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British Columbia Investment Management Corporation

PRI reporting framework 2019

Export Public Responses

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Pre-investment (selection)

PE 05. Incorporating ESG issues when selecting investments

05.1. During due-diligence indicate if your organisation typically incorporates ESG issues when selecting private equity investments.

05.2. Describe your organisation's approach to incorporating ESG issues in private equity investment selection.

Investments in private equity are often made with a long-term outlook. As ESG issues can develop over time and affect companies, sectors and regions, assessing these factors is integral to our due diligence process for examining opportunities. In addition to financial performance, we assess the governance model of the prospective acquisition and commission detailed reports on legal, environmental, regulatory, and social factors. Potential risks are incorporated into our investment strategy. Depending on our ownership position, we may also play a more active role in addressing these risks with the companies.

05.3. Additional information. [Optional]

PE 06. Types of ESG information considered in investment selection

06.1. Indicate what type of ESG information your organisation typically considers during your private equity investment selection process.

06.2. Describe how this information is reported to, considered and documented by the Investment Committee or similar.

All our investment memos include a section on ESG considerations. The content will be situation specific, depending on the nature of items uncovered during the due diligence process

PE 07. Encouraging improvements in investees

07.1. During deal structuring,what is the process for integrating ESG-related considerations into the deal documentation and/or the post-investment action plan?.

If yes

07.2. Describe the nature of these improvements and provide examples (if any) from the reporting year

This is situation specific and will address items uncovered during the due diligence phase and that will be addressed to meet industry best practices.

Through our board presence, BCI has worked with our partners and the executive team to establish strategic direction and improve reporting. During a board meeting during the year, ESG matters are discussed. As an example during dilligences it was identified staff turnover for one of the co-investments was high. Post ownership, the Board and BCI implemenet a series of initiatives to improve staff moral and turnover, these include company transportation, on-site shops, manager feedback and improved team engagement.

07.3. Additional information. [OPTIONAL]

PE 08. ESG issues impact in selection process

08.1. Indicate how ESG issues impacted your private equity investment selection processes during the reporting year.

08.2. Indicate how ESG issues impacted your private equity investment deals during the reporting year.

08.3. Additional information. [OPTIONAL]