The problem we solve

We help enhance and accelerate sustainability due diligence across private investments.

US-HQ Top-Tier Global Alternate Asset Manager

Pre-investment due diligence to identify potential sustainability risks and opportunities across private and liquid credit deals.

Client Challenges

A top-tier alternate asset manager wanted to conduct pre-investment due diligence across private and liquid credit portfolios to identify potential sustainability-related risks and opportunities. While the client had an overarching responsible investment framework, practical challenges persisted in implementation due to regional / sectoral divergence, data availability, and potential greenwashing risks.

Our Approach

Crisil’s approach involved,

Enhance framework: We studied the client’s existing due diligence framework in detail and suggested potential enhancements to ensure practical applicability across all sectors and regions. Furthermore, we suggested integrating proxy KPIs from credible alternate data sources for certain sustainability risks to address data gaps and ensure comprehensive assessments. We helped document the framework in detail to ensure systematic integration and reduce subjectivity

Accelerated due diligence:

• We leveraged an enhanced framework to conduct due diligence across all private and liquid credit transactions. As part of the due diligence process, we incorporated a top-down approach, considering outside-in sector and region-based risk exposures to provide broader context for evaluating company-specific risks.
  
• We gathered data from various sources for the assessment, including company disclosures, credible alternate data providers, third-party databases, and news articles. This helped address data gaps, conduct holistic assessments, and mitigate greenwashing risks.
  
• We also conducted thorough reputation risk analysis, examining instances of violations, litigation, penalties, and other controversies for all transactions.
  
• We drafted an ESG due diligence summary which was integrated across all investment memos.

Ongoing review: We conduct ongoing controversy surveillance of all portfolio companies leveraging third party database and public disclosures. We update the due diligence summary based on materiality of each controversy.

Impact Delivered
 

• Streamlined and enhanced due diligence process to identify potential sustainability risk and opportunities across all transactions.
• Completed ESG due diligence across 800+ private and liquid credit and integrated summaries across all investment memos.

Questions

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