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Invest Europe launches ESG questionnaire for GPs

The launch of the Due Diligence Questionnaire follows that of an equivalent LP-focused document published by the UN-backed Principles for Responsible Investment initiative in 2015.

A questionnaire enabling fund managers to assess environmental, social and governance factors at the companies they own or plan to invest in has been published by Invest Europe.

The industry association worked with private equity fund managers and institutional investors in Europe to develop the questionnaire as a tool to facilitate due diligence, investment and enhanced ESG reporting.

It covers areas such as environmental impact, health and safety processes, human rights and labour standards across a company’s operations and supply chain. It will help fund managers identify issues requiring more detailed technical assessment, as well as opportunities to enhance value and mitigate risks following an investment, said Invest Europe.

“Not all portfolio companies are on the same page when it comes to ESG factors,” said Marta Jankovic, senior sustainability and governance specialist and head of ESG integration alternatives at APG Asset Management, and chairwoman of Invest Europe’s Responsible Investment Roundtable. “The more we can help fund managers and investors identify the potential issues and opportunities in the investment process, the more we can promote high ESG standards across the board.”

Last year, Invest Europe updated its Professional Standards Handbook and Investor Reporting Guidelines to incorporate ESG considerations.

The launch of the DDQ follows the launch last year of a similar document aimed at LPs. The United Nations-backed Principles for Responsible Investment Limited Partner Due Diligence Questionnaire helps investors evaluate fund managers on their commitment to ESG issues.