Responsible Investing

 

Churchill is committed to investing responsibly and supporting sustainable development. We recognize that environmental, social and governance (ESG) factors contribute to the long-term performance of companies and are critical to well-functioning securities markets. Our commitment to responsible investment is reflected in our integration of ESG factors across the investment lifecycle and our alignment to the UN Sustainable Development Goals (SDGs).

Churchill is an affiliate of Nuveen, the asset management division of TIAA. TIAA has a long history of responsible investing leadership and was an early signatory to the UNPRI.

 

ESG Integration at Churchill

We believe that addressing material ESG risk and opportunity factors in the investment decision-making process helps to reduce investment risk, may enhance long-term value and ensures that investor capital is used effectively and ethically.

Aligned to:

LOGO

Our Beliefs

Demand from institutional investors is driving rapid growth across private debt segments, and the increasingly competitive landscape is adding another layer of complexity when sourcing and closing deals. We believe that addressing material ESG risk and opportunity factors in the investment decision-making process helps to reduce investment risk, may enhance long-term value and ensures that investor capital is used effectively and ethically.

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Our Approach

We seek to partner with like-minded and reputable long-term oriented companies and operators with strong ESG practices. Our commitment and approach to responsible investing is set out in our Sustainability Policy and reflects evolving industry best practices for integrating ESG factors throughout the investment lifecycle. Core elements of our approach include:

ESG screening
ESG due diligence
ESG monitoring
ESG screening

A materiality and exclusions analysis helps to identify ESG-related risks that have the potential to damage a company’s operations and reputation.

ESG due diligence

An ESG checklist is used to further prioritize and understand material ESG issues against a set of common criteria, the result of which are discussed by the Investment Committee and inform the credit decision.

ESG monitoring

Our investment teams monitor material ESG risks throughout the life of an investment and conduct frequent reviews with management teams and investment partners to address any issues or incidents that may arise.

We integrate ESG factors throughout the investment lifecycle and seek to partner with like-minded companies with strong ESG practices.

Due diligence & underwriting
Monitoring
Due diligence & underwriting
  • Identify materiality and exclusions based on company, sector and geography
  • Evaluate ESG-related risks using customized checklist
  • Consider alignment with the UN sustainable Development Goals (SDGs)
  • Include ESG analysis in investment approval memo
  • Document material ESG issue to be monitored during portfolio review
Monitoring
  • Assess management of ESG issues by portfolio companies on a quarterly basis
  • Report any ESG risks or incidents as they arise, and continue to monitor 
  • Communicate ESG-related information in investor reporting
  • Disclose materials ESG incidents as they arise

Sharing Our Experience

We are committed to sharing our experience and perspectives on ESG integration in private debt with the broader responsible investing community, to encourage others to adopt these practices.

In 2019, we collaborated with the UN backed Principles for Responsible Investment (UNPRI) on the launch of the report “Spotlight on responsible investment in private debt,” the first industry guidance on responsible lending in private credit. Related resources are included below:

PRI

1 UNPRI Case Study
2 UNPRI Webinar
3 UNPRI Report

Case Examples

UNPRI case study

Reducing Investment Risk

ESG due diligence helps identify environmental liabilities, legal liabilities or repetitional risks.

UNPRI webinar

Monitoring ESG Risks

ESG due diligence helps to uncover material issues that should be monitored throughout the lifetime of n investment.

UNPRI repoty

Screening to Ensure Ethics

Using ESG screens helps us to ensure that we invest in an ethical manner and exclude companies not aligned with our core values.

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Aligning with the UN Sustainable Development Goals (SDGs)

SDG 3 - health and well-being
SDG 4 - education
SDG 8 - decent work

In addition to ESG integration, we also consider the sustainability impact of our investments by assessing their relevance to the UN Sustainable Development Goals (SDGs). Established in 2015, the SDGs provide clear guidelines and targets to achieve sustainable development at a global level by 2030. They serve as an important external framework for investors to align their sustainability efforts.

We screen all investments for alignment with one or more of the sustainable development themes covered by the SDGs using an SDG checklist. This helps us to better understand our potential sustainability impact at the individual deal and portfolio level and communicate shared sustainability objectives with our partners and stakeholders.

Our SDG-aligned investments primarily target sustainable development themes related to health and wellness, education, and decent work.