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Ardian

PRI reporting framework 2017

You are in Direct – Private Equity » Post-investment (monitoring)

Post-investment (monitoring)

PE 11. Proportion of companies monitored on their ESG performance

11.1. Indicate whether your organisation incorporates ESG issues in investment monitoring of portfolio companies.

11.2. Indicate the proportion of portfolio companies where your organisation included ESG performance in investment monitoring during the reporting year.

 (in terms of total number of portfolio companies)

11.3. Indicate ESG issues for which your organisation typically sets and monitors targets (KPIs or similar) and provide examples per issue.

ESG issues

List up to three example targets of environmental issues

          Water and Energy consumption practices/policy.
        
          Waste management practices/policies.
        
          Pollution risks.
        

List up to three example targets of social issues

          Health and Security (absenteeism, accident rate, ratio of women in staff and at executive positions, disabled people, etc.).
        
          Training and career development
        
          Alignment of interests and compensation practices/policy (incentives, profit sharing schemes, etc.)
        

List up to three example targets of governance issues

          Anti-bribery practices and policy.
        
          Presence of Compensation and Audit Committees; and of transparent management compensation policies.
        
          Employee shareholding policy and proportion of employees holding the company’s capital.
        

11.4. Additional information. [Optional]

For direct investments in Private Equity (majority shareholder or significant minority) throughout the holding period, the investment team maintains a constant dialogue with the portfolio company's management teams and actively monitors the evolution of their ESG practices, directly and with the support of external consultants who regularly carry out ESG reviews. The results of these ESG reviews serve as a basis for the establishment of recommendations and goals with concrete action plans to help portfolio companies to improve their ESG performance. Furthermore, the investment team often has a seat on the Supervisory Board of portfolio companies which is powerful lever to promote the integration of extra-financial issues and to disseminate best practices. Moreover, to structure the collection and analysis of extra-financial indicators during the holding period, Ardian has developed an ESG Framework, based on industry recommendations and active dialogue with investors.

 

When Ardian is a minority shareholder: ESG monitoring takes place via Supervisory Boards when Ardian has a seat, or via interactions with the lead sponsor and/or portfolio companies when possible. An ESG Framework with indicators was established in order to help Ardian investment teams with the monitoring process during the holding period.

 


PE 12. Proportion of portfolio companies with sustainability policy

12.1. Indicate if your organisation tracks the proportion of your portfolio companies that have an ESG/sustainability-related policy (or similar guidelines).

12.2. Indicate what percentage of your portfolio companies has an ESG/sustainability policy (or similar guidelines).

(in terms of total number of portfolio companies)

12.3. Additional information. [Optional]


PE 13. Actions taken by portfolio companies to incorporate ESG issues into operations

New selection options have been added to this indicator. Please review your prefilled responses carefully.

13.1. Indicate the types of actions taken by your portfolio companies to incorporate ESG issues into operations and what proportion of your portfolio companies have implemented these actions.

Types of actions taken by portfolio companies

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies
Implemented by percentage of portfolio companies

13.2. Describe how your organisation contributes to the portfolio companies’ resourcing and management of ESG issues.

In addition to informal dialogue and Board discussions, Ardian has developed a formal ESG engagement program with its portfolio companies.

Through the Annual ESG Audits external consultants perform and the ESG questionnaires it sends to management, teams contribute to raise awareness on certain specific ESG-related issues, identify areas for improvement and suggest ESG-related initiatives which are discussed with companies’ management and monitored over time.


PE 14. Type and frequency of reports received from portfolio companies

14.1. Indicate the type and frequency of reports you request and/or receive from portfolio companies covering ESG issues.

Type of reporting 

Typical reporting frequency 

Typical reporting frequency 

14.2. Additional information.

In addition to annual company reports, as a basis for every monthly investment meeting, the companies' management teams prepare a Monthly Report. Aside from traditional financial updates, this document can include business-related information as well as ESG-related information when appropriate: i.e. development of "green products", R&D strategy, investments to strengthen environment-friendly industrial processes, hiring of CSR executives, turnover figures, Health & Safety KPIs, etc.

The company's management teams also prepare a Quarterly Report that serves as a base for the Supervisory Board's meetings. Next to the traditional financial update, this document also includes business-related information as well as ESG-related information when appropriate. Investment teams may also refer to Corporate Responsibility Reports (or similar documents) whenever companies publish them.


PE 15. Disclosure of ESG issues in pre-exit

15.1. Indicate whether during the reporting year your organisation disclosed information on ESG issues to potential buyers prior to exit for private equity investments.

15.2. Apart from disclosure, describe how your organisation considers ESG issues at exit.

Ardian systematically favours the company's long-term interests. As a general rule, processes are planned and implemented in agreement with management at the companies. The potential impact of the operation on ESG issues is assessed in the evaluation of offers made by buyers, in addition to financial considerations.

Ardian believes that ESG integration in portfolio companies should be results driven - and results are only truly recognized at ; in order to enhance extra-financial progress made by portfolio companies, the investment team will seek to conduct an ESG Vendors Due Diligence (VDD) as often as possible.

In accordance with Ardian's internal charter at, under certain conditions, Ardian strives to redistributes a portion of capital gains to employees. Ardian was the first private equity firm in France to call for a portion of capital gains to be redistributed to portfolio company employees at the point of and always tries to extend portfolio companies' profit sharing mechanisms when possible. Ardian strongly believes that such aligned interests are a key lever for long term value creation. For example, when exiting three portfolio companies in 2016, Ardian implemented capital gain sharing schemes and distributed the equivalent of two months of salary with all employees.

Since 2008, Ardian implemented capital gain sharing schemes with 8,200 employees from16 portfolio companies in over 20 countries, sharing a total of €19 million.

15.3. Additional information.


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