consultants employed for each of our investments. This includes lawyers to provide advise on governance, technical advisors to help advise on procurement (where relevant) and environmental advisors to advise on environmental aspects. The feedback from these consultants can lead us to perform additional checks. 

 


INF 14. Type and frequency of reports received from investees (Private)


Infrastructure Maintenance

INF 15. Proportion of maintenance projects where ESG issues were considered

15.1. Indicate the proportion of active infrastructure maintenance projects where ESG issues have been considered.

(in terms of number of active maintenance projects)

15.2. Describe your approach to ESG considerations for infrastructure maintenance projects. [Optional]

Our investments tend to be in Greenfield projects to be constructed rather than maintenance type projects.


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