In addition to requiring compliance with national laws and regulations pertaining to ESG, we conduct investments in alignment with international ESG management standards and practices including:
ARCH regularly monitors, reviews and reports on the Funds’ and investments’ ESG performance in alignment with Environmental and Social Management Systems (ESMS). Each ESMS is fit-for-purpose in relation to each investment theme and includes policies, procedures and tools to:
The Funds‘ ESMS also define actions for active ESG stewardship, including supporting ARCH’s investments by sharing knowledge, building internal capacity, and leveraging board/shareholder influence. They outline prohibited investment activities based on the IFC’s Exclusion List, at minimum, as well as requirements from Limited Partners (LPs).
As part of ARCH’s Fund strategies to minimise adverse ESG impact, we seek to avoid involuntary physical and economic displacement where possible, or conduct it in line with IFC’s Performance Standard 5 to minimise impact. We also strive to avoid negatively impacting critical cultural heritage; Indigenous Peoples; legally protected and internationally recognized areas; and critical habitats.
ARCH is committed to upskilling investment teams on, and developing a tool to support them with pre-screening targets’ climate risk exposure. We are also committed to conducting climate risk scenario analysis at the portfolio company level in line with disclosure recommendations by the Task Force on Climate-related Financial Disclosures (TCFD).