JLL Partners | Environmental, Social, and Governance (ESG) Policy
At JLL Partners (“JLL” or “we”), we understand that environmental, social, and governance (“ESG”) considerations can have a material impact on our business and the businesses of our portfolio companies. We believe that by employing best practices for ESG management, we can mitigate risk and create value for all relevant stakeholders in our portfolio companies. In furtherance of this belief, we have established a framework through which to consider ESG risk factors and opportunities over the course of our private equity investment process, including pre-acquisition due diligence and continuous monitoring throughout the holding period.
Through this ESG policy, we will strive to align our investment practices with the American Investment Council (“AIC”) Guidelines for Responsible Investing, as incorporated in Appendix I. These private equity-specific guidelines incorporate elements of internationally recognized standards, including the UN-backed Principles for Responsible Investment.
ESG Governance & Oversight
ESG oversight, accountability, and implementation responsibility is executed at various levels within the Firm under the guidance of JLL’s ESG Committee. The Committee is a cross-functional cohort of senior and junior staff with representation from the Firm’s Investment, Compliance, Operations, and Investor Relations coverage teams. While some members are permanent, others may rotate in order to provide practical ESG experience throughout the Firm. The Committee is responsible for overseeing the Firm’s initiatives and maintenance of the Firm’s ESG Policy.
JLL recognizes that ESG is an ever-evolving field, and industry best practices in ESG management will continue to shift and improve over time. JLL will review this ESG Policy annually and revise as necessary in order to reflect updated standards. Updates to the policy will be shared with the Firm’s stakeholders.
Internal ESG Management and Accountability
At the Firm-level, JLL is committed to establishing clear ESG accountability within our team and enhancing the ESG management capacity of our employees, by:
Publicly disclosing this ESG Policy on our website, and distributing it internally to all investment professionals and other employees for reference;
Conducting dedicated training for all staff, including senior executives, on specific ESG risk factors and the potential impact on portfolio investments on an annual basis;
Engaging external consultants, as needed, to guide our ESG efforts and to ensure successful ESG diligence, remediation, and monitoring of each portfolio investment; and
Establishing formal policies and procedures to address Firm-level ESG matters, including data security controls, anti-bribery and corruption in interactions with foreign investors, anti-money laundering, employee political contributions, and anti-discrimination and anti-harassment.
ESG in the Investment Process
During the pre-investment phase, JLL is committed to proactively evaluating and monitoring material ESG risks and opportunities related to our investments. As part of the due diligence process for all platform and add-on deals, prior to signing, the deal team will assess all ESG-related risks and opportunities through the use of JLL’s ESG Due Diligence Sector Checklists. Any material findings from ESG due diligence assessments will be raised with the Investment Committee for a discussion of appropriate next steps. Prior to closing on all platform deals, and as needed for add-on deals, JLL will engage with a third-party expert to conduct ESG Due Diligence and further examine any ESG risks and opportunities identified in the pre-investment due diligence phase.
ESG Focus Areas
JLL aims to evaluate ESG considerations during the investment process in order to highlight significant ESG risks and value creation opportunities. To identify the selected material topics, JLL utilized global ESG standards, such as the Sustainability Accounting Standards Board (SASB), as well as industry expertise. Focus areas may include:
Greenhouse Gas (GHG) Emissions
Waste and Hazardous Materials Management
Product Lifecycle Management
Health, Safety & Wellness
Diversity, Equity, & Inclusion (DEI)
Employee Engagement & Retention
Philanthropy & Community Engagement
Supply Chain Management
Physical Impacts of Climate Change
Additionally, JLL has identified specific ESG topics that are relevant to the healthcare, business services, and industrials sectors in which the Firm invests. These include, but are not limited to, the areas outlined on the following:
Management of Waste & Hazardous Materials
Access & Affordability
Quality and Safety
Patient Privacy & Electronic Health
Supply Chain Management
Hazardous Materials & Waste
Product Quality & Safety
Material Sourcing & Efficiency
Supply Chain Management & Competitive Behavior
Intellectual Property & Competitive Behaviors
Systemic Risk Management
Exclusions & Parameters
JLL will screen all potential investments against their exclusions List, which identifies business sectors and activities that are inconsistent with JLL’s values as a Firm. JLL will not invest in any company that:
Involves child labor, forced labor, or human trafficking in its activities;
Engages in illegal activities or illegal production as per local, state, and national laws;
Derives any revenue from the production or sale of tobacco, coal, cannabis, alcohol, gambling, or adult entertainment; and/or
Produces or sells firearms or other military weapons.
JLL will work closely with its portfolio company management teams to ensure proper management of material ESG-related topics. This will be accomplished by:
Working closely with portfolio company management teams post-close to ensure compliance with all applicable laws and regulations, to mitigate material risks identified in due diligence, and to create value through recognized ESG opportunities; and
Incorporating ESG-related inquiries and updates into regular Board discussions, when necessary.
Stakeholder Engagement & External Reporting
In order to promote transparency with our limited partners regarding material ESG, findings, events, and performance, JLL will:
Provide routine ESG updates upon investor request and
Notify our investors of any material ESG incidents at portfolio companies that may have a substantially negative impact on investment performance, as necessary.
Last updated: January 2023
Appendix I: AIC Guidelines for Responsible Investing
The American Investment Council (“AIC”) membership has adopted a set of comprehensive responsible investment guidelines that they apply prior to investing in companies and during the period of ownership. The guidelines cover environmental, health, safety, labor, governance, and social issues. We will take into account the AIC guidelines as part of our private equity investment process:
Consider ESG issues relevant to target companies when evaluating whether to invest in a particular company, and encourage company leadership to monitor these issues during the period of ownership.
Be accessible to, and engage with, relevant stakeholders either directly or through representatives of portfolio companies to discuss ESG issues.
Work through appropriate governance structures (e.g., board of directors) with our portfolio companies to assess and monitor ESG issues, with the goal of improving performance and minimizing adverse impacts in these areas.
Seek to grow and improve the companies in which we invest for long-term ESG sustainability and to benefit multiple stakeholders.
Seek to use governance structures that provide appropriate levels of oversight in the areas of audit, risk management and potential conflicts of interest and to implement compensation and other policies that align the interests of owners and management.
Implement, or direct the implementation of, appropriate policies at our portfolio companies regarding applicable national, state, and local labor laws, including polices related to the payment of competitive wages and benefits to employees and provision of a safe and healthy workplace in conformance with national and local law.
Maintain appropriate policies that prohibit bribery and other improper payments to public officials consistent with the U.S. Foreign Corrupt Practices Act, similar laws in other countries, and the OECD Anti-Bribery Convention.
Respect the human rights of those affected by our investment activities and seek to confirm that our investments do not flow to companies that utilize child or forced labor or maintain discriminatory policies.
Encourage our portfolio companies to take into account these same guidelines in the course of their operations in a way that is consistent with their fiduciary duties.
Make our ESG policy available to limited partners upon request.