ESG integration in the investment process
Inclusion of ESG considerations at various stages of the investment cycle helps in identifying early risks for the investment and enables suitable actions to be taken at an appropriate stage of investment. It also opens opportunities for innovation, cost & resource savings and sustainable development over the investment period. Neev performs an initial screening to decide whether the investment opportunity fits with the Fund’s ESG Framework. The fund carries out an assessment of likely environmental and social risks and impacts including mitigation measures. Post-investment the fund monitors the compliance of its portfolio companies with ESG principles. The fund tracks new risks and undertakes actions to address the risks effectively.
The ESG focus at the fund aims to look beyond the traditional focus of applying negative screens to the investment and including leading ESG frameworks to adopt a more comprehensive and holistic view to include factors such as having ESG monitoring and evaluation on an annual basis, aided by in-house expertise in ESG, a custom developed impacts dashboard which is a user-friendly way of communicating the progress to investors.
Impact of ESG
The integration of ESG principles has rendered breadth to our companies to attract more green capital from international funds and is setting the tone for the emergence of a new-normal where companies are embracing the tenets of accountability and social equity. A well governed company with global best practices on internal controls, risk management frameworks and enterprise resource management attracts international customers which also leads to an overall improvement in company processes in areas such as procurement and vendor management.