US union, non-profit request PRI delist private equity firm PAI Partners

A US trade union and a non-profit organisation called the Private Equity Stakeholder Project (PESP) have written to the Principles for Responsible Investment (PRI) requesting the delisting of private equity firm PAI Partners in connection with one of its portfolio companies.

In a letter to PRI chief executive officer David Atkin, representatives of the United Electrical, Radio and Machine Workers of America (UE), a trade union, and the PESP alleged that PAI Partners’ portfolio company Refresco, a beverage bottler, was engaged in practices that endanger the environment and the health and safety of its workforce.

They said that last year, a majority of the almost 250 workers at a Refresco bottling plant in New Jersey, on the east coast of the US, had voted to join UE “to counter the abusive treatment by supervisors, low wages, minimal benefits, sexual harassment, constant schedule changes, and an unforgiving attendance system that penalised workers for getting sick”.

According to UE and PESP, Refresco is refusing to recognise the union and refusing to bargain, although the UE has been officially certified.

In their letter, UE and PESP wrote that although PAI Partners “may call itself a responsible investor that is concerned with environmental, social and governance issues”, its actions and those of Refresco contradicted the private equity firm’s stated commitment.

They said the PRI should delist PAI Partners using the authority outlined in its ‘Serious Violation Policy’. Under this policy, the PRI’s board, by way of a majority vote, can delist a signatory if it believes the behaviour of the signatory puts the integrity of the PRI at risk.

A spokeswoman for the PRI confirmed that it had received a complaint about a signatory, and said that it would be reviewing the complaint under the organisation’s current policies.

The delisting that the UE and PESP have in mind is different from that which the PRI can also implement under a model introduced in 2018, whereby signatories can be kicked out for failing to meet mininum requirements such as that there is an investment policy covering the firm’s responsible investment that covers more than 50% of assets under management.

The PRI has delisted five signatories under this model, and has said it intends to up minimum requirements.

A spokesman for PAI Partners said: “Following our continued discussions with Refresco, we have full confidence in the ability of its management team to address the issues raised and we are satisfied that the company has met and continues to meet all obligations towards its employees.”

Originally the principal investment arm of Paribas, a merchant bank now part of BNP Paribas, PAI Partners has been a signatory of the PRI since 2010, and in recent years has received ‘A+’ ratings for strategy and governance, private equity, and climate change.

Refresco did not respond to a request for comment. IPE understands that the company has established a sustainability committee that includes PAI’s board members and that the committee’s job is to ensure Refresco’s sustainability “roadmap” is implemented and targets are met.

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