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Setting New ESG Reporting Standards
19 Apr 2021

Investment consultant Albourne1 has launched a new Environmental, Social and Governance (ESG) framework for Alternatives (including both Hedge Funds and Private Markets). This initiative is supported by Border to Coast Pensions Partnership (Border to Coast), one of the largest public sector pension pools in the UK.

With a Private Markets investment program expected to grow to over £5bn in the next 12 months, Border to Coast is concerned at the lack of robust and consistent ESG standards in Private Markets. It is therefore supporting Albourne as it develops a framework based on the recommended due diligence questions (DDQs) set out by the United Nations-supported Principles for Responsible Investment (“PRI”).

Albourne is taking a multi-tiered approach and has just launched:

  1. A new questionnaire based on the PRI framework (replacing Albourne’s ESG DDQ originally launched in 2011);
  2. A new Albourne proprietary short form questionnaire; and
  3. A new proprietary ESG scoring framework (based on the above short form questionnaire).

Albourne is rolling out the above approach for all the alternative investment managers it is engaged with. Managers are invited to complete the questionnaires on Albourne’s manager portal, MoatSpace.

Border to Coast Chief Investment Officer, Daniel Booth said: “While ESG reporting has improved in public markets, there is a clear need to enhance standards, transparency and how we measure ESG risk, opportunity and performance in Private Markets. Albourne has a successful track record of implementing improvements on behalf of investors and we are delighted to work with them to enhance ESG reporting.”

Albourne’s Chief Executive Officer, John Claisse said: “Reporting around ESG is important and at Albourne we strive to change the view that ESG in the context of due diligence is just a ‘nice to have.’ We urge investors and managers alike to be thoughtful in their approach to ESG issues.”

The new scoring framework will cover three areas:

  • Policy and Governance;
  • Investment Process and Monitoring; and
  • Reporting.

The output will be a numerical score out of 100 which aims to enhance standards and transparency in the Alternatives industry.

Emlyn Palmer, Head of ESG Investing and Partner at Albourne, who leads the firm’s ESG initiatives, said: “Today, the game changer is that investors are increasingly looking at ESG factors as investment risk factors. Incorporating an ESG scoring framework helps encourage managers to not only meet minimum acceptable standards, but to raise industry standards overall. We anticipate a robust adoption rate by managers. In August 2020, we launched a new diversity and inclusion questionnaire, in partnership with the Alternative Investment Management Association and in just eight months received responses for more than 2,000 funds.”

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About Albourne

  • Albourne is an independent non-discretionary investment consultant founded in 1994. The firm advises over 300 clients2 on their alternative investments across the liquidity spectrum, specializing in Hedge Funds, Private Equity, Private Credit, Real Assets, Real Estate and Dynamic Beta.
  • Albourne’s clients include institutional investors, financial intermediaries and family offices, which collectively, have over $550bn3 invested in alternatives.
  • Albourne’s goal is to empower our clients to be the best investors they can be by providing Portfolio Advice, Research (Investment, Operational and Quantitative Due Diligence), Fintech (Data and Tools) and Implementation (Middle Office, Back Office, Fees & Liquidity) services. Albourne seeks to minimize potential conflicts of interest by only providing non-discretionary advice on a fixed-fee basis.
  • Albourne has over 450 employees and over 100 Partners based in North America, Europe and Asia. Albourne is 100% owned by current employees, a former employee and the Albourne Employee Benefit Trust.
  • In 2020 Albourne was appointed as an investment consultant to Border to Coast to provide a series of services to support Private Market activities, such as investment and operational due diligence, strategy, market research and portfolio construction support.
  • For more information, please see our website: www.albourne.com

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1 “Albourne”, “we” and “our” refer to the group of companies comprising Albourne Partners Limited and its subsidiaries.
2 The aggregate number of client entities for the Albourne Group worldwide. Clients may be subscribed to multiple services. All numbers are as of 1 January 2021.
3 This is a conservative aggregation of the estimated investments in alternatives (where known) of Albourne Group clients worldwide, using public sources where possible.

About Border to Coast Pensions Partnership Ltd

  • Based in Leeds, Border to Coast is an asset manager owned by 11 local government pension schemes (‘Partner Funds’), whose combined assets total c.£46 billion. The funds are Bedfordshire, Cumbria, Durham, East Riding, Lincolnshire, North Yorkshire, Surrey, South Yorkshire, Teesside, Tyne and Wear and Warwickshire.
  • Border to Coast offers its 11 Partner Funds investment opportunities across Equities, Fixed Income and Alternatives.
  • Since launch, Border to Coast has secured £3 billion of commitments across Private Equity, Infrastructure and Private Credit and has deployed c. £2.6 billion to date. Partner Funds can choose on an annual basis the level of their investment in each of these asset classes.
  • Border to Coast Pensions Partnership Ltd is authorised and regulated by the Financial Conduct Authority. Registered in England Number: 10795539 and Registered Office: 5th Floor, Toronto Square, Toronto Street, Leeds, LS1 2HJ.
  • Further details can be found at https://www.bordertocoast.org.uk

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