Describe your organisation's approach to incorporating ESG issues in infrastructure investment selection.
With respect to large direct investments, we incorporate the following into our due diligence procedures pre-investment:
- Review the particular investment against an ESG red flag checklist for specific concerns and work to 1) fully assess them through due diligence (sometimes with the help of external consultants); 2) assess the risk they pose over both a short and long term basis; 3) work to address the concerns through changes to the business, governance, price adjustments, etc.
- Commission detailed environmental reviews prior to investing using a respected 3rd party advisor
- Negotiate detailed shareholder arrangements that define 1) the responsibilities of the new company board; and 2) shareholder rights
Review employment policies and practices, stakeholder engagement, and assess level of interaction with the communities in which they operate;
Conduct legal review of historic and current litigation;
Review relationship with regulatory bodies including negative rulings or fines levied;
Incorporate the results of the analysis above into our pro-forma plan including addressing areas identified as deficient.