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8 Miles

PRI reporting framework 2020

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Post-investment (monitoring)

PE 09. Proportion of companies monitored on their ESG performance

09.1. Indicate whether your organisation incorporates ESG issues in investment monitoring of portfolio companies.

09.2. Indicate the proportion of portfolio companies where your organisation included ESG performance in investment monitoring during the reporting year.

 (in terms of total number of portfolio companies)

09.3. Indicate ESG issues for which your organisation typically sets and monitors targets (KPIs or similar) and provide examples per issue.

ESG issues

List up to three example targets of environmental issues

Example 1

          Permit and legal compliance - Waste Management,  Water Use, Waste Water
        

Example 2 (optional)

          Drinking Water Quality - Potable and Salinity
        

Example 3 (optional)

          ESMS - Completion or progress
        

List up to three example targets of social issues

Example 1

          HSE - Accident rates per operational hours
        

Example 2 (optional)

          Percentage of staff with permanent contracts
        

Example 3 (optional)

          Turnover and Attendance - Sick Days, New Staff,
        

List up to three example targets of governance issues

Example 1

          Incorporation and use of core ABC policy suites, Code of Conduct
        

Example 2 (optional)

          Grievances resolved within 10 days
        

Example 3 (optional)

          Percentage Execution of Board and Sub-Committee schedules
        

09.4. Additional information. [Optional]


PE 10. Proportion of portfolio companies with sustainability policy

10.1. Indicate if your organisation tracks the proportion of your portfolio companies that have an ESG/sustainability-related policy (or similar guidelines).

10.2. Indicate what percentage of your portfolio companies has an ESG/sustainability policy (or similar guidelines).

(in terms of total number of portfolio companies)

10.3. Additional information. [Optional]


PE 11. Actions taken by portfolio companies to incorporate ESG issues into operations

11.1. Indicate the types of actions taken by your portfolio companies to incorporate ESG issues into operations and what proportion of your portfolio companies have implemented these actions.

Types of actions taken by portfolio companies

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies
Implemented by percentage of portfolio companies

Implemented by percentage of portfolio companies

          Promotion of Specific ESG Sub-Committee's of the Board. 
Association with an international disclosure standard and use of third party assurance
        

(in terms of total number of portfolio companies)

11.2. Describe how your organisation contributes to the portfolio companies’ resourcing and management of ESG issues.

1. Entry to Portfolio Companies includes engagement prior to the investment to agree a suite of committments and targets. These committments are then supported through the use of Fund staff to project manage and provide technical advice on ESG aspects. 

2. We provide access to preferred ESG suppliers and third party assurers and where necesary facilitate appointment of advisors, new ESG staff and the provision of our own internal templates - ESMS, HR Management, HSE monitoring and planning, etc. 

3. Resourcing and management of ESG issues is a partnership between the fund and the Portfolio Company. Ideally we are in a position to support and guide rather than execute the necessary activities to improve environmental performance, obtain a social license to operate and deliver good corporate governance. 

4. We initiate governance training (for all Portfolio Company Boards) to ensure we have partners who understand the value of and what "good" governance looks like

5. We co-ordinate broader ESG training with our LPs (inc. DFIs) and provide training by the fund ESG Director. 

6. We participate in Board and ESG Committee's

7. We nominate industry, jurisdiction and sector Non-Executive Directors (NEDs) for all Portfolio Company Boards where we have more than one board seat. 


PE 12. Type and frequency of reports received from portfolio companies

12.1. Indicate the type and frequency of reports you request and/or receive from portfolio companies covering ESG issues.

Type of reporting 

Typical reporting frequency 

Typical reporting frequency 

          ESG Action Plan, Post Completion Action Plans or specific non-conformity actions - Weekly and Monthly Reporting
        

Typical reporting frequency 

12.2. Describe what level of reporting you require from portfolio companies, and indicate what percentage of your assets are covered by ESG reporting.[OPTIONAL]

All Portfolio Companies are required to report on ESG. Each Portfolio Company formally reports on ESG on a monthly basis, e.g. permit compliance, grievances, environmental exceedances, taxation paid, etc. Weekly engagement with Portfolio Companies occurs on detailed ESG Activity depending upon the duration of the investment and the ongoing matters at hand. 

