Triton’s RI Policy requires all potential investments to be reviewed for ESG risks and opportunities on a "company by company" basis.
ESG due diligence commences with an initial evaluation undertaken by the Investment Team and the ESG Team on the ESG risks and opportunities within the industry and geographic area. This includes conducting online screening using RepRisk and Exiger which identify and quantify a target’s exposure to ESG issues, business conduct and compliance risks. This assessment is also cross-checked using external benchmarks such as the SASB Materiality Map and EBRD Environmental and Social Risk Categorisation List. Publicly available information on the target company and any potential partners is also reviewed at this stage, where appropriate.
Following this initial stage, the ESG Team will take a proportionate approach to the next stage of due diligence depending on the nature of risks identified. In certain “low concern” situations, further desk-based research (e.g. media searches or consultation with relevant civil society and regulatory organisations) may be performed in-house or commissioned from a specialist ESG service provider.
However, in the majority of situations, independent due diligence is commissioned on the target’s management of material ESG issues, the scope of which could include, but is not limited to the following factors:
- Environment - Energy efficiency, climate change, waste reduction, recycling, environmental impact, site pollution and sustainability.
- Society - Community investment, stakeholder dialogue, inclusion, public perception, social mobility and human rights compliance.
- Corporate Governance - Code of ethics, processes and procedures, reporting, transparency, anti-corruption policy and practice, stakeholder interests, accountability, data protection and documentation retention.
- Human Capital - Staff turnover, health and safety, training and development, absence rate, performance management, equality and diversity and recruitment and retention.
- Customer Relations - Customer satisfaction, retention and loyalty, reputation, trust, quality of service and product and competitive positioning.
Furthermore, the ESG Team will also conduct site visits during the due diligence process where applicable.
This outcomes of ESG due diligence, including key ESG risks and opportunities, are raised by the Investment Team, as appropriate, after discussion with the ESG Team, at the level of the Investment Advisory Committee (“IAC”) and the board of the Manager.
In 2015, Triton implemented a “Transaction Checklist” for all potential acquisitions. This covers commercial, legal, compliance, communication, ESG and other areas. Prior to signing any acquisition, sign-off by the Head of ESG and Legal Counsel Portfolio Governance on the Transaction Checklist is required to confirm that appropriate ESG due diligence has been conducted.