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.