OCPE recognises that our investee companies will have, to varying degrees, environmental, social and governance (ESG) impacts. OCPE will therefore work together with its investee companies (both pre- and post-investment) to identify and apply good practice with regard to managing ESG matters, so as to ensure that RI is at the core of OCPE’s activities. This commitment was underscored by Oakley Capital Limited becoming a signatory, in 2016, to the United Nations Principles for Responsible Investment (PRI).
OCPE has adopted this RI Policy, covering our investment activities. The ESG impacts from OCPE’s internal day-to-day activities are covered by the associated Oakley Capital ESG Policy.
Why RI is important
OCPE recognises and believes that RI is an increasingly important principle for its investors, employees and other stakeholders. Whilst OCPE has always invested responsibly, this policy formalises OCPE’s approach to RI, which applies to all our Fund III, and future, investments.
The purpose of this RI policy is to set out OCPE’s approach to supporting the effective recognition and management of ESG risks and opportunities consistently throughout our investment activities.
Our Core RI Principles are to:
- Promote compliance with relevant laws and regulations by portfolio companies;
- Integrate ESG considerations into all stages of the deal cycle – from due diligence throughout the period of ownership, to exit;
- Pursue alignment, in our RI approach, with the BVCA RI Guidelines, and other industry good practice as it develops;
- Promote the respect, by OCPE and any fund investee companies, of fundamental human rights;
- Avoid bribery or corruption in any of the OCPE and any fund investee companies’ dealings;
- Encourage investee companies to consider and mitigate the ESG impacts of their operations;
- Avoid investment in specific sectors which we, or our investors, consider especially sensitive from an ESG or ethical viewpoint;
- Seek continuous improvement in RI techniques and ESG performance at OCPE and our investee companies; and
- Report annually on OCPE’s RI practices via the PRI reporting process and make information about our RI approach available on our website.
OCPE has an RI Committee comprising of two Investment Professionals, the General Counsel and Senior Partner, David Till. Committee members are responsible for the implementation of the RI Policy under the oversight of David Till. A quarterly Group compliance meeting is held where RI and ESG issues constitute a standing agenda item.
All Investment Professionals are required to follow the RI Policy and consider its effects both pre- and post-investment. OCPE has created an ESG Risk Assessment Toolkit to aid Investment Professionals in understanding a variety of inherent ESG-related risks by both sector and geography. OCPE Investment Professionals receive training on the RI policy and accompanying toolkit.
When considering potential new investments, OCPE conducts an inherent ESG risk assessment on the investee company’s sector and countries of operations.
The sector risk assessment outlines the key environmental and social risks inherent to operations of companies in that sector. The categories of inherent environmental and social risk assessment are Environment, Health and Safety, Labour and Community.
The country risk assessment assesses the overall inherent ESG risk for each country of direct and indirect operations. The external indices which inform this assessment consider the level of corruption, political development, economic development, socioeconomic development, and environmental protection within each country.
The outputs of these risk assessments are included in the initial investment papers and are discussed at the Investment Committee. Where the outputs of these risk assessments suggest a high ESG risk, OCPE may itself, or may instruct external consultants to conduct ESG Due Diligence and produce reports on significant ESG risks and opportunities.
Once OCPE has invested in a company, the following activities are undertaken:
- Investee companies are required to complete OCPE’s ESG questionnaire which assesses their current level of maturity in managing five overarching ESG topics; Governance, Workplace, Marketplace, Environment and Community;
- OCPE works with investee companies to understand where ESG efforts should be focussed, based on an assessment of the materiality of the company’s ESG impacts, and progress to date;
- ESG risks and opportunities are considered at Board meetings and each investee company’s performance is monitored in relation to the management of ESG issues; and
- OCPE encourages investee companies to discuss ESG issues with their top tier suppliers, with a view to the identification and improved management of material ESG matters.
Investee companies are required to inform OCPE immediately should a material ESG incident occur, e.g. a serious data breach or a serious injury. Where appropriate, OCPE will in turn inform investors of such incidents.
Prior to Exit
Prior to exiting an investment, we will ensure that information on material ESG issues is captured and made available to potential buyers.
This policy will be reviewed on an annual basis by OCPE’s RI Committee and will be updated as appropriate.