Environmental & Social Value

Why it