All potential new investments undergo formal ESG due diligence based on Bowmark’s ESG Due Diligence Framework. A summary of key ESG issues and post-investment actions is provided to the Investment Committee, along with the full ESG report which form part of the suite of due diligence documentation. The Investment Committee will then discuss and consider the ESG matters as part of its overall review of the investment.
While most issues arising are typically addressable as part of the post-investment action plan, there are some which Bowmark would consider materially adverse in formulating its investment decision, such as:
accidents or health and safety incidents leading to serious injury or loss of life;
accidents or incidents having a negative environmental impact;
proceedings relating to any serious offence against an employee or officer, including regulatory breaches, dishonesty, fraud, corruption or bribery;
any actual or alleged involvement in criminal activities; and
strongly negative media coverage.
In these and other such circumstances, the Investment Committee would likely consider that the ESG-related issues were not capable of being resolved through post-investment actions and hence would elect not to proceed with the transaction.