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Terms and conditions

Investment process

The active management of sustainability risks and opportunities is integral to our investment, portfolio management and value creation processes. We embed an assessment of the long-term sustainability profile of existing and new investments in our processes. Once invested, we support companies as they develop strategies and respond to stakeholder expectations, and we gather data to measure progress against sustainability objectives. This enables us to prepare companies ahead of any exit opportunity.

Pre-investment

Assessment and action planning

  • Screen each opportunity against the requirements of the Responsible Investment policy
  • Identify and assess the most material sustainability factors 
    relevant to each investment opportunity
  • Commission specialist technical due diligence on sustainability matters where appropriate
  • Ensure sustainability considerations are reflected in Investment Committee materials
  • Integrate key actions into the post-investment value creation plan

Objectives

  • The Investment Committee may decline opportunities where the 
    pre-investment sustainability assessment highlights red flags that cannot be remedied post investment. Where appropriate, further specialist due diligence may be commissioned to evaluate whether specific issues can be resolved.

During investment period

Use of influence and engagement

Data collection and monitoring
  • Establish robust governance and procedures within portfolio companies to ensure sustainability risks and opportunities are assessed and managed appropriately
  • Use board participation and influence to ensure companies address relevant sustainability risks
  • Provide a clear framework to guide companies as they mature and encourage year-on-year progress
  • Leverage the 3i network and broader portfolio to facilitate introductions, share advisers’ contacts and promote best practice
  • Engage with companies as they develop sustainability strategies, supporting the implementation and delivery of related projects
  • Collect sustainability data from portfolio companies annually to establish baselines and track progress over time
  • Conduct detailed quantitative and qualitative sustainability assessments annually as part of the portfolio company review process
  • Benchmark portfolio company performance in the context of the broader 3i portfolio
  • Ensure sustainability is a standing agenda item in portfolio company review meetings, involving investment teams, Investment Committee members and 3i Board members
  • Set and monitor progress against portfolio-wide sustainability objectives, aligned with the minimum requirements outlined in the RI policy
Objectives Objectives
  • We use our influence to manage risk and ensure that value creation opportunities linked to sustainability are identified and captured.
  • We use data to strengthen our understanding and management of sustainability matters, to support decision making, identify key trends and opportunities across the portfolio and enable benchmarking. Data also helps us to comply with our reporting obligations.

Exit

Preparation and communication

  • Anticipate and prepare the data collection, reporting and governance structures needed ahead of potential exit
  • Collaborate with advisers to ensure relevant sustainability information is clearly and effectively communicated to prospective buyers

Objectives

  • Good sustainability performance can protect and potentially enhance the value achieved in an exit.

Please refer to our latest Annual report for more information on how we integrate sustainability considerations in our investment process.