Our investments have always been subject to a pre-investment due diligence review which incorporates ESG issues, but this activity has been strengthened during 2019, as described below. Where ESG issues or potential issues are identified, and considered likely to be material in the context of our proposed investment, we undertake comprehensive due diligence to understand both the risk and, wherever possible, how to manage or mitigate it during the lifetime of our investment.
We believe that the work we have undertaken this year has helped mature our processes in line with the progressive Responsible Investment agenda and to a standard which will give us a future-proof, comprehensive and robust approach. This predominantly takes the form of a structured asset management deal tool, designed to support implementation of our asset class specific Public Equity Sustainable Investing Policy, and our company-wide thematic Sustainable Investment framework.
The tool has been developed in close cooperation with our external ESG advisers, and incorporates as series of prompts and checks as well as a set of focused questions designed to proactively identify areas of potential concern. It contains links to content-rich guidance which is based on both global and local ESG risks, trends, guidance and considerations. This will be updated on a periodic basis as and when required.
Our team is encouraged to undertake asset-specific research as needed on potentially material ESG risks (and opportunities where relevant) as part of the intelligence gathering aspect of the tool. This could include industry papers, guidance, guidelines, etc and/or discussions with management as needed. Where necessary, we would rely on the support and guidance of external experts to aid our research.
We keep a continuous watching brief on a number of key information sources to scan for new and emerging ESG issues:
- The mainstream media including consumer trends, public interest and campaigns
- The industry press, regulation, guidance and guidelines specifically associated with sustainable investing
- UN PRI Industry events and webinars
- Periodic topic-specific updates from our external ESG advisors, backed up by refresher training.
Our team has been trained in the use of our internal tool by external ESG experts.
We are also in the process of undertaking a retrospective documented review of our existing portfolio to identify any material ESG risks which pre-date the adoption of our Sustainable Investing Policy and principles.