Integration of sustainability risks into the investment process

Sustainability risks are considered by Trail at all stages of each product’s investment process.


  • Trail has an exclusion policy whereby they will not invest in persons or entities directly and significantly involved in the production, marketing or use of, or trade in identified activity sectors that may represent sustainability risks. 
  • ESG factors (environmental, social, business ethics, governance) and growth opportunities are considered when evaluating an investment opportunity.
  • Investment team performs ESG screening to ensure consistency with Trail’s values and commitments.
  • External experts conduct ESG due diligence if necessary.
  • ESG risks and opportunities are included in investment memo presented to investment committee when Trail is a majority shareholder.


During the holding period: 

  • Sustainability risks are closely monitored during the holding period.
  • Trail seeks to mitigate risks and add value through implementation of sustainability measures and participation in shareholder governance meetings.
  • Annual external assessment of ESG practices is conducted.


The sustainability risks are identified particularly using guidance from an external advisory firm using frameworks and initiatives such as the Sustainability Accounting Standards Board (SASB) framework, which identifies financially material ESG risks by activity. 

Consideration of sustainable Principle Adverse Impacts (PAIs)

Trail does not currently monitor principle adverse impacts at the portfolio level. Incorporating such criteria would entail the collection and computation of numerous key indicators and data, which would represent a significant administrative burden for portfolio companies that do not have the internal resources necessary to monitor these indicators given their stage of development. 

Nevertheless, Trail continues to support its portfolio companies in addressing environmental, social and governance (ESG) aspects and annually collects indicators to measure and improve sustainability practices.

Integration of sustainability in the remuneration policy

To date, Trail does not include sustainability criteria in its remuneration policy.  However, the management team plans to integrate these criteria in the future.