ESG factors are initially defined by the due diligence undertaken on the target company and then executed through the ESG Action Plan. The Responsible Investment Code and SEMS provide the framework for what is material and how this is then incorporated into decision making.
The ESG Director has ultimate responsibility for subsequent definitions of material ESG factors and works with the portfolio team, partners and ESG Committee to improve performance and enhance risk management activities from within each company.
Evaluation of materiality then becomes a function of the monitoring process and the themes that are identified. When new operational activities are identified, i.e. land acquisition or new labour contracts, these are considered at a portfolio team level and the ESG Director is involved with determining if there are meaningful changes in exposure or risk to the business and whether further assessment is required.