Please see below an extract of the PPM for Primary V, the latest fund being raised by Primary.
Primary has always encouraged responsible business conduct, environmental stewardship and social responsibility throughout its own business and in its portfolio companies. Primary constantly strives to ensure that these businesses operate to the highest legal and ethical standards appropriate for the company.
Primary believes that a focus on good management of environmental, social and governance (“ESG”) considerations and ethical conduct is an integral part of good risk management and underpins sound long-term business performance. In turn, it believes that failure to manage the risks inherent in these issues has the potential to adversely affect its investments, carries reputational and regulatory risk and can affect the saleability and value of a portfolio asset on exit.
Therefore the Primary investment ethos is predicated on the view that effective management of ESG matters is not only “the right thing to do” but can also beneficially influence the value of the investments it makes.
Primary is a signatory to UNPRI and reports under the UNPRI reporting framework.
Primary is committed to preparing and periodically updating its bespoke Responsible Investment Policy (“RIP”) which is tailored to its investment focus, strategy and operating style and which is pertinent to the market in which it operates. It is important that the RIP is commercially-based, pragmatic and deliverable. Primary anticipates that the RIP will evolve and develop over time to reflect the unique changes in its business, its target markets and the changing demands of its stakeholders. Primary has to date taken the UN Principles for Responsible Investment (PRI) and the UN Global Compact as the appropriate framework for the RIP.
The RIP provides a statement of environmental, social and governance (ESG) principles and seeks to integrate these principles into Primary’s business strategy by establishing procedures to cover the investment process including due diligence, completion, and monitoring as well as guidance for the investment teams and the management teams it supports.
Pre-investment, Primary commits to integrate ESG and ethical issues into the due diligence process by developing an investment analysis framework including an identification of the ESG risks and opportunities and any related financial impacts. Primary also adopts, based on its values and principles and those of its investors, an ESG-related exclusion policy with regard to certain industries; currently it will not invest in the armament and tobacco industries. In addition, Primary seeks to ensure through legal documentation that portfolio companies disclose any non-compliance with ESG-related laws and regulations of which they are aware and adopt appropriate external standards or codes.
Post-investment Primary engages with its investee companies and establishes appropriate ESG policies and practices consistent with the RIP, initially through the 100 day plan which will establish action plans and targets to mitigate risks and realise opportunities. Primary continues to monitor ESG issues in portfolio companies to provide any updates and report on whether any new significant or material issues have arisen and to encourage the managers of investee businesses to achieve continuous improvements in those areas. In this regard, it assists portfolio companies in maintaining awareness of trends in consumer and investor preferences, regulation, technology and environmental thinking.