Continued ESG progress evident in direct lending portfolio companies

Environmental, social and governance (ESG) survey highlights

Engagement in our Direct Lending portfolio is vital to understand the ESG risks and opportunities of the investment opportunity.

At the time of initial investment, we use our ESG screening checklist and climate risk assessment for each new investment. We engage with our portfolio companies and monitor the ESG performance of investments through our annual ESG survey, which covers areas such as ESG governance and accountability, climate change, diversity and inclusion, among others.

Case study

Senior Debt Partners strategy

We first started engaging with Senior Debt Partners portfolio companies on ESG in 2017 by circulating the annual ESG survey. The survey results provide an insight into ESG at a portfolio company level and enables us to track how companies are evolving their ESG processes over time and managing ESG issues.

2021 ESG survey highlights

  • 31 portfolio companies surveyed in 2021 (26 in 2020)
  • 84% response rate (69% in 2020)
  • Highlights of the results are included below

92% (2020: 78%) have ESG responsibility assigned

65% (2020: 44%) have a sustainability policy implemented

38% (2020: 33%) have ESG KPIs and targets set

50% (2020: 33%) have initiatives or targets to improve diversity

35% (2020: 28%) have assessed the business risks and opportunities associated with climate change

35% (2020: 22%) have set climate change or energy related objectives and targets