An ESG compass for the portfolio: How we tell sustainable success stories
We've long recognised the importance of environmental, social and governance (ESG) considerations. Equistone has been integrating responsible investment principles into its business and investment strategies for quite some time. Our journey started back in 2011 when we first introduced formal ESG policies. Over the years, we've actively supported various sustainability initiatives and organisations while also developing our own internal ESG governance structures.
Since 2021, we've been providing an annual overview of our sustainability efforts, both within our own organisation and with our portfolio companies. Our latest report, the "ESG Review 2022", is now available. In it, you can learn more about our responsible investment approach, highlights from the past year and specific case studies from our portfolio, complete with key performance indicators related to ESG.
These actions align with our commitment to creating positive impacts on people, the environment and the economy through our ambitious responsible investment goals and day-to-day efforts to improve ESG standards.
Momentum through expertise
The report clearly demonstrates our ongoing commitment to progress in this area, rather than resting on our achievements. One notable step we took was the appointment of regional ESG managers, Sophia Nicol (DACH/NL), Diane Vignalou (France) and Jessica Clavette (UK), at the end of 2022. This move marked a significant advancement in our efforts and paved the way for several new initiatives:
- Collaborative ESG Integration: The integration of ESG managers directly into the investment teams allows for tailored support to enhance the sustainability profiles of our portfolio companies. We advise these companies in terms of developing and implementing customized sustainability solutions, which have been well-received across the board, regardless of their current ESG maturity level.
- Transparency Through Metrics: By introducing key performance indicators and benchmarks, managers, employees and investors can gain a clear understanding of where our portfolio companies stand. This enables us to pinpoint gaps or areas with potential for improvement, such as reducing CO2 emissions, enhancing employee engagement or strengthening cyber security, and to develop specific roadmaps to address them.
- Enhanced Decision-Making: At both the investment and fund levels, our ESG managers bring valuable expertise to the table. Their guidance helps Equistone to make more informed decisions, particularly in shaping the strategic direction towards responsible investment.
The outcomes of these actions speak for themselves. The introduction of these measures and an ESG reporting questionnaire has led to significant improvements at both our portfolio companies and Equistone as a whole. We are committed to building on this progress, and one of our next steps includes establishing specific climate-related goals.
We used the first few months primarily to build uniform structures both for our portfolio companies and within Equistone. These structures form the basis for us being now able to implement a number of specific initiatives. Moreover, promising pilot projects, such as setting ESG-based incentives for our investee companies’ management teams, show that we are well on the way to effectively integrating ESG into all of our portfolio companies.