Environmental, Social & Governance Policy
Corsair Capital’s purpose is simple, to create value inclusive of financial returns on behalf of our stakeholders and investment partners across the firm’s range of activities. Corsair applies specialized knowledge developed through a diversity of backgrounds and depth of experience across key industry verticals. Underpinned by Corsair’s history of integrity, ethics, and commitment to our partners, we seek to integrate environmental, social, and governance (“ESG”) factors and topics throughout our investment process to unlock ESG opportunities and mitigate risk. We believe that ESG integration represents a broader articulation of the firm’s guiding principles, which highlights our values and commitment to stakeholders. Several of the ESG practices highlighted are articulations of ways in which Corsair has been conducting business and engaging with our portfolio for decades.
Corsair believes that the consideration of ESG issues and conventions regulating these issues is an important part of making responsible investment decisions, and that the incorporation of ESG at various stages of the investment lifecycle leads to better outcomes in the long-term. Corsair seeks to consider ESG issues during all phases of its investment process, where consistent with its fiduciary responsibility, through application of the following policy.
Corsair’s buyouts business and infrastructure business are both signatories of the United Nations-backed Principles for Responsible Investment, committing to the six voluntary and aspirational principles of the PRI.
Corsair’s leadership is strongly committed to Diversity, Equity, & Inclusion at both the Corsair and portfolio company level. We became a member of the National Association of Investment Companies, the largest network of diverse-owned private equity firms and hedge funds focused on increasing the flow of capital to high-performing diverse investment managers often underutilized by institutional investors through advocacy, education, and industry events.
Objective and Scope
The ESG Policy applies to Corsair’s infrastructure and buyouts business. The objective of the ESG Policy is to explain our integration of ESG considerations and risks into our investment decision-making process and risk framework; also, how we may report on ESG to our stakeholders.
In developing this policy, Corsair has considered a number of international standards, including the UN PRI, the CDC code of Responsible Investing (UK); the Private Equity Growth Capital Council Guidelines for Responsible Investment (US); and the Institutional Limited Partners Association ESG Assessment Framework
Corsair’s ESG Commitment to Partners
The firm is
Select ESG focus areas that Corsair may consider during the investment life cycle include, as relevant:
Climate-related Considerations
ESG Integration
Upfront Screening
Corsair partners with external ESG consultants to help in our upfront screening and diligence processes. Where appropriate, we use industry standards such as the Sustainability Accounting Standards Board (SASB) and expert third party judgment to identify material ESG topics to understand in investment decision-making. We seek to avoid certain investment opportunities that are not satisfactory from a risk perspective because of products or services offered and/or the business’ use of practices which cannot be changed or managed through active ownership or which are not compliant with national, regional, or local rules. Corsair has spent almost three decades investing in businesses that touch on public policy and/or are regulated and the firm has years of experience operating within that framework. With this in mind and with guidance from PRI, we seek to apply a negative screening to prevent investments that fail to adhere to our standard of ESG criteria. This includes those companies principally engaged in payday lending; cannabis; alcohol; tobacco and firearms manufacturing. Corsair seeks to apply these screening criteria to all potential investments.
Pre-Investment
Corsair has developed an ESG approach that focuses on managing material ESG risks and delivering sustainable, long-term value for investors. More specifically, Corsair’s approach to ESG includes, as relevant:
Post-Investment & Ownership
Corsair continues oversight of the implementation and adherence of this ESG policy. Thoughtful data collection and monitoring programs facilitate good management. As such, the firm intends to implement a portfolio-wide data collection and tracking program to understand financial, operational, and ESG information. If the management of or performance on a key ESG focus area is considered by Corsair to need improvement, then Corsair expects to exercise influence through the board and work with relevant third-party professionals to support the development of a plan to remedy or address the topics to mitigate risk and facilitate more positive sustainability outcomes. Our investment professionals seek to regularly address ESG at the portfolio company level through strategic hiring and in the business practices that those individuals manage and influence.
Governance and Transparency
Management of ESG across the firm is achieved by building out the following core areas:
By striving towards these areas, we will formalize ownership of ESG and capacity across the firm for responsible investment activities. All Corsair employees are accountable for day-to-day responsible investing efforts. Ultimate responsibility for the integration of ESG, including ensuring that our policy activities are aligned with our position on sustainable finance and our commitment to the six principles of the PRI, rests with the firm’s Partners and Members of the Investment Committee.