ESG is incorporated in all parts of our investment process. These include initial screening, due diligence, investment decision, acquisition structuring, investment agreements and documentation, regular monitoring, and exit.
- During the initial screening phase, all shortlisted companies are examined for controversial products and practices. Controversial products include those related to nuclear, defense, tobacco, gambling, and distilled alcohol. VNH does not invest in such businesses. Furthermore, VNH refuses to invest in companies that do not commit to comply with relevant legislation. The outcome is a Pipeline with a shorter list of companies slated for further research and due diligence.
- During a due diligence phase, ESG risks and opportunities are carefully examined based on sound national and international standards, mainly those of the IFC/ World Bank; and
- During the investment phase, ESG risk/opportunity analysis is continuously conducted through regular monitoring to review and assess the true ESG status of the portfolio. Company visits and management interviews are integral to the team's engagement activities and an important part of the ESG due diligence and investment phase. ESG exit shall be conducted in case of controversial businesses and major violations.