(1) SELECT: We invest exclusively in companies where impact and high-growth potential go hand-in-hand, with a focus on four main themes: Healthier Lives, Future Skills, Sustainable Planet and Stronger Communities. Certain sectors are excluded e.g. alcohol, gambling, arms and pornography.
(2) ENGAGE: We work with our investees to optimise their ESG impacts in ways that protect and improve commercial performance. This analysis begins pre-investment and informs our investment selection. Prior to making an investment, our investment team works with the management team of the prospective portfolio company to identify ESG risks. To guide this discussion, we have developed an in-house risk assessment screen based on global best practices but adapted to fit the needs of investees operating in our areas of thematic focus. Our emphasis is on making this ESG risk screen as practical as possible – on making it a conversation about operational excellence. We use a materiality lens to grade each risk as a high, medium or low priority and record the results on a risk register. For each material risk, we propose a mitigation plan in the Investment Committee paper, so that our investment decision is made with a holistic view of projected impact and a 100-day plan can be developed for immediately post-investment. We have also incorporated the use of a 3rd party tool, the B Impact Assessment, into our investment process. Each potential investee is asked to complete the ESG assessment which covers questions on Worker, Governance, Community, Environment as well as Impact business model. The results of this questionnaire are used to identify areas of ESG risk and inform a post-deal improvement plan should we decide to invest.
(3) TRACK: We track progress to inform timely management decisions, as well as report back to our investors. Each investment has a bespoke Impact scorecard, reviewed at least annually, and used to report to investors. As an impact-driven investment firm, ESG indicators form a seamless part of our performance management.