Environmental, Social and Governance Investment Policy
We strongly believe that by accommodating a broad set of environmental, social andgovernance (ESG) issues, we can improve the financial performance of our portfoliocompanies, make our portfolio companies more attractive to potential acquirers, whilstreducing investors' exposure to reputational risk.
That is why we want to factor these investment considerations into our investmentstrategies. Our objective is to seek strategic advantages from managing ESG issues andto maximise business and investment opportunities, whilst concurrently complying withregulations and mitigating business and investment risks.
To successfully integrate ESG issues, we shall monitor our portfolio companies to ensurecompliance with this ESG policy throughout the Fund's investment cycle, from pre-dealdue diligence all the way through to portfolio company management.This ESG investment policy intends to define how we can manage
This ESG investment policy has been approved by the Board of Managers of the GP, andmay be amended from time to time to reflect evolutionary changes in ESG practice
1. UNPRI PRINCIPLES
We support and endorse the United Nation Principles of Responsible Investment("Principles") and the GP has been a signatory to the UNPRI principles since 18 th November 2011. In accordance with the terms of the 6 Principles:
- We will incorporate ESG issues into our investment analysis and decision making.
- We will be active owners and incorporate ESG issues into our ownership policies and practices.
- We will seek appropriate disclosures on ESG issues from the entities we invest in.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will report on our activities and progress towards implementing the Principles.
2. ESG RESPONSIBILITY
In order to integrate ESG issues within each step of our investment practices, we have
appointed an ESG responsible person who is a Member of the Board of Managers of the
GP. He takes overall responsibility for the execution and continuing development of the
ESG policy. In this context, he makes sure that all relevant information concerning ESG
items are put at the disposal of the Board of Managers. This information is communicated
to the Board of Managers through the various ESG reports for each investment and
disinvestment decision on a continuing basis.
He will ensure that ESG considerations play a role in each stage of the investment
process, as well as during the whole investment period and during the disinvestment
When making investment decisions, the Board of Managers of the GP will always keep in
mind that the ESG factors are just one of a whole series of indicators that they will be
required to consider. We shall not consider a company's ESG performance in isolation
from the wider issues affecting the investment, including the ultimate impact the ESG
factors will have upon the investment.
3. EXCLUSION POLICY
The confidential Prospectus of the Fund imposes geographical restrictions for investments
The list of jurisdictions for potential investments is limited to countries within Western
Europe. We therefore do not have any geographical exclusion.
Our exclusion policy includes companies whose sole or primary business purpose is engaging in the following list of excluded activities:
- direct involvement in the production of anti-personnel landmines, cluster bombs,and/or chemical or biological weapons
- Any direct involvement in the production and/or sale as an end weapon, or the supply of essential and/or customized semi-finished parts, of anti-personnel mines, cluster bombs, nuclear weapons (as well as the upgrading and maintenance of nuclear weapons), biological weapons and depleted uranium ammunition (as determined at the time of the investment)
- Any exploration for oil and/or gas
- Any manufacturing of or trading in tobacco
- Any gambling activities
- Fur production
- Adult entertainment
In some cases, it is very difficult to determine whether a company is actually engaged in
an excluded activity and some companies may have a de minimis revenue stream from
an excluded activity, such as a supermarket selling tobacco. In these circumstances, the
determination of whether or not a company is engaged in an excluded activity is often
an issue of individual conscience. Therefore, our exclusion policy implies that each
decision to invest in a new company whose activities could be considered as linked to
an excluded activity (an "Excluded Activity Linked Investment") must be approved by
the unanimity of the Managers present or represented at the meeting of the Board of
Managers deciding on such investment. Furthermore, the Board of Managers will only
approve an Excluded Activity Linked Investment if they are satisfied that the particular
company is not engaged in an excluded activity, as defined in this ESG investment
4. ESG REPORTS
We have developed various ESG reports which must be completed and submitted to the Board of Managers of the GP, covering the whole lifecycle of each investment, as follows:
- ESG ACQUISITION REPORT: each binding decision to invest in a new company must be approved only with the support of this acquisition report (see ANNEX 1)
- ESG EXIT REPORT: each binding decision to sell a portfolio company must be approved only with the support of this exit report (see ANNEX 2)
- ESG ANNUAL REPORT: an annual ESG report is presented to the Board of Managers for each company in the portfolio (see ANNEX 3)
- The above reports will be summarized in a ANNUAL ESG PORTFOLIO REVIEW, giving a global picture of the ESG situation of the Fund's portfolio of investments (see ANNEX 4)
Information contained in the ESG reports are provided by the Local Advisers to the GP, based on the company's data, interviews with senior managers and any other resources.
The ESG reports are key elements in the decision making process of the Fund and are included in the Minutes of the Board of Managers of the GP. The ESG reports are completed by an
Annual ESG Report of the GP(see ANNEX 5).