Kensington views ESG factors as contributors to business success and thereby, investment performance. The increasing demand for transparency, along with changing expectations and public awareness of social and environment challenges, collectively present unique opportunities as forward-thinking investors.
ESG is both an investment and operational criteria
Kensington incorporates ESG considerations in our investment due diligence, portfolio composition and investment decisioning processes. In addition, Kensington folds these considerations into our own business practices including the awareness of our carbon footprint, our social community engagement including diversity, equity and inclusion, and the way we govern and conduct ourselves with our investor, partners, and stakeholders.
ESG as risk management
Not every ESG factor will be material to all business and sectors. Accordingly, Kensington identifies and assesses the risks to individual companies based on what is financially and operationally material to the specific business model.
Our ESG Framework
Kensington follows a framework for ESG, consistent with our investment screening and selection process that includes a fact-based approach, a balance of qualitative factors and situational context, and personal alignment in principles and conviction. Kensington is proud to incorporate ILPA’s ESG Assessment Framework in our due diligence for general partners, as well as the United Nations Sustainable Development Goals (SDGs) and Sustainable Accounting Standards Board (SASB) sustainable industry classification system for our investments.
Our commitment to ESG starts at the top and flows down to everyone in the company. We have a dedicated ESG committee working in parallel with the investment committee. The ESG Committee is co-chaired by the Senior Investment Officer and CFO.
Deal Sourcing to Reporting
We identify any high-level ESG considerations in the very beginning starting with the deal sourcing phase. We incorporate those ESG considerations into the due diligence process and assess the suitability of the investment. We continuously gather data from our portfolio companies to ensure adherence to ESG policies and commitments and engage with them in an effort to increase those reporting standards across the industry.
