ESG Integration Approach
In keeping with Constellation’s objective to build long-term sustainable asset management businesses, Constellation seeks to facilitate the integration of environmental, social, and governance (“ESG”) considerations throughout the platform’s investment process. Our approach is founded in the belief that integrating material ESG factors can help us manage financial risk more holistically and identify opportunities that aim to create value for our partners. As such, Constellation takes a hands-on approach to ESG by viewing investments as partnerships in which we aim to educate, engage and empower the platform’s portfolio companies to adopt best-in-class ESG practices.
Our Multiplier Effect
Constellation is uniquely positioned to catalyze the adoption of strong, long-term ESG practices, not only among a new generation of alternative investment managers but also across their underlying investments. The platform seeks to facilitate the integration of ESG considerations into the investment decision-making processes of its portfolio companies, partner with them to implement strategic value creation projects related to ESG best practice and provide ongoing guidance and opportunities for learning throughout ownership. This approach aims to generate a multiplier effect, allowing ESG synergies to spread across our portfolio companies and flow through to their underlying investments.
Our ESG Integration Framework
When developing Constellation’s ESG strategy, we worked closely with the platform’s asset owners to create an approach that reflects a collaborative, global solution founded on shared ESG values across North America, Europe and the Middle East. As a result, Constellation has a defined ESG policy that sets forth a robust approach focused on integrating material ESG considerations into the investment process and providing ongoing guidance to each portfolio company. Constellation’s targeted ESG due diligence approach is designed to cover breadth and depth within a portfolio company: facilitating analysis of both the portfolio company’s operations and its underlying investment process. The process aims to identify key areas for value retention and value creation in each portfolio company and facilitate collaboration across the platform.
Constellation integrates ESG factors in three consecutive steps:
