ENVIRONMENTAL, SOCIAL AND GOVERNANCE POLICY
Park Square Capital, LLP (“Park Square” or the “Firm”) recognises the importance of environmental, social and governance (“ESG”) issues, and is a signatory of the UN-supported Principles for Responsible Investment (PRI). Park Square is primarily focused on investments in credit, rather than in control equity, and so has a limited ability to influence portfolio company management policies directly, since the responsibility for governance generally lies with the control equity owner. However, Park Square believes that it is good investment practice to invest in businesses that uphold high standards of corporate governance, as that is generally a hallmark of a high quality business and management team. Poorly managed ESG risks can lead to inefficiencies, operational disruption, litigation and reputational damage, which may ultimately impact an issuer’s ability to meet their financial responsibilities. Where possible, and consistent with its fiduciary responsibilities to its investors, Park Square works with financial sponsors and portfolio companies to address ESG issues through the following policies:
- Park Square has implemented a selective and disciplined investment approach, using a high-touch “private equity-style” due diligence process, and seeks to differentiate itself on the quality and depth of its investment analysis. The Firm considers ESG issues both as part of the detailed due diligence carried out before an investment, and as part of the ongoing monitoring of portfolio companies following an investment. Park Square will decline opportunities that it believes may provide an inappropriate exposure to ESG risks;
- Park Square seeks to be accessible to, and to engage with, a range of stakeholders on key issues and challenges relating to ESG issues;
- Park Square seeks to ensure that portfolio company managers maintain appropriate levels of oversight in the areas of audit, risk management and conflicts of interest, and will independently commission specific diligence reports from consultants where appropriate;
- Park Square seeks to provide timely information to limited partners and other stakeholders regarding the actions taken to address ESG issues, and to foster transparency in portfolio companies regarding these matters.
Park Square believes that incorporating ESG issues into its business decisions is an important part of its investment strategy, and helps develop the sustainable long-term value of its investments. Park Square will continue to monitor and develop its ESG policy in line with internationally established guidelines and conventions for responsible investing.