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ISATIS Capital

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.

The role of the taking into account of ESG factors is important from the very beginning of the investment decision- process. Indeed, before making a long-term commitment with a company, it is important that we are comfortable with ESG risks. This begins with the choice of sectors with relatively low environmental externalities (NICTs (New Information and Communication Technologies), Business Services, Health, Advanced Industry).

The fact that the company that we are analysing has no CSR policy concerning the ESG issues is not a factor in the abandonment of our investment. Nevertheless, before the final investment decision is made, we validate two essential points:

- The business model of the analysed company must not be based on social or environmental risk taking

- The managers are open to improve their ESG practices and discuss with Isatis-Capital on the actions plan for the future development.

A specific Due diligence questionnaire is submitted to the new company covering the 3 pillars ESG mostly focused on qualitative approach. The objective of this questionnaire is to measure the knowledge of the managers on their ESG issues/challenges and how ISATIS Capital will help and support the company to improve their practices in terms of ESG in the future. 

 

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.

          The most important thing is to ensure that the managers are open to improving their practices in the future with the help of  ISATIS Capital.
        

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

In 2019, the ESG Incorporation policy have been done for all new investments as follow: the information is reported in the investment note on a specific page dedicated on ESG issues described with  ESG SWOT and comments about the degree of risks and the knowledge and the openness of the managers on these topics.

The managers have to accept in the shareholder agreement to provide each year the KPIs on E & S to allow the measurement of the trends. Isatis-Capital expects the "best effort", aware that its universe of investments is composed of very small companies. Those Kpis should help Isatis-Capital to identify the points where some actions have to be taken to remediate to the issue.


PE 07. Encouraging improvements in investees (Private)


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


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