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.
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.
Core elements of our approach include:
An initial analysis is conducted to help to identify ESG-related risks related to specific industries that have the potential to damage a company’s operations or Churchill’s reputation.
A proprietary ESG ratings tool is used to further prioritize and understand material industry specific ESG issues against a set of common criteria, the result of which are included the Investment Committee memo and inform the credit decision.
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 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.
We integrate ESG factors throughout the investment lifecycle and seek to partner with like-minded companies with strong ESG practices.
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:
Reducing Investment Risk
ESG due diligence helps identify environmental liabilities, legal liabilities or reputational risks.
Monitoring ESG Risks
ESG due diligence helps to uncover material issues that should be monitored throughout the lifetime of an investment.
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.