UN PRI Principles, UN Global Compact, and PEGCC Guidelines
At DCA, we are committed to thoughtfully considering Environmental, Social and Governance (ESG) issues as they pertain to our portfolio company investments.
As part of our commitment to this investment approach, DCA has become a signatory to the United Nations Global Compact and United Nations Principles for Responsible Investment and has adopted the Private Equity Growth Capital Council’s (PEGCC) Guidelines for Responsible Investment. The Compact, Principles, and Guidelines serve as a platform for formalizing and focusing our investment efforts. In accordance with the Compact, Principles, and Guidelines, DCA commits to take environmental, social, governance, and labor issues into account when making and managing investments.
As institutional investors, we have a duty to act in the best long-term interests of our investors. In this fiduciary role, we believe that environmental, social, and corporate governance (ESG) issues may affect the performance of our investment portfolio (to varying degrees across companies, sectors, regions, and over time). We also recognize that applying the Compact, Principles, and Guidelines may better align our investors with broader objectives of society. Therefore, where consistent with our fiduciary responsibilities, we commit to the following:
UN Global Compact
DCA will embrace, support and enact, within our sphere of influence, the following set of core values in the areas of human rights, labor standards, the environment and anti-corruption:
Principle 1: Businesses should support and respect the protection of internationally proclaimed human rights; and
Principle 2: Make sure that they are not complicit in human rights abuses.
Principle 3: Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining;
Principle 4: The elimination of all forms of forced and compulsory labor;
Principle 5: The effective abolition of child labor; and
Principle 6: The elimination of discrimination in respect of employment and occupation.
Principle 7: Businesses should support a precautionary approach to environmental challenges;
Principle 8: Undertake initiatives to promote greater environmental responsibility; and
Principle 9: Encourage the development and diffusion of environmentally friendly technologies.
Principle 10: Businesses should work against corruption in all its forms, including extortion and bribery.
UN Principles for Responsible Investment
DCA will embrace, support and enact, within our sphere of influence, the following set of Principles for Responsible Investment when making investments in portfolio companies:
Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: We will each report on our activities and progress towards implementing the Principles.
Private Equity Growth Capital Council’s (PEGCC) Guidelines for Responsible Investment
DCA will embrace, support and enact, within our sphere of influence, the following set Guidelines for Responsible Investment when making investments in portfolio companies:
Guideline 1: We will consider environmental, public health, safety, and social issues associated with target companies when evaluating whether to invest in a particular company or entity, as well as during the period of ownership.
Guideline 2: We will seek to be accessible to, and engage with, relevant stakeholders either directly or through representatives of portfolio companies, as appropriate.
Guideline 3: We will seek to grow and improve the companies in which they invest for long-term sustainability and to benefit multiple stakeholders, including on environmental, social, and governance issues. To that end, Private Equity Growth Capital Council members will work through appropriate governance structures (e.g., board of directors) with 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.
Guideline 4: We will seek to use governance structures that provide appropriate levels of oversight in the areas of audit, risk management, and potential conflicts of interest and to implement compensation and other policies that align the interests of owners and management.
Guideline 5: We will remain committed to compliance with applicable national, state, and local labor laws in the countries in which they invest; support the payment of competitive wages and benefits to employees; provide a safe and healthy workplace in 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.
Guideline 6: We will maintain strict policies that prohibit bribery and other improper payments to public officials consistent with the U.S. Foreign Corrupt Practices Act, similar laws in other countries, and the OECD Anti-Bribery Convention.
Guideline 7: We will respect the human rights of those affected by their investment activities and seek to confirm that their investments do not flow to companies that utilize child or forced labor or maintain discriminatory policies.
Guideline 8: We will provide timely information to their limited partners on the matters addressed herein, and work to foster transparency about their activities.
Guideline 9: We will encourage their portfolio companies to advance these same principles in a way which is consistent with their fiduciary duties.
DCA’s ESG Approach to Investments and Operations
While observing and adhering to the UN Global Compact, UN Principles for Responsible Investment and PEGCC Guidelines for Responsible Investment, there are five governing principles which provide the foundation of our approach to and implementation of ESG. DCA will work with management in each portfolio company to ensure they:
- Respect the dignity and well-being of all our investors, team members and those at or associated with our portfolio companies
- Operate professionally in a performance-orientated culture and be committed to continuous improvement in our Firm and each portfolio company3. Be open, honest and transparent in all our dealings, while respecting commercial and personal confidentiality
- Be good corporate citizens, demonstrating integrity in each portfolio company and community in which we operate
- Be objective, consistent and fair with all our stakeholders – putting their interests before those of the Firm
- We are committed to creating sustainable value through ensuring that these principles and practices are shared by our portfolio companies. To promote these common values we champion the rigorous standards in health and safety, environmental and social issues in addition to transparency and best practices in corporate governance and accounting.
For each portfolio company investment that DCA makes, we will encourage the company to become signatories to the UNPRI and Global Compact and strive to ensure that best practices are implemented in all aspects of that business including those relating to its interactions with its customers and community. ESG screening and appraisal are crucial elements of the investment selection and review process and we ensure that all of our portfolio companies adhere to our ESG code and work towards best practices.