All Portfolio Companies report on ESG action plans at a quarterly interval to formally confirm the status of their progress and intended activities for the upcoming quarter.

All Portfolio Companies prepare a response to our Annual ESG report to ensure we can provide a Fund level summary of our activities and progress in the past year (calendar Jan-Dec). 

 


PE 13. Disclosure of ESG issues in pre-exit

13.1. Indicate whether during the reporting year your organisation disclosed information on ESG issues to potential buyers prior to exit for private equity investments.

13.2. Apart from disclosure, describe how your organisation considers ESG issues at exit.

Exit planning requires considered and strategic understanding of the intended partners and acquirers of our equity stake. Upon entry to each Portfolio Company we have clear expectations of ESG performance, meeting at a minimum the IFC performance standards (2012). In this respect, the tailoring of ESG activities and priorities prior to exit depends upon the focus for trade buyers, IPO or another fund. ESG is considered a material aspect of value creation during ownership and as such is a material aspect upon exit valuation. 8 Miles has a defined responsible divestment policy that is undergoing review and is summarised below. 

Introduction

8 Miles considers responsible divestment as the final phase of responsible investment practices that have been applied as part of the fund raising, deployment and operational improvement. Responsible divestment is critical given the primary focus on exiting to a trade entity and as part of the development impact we achieve. Taking family run small to medium enterprises to a new scale or position requires improved risk management practices across operational, environmental, social and governance realms to improve business continuity and value.  8 Miles has committed to following a process similar to investment considerations during exit discussions to provide continuity and certainty over measures we believe are core attributes to successfully performing companies. The following is a a high level summary of the requirements undertake during divestment activities.

Stage 1: Business Integrity Questionairre on Counterparties

Prior to disclosing key documentation and entering into post term-sheet discussions a questionairre (Annex 1)is sent to the counter-party to provide material information on their activities and character. This questionaiire provides certainty over whom 8 Miles is dealing with and relevant information on environmental, social or governance matters as they could relate to the portfolio company we are seeking to fully or partially exit. Stage 1 will exclude entities that have been sanctioned under OFAC and will provide a cessation to negotiations where entities are currently engaged in legal disputes over environmental, social or governance considerations in the same or other jurisdictions. KYC will be undertaken into the brokers or advisors of the counterparty including potential conflict of interest declarations where advisors may have historically held confidential or sensitive information as part of former roles within the portfolio company being exited.

Stage 2: Due Diligence on ESG Performance

Counter-parties will provide their current suite of ESG policies, practicies and management systems, including any discloseable reporting committments such as SASB, GRI, UNPRI, etc (Annex 2). Wage profiles of equivalent businesses will be requested on the basis of understanding the implications for the future workforce of the target company. In principle agreement will be requested for the Responsible Business Principles (Annex 3).

Stage 3: Responsible Ownership Plan

Environmental, social and governance principles and committments will be highlighted for negotiation as part of the exit terms. These committments will include condition precendents and condition subsequents within the executed contracts and may include a responsible ownership plan or ESG action plan. The purpose of the committments is to provide continuity and embed the existing ESG principles within the future entity. Examples of committments include, but are not limited to the following:

Social - Committments on key standards such as living wage, contract conditions, retained roles and numbers that are reasonable to the future business plan, enshrining grievance and other material safeguarding processes.
Environment - Food health and hygiene, waste and water management, management system investment
Health & Safety -Substantiated commitments on the values the future owner/investor will place on this topic
Governance - Proposed approach to be adopted or committed to by the future shareholder inc. structuring board and sub-committees, taxation approaches, etc

13.3. Additional information.


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