Insights

Europe VIII’s enhanced ESG framework

13 January 2022

Sustainability & People Report 2021

ICG Sustainability and People Report front cover
Explore
In preparation for the launch of Fund VIII we enhanced our ESG integration framework and climate change strategy.

Case study

European Corporate strategy (Europe VIII)

We have made good progress in implementing this enhanced framework across the first investments of the Fund and have also decided to roll it out, as relevant, across new investments in other corporate and seeded strategies with greater influence in the capital structure.

Enhanced ESG framework

The Fund is aligned with the requirements of the EU’s SFDR Article 8 by promoting environmental or social characteristics through the implementation of ICG’s Exclusion List and screening process. Core KPIs, targets and assigned Board-level responsibility are set against three key themes:

  • climate change
  • human capital management, and
  • diversity and inclusion

We have also opted in to report annually against SFDR environmental and social indicators.

Our ESG approach

  • Europe VIII promotes environmental or social characteristics in accordance EU SFDR Article 8 through the implementation of ICG’s Exclusion List, ESG Screening process and the Fund’s enhanced ESG Framework
  • Three key themes with core KPIs, targets agreed and responsibility assigned at Board level. Annual reporting to clients against SFDR environmental and social indicators (PAIs)
  • ESG-linked line of credit (LOC) facility with targets linked to the implementation of the Fund’s ambitious ESG Framework

Focused ESG engagement and monitoring

Climate change

Objectives:

  1. Reduce operational emission intensity
  2. Source renewable energy
  3. Set emission reduction targets in line with (science-based targets) SBTs

Human capital management

Objectives:

  1. Optimise working conditions to improve employee retention
  2. Attract the best talent

Diversity and inclusion

Objectives:

  1. Support a more inclusive working environment
  2. Improve diversity at manager, senior manager and Board level

External oversight

ESG-linked LOC facility

Margin adjustment (+/- 5bps) based on two KPIs linked to portfolio coverage:

  1. Set a portfolio company target to reduce emissions by 2030, in line with a SBT; reduction target annually
  2. Implementation of the Fund’s ESG Engagement Strategy

Related content