Sustainable Investing in Infrastructure and Private Equity

The approach taken with infrastructure and private equity investments is to incorporate sustainability in our investment decisions, consistent with our commitment to our members, and with OMERS stated approach to sustainable investing and corporate responsibility. Specifically, we gauge the likelihood and degree to which ESG-related issues could affect our investments, either through a direct impact to the intrinsic value of the business, or through reputational risk.

We also consider opportunities to enhance ESG practices through the active role we take in the management practices of our portfolio companies. Generally, we have influence over governance through holding seat(s) on the Board, active involvement in strategy setting, and through direct contact with management teams.

We consider sustainable investing and corporate responsibility factors in all stages of the investment cycle.

Origination

When considering a potential investment, we review relevant ESG factors that could influence our investment return. While we do not exclude industries from our review process based on ESG factors, we tailor the depth of assessment required for potential investments, as required, to ensure consistency with OMERS sustainability beliefs. Some ESG factors that are considered include:

  • environmental risk;
  • health and safety;
  • compliance with regulation; and
  • governance over anti-bribery and anti-fraud practices.

Asset Management

As an asset owner, we take an active governance role in influencing the way our portfolio companies approach ESG. In almost all circumstances, we hold an equity position (minority or majority) with appropriate governance rights, including negative control rights, as applicable, and participation on boards and related committees. We will appoint independent directors to bring in specialized skills and varied experiences, where necessary.

Monitoring

Our investment monitoring and valuation process includes identification of and reporting on key investment risks, including relevant ESG risks. In our oversight of the companies in which we invest, we require that they be transparent in reporting on sustainable investing.

In 2018, our objective will be to ensure that every private investment in which we have a board seat has a robust discussion about sustainable investing.