NBPE believes that financially material environmental, social and governance factors are an important driver of long-term investment returns from both an opportunity and a risk-mitigation perspective.
Centered on NBPE’s objective to deliver better investment outcomes, the Board has adopted a Responsible Investment Policy. The policy is subject to periodic review by NBPE’s Board and the Manager’s Stewardship and Sustainable Investing (SSI) Committee.
The Manager uses a reputable, recognised third party to identify companies with past financially material risk incidents and violations, with the understanding that there may be coverage gaps of non-listed company names. The Manager provides the Board with an update on investments and ongoing monitoring in the context of adherence to the Responsible Investment Policy.
NB Private Markets also leverages Neuberger Berman’s broader sustainable investing capabilities and resources, including Stewardship and Sustainable Investing policy and climate strategy, proprietary ratings, and data analytics.1
Neuberger Berman has longstanding experience in responsible investing, considering finanically material environmental, social and governance factors as important drivers of long-term investment returns from both an opportunity and a risk mitigation perspective.
Three Pillars of NBPE’s Responsible Investment Policy and Implementation
NBPE believes investing responsibly and the incorporation of finanically material environmental, social, governance considerations can help inform the assessment of overall investment risk and opportunities, which we include as a standard part of our process.
1. Avoid
- Ability to exclude particular companies or whole sectors from the investable universe to meet regulatory requirements and accomodate client needs.
- NBPE expects corporations to uphold fundamental responsibilities as defined by the United Nations Global Compact (UNGC) Principles, OECD Guidelines for Multinational Enterprises, and the United Nations Guiding Principles on Business and Human Rights, in regards to human rights, labour, the environment and anti-corruption. The Manager includes a review of related violations and higher risk exposures as a part of its due diligence and monitoring activities.
- NBPE will endeavor to not invest in companies which are engaged in activities related to: controversial weapons, tobacco, civilian firearms, private prisons, and fossil fuels.
2. Assess
- NBPE considers financially material environmental, social, and governmental factors alongside traditional factors in their investment decisions. These factors are generally no more significant than other factors in the investment selection process.
- Financially material environmental, social, governmental factors are formally incorporated in Investment Committee memorandums.
3. Amplify
- Seek to achieve a financial goal by investing in issuers with sustainable business models, practices, products or services and leadership on relevant sustainability factors.
NB Private Markets believes that incorporating financially material environmental, social, governance considerations throughout its investment process can potentially lead to more consistent and better investment outcomes by helping to identify both financially material risks and opportunities to drive value. We are focused on long-term partnerships and engaging with our partners to promote sustainable investing integration best practices.
1 Subject to Neuberger Berman’s policies and procedures, including certain information barriers within Neuberger Berman that are designed to prevent the misuse by Neuberger Berman and its personnel of material information regarding issuers of securities that has not been publicly disseminated.
SUSTAINABLE INVESTING-RELATED DISCLOSURES
Neuberger Berman views the consideration of financially material environmental, social and governance factors to be an opportunity to potentially enhance or protect the performance of its investments over the long-term. While the analysis of financially material environmental, social and governance factors is subjective by nature and may be informed by both internally generated and third-party metrics, data and other information, Neuberger Berman believes that the consideration of financially material environmental, social and governance factors, alongside other financial metrics, may enhance the overall investment process. Neuberger Berman cannot guarantee that its consideration of financially material environmental, social and governance risks will positively impact the performance of any individual investment or any respective Fund as a whole. The use of financially material environmental, social, and governance factors could result in selling or avoiding investments that subsequently perform well or purchasing Investments that subsequently underperform. NB Private Markets consists of the following investment strategies that are currently classified as integrating financially material environmental, social, governance considerations by the Neuberger Berman ESG Product Committee: Private Equity Investment Portfolios and Co-investment Platform, Private Equity Secondary Platform, ARS Funds, Private Credit Platform, Marquee, NB Insurance-Linked Strategies Platform, NB Specialty Finance Platform and NBAIM Fund-of-Funds Platform.
This material is intended as a broad overview of the portfolio managers’ style, philosophy and process and is subject to change without notice. Many of the-firm level processes described herein are subject to Neuberger Berman’s policies and procedures, including certain information barriers within Neuberger Berman that are designed to prevent the misuse of material information between the NB Private Markets teams and the public side investment and Stewardship and Sustainable Investing teams.