Our due diligence process involves systematically assessing companies on ESG risks and opportunities which may have an impact on potential investments. Analyses are carried out using internal resources and, where necessary, external consultants.
To that purpose, the PAI investment teams collaborate with our ESG team to define the indicators which have the highest potential impact on business. The indicators selected for each company depend on their materiality. Materiality level is determined thanks to the investment and ESG teams' understanding of the business, with the help of the materiality map developed by the Sustainability Accounting Standard Board (SASB).
Using the list of ESG key indicators, investment teams identify a set of priority items to be addressed in the due diligence analysis. The related questions are embedded in the general due diligence process and the interactions with management.
At the end of the due diligence process, an ESG memo is systematically presented to the Investment Committee prior to the final investment decision. This memo includes a comprehensive list of all relevant risks and opportunities linked to the potential acquisition. The outcome of the ESG analysis can influence the final investment decision positively or negatively.
Climate risks are integrated into this overall analysis by integrating physical, transition and financial risks.