Botanical Gardens

ESG risk management

To be a successful long term investor, analysis of environmental, social and governance (ESG) risks should be integrated into holistic risk management.

We have robust mechanisms in place to ensure that environmental and social risks are fully considered in all investment decisions.

ESG risk management principles

In practice, our analysis of ESG risks is focused around four areas of activity: screening, due diligence, engagement and collaboration.

Investing in solutions

Since being founded in 2007, OUem has sought to be part of the solution to sustainability and climate change. As long term investors,  we have a vested interest in sustainable stewardship of the planet’s natural resources, achieved by efficiency and innovation. Our investors’ permanent capital allows us to invest in areas of innovative sustainability solutions not possible for investors with shorter time horizons.

Screening and due diligence

We screen ideas on a variety of factors including market structure, experience of team and return potential, as well as assessing a group’s approach to environmental, social and governance (ESG) risks. Before any investment is made, we undertake a detailed due diligence process to ensure an idea matches our expectations with regards to ESG risks. If we are not happy with the outcome of the due diligence process, we will not invest in the idea.

Engagement

Our ongoing evaluation of the groups we invest in involves frequent contact and dialogue on a range of topics including environmental and social concerns. We prefer groups that engage with the management teams of underlying companies regularly. These groups focus on environmental and social issues as part of being a responsible business owner. We prioritise engagement as a tool for achieving net zero Greenhouse Gas (GHG) emissions and biodiversity net gain.

Collaboration

OUem has forged a wide reaching professional network, which spans all levels of our team. All team members are encouraged to engage with peers to constantly evaluate our processes. We take best practice from a variety of frameworks, and we will join organisations that we feel are appropriate to further enhance our processes. We are a member of The Investor Forum and the Institutional Investors Group on Climate Change, a signatory of CDP (Carbon Disclosure Project), a supporter of Say on Climate, a supporter of the TCFD (Task Force on Climate-Related Financial Disclosures) and a member of the TNFD Forum (Taskforce on
Nature-Related Financial Disclosures).

ESG risk management in practice