At the screening stage, we filter prospective investments based on their exposure to industries or geographies deemed high risk or specific business practices considered unethical. During due diligence, we evaluate the ESG practices and societal impact of prospective investments to identify risks and opportunities within the company. This results in a roadmap for initiatives to be implemented if the investment materializes. The investment committee discusses ESG findings in depth and weighs them when making investment decisions. If significant red flags are found, we may choose to withdraw from a transaction. During ownership, the Linzor deal team establishes ESG and impact goals in collaboration with management and monitors day-to-day progress on ESG initiatives, while an ESG & Impact committee formed by in house and external executives reviews ESG & Impact plans and performance annually.

We have been well-aligned with the principles of the PRI throughout the firm’s history given our investment approach, and became signatories in 2021. We have also developed an SDG impact thesis for each investment in our third fund, and plan to do so in subsequent funds as well. We track the evolution of a set of environmental, social, and governance indicators, including some that apply across the portfolio (on climate change and diversity, equity and inclusion), and others that are company-specific, and we report the results to our investors annually. In 2021, we participated in the PRI-sponsored Climate Initiative for Latin American Investors and became the first signatory in Latin America ex-Brazil of the Net Zero Asset Managers Initiative.

Our responsible investment policies and practices are the product of our evolution as a firm. While we have always sought to instill the best practices in transparency, corporate responsibility, and ethics throughout our portfolio, today we are taking a more proactive and deeper approach that involves setting more ambitious ESG and impact targets. We are convinced that this will have a positive impact on our communities and environment, while enhancing the long-term value creation of our portfolio.