Scorecards are useful tools for investment managers looking to create an environmental impact framework and understand their investment’s performance against a set of KPIs. Scorecards can be used as screening material to:
- Outline an exclusion-based approach that underpins funds’ investment strategies;
- Include screening recommendations for criteria material to the fund ( or other framework(s) aligned);
- Include idiosyncratic positive criteria; and
- Inform the fund’s ESG approach and be the basis for future disclosures relating to the fund’s investment strategy.
ESG scorecards are bespoke tools that reflect sector-specific risk issues. These can be used for portfolio management or to screen investments and companies that your business is looking to engage with.
Through a scorecard, funds can monitor and assess exposure to Environmental, Social, Governance (ESG), and reputational risks across the full range of commercial and financial transactions, from investment through acquisition.
How does ESG risk screening benefit your business?
Mapping ESG criteria to capital allocation and management contributes to long-term value creation, financial return, and positive social and environmental impact. Stakeholders have developed a keen interest on how asset managers assess and mitigate ESG risks. These range from climate change mitigation to compliance to legislations and regulations, and respect for human rights.
ESG Scorecards provide the following key benefits:
- Successfully monitor ESG externalities in acquisition decision-making;
- Use a unitary methodology in acquisition and KPI tracking throughout the life cycle of the fund;
- Identify opportunities to upgrade well-performing financial transaction into green loans;
- Monitor against stranding risks with red flagging mechanisms;
- Stay ahead of changing regulatory and investor demands.
How can Longevity Partners help you?
Our Sustainable Finance experts have assembled the best practices from across the market to provide you with a customisable screening tool which assesses the ESG performance of potential investments and aid in portfolio construction along responsible investment principles.
- We collaborate with you to identify sector or company specific ESG indicators;
- We breakdown exclusionary and sector-material issues into a range of KPIs (e.g., policy, measures, disclosure). We determine a scoring system based on what good/best practice looks like for each indicator/issue, this allows you to issue a benchmarked score to each investment you screen;
- With debt issuers, Longevity’s ESG scorecard looks at the ESG performance of the borrower, assessing whether any red flags are raised that could affect the client or asset’s reputational or counterparty risks;
- With acquisitions, we give you the tools to screen for asset class specific ESG risks prior to transaction;
- Where a scheme is screened to have a high ESG performance, Longevity Partners can recommend pursuing a Green Loan and guide you through the process of Green Loan issuance.
We develop ESG scorecards to include ESG consideration material to your investment approach. This provides a guideline for responsible investment by incorporating exclusionary criteria, negative screening of poor ESG performance, and positive screening endorsing the use of sustainable capital. The tool can be applied to:
- Pre-investment screening and due diligence;
- Portfolio management; and/or
- Post-investment reporting.
INVESTMENT AND FIRM-LEVEL SCREENINGS
We develop & implement negative and idiosyncratic screening criteria to improve your investment approach to assess ESG and reputational risks and elevate well-performing transactions.
We provide customizable screening tools assessing ESG performance in potential investments. We assist in integrating ESG strategy in portfolio construction. Finally, we flag ‘red’ and ‘best-in-class’ reputational risks & opportunities.
GREEN LOAN OPPORTUNITIES
Screen transactions for ESG & reputational risks and elevate transactions by recommending green loan and bond financing. Ongoing engagement with debt teams and property managers to identify potential green debt projects.
Sustainable Finance Services:
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