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Vinci Partners Investimentos Ltda.

PRI reporting framework 2020

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Outputs and outcomes

PE 14. ESG issues affected financial/ESG performance

14.1. Indicate whether your organisation measures how your approach to responsible investment in Private Equity investments has affected financial and/or ESG performance.

14.2. Describe how you are able to determine these outcomes.

We don´t measure how ESG issues impacts either financial performance or ESG performance

In 2019 we worked to improve our monitoring and reporting mechanisms of our ESAP, following conversations with IFC (our LP investor) to address their new policy requirements. Based on that, we will start to measure ESG Performance


PE 15. Examples of ESG issues that affected your PE investments

15.1. Provide examples of ESG issues that you identified in your potential and/or existing private equity investments during the reporting year.

Investment Stage
ESG issues

ESG issues

          We identified that there was not proper labor contracts in place for all staff, including for temporary and seasonal workers
        
Sector(s)
          QSR (quick service restaurant)
        
Impact (or potential impact) on the investment

Some employees were hired as "service providers", which could represent a risk related to potential fines and taxes from Labor/Tax authorities

Activities undertaken to influence the investment and its response

In the due diligence, we identified which employees were in this situation and negotiate regularization with the seller and negotiate protection against possible contingencies 

Investment Stage
ESG issues

ESG issues

          Code of conduct had a limited scope, covering only the employees
        
Sector(s)
          Healthcare
        
Impact (or potential impact) on investment

Potential liabilities and reputation risk in doing business with suppliers and other stakeholders that were not complying with our Ethics standards 

Activities undertaken to influence the investment and its response

We expanded the code to make it applicable to suppliers and clients. Establish procedures to inform all main stakeholders of the contents of the code

15.2. Describe how you define and evaluate the materiality of ESG factors.

As part of the ESG manual, an initial ESG risk assessment (sample) was included at the ESG Due Diligence Toolkit to be used at the first due diligence. It contains the main environmental and social issues addressed by some sustainability initiatives, inspired in the International Finance Corporation (IFC) Performance Standards, and a preliminary assessment of the material issues per sector that VINCI invests or plans to invest. For each new investment analysis, VINCI shall complete the risk assessment table to confirm the material issues.

As part of the second phase of the due diligence, when the deal team reviews the target company’s accounting, legal, tax, regulatory and information technology operations with the objective of identifying potential liabilities and the systems and controls necessary to manage the business effectively, VINCI typically hires a consulting firms in order to review the industry fundamentals, business model of the target companies and ESG topics identified as material during the previous phases of the process.


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