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Wise Equity SGR

PRI reporting framework 2019

You are in Direct – Private Equity » Outputs and outcomes

Outputs and outcomes

PE 14. ESG issues affected financial/ESG performance

14.1. Indicate whether your organisation measures how your approach to responsible investment in Private Equity investments has affected financial and/or ESG performance.

14.2. Describe how you are able to determine these outcomes.


PE 15. Examples of ESG issues that affected your PE investments

15.1. Provide examples of ESG issues that you identified in your potential and/or existing private equity investments during the reporting year.

Investment Stage
ESG issues

ESG issues

          Environmental footprint of the production process and polluting effluent water
        
Sector(s)
          Manufacturing
        
Impact (or potential impact) on the investment

Licence to operate and potential fine as liability 

Activities undertaken to influence the investment and its response

Relocation of the main production to a new clean tech plant and completion of a biological cleaner to treat effluent water for a subsidiary plant, both completed in 2018 

Investment Stage
ESG issues

ESG issues

          Polluting plant in an emerging market subsidiary
        
          Employees' Health and Safety and complaints by local community
        
Sector(s)
          Manufacturing
        
Impact (or potential impact) on investment

Limits to production expansion and not compliance with clients' supplier policy guidelines

Activities undertaken to influence the investment and its response

Production was transferred to a new plant with the certification of clean plant

15.2. Describe how you define and evaluate the materiality of ESG factors.

The materiality of ESG factors is defined through reference to our ESG Policy and in general through the respect of the United Nations Conventions and the United Nations Global Compact, the domestic legislations and best practices. The materiality of the ESG factors is sector specific according to the environmental footprint of the production process as well as the main social and governance challenges of each specific sector. An ESG Advisor supports us in defining and evaluating the materiality of ESG factors for each company invested in. 

In the first example, the construction of a clean tech plant was strategical in the investment case and the construction of the biological cleaner was a pre-requisite of the investment. 

Also in the second example, the target of improving the production standards of the subsidiaries in emerging markets was strategical in the investment case, but also a requirement to remain competitive in the market and satisfy the suppier policy of a major client. 


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