Describe your organisation`s approach to incorporating ESG issues in infrastructure investment selection.
With respect to our investment agent, BCI's, large direct investments, they incorporate the following into their due diligence procedures pre-investment:
- Review the particular investment opportunity against an ESG red flag checklist for specific concerns and work to 1) fully assess such investment opportunities through due diligence (sometimes with the help of external consultants); 2) assess the ESG risks these opportunities pose over both a short and long term basis; and 3) work to address the concerns through changes to the business, governance, price adjustments, etc.
- Commission detailed environmental reviews prior to investing using a respected 3rd party advisor
- Negotiate detailed shareholder arrangements that define 1) the responsibilities of the new company board; and 2) shareholder rights;
- Review employment policies and practices, stakeholder engagement, and assess level of interaction with the communities in which they operate;
- Conduct legal review of historic and current litigation;
- Review relationship with regulatory bodies including negative rulings or fines levied;
- Independent ESG risk review is conducted by the ESG Strategy and Risk team in BCI's Investment Strategy and Risk department. This risk review is provided to investment comittee alonside the investment memo.
- Incorporate the results of the analysis above into BCI's pro-forma asset management plan including addressing areas identified as deficient.