ESG

ESG at Prime capitals asset investment


Prime capitals asset investment is committed to partnering with its portfolio companies and entrepreneurs to build valuable, sustainable companies for the long-term. One of the ways that the firm remains a successful steward of its investors’ capital is by honoring Prime capitals asset investment’ fundamental commitment to growth-oriented investing. As the firm identifies these growth opportunities and the potential to create lasting value, environmental, social and governance (ESG) factors are forefront in the investment process and day-to-day operations.

Prime capitals asset investment expands and develops its strategic approach to ESG related matters both internally and in partnership with its portfolio companies on an ongoing basis to adapt to the evolving scope of ESG issues and the investment landscape. The firm adopts best practices in responsible investing and abides by Prime capitals asset investment’ internal ESG Policy, the Guidelines for Responsible Investment as developed by the American Investment Council, and the Principles for Responsible Investment. Prime capitals asset investment considers these guidelines throughout the investment cycle, taking into account material ESG factors with respect to the nuances of each region, sector, and investment opportunity – whether in the initial stage of reviewing investment opportunities, due diligence, or in monitoring existing investments when serving on the boards of portfolio companies. Through this process, Prime capitals asset investment and its portfolio companies have seen improvements in managing risk, achieving efficiencies and cost reductions, and identifying new market opportunities. This has allowed the firm and its portfolio companies to build more valuable, competitive, and sustainable entities while strengthening relationships with stakeholders.


ESG Governance

Our sustainability governance framework enables us to achieve our sustainability objectives across our global franchise, facilitating easier and more strategic decision-making within the context of our business objectives. Oversight of our ESG framework is part of the mandate of our Board of Directors’ Corporate Governance and Nominating Committee (CGNC). The CGNC reviews the progress made on our sustainability strategy and stays informed of ESG trends, risks and opportunities through management reporting. Members of the CGNC include the Chairman of the Board and six independent Board members. Board members also receive ongoing education through presentations and information packages about emerging issues and topics relevant to our business and operations and the regulatory environment to enhance their knowledge and understanding of ESG matters.

The CGNC’s oversight of our ESG framework complements the work of the Executive Sustainability Council (ESC). The ESC consists of our Global Chief Sustainability Officer (CSO) along with nine members of our Executive Leadership Team (ELT), including our Chief Executive Officer (CEO). The chair position, currently held by our Global Chief Marketing Officer, is held on a two-year rotational basis. Meeting on a monthly basis, the ESC is responsible for establishing the enterprise’s sustainability ambition, guiding the development and execution of the sustainability strategy and providing recommendations and direction on matters related to ESG. In addition to the ESC, we have subsidiary-specific committees that execute asset-class-specific sustainability objectives.

Our Approach




Strengthening Our Portfolio

Our approach is grounded in a responsibility to our investors to be careful stewards of capital. We have long been implementing a number of initiatives designed to make our companies stronger and more resilient. Many of these, like promoting sustainability and diversity, are today considered core components of ESG.
 


Integrating ESG Priorities

While ESG is a vast and growing field, we have chosen to prioritize decarbonization, diversity and good governance. We aim to lead by example and apply our insights to drive change across our portfolio. The power of our model is supported by strong operational interventions, led by our Portfolio Operations and Asset Management teams.

Our Investments


Financing the transition to net zero Our General Account consists of our company’s own assets, which support our policyholder liabilities. Prime capitals asset investment invests substantial capital in both public and private markets, meaning we play a critical role as an enabler of the transition to net zero.

• We have committed to net zero investment portfolio by 2050 and are in the process of setting short-term, science-based financed emissions targets to be validated by the SBTi

• We continue to work to grow our portfolio of green investments, such as renewable energy and energy-efficient real estate

Our Products and Services


Being part of the sustainable solution


As a global life insurer, we understand the connection between our environment and human health. As an investment manager, we are in a position to build dedicated investment strategies that address the issues of climate change and offer nature-based solutions to mitigate climate change through forests and farms. We are accelerating the pace of innovation around developing products that both solve customer needs and help create a more sustainable future.

