You selected an `Other` option in table SAM 02.1 above, please specify
We also vet our managers for specific exclusions such as companies engaged in the production of cluster munitions or landmines or companies involved in the use of child or forced labor, and companies that have committed bribery or fraud.
As we have no visibility into the investments to be made, we ask about the managers track record and management of ESG topics, including incorporation but also remediation of ESG issues and identification of value creation opportunities.
You selected an `Other` option in table SAM 02.4 above, please specify
We also vet our managers through our ESG Due Diligence Questionnaire, which assesses the manager's approach to integrating ESG factors into their investment process. This questionnaire is informed by UNPRI's DDQ and also includes questions of particular importance to Partners Group. It asks managers to respond to related to:
- Compliance with sanctions standards, as well as human rights/labor standards, and environmental rules/regulations.
- Affiliations with key Responsible Investment organizations and frameworks (e.g., UNPRI, IFC, etc.)
- Responsible Investment policies, including any industries excluded from investment
- Approach to assessing materiality
- ESG due diligence processes
- Internal responsibilities for ESG integration and training for relevant teams
- Approach to monitoring and engaging with portfolio assets on ESG
- Processes for reporting on ESG to LPs.
The questionnaire also assesses managers' actions related to specific environmental, social, and governance topics, such as:
- Addressing climate change or reducing carbon emissions
- Ensuring health and safety standards among operators, contractors, and sub-contractors
- Managing relationships with stakeholders and communities
- Assessing and managing cybersecurity risks.
Describe how the ESG information reviewed and discussed affects the selection decision making process.[OPTIONAL]
ESG information enables us to better understand the practices of the manager. We normally integrate standard ESG language in our side letters, which enables us to request a minimum level of ESG criteria in our investments. If we have doubts about this, we engage until we gain comfort around the manager's practices. For example, in 2019, we evaluated an opportunity to invest in a secondary deal with exposure to the wood pellet industry. Our ESG and investment teams met with both the investment manager and the wood pellet company's management team to conduct further ESG diligence on the environmental impacts of wood pellets, as well as the company's health and safety record. Ultimately, we were not able to gain comfort with the environmental impacts of wood pellets and the regulatory environment surrounding this type of energy.