Responsible Investing
Investing Responsibly and Ethically
Investing responsibly and ethically can lead to better-informed decisions, therefore protecting and/or creating long-term value for our stakeholders. Through our Corporate Sustainability Policy, Sustainable Assessment Policy, and Stewardship and Engagement Policy, ORIX USA Group has developed guidelines seeking to incorporate critical sustainability considerations into its decision-making processes in addition to developing a constructive approach to engaging with stakeholders.
Key Sustainability Considerations
Environmental
We seek to identify and evaluate material environmental matters related to an obligor’s/investee’s direct and indirect impact on the environment (e.g., climate change resilience/preparedness, air, water, and soil quality, resource use and waste management, environmental innovation, and biodiversity & ecosystems), as well as how environmental matters may affect the business.
Governance
We seek to assess the strength and quality of an obligor’s/investee’s governance practices (e.g., Board composition, independence, transparency, and ownership structure; qualifications and alignment of senior management with stakeholders; sustainability strategy; exposure to unethical behavior, corruption, or poor oversight practices; and approach to corporate social responsibility). Governance is a foundational consideration, as weak governance can amplify other material sustainability risks across an organization.
Social
We seek to evaluate the direct and indirect impact of an obligor/investee on society/communities (e.g., relationship with and impact on employees, customers, suppliers, and the broader community; human rights; labor rights & practices; employee and product health and safety; data privacy and cybersecurity; and product/service responsibility and customer protections), as well as social matters affecting its business and industry.
Sustainability Assessment Framework
Our approach to responsible investing has been translated into our “Sustainability Assessment Framework” which applies to new and existing investment opportunities across all our asset classes1 consisting of the following:
Screen & Assess
Applying a screen to certain escalated activities that we generally seek to avoid. Consideration of material sustainability issues relating to a potential investment, using our proprietary Sustainability Scorecard. Leverage the guidance of ORIX USA Group’s Sustainability Advisory Group as needed.
Monitor
Regular review and update of our sustainability assessments, with a focus on areas of concern identified during underwriting.
Engage
Seek to engage – constructively and directly – with sponsors, obligors/investees, and stakeholders on material sustainability matters and effectively address areas of concern that may enable risk mitigation, as well as value protection and/or creation.
1 Strategies under asset classes are subject to any fiduciary or other legal limitations, as well as the level of control, access, and influence we have through our equity positions in investees and/or loans provided to obligors and should also be considered to the extent possible so long as consistent with each client’s contract, specific investment objectives, investment management agreements, offering memoranda or private placement memoranda and other governing documents (collectively, “Governing Documents”), as well as relevant regulatory requirements.
