ESG risk assessments are performed as part of the portfolio monitoring process.
In order to monitor appropriately its portfolio from an ESG perspective, GBL conducts on a yearly basis an in-depth risk assessment focusing on its portfolio companies.
This risk assessment has been structured by GBL to combine information from third-party ESG-rating reports and market data with proprietary data derived from (i) GBL’s in-house Compliance questionnaire (see below for covered areas) and (ii) the knowledge and expertise of GBL’s investment team on the portfolio companies and, more generally, their sectors.
On that basis, GBL’s ESG risk assessment does cover a wide scope of ESG factors including (AnnualReport p.69):
- from an environmental perspective: Resource efficiency, pollution prevention and management, ecosystems and biodiversity, climate change, procurement standards, etc.
- from a social and governance perspective: Labor rights and working conditions, business ethics and governance, etc.
This assessment aims at identifying, for each portfolio company, its key ESG risks, and, if assessed as material, (i) translating them into potential adjustments to the investment theses, (ii) reporting them to GBL’s Audit Committee and ultimately to GBL’s Board of Directors, and (iii) ensuring their monitoring by GBL’s representatives through the governance bodies of the portfolio companies.