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British Columbia Investment Management Corporation

PRI reporting framework 2019

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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.

As ESG KPIs are deal specific, it is difficult to adopt a standardized tool to measure ESG impact. Further, BCI typically invests in portfolio companies with strong ESG practices.


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

          The Board of a direct co-investment is reviewing the plastic thickness of its products.
        
Sector(s)
          Industrial
        
Impact (or potential impact) on the investment

The thickness in plastic manufacturing impacts the cost of the product and has environmental considerations.

Activities undertaken to influence the investment and its response

The Environmental considerations, risks and costs were evaluated as part of the long-term profitability.  

Investment Stage
ESG issues

ESG issues

          Investment opportunity with no BCI Board representation.
        
Sector(s)
          TMT
        
Impact (or potential impact) on investment

A significant investment opportunity lacked BCI board representation. Without board representation BCI cannot influence the direction or strategic decisions (including ESG) of the Company.

Activities undertaken to influence the investment and its response

The opportunity was not pursued.

Investment Stage
ESG issues

ESG issues

          Transparency of Board and management information required improvement
        
Sector(s)
          Manufacturing
        
Impact (or potential impact) on investment

The size and complexity of the business requires smarter Board information to improve informed decision making, risk identification and priorities for management attention.

Activities undertaken to influence the investment and its response

Through our board presence, we have worked with our partners and the co-investment executive team to improve reporting and disclosure

Investment Stage
ESG issues

ESG issues

          Macro social trends in the health & fitness sector is generating investment opportunities
        
Sector(s)
          Consumer discretionary
        
Impact (or potential impact) on investment

The change in Consumer dynamics related to health and fitness is leading to potential revenue opportunities and specific co-investments.

Activities undertaken to influence the investment and its response

As part of the investment due diligence, the social factor of 'healthy & fitness' and its potential impact on valuation was investigated.

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

On direct company investments ESG factors are documented and discussed during pre-investment diligence, monitored post acquisition at the Company Board level and any material factors are escalated internally within BCI. In addition, BCI incorporates an ESG risk update within its Co-Investment Annual Investment Review process.


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