ESG management
The integration of Environmental, Social and Governance (ESG) topics is distinct from impact. Whilst impact focuses on delivering positive outcomes on specific environmental and/or social aspects, our ESG framework ensures effective management of the wider universe of ESG topics, with a primary focus on avoiding potentially harmful unintended consequences.
The integration of Environmental, Social and Governance (ESG) topics is distinct from impact. Whilst impact focuses on delivering positive outcomes on specific environmental and/or social aspects, our ESG framework ensures effective management of the wider universe of ESG topics, with a primary focus on avoiding potentially harmful unintended consequences.
Our ESG framework
Strong ESG management is an essential component of BlueEarth’s investment strategy. We are a signatory to the PRI, and ESG is fully integrated through the entire investment lifecycle. The primary focus of our ESG strategy and management framework is to ensure our investment activities do not cause harm (i.e., don’t have any unintended negative ESG consequences). But it’s also about more than just downside protection, with a comprehensive ESG strategy providing significant upside opportunities, such as cost savings from reducing waste and higher productivity from more engaged employees.
Our framework in action
We undertake a comprehensive ESG assessment of every investment as a dedicated due diligence workstream, and engage actively with our investees post-investment on material ESG topics. Our approach is tailored to each strategy, and underpinned by proprietary tools and in-house expertise.
Private equity
ESG Due Diligence: Our proprietary ESG DD assessment tool is underpinned by the Sustainability Accounting Standards Board (SASB) framework, which we use in conjunction with an ESG questionnaire for management, follow-up engagement with management, and involvement of external specialists as required.
Post-investment: We partner with our investees and co-investors to help identify material ESG issues, and guide the development and implementation of their ESG strategies and programs. We use our Board and/or Board Observer representation to influence management’s approach to priority ESG topics. As a signatory to the ESG Data Convergence Initiative, we monitor and report against a core set of ESG metrics drawn from leading frameworks.
Private credit
ESG Due Diligence: We assess each credit investment against our proprietary Environmental and Social Management System (ESMS). Our ESMS incorporates IFC Performance Standards, the ILO conventions, and the full breadth of potential material ESG risks with each transaction. If needed, corrective action plans are then developed, setting out key requirements that need to be addressed prior to disbursement of funds.
Post-investment: We ensure commitment to ESG issues by incorporating priority ESG requirements as conditions precedent to disbursement, establishing ESG-related milestones that dictate volume and/ or terms of the facility and setting covenants and exclusion policies that enable BlueEarth to take action in the case of material non-adherence.
Private equity partnerships
ESG Due Diligence: We have developed a proprietary fund rating tool to assess prospective fund managers on their ESG frameworks, implementation resourcing and consistent application during investment processes.
Post-investment: We undertake ongoing monitoring activities across all our investees, actively engaging with managers on priority ESG topics. We are members of the Limited Partner Advisory Committee (LPAC) on approximately half of our fund investments, which provides us with additional influence and opportunities to engage with our investees on important ESG topics.
