We´ve applied our ESG-MS in all of the investments executed in the VCP III fund and identified improvement opportunities in the target companies, that became actions in our ESAP
1) Environment Aspects
Question: Does the company/project control and evaluate compliance with respect to environmental practices of its subcontractors from which it sources significant inputs?
Finding in the ESG DD: No. Currently the company / project does not control or assess relevant sub-contractors. There are clear conditions that could / have result in environmental impact. The company /project is not able to influence contractors to improve their environmental practices.
Action Required: Implement a more robust supplier audit process after Closing, together with the establishment of long term contracts with key suppliers that include protective clauses related to those issues.
2) Governance Aspects
Question::Does the company have a implemented code of conduct?
Finding in the ESG DD: The Target does not have a Code of Conduct in place
Action Required: Establish Code of Conduct/Ethics after conclusion of the transaction, including orientation to the following areas: corruption and bribery, discrimination, confidentiality of information, antitrust / anticompetitive practices, money laundering and or insider trading and dealing, environmental, health and safety, whistleblowing