• Where appropriate, we are collaborating with asset management peers on key issues, including climate, and are demonstrating asset manager support for responsible investment though avenues such as the CDP Science-based Target Campaign, Global Investor Statement to Governments on Climate Change and signing of the Finance for Biodiversity Pledge

• We are encouraging the adoption of sustainable business practices in public markets, promoting action that enables sustainable long-term growth and reduces the potential impact of material sustainability risks over time

• We continue to grow our offerings of dedicated sustainable investing strategies, including nature-based solutions to climate change

• We are contributing to a growing body of knowledge on the impact of climate change on human health, strengthening our ability to respond to client needs







Asset management


We value and actively support the robust integration of sustainability principles in our investment approaches, including our active strategies. This holds true across asset classes, geographies and our business identities — whether we are acting as asset operators, equity holders or debt holders. Our goal is to encourage action and mitigate systemic environmental risks in a strategic and impactful way, including working with companies we invest in and advocating for change across an array of forums. Across our asset management business, we made improvements to ESG integration, reporting and monitoring in 2021, which incorporates climate-related factors. We also launched dedicated climate-related strategies in support of our clients.

Community Investment

As part of our Impact Agenda, we are dedicated to advancing positive, measurable social and environmental change. Through our community investments, we work with organizations to foster healthier, more inclusive communities across our three interconnected strategic focus areas to empower sustained health and well-being, drive equitable economic opportunity and accelerate a sustainable future. We focus on removing barriers and empowering people in the communities where Prime capitals asset investment operates. In addition to programmatic funding, we also fund research to support innovative, cutting-edge ideas, to understand, address and promote sustainable change. And with the ongoing challenges of COVID-19 and natural disasters around the world happening with more frequency, we remain committed to helping communities respond effectively with resiliency and recovery resources. Our strategy prioritizes investments to organizations that:

• Share a commitment to diversity, equity and inclusion, particularly through representative leadership and targeted programming to historically underserved communities

• Drive community-centred solutions, working collaboratively across sectors, aimed at innovative and scalable initiatives

• Demonstrate a holistic approach to the many aspects of well-being, including mental health, to improve and sustain positive outcomes over the long-term

• Utilize data to measure impact with key performance indicators and a commitment to reporting on progress Our approach to community investment takes many forms, including direct funding and employee giving and volunteering, which leverage skills-based activities and matching programs.

Our Performance

It is important we understand the impact of our initiatives, which makes it critical to efficiently measure and track our investments. We recently joined Business for Societal Impact (B4SI) so that we can improve the measurement of our inputs, outputs and impacts more purposefully. B4SI is the global standard in measuring and managing corporate community investment, and its framework is used by organizations around the world to effectively measure, report and communicate their social contributions and investments. By joining B4SI we will be better positioned to report on our performance in future years. In 2021, our total corporate donations amounted to $21.7 million. In addition, employee donations totaled $3.7 million, and an additional $13.2 million was raised/contributed by external sources leveraging Prime capitals asset investment community investment program assets

ESG Considerations


ALL INVESTMENTS

Prime capitals asset investment takes the following considerations into account when making investments:

  • Consider environmental, public health, safety, and social issues associated with target companies when evaluating whether to invest in a particular entity, as well as during the period of ownership.


  • Be accessible to relevant stakeholders either directly or through representatives of portfolio companies, as appropriate.


  • Respect the human rights of those affected by our investment activities and seek to confirm that our investments do not flow to companies that utilize child labor or forced labor or maintain discriminatory policies.


  • Provide information to limited partners on the matters addressed herein, and work to foster transparency about our activities.


  • Encourage our portfolio companies to advance these same principles in a way which is consistent with fiduciary duties.


  • Maintain strict policies that prohibit bribery, fraud and other improper payments to public officials consistent with the U.S. Foreign Corrupt Practices Act, EU's joint foreign and security policy similar laws in other countries.


