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Fonds de solidarité FTQ

PRI reporting framework 2020

You are in Direct – Private Equity » Pre-investment (selection)

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.

All PE investments must be preceded by an analysis of social acceptability and a social audit. At this stage, investments might be turned down if social risks are deemed too high, or improvements in social practices might be recommended.

Social audits cover many aspects, including number of jobs created or maintained, health and safety performance and quality of employee-management communication and relationship. Social audits always comprise on-site visits and interviews with predefined stakeholders.

Furthermore, the Fonds investigates cases of non-compliance with environmental laws or convictions resulting in fines before concluding any investment. The governance structure as well is evaluated before investing.

As a standard practice, the Fonds encourages open and ongoing discussions with its partner companies and outlines the opportunities for progress with regards to business and ESG practices.

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.

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

The Fonds’ Relationships with workers team is responsible for performing social acceptability analysis and social audits. As documented previously, social audits cover many aspects (quantitative and qualitative information collected), including:

  • Number of jobs created or maintained;
  • Health and safety performance;
  • Quality of employee-management communication and relationship, whether employees are unionized or not;
  • Compliance with human and workers’ rights legislations, including pay equity and harassment laws;
  • Community investments and involvement, including donations, sponsorships, employee volunteering programs and internship programs.

Social audits always comprise on-site visits and confidential interviews with stakeholders. At this stage, investments might be turned down if social risks are deemed too high, or improvements in social practices might be recommended.

Adding to the documents that must be prepared by the Relationships with workers team, investment teams must complete a section in their financial analysis relating to the social aspects of the transaction under study. At this stage, an investment might be turned down if social risks are deemed too high.

The results of each and every social audit must be considered by the Investment committee and must be discussed at the board level, when required due to an investment size.


PE 07. Encouraging improvements in investees (Not Completed)


PE 08. ESG issues impact in selection process (Not Completed)


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