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CDC Group plc

PRI reporting framework 2020

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Organisational Overview
Basic information [OO 01 - 09] Asset class implementation gateway indicators [OO 10 - 12] Peering questions [OO LE 01 - HF 01]
Strategy and Governance
Investment policy [SG 01 - 04] Objectives and strategies [SG 05 - 06] Governance and human resources [SG 07 - 08] Promoting responsible investment [SG 09 - 11] Outsourcing to fiduciary managers and investment consultants [SG 12] ESG issues in asset allocation [SG 13 - 15] Asset class implementation not reported in other modules [SG 16 - 17] Innovation [SG 18] Communication [SG 19]
Indirect – Manager Selection, Appointment and Monitoring
Selection [SAM 02 - 03] Appointment [SAM 04] Monitoring [SAM 05 - 07] Outputs and outcomes [SAM 08 - 09]
Direct - Fixed Income
ESG incorporation in actively managed fixed income [FI 01 - 12] Implementation processes [FI 01 - 03] (A) Implementation: Screening [FI 04 - 06] (C) Implementation: Integration [FI 10 - 12] Fixed income - Engagement [FI 14 - 16] Outputs and outcomes [FI 17 - 18]
Direct – Private Equity
Overview [PE 01 - 02] Pre-investment (selection) [PE 05 - 08] Post-investment (monitoring) [PE 09 - 13] Outputs and outcomes [PE 14 - 15]
Direct - Inclusive Finance
Context [IFD 01 - 06] PIIF Principle 1: Range of services [IFD 07 - 10] PIIF Principle 2: Client protection [IFD 11 - 13] PIIF Principle 3: Fair treatment [IFD 14 - 17] PIIF Principle 4: Responsible investment [IFD 18 - 24] PIIF Principle 5: Transparency [IFD 25 - 27] PIIF Principle 6: Balanced returns [IFD 28 - 31] PIIF Principle 7: Standards [IFD 32 - 34]
Confidence building measures
Confidence building measures [CM1 01 - 07]
Export Public Responses
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You are in Direct – Private Equity » Pre-investment (selection)

投資前（投資対象の選定）

PE 05. Incorporating ESG issues when selecting investments

05.1. デューデリジェンスで組織がプライベートエクイティ投資先を選定する際、通常ESG問題を組み入れているかどうかを記載してください。

05.2. ESG問題をプライベートエクイティ投資の選定に組み入れる際のアプローチを説明してください。

ESG is integrated into CDC's investment process with the Environmental, Social and Governance Impact (ESG-I), Business Integrity (BI) and Development Impact (DI) teams, which provide specialist input into all stages of CDC's investment process (from screening and due diligence to legal agreements and monitoring). They then present risks and opportunities to add value at Investment Committee meetings to inform investment decisions. Where gaps in compliance with CDC's Code are identified, CDC will negotiate an action plan with the company to meet CDC's requirements within a reasonable timeframe and this is formally documented in the shareholder agreements. ​

Beyond this standard approach during the pre-investment stage, there were instances in 2019 when specific ESG issues were considered in more detail due to higher risk or opportunity, as outlined by Schedule 4 of the CDC Code. These included:

​​- Specific screening for child labour in sectors and regions where this is endemic, such as construction in South Asia

-Assessing retrenchment plans for a company who would require large-scale dismissal as part of an industry pivot

-Conducting pre-investment energy audits where resource efficiency is considered core to the investment thesis

- Additional consideration of gender opportunities in companies where women are underrepresented or have a high potential to take on leadership roles

- Conducted workshop on business integrity issues to ensure alignment and raise awareness following some BI concerns raised in due diligence

- Quality of education assessment including safeguarding to understand specific company policies and practices

Regulatory regimes in different countries and sectors can impact the way that ESG issues are considered. Strong environmental and social regulatory requirements better facilitate alignment with the IFC Performance Standards and the requirements of the CDC Code, but in countries and sectors where these are less robust, ESG issues are likely to have greater scrutiny in the investment selection process.

05.3. 補足情報 [任意]

PE 06. Types of ESG information considered in investment selection

06.1. プライベートエクイティの投資選択プロセスにおいて組織が通常どのような種類のESG情報を考慮するかを記載してください。

06.2. 投資委員会または類似の委員会において、この情報がどのように報告・検討・文書にまとめられているかを記載して下さい。

Through the due diligence process, CDC collects raw data from the target company to assess capacity, commitment and track record on ESG issues (raw data may include documented E&S management systems, HR policies, ESG policies, serious incident data, information on energy and water consumption, compliance certificates, gender breakdown of employees at different levels, etc.), in order to assess actions that might be needed to bring the company into compliance with CDC's Code of Responsible Investing and to identify areas to add value. CDC assesses company performance against the ILO Core Conventions, IFC Performance Standards and sector-specific reference frameworks to develop an action plan to close compliance gaps; and also benchmarks against other companies in the same sectors and countries in which it has invested, to assess lessons learnt and realistic ESG targets for potential investees to aspire to. Certifications and internationally recognised standards (e.g. RSPO, ISO 14001, Ethical Trading Initiative) are also considered (often with advice sought from external consultants with specialist expertise). Key ESG information considered in the investment selection process is recorded in all investment committee papers at each stage of the process and raised by ESG staff during the IC meetings.

PE 07. Encouraging improvements in investees

07.1. ディールストラクチャリングの際、ディール文書または投資後アクションプランにESG関連考慮事項を統合するためのプロセスは何ですか。

促している場合

07.2. これらの改善の種類を説明し、報告年度において事例がある場合には、その事例を提供してください。

CDC's ESG requirements are outlined to potential investees before CDC progresses to due diligence to avoid progressing a deal where a company is not prepared to meet the requirements as set out in the Code of Responsible Investing. Due diligence assesses the capacity, commitment and track record of the investee to manage ESG issues and identifies gaps against CDC's Code. A legally binding action plan is agreed between CDC and the company to address ESG issues and opportunities identified. Post investment, the action plan is monitored to drive continuous improvements in the management of ESG issues. CDC recognises that it takes time and money to change culture and embed international good practice, and works closely with companies to support them to implement action plan items. The action plans may include initiatives to add value through, for example, improving energy efficiency and water conservation in line with CDC's Climate Change Policy or improving the workforce gender balance.

07.3. 補足情報 [任意]

PE 08. ESG issues impact in selection process

08.1. 報告年度において、ESG問題がプライベートエクイティ投資の選択プロセスにどのような影響を及ぼしたかを明示してください。

08.2. 報告年度において、ESG問題がプライベートエクイティ投資取引にどのような影響を及ぼしたかを明示してください。

08.3. 補足情報 [任意]

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