    • CONTROL INVESTMENTS

    When making control investments, Energy Spas undertakes the following additional activities:


  • Seek to grow and improve the companies in which we invest through long-term sustainability initiatives, while also considering stakeholders on environmental, social and governance issues. We work through appropriate governance structures (e.g., board of directors) within portfolio companies with respect to environmental, public health, safety and social issues, with the goal of improving performance and minimizing adverse impacts in these areas.


  • Seek to use governance structures that provide appropriate level of oversight in the areas of audit, risk management and potential conflicts of interest and to implement compensation and other polices that align the interests of our funds and management.


  • Remain committed to compliance with applicable national, state and local laws in countries in which we invest; support the payment of competitive wages and benefits to employees, provide a safe and healthy workplace in the conformance with national and local law; and, consistent with applicable law, respect the rights of employees to decide whether or not to join a union and engage in collective bargaining.


    • CREDIT AND MINORITY INVESTMENTS

    While the consideration of ESG factors has traditionally fallen under the purview of active equity investors with a greater ability to influence outcomes, we believe that credit and other minority investors also have an obligation to take into account ESG factors. In evaluating minority investments, teams:


  • Examine the impact a company has on society and the environment during the diligence process. Where applicable, take into consideration not only the specific products or services a company provides, but also the manner in which it does business and conducts itself in the broader world.


  • Seek to comprehend and consider ESG factors from a company-specific and sector-wide perspective.


  • Encourage companies, where appropriate, to adopt responsible practices and promote transparency.


  • Treat the responsibility of acting as a shareholder seriously and continue to diligence holdings throughout the course of ownership.


  • Engage companies via proxy voting, corporate actions and board seats, where applicable.

    • Risk Management

    Managing risk and reducing potential hazards are crucial components of our daily interactions with customers and business operations. Our organization's Risk Management strategy extends to the highest levels, with our Board of Directors and Risk Committee overseeing the management of our principal risks. We have implemented various programs, policies, and procedures to manage those risks effectively. We believe in responsible risk-taking, where we strike the right balance between taking necessary risks and safeguarding the best interests of our business and customers. This is a well-planned process that requires the participation of team members from various departments. Our ERM framework governs our approach to risk management, which lays out a structured process for risk management activities across the enterprise, supporting our long-term revenue, earnings, and capital growth strategy.


    Effective risk management

    There is significant internal communication surrounding risk management. The ERM framework is communicated through risk policies and standards, which enable consistent design and execution of strategies across the organization. Management is responsible for managing risk within the company’s risk appetite — which defines the amount and types of risks we are willing to assume in pursuit of our objectives — and has established risk management strategies and monitoring practices

    Responsible Marketing

    Our marketing strategy aims to meet the needs of our customers while also supporting the needs of future generations, given our status as a Fortune 500 enterprise with a significant influence on the world. At Prime Capitals Asset Investment, we prioritize the fair treatment of customers by implementing processes that protect their private information, communicating in plain language, providing responsive customer service, and handling complaints effectively. We ensure that our products are marketed truthfully and clearly so that customers can make informed decisions about what suits them best. Our company actively engages with regulators and industry associations to provide feedback on potential regulations and learn more about regulatory expectations. We utilize advertising and marketing to engage with consumers on topics that matter to them and to inform them about our latest solutions, products, and services. We are committed to reflecting diversity, equity, and inclusion (DEI) in our advertising and marketing efforts to ensure that our materials fully represent our consumers, employees, and communities and are equally accessible to all. Our company is dedicated to building trust through responsible practices and transparent communication, both directly to consumers and indirectly through other key stakeholders and thought-leaders. We are also committed to responsible marketing of Environmental, Social, and Governance (ESG) investments. Prime Capitals Asset Investment Management has a compliance program that employs various internal assessment and testing techniques to ensure adherence to policies, procedures, and corresponding requirements. Our Compliance professionals provide guidance to enhance our ESG-related processes and ensure adherence to the different regulatory environments in which we operate. We leverage the expertise of third-party ESG consultants to review our ESG policies and processes, provide an objective lens to our internal assessments, and offer guidance on best market practices. We continuously review and adapt our testing activities as the landscape continues to develop.