The Apax Funds’ portfolio consists of a growing number of “asset light” businesses, due to the Apax focus on four specific sectors which do not have a significant ESG impact: Tech & Telco, Services, Healthcare and Consumer. The most material environmental indicator for 40% of portfolio companies is electricity usage, followed by paper usage and airplane travel.
The Firm defines materiality as the portfolio companies, which have the largest ESG footprint within the overall portfolio. From a Fund perspective, a small number of companies influence the ESG footprint to a large degree. For example in 2018, 80% of electricity kWh was reported by six portfolio companies and the remaining 20% accounted for by the 15 other reporting companies. Similarly, the Apax Funds’ portfolio contains a small number of large employers. In 2018, 6 companies accounted for over 60% of the overall ESG Group workforce with the remaining 40% of the workforce employed by 26 other portfolio companies.