ESG is integrated throughout our investment process

Increasingly, investors are demanding high standards from companies in relation to sustainability and societal impact. These standards, which include climate change, diversity and corporate ethics, are commonly covered by the term Environmental, Social and Governance (“ESG”). While definitions vary, ESG is used to help evaluate a company or organisation’s progress against key criteria.

There is often a misapprehension that ESG factors are not regarded as important in private equity investment. However, Pantheon believes that the consideration of ESG risk forms part of general risk management and effective mitigation of such risks strengthens downside protection and enhances a company’s reputation. In fact, it is Pantheon’s view that the implementation of sound ESG practices can have a material impact on value creation in private equity.

As a result of Pantheon’s approach and with the full commitment of the Board, ESG factors are incorporated into the entire investment process. This starts with the initial due diligence and assessment of the suitability of a fund/company for inclusion in PIP’s portfolio. But it does not stop there. There is also an extensive ongoing monitoring programme which comes into play after an investment has been made.

Pantheon’s dedicated ESG Committee is comprised of senior individuals from its Investment, Risk and Investor Relations teams. As part of its duties, the Committee sets Pantheon’s ESG strategy and policy, and provides feedback across the business and to external stakeholders.

The Directors of PIP have oversight of ESG matters within PIP’s portfolio.