“We frequently seek opportunities to enhance ESG within our investment processes. We felt that OSINT-based analysis was the natural next step for our ESG programme.” – Coller Capital
Neotas Partners With Coller Capital
In their latest ESG Report, Coller Capital highlighted the power of OSINT in providing valuable insight beyond what is typically self-reported. This is critical at the initial investment stage and ongoing monitoring of the portfolio, to identify any red flags which need to be addressed throughout the funds’ lifecycle.
“This data provides new and original insights into non-financial risks. The inclusion of non-financial risk analysis has enabled better decision-making.” – Coller Capital
Who Are Coller Capital?
Founded in 1990, Coller Capital is one of the world’s leading investors in the secondary market for private assets, whose individual investments can be up to $1 billion or more. In January 2021 the firm closed Coller International Partners VIII, with committed capital (including co-investment vehicles) of just over $9 billion and backing from over 200 of the world’s leading institutional investors. In February 2022 the firm closed Coller Credit Opportunities I, with committed capital (including co-investment vehicles) of $1.45 billion and backing from over 30 institutional investors.
Regarded as a market leader for responsible investment, Coller Capital formed its ESG Committee in 2011, joined the first cohort of the Carbon Disclosure Project (CDP) and became carbon neutral as a firm in 2019. They are a founding signatory of the Initiative Climat International as well as a founding signatory of ILPA’s Diversity in Action (DIA) initiative.
Coller Capital have also retained their A+ rating from the PRI across the board since 2018.
ESG Report 2021
Within their ESG Report 2021, Coller Capital highlights the important role held by the industry in engendering greater innovation and collaboration in ESG.
As a secondary private capital investor, Coller Capital is well positioned to influence the General Partners (GPs) into whose funds they invest on ESG.
For their latest ESG report, Coller Capital gathered responses from 95 GPs representing 525 private equity funds, on their ESG approach and adoption of ESG practices.
Findings showed 86% of GPs of respondents are initiating measures to improve ESG performance within their portfolio companies. The proportion of GPs planning to increase their emphasis on ESG during the holding period also continues to grow, with 88% of respondents looking to increase their focus on ESG throughout their operational management. 73% respondents will focus on ESG during due diligence and / or when preparing for exit.
“Neotas searches go deeper than traditional due diligence checks by ‘spidering out’ across the entire internet and their proprietary AI technology helps them analyse vast quantities of data at speed.” – Coller Capital
Value of Enhanced ESG Screening
Early screening remains the most frequent stage at which a GP declined an investment for ESG reasons. Almost half of respondents within Coller Capital’s ESG report were found to have declined an opportunity on ESG grounds at the initial stage of the investment process, rather than after due diligence or at the Investment Committee stage.
This only serves to highlight the importance of engaging OSINT investigations as early as possible.
Further, only 32% of GPs reported ESG-related adverse events at their portfolio companies in the last 12 months and after cases of litigation, adverse publicity and negative media were the most common events.
Is there more to uncover, before it’s too late?
“In revisiting and refining our process over time we have enhanced our approach to ESG screening, and our analysis and outputs” – Coller Capital
OSINT for ESG Risk Analysis
Did you know that search engines only capture 4-6% of available data online?
Applying the science of OSINT honed over multi-year R&D, Neotas’ AI-powered Platform can rapidly analyse all publicly available data online across the entire breadth of the internet.
OSINT techniques overcome many of the shortcomings of traditional ESG assessments, which rely on self-reporting and experiences a time lag, as well as only capturing data at a point in time. The Neotas Platform and ongoing monitoring tool delivers analysis on a more real-time basis, rapidly processing vast quantities of live data to deliver meaningful insights for more robust, holistic decision-making.
Deep-dive investigations can be applied to both individuals or organisations and are not limited by international jurisdictions. The Platform processes data in over 200 languages and pulls from the following sources:
Example red flags that would otherwise have gone undiscovered using traditional methods include:
- The illegal use of animals and animal parts (e.g. rare, and protected species)
- Deforestation (e.g. illegal logging or logging in sensitive areas)
- Financial crime (e.g. fraud, money laundering)
- Unethical or unsafe work practices (e.g. modern slavery and human trafficking or other human rights abuses)
“The time when firms could get away with a veneer of ESG is over.” Adam Black, Head of ESG & Sustainability at Coller Capital
Increasingly, regulators are turning attention to the claims of private market participants around sustainable investing, with a higher degree of scrutiny and emphasis on evidence.
Neotas OSINT investigations can tackle accusations of ‘greenwashing’ by delivering ESG risk signals and reporting that is 100% fully auditable, documented and recorded at every step of the way.
Through greater emphasis on non-financial risk data and the use of OSINT techniques, Neotas are pleased to be long-term partners with Coller Capital to support their pioneering commitment to ESG.
Make sure you’re ahead of the curve – schedule a call with a member of our team to enhance your ESG risk management framework today.