ESG factors are weighted equally to other PEG evaluation factors (e.g., team, strategy, track record etc.). Other RI considerations include women/minority/diversity ownership of management companies and tracking emerging managers.
In each external manager investment PEG will seek to obtain an advisory board seat. PEG professional constantly evaluates the status of the external manager, ESG considerations, reviews financial statements, and stays in close contact with the general partner of the external manager. This enables PEG investment professionals to identify any potential problems at an early stage so that timely corrective action can be taken and prepares PEG make future investment decisions. Advisory board meetings, annual meetings and additional conversations are documented and distributed to PEG. In addition to ESG issues being distributed to all of PEG in the meeting notes, ESG is verbally discussed during our weekly team meetings. Finally, PEG enhanced its back office financial reporting system to ‘flag’ for ESG policies and issues.