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Partners Group AG

PRI reporting framework 2020

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Pre-investment (selection)

PE 05. Incorporating ESG issues when selecting investments

05.1. During due-diligence indicate if your organisation typically incorporates ESG issues when selecting private equity investments.

05.2. Describe your organisation`s approach to incorporating ESG issues in private equity investment selection.

We use long-term environmental and social trends (alongside other factors) to identify private equity investment opportunities. Potential investments are initially screened by the investment team and the ESG team against our internally developed ESG sensitivity map to determine whether the deal includes ESG topics for discussion, escalation, or exclusion. During the due diligence phase Partners Group employs our proprietary ESG due diligence assessment tool, informed by SASB's materiality framework, to thoroughly assess the target for the most material ESG factors.

Moreover, we use specialist ESG consulting firms to conduct independent ESG DD for each lead investment that has reached the third stage in our four-stage investment decision process. The selected consulting firm will assist us on the following four tasks: a) shedding light on red flags risks; b) in case of investment selection, they perform an in-depth DD on potential deal-breakers like anti-bribery and corruption (ABAC) as well as poor business practices; c) assess transition and physical risks related to climate change; d) create a shortlist of the top 5-10 opportunities for ESG engagement during ownership. Based on findings of our internal ESG assessment and/or external ESG due diligence, we decline investments with material ESG issues that pose significant reputational risks, or investment risks that cannot be mitigated during our ownership period.

05.3. Additional information. [Optional]


PE 06. Types of ESG information considered in investment selection

06.1. Indicate what type of ESG information your organisation typically considers during your private equity investment selection process.

06.2. Describe how this information is reported to, considered and documented by the Investment Committee or similar.

Investment teams are required to complete our proprietary ESG due diligence assessment for any investment that passes our initial screening gate and include it in all subsequent investment committee submissions. Our ESG team assists the deal teams in this process as a coordinator and coach to ensure ESG topics are integrated rather than "insourced" entirely to an ESG-specific team. The assessment is further sharpened/refined as it proceeds towards the investment decision. All lead investments that reach the third stage of the investment process contract an external ESG DD provider to provide greater depth to potential ESG risks, as well as opportunities for ESG engagement and value creation during ownership, which are they identify by benchmarking company performance against industry and country peers. By the final investment decision, we aim to have at least three short-listed area of ESG engagement to build into the overall value creation plan during ownership. The ESG team reviews 100% of internal and external due diligence assessments. Starting in 2019, the team also provides a quarterly report to the Chair of our Global Investment Committee on the quality of ESG due diligence across all deals to promote accountability. 

 


PE 07. Encouraging improvements in investees (Private)


PE 08. ESG issues impact in selection process (Private)


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