OUR APPROACH TO
We understand the responsibility that comes with private lending and the impact it has on our investors and borrowers. The concept of responsible investing has always been an important part of Cortland's business model and now we have a formal ESG approach to enhance our investment process as well as identify and mitigate risks in prospective investments.
Beyond our investments, Cortland is committed to strengthening our internal ESG practices so that we can better serve our employees and community.
Identifying and minimizing
from ESG factors
risk-adjusted returns to our investors
our corporate citizenship practices
What is ESG?
ESG stands for Environmental, Social, and Governance and are non-financial factors that can contribute to the financial performance of a company. Investors and managers are actively including ESG assessments in the investment process to identify material risks and growth opportunities.
There is no definitive list of ESG issues and some of these issues cannot be solely categorized as only environmental, social, or governance issues. Below are some examples of ESG considerations across 3 broad categories.
Examples of ESG considerations include
Examples of environmental considerations include Greenhouse gas emissions; Energy, water, waste, and consumption management; Regulatory compliance; Resilience to climate change; Biodiversity/habitat conservation; Hazardous materials; Contaminated land; Land rehabilitation/remediation; Supply chain impacts; Responsible sourcing; Certifications and accreditations.
Examples of social considerations include Stakeholder/community engagement; Health and safety practices; Employee training and development; Gender, diversity, and discrimination; Supply chain integrity; Maintaining social license to operate; Indigenous rights; Human rights; Land acquisition and relocation; Local hiring practices/ job creation; Community benefits; Security/cyber security.
Examples of governance considerations include Policies and procedures; Board quality and independence; Board gender diversity; Audit/compensation committee structure and independence; Voting rights; Bribery and corruption; Executive compensation; ESG oversight and management; Political contributions; Lobbying activities; Whistleblower protection.
ESG-related conversations with borrowers during the origination process
Including ESG updates in investor communications and regular client reporting
Incorporating applicable ESG information and analysis into credit documents
a social committee to incorporate ESG considerations into corporate culture
ESG risks through regular meetings and reporting on company performance
by legal and underwriting ESG team members