This document sets out Praxis Capital Partners’ approach to the management of environmental, social and governance (ESG) issues, including the principles which we aspire to and the procedures we have implemented in order to integrate these principles into our activities.
The ESG Policy covers all of our funds, existing portfolio companies as well as new acquisitions, all investment activities across the deal cycle, and our own operations. Our staff are also required to adhere to the ESG Policy.
Our Guiding Principles
We recognize that the private equity industry can have a significant impact on society and the environment. The sector affects many people and involves the use of a significant amount of the earth’s natural resources. We believe that ESG issues should be integral to the investment process and have formalized our approach to managing these issues.
We understand that the effective ownership and management of a company creates benefits for all stakeholders: from employees to customers, suppliers to shareholders, and the wider community at large. Implementing best practice management techniques for ESG issues contributes to both mitigating risks and capturing opportunities that enhance the long-term value of our funds’ portfolio companies. Therefore, we are committed to making responsible investments in order to create sustainable, long-term value in close partnership with management teams.
We have been a signatory of the Principles for Responsible Investment (PRI) since 2019. We are committed to implementing the six principles with a view to aligning our investment management and activities to the interests of wider stakeholders.
Praxis ESG(사회책임투자) Approach
- Praxis는 SRI(사회책임투자), ESG(친환경, 사회적 책임, 기업지배구조)에 부합하는 투자가 사회에 기여함은 물론, 장기적인 투자 성과에도 긍정적인 영향을 미칠 것이라는 믿음을 갖고 있음
- 이러한 믿음 하에, Praxis는 UN PRI(Principles for Responsible Investment, 책임투자원칙)에 서명하였고, 이를 ESG 원칙으로 삼아 투자 프로세스 및 운용 인력의 업무에 반영하여 운영 중
- 우리는 ESG 이슈들을 투자 분석 및 의사결정시 적극적으로 반영한다.
- 우리는 투자 철학 및 운용원칙에 ESG 이슈를 통합하는 적극적인 투자가가 된다.
- 우리는 우리의 투자대상에게 ESG 이슈들의 정보공개를 요구한다.
- 우리는 금융 산업의 PRI 준수와 이행을 위해 노력한다.
- 우리는 PRI의 이행에 있어서 그 효과를 증진시킬 수 있도록 상호 협력한다.
- 우리는 PRI의 이행에 대한 세부 활동과 진행사항을 보고한다.
세부 실행 방안
투자 의사 결정 및 관리 전반에서 ESG 이슈를 고려
- 실사 과정에서 대상 회사의 ESG 이슈에 대한 점검/확인
- 투자 이후, 피투자회사의 연간/분기별 경영 계획 작성 시 ESG 관련 항목 포함
투자 운용 인력
업무 전반에서 ESG 이슈를 고려
- 투자 검토 시 잠재적 ESG 이슈들에 대한 고려
- 피투자회사의 ESG 이슈에 대한 지속 관찰 및 ESG에 부합하는 세부 실행 방안 도출 지원
Our Commitment to Responsible Investment
We commit to:
- Maintaining strong ESG governance at the Praxis level. The Board and the Risk Management Committee are responsible for overseeing our ESG management activities. Our staff are responsible for implementing the ESG Policy & Procedures and for raising and addressing ESG factors at the Board level. We provide our staff with specific ESG training and resources to help them to fulfil their ESG commitments.
- Complying, as a minimum, with all ESG-related legislation and not tolerate irresponsible or corrupt business practices. We have set our ESG & Compliance Checklists and strongly encourages all staff and portfolio companies to meet them. Our portfolio companies are required to escalate and address any ESG related issues during the periodic business reporting.
- Embedding ESG issue management throughout the deal cycle:
- Pre-investment: We assess ESG risks and management standards in target companies when evaluating investment opportunities. We analyze inherent ESG risks and relevant management activities (to the extent that information is available) throughout the investment review stages, and any material findings are documented in the investment papers. To assist our team with this analysis, we have an early stage compliance and ESG red flag checklist. Where deemed necessary by the deal team, we may instruct external experts to perform ESG due diligence on target companies. If we conclude that the ESG risks of a target company are too great and cannot be appropriately mitigated, no investment is made.
- Post-closing: From the early stages of our fund ownership period, we support portfolio companies in improving their ESG performance, where necessary. To do this, we conduct a more detailed review of each company’s ESG management practices within the first 6 months of ownership by our funds, as more information becomes available. These reviews represent an opportunity for us to engage with the portfolio companies and to offer support to help them meet our ESG standard. In cases where we identify significant need or potential for value creation, a further, comprehensive review of the portfolio company’s ESG activities, is undertaken.
- Monitoring and continuous improvement: We monitor portfolio companies’ ESG performance with a view to help management teams identify and respond to opportunities for further improvement on an ongoing basis. We are implementing processes to allow portfolio companies to promptly report any material ESG incidents and remain prepared to provide support to portfolio companies should these situations arise.
- Exit: We disclose relevant ESG information, gathered through the pre-investment and fund ownership periods, to potential buyers at the exit stage.
- Engaging with investors on ESG issues. We seek to increase transparency for investors in our funds. To this end, we proactively include ESG information in periodic reports to investors, make the ESG Policy available to investors and respond to ad hoc requests for ESG information from investors.
Our Commitment to Responsible Operation
We strive to embed effective ESG practices in our operation as well as in its investment activities. Therefore, we commit to:
- Supporting ethical behaviors in our activities. All of our staff are subject to, and receive training on our policies, including our Internal Regulatory Standard. All members are required to acknowledge they have received, read and understood and agree to comply with our policies upon joining the team.
- Contributing to global society. We donate and sponsor global charity organizations that provide support and education for under-privileged youths in third world countries. We believe that sustainable, long-term value creation can be better realized by helping young people and disenfranchised members of the community to integrate themselves into the global society.
- Promoting diversity in the workplace. We are an equal opportunities employer and we respect the diversity of our people. Our employees are the “best of the best” who use their initiative, good judgment and creativity to drive superior performance for us and our portfolio companies. Our aim is to attract, motivate, develop, and retain a diverse talented group of people who make informed career and lifestyle choices within a supportive working environment.
Governance of this Policy
Our Board will review and update the ESG Policy to reflect on-going efforts to improve our ESG approach, as well as emerging requirements from stakeholders and evolving good practices. We will actively communicate the ESG Policy to our staff and will use the ESG Policy as a basis to engage internal and external stakeholders on ESG management, as appropriate. Our management and the Head of Risk Management Committee are the sponsoring Managing Partners of this ESG Policy and are accountable to our Board for its implementation.