ESG Core Principles
Responsible lending is a key priority for Vector as it seeks to generate competitive returns for its investors. The Company believes that a responsible approach towards its borrowers, the environment and society is an essential part of its success and seeks to embed consideration of ESG factors throughout all stages of its lending activities. Vector is fundamentally committed to building long-term, sustainable relations with its customers and those that introduce opportunities to it. Vector believes that responsible lending requires proper analysis, judgement and mitigation of risk and aims to lend to companies that take a responsible approach towards the environment, society and corporate governance.
The three main areas of focus for responsible lending relate to the environmental and social impact of any business’s activity, and the manner in which a business is managed. Together, these Environmental, Social and Corporate Governance processes and procedures focus on non-financial performance indicators that address a company’s approach towards responsible lending, sustainability, its impact on society and the environment, in addition to other ethical and corporate governance considerations.
The depletion of natural resources and the clear adverse implications of climate change have raised hugely important concerns about the environment and sustainability. Sustainable options are increasingly being considered as part of any business and, while the issues are diverse, the main areas are:
Inclusion, diversity and equality have rightly become increasingly important considerations in relation to the way in which businesses operate and are attracting increasing scrutiny from a range of stakeholders. In particular, businesses must have inclusive and diverse work ethics and practices; and must look at their impact on their employees, local communities and society. The main areas of consideration are:
Corporate governance covers the rights and responsibilities of the company’s management – its structures, corporate values and accountability processes. This relates to the following areas:
Vector’s core ESG Principles
Vector’s core ESG Principles set out below are regularly reviewed. We seek to:
In addition to our Core Principles, Vector has developed specific principles of secured lending which are to:
Vector’s ESG Procedures
The Company is developing its ESG procedures and these will be expanded. However, at present these fall within three main headings:
Pre-Loan Due Diligence
Prior to any loan advance detailed legal and financial due diligence checks are undertaken on the borrower and the asset being secured. During this process we consider whether there is a risk that the borrower will not be able to service and repay the debt, and we also assess the purpose for which loan is being applied. Vector would not in principle knowingly finance property being used for Adult Entertainment, the sale of weapons & armaments, the processing and sale of Fossil Fuels, Gambling and the sale of Tobacco.
Furthermore, as regards to the Group’s overall loan book utilised to finance residential developments, the board seeks to ensure where possible that projects involving an element of affordable a housing are fairly reflected.
The Group’s integrated operational, management and financial systems and its day-to-day processes create a minimum of paper and related waste, premises are energy efficient and business travel is minimised due to the increasing use of on-line working. As such the company is committed to be coming carbon neutral in the short term. The company has signed up to the Net Zero by 2050 initiative and is actively working towards obtaining the Carbon Neutral Standard.
The Company complies with the guideline and principles set out by the Quoted Company Alliance in its corporate governance code, to the extend relevant to the company’s size and structure. As such we operate with Audit, Remuneration and Nomination Committees which comprise non-executive directors, meet on a regular basis and report their findings to the main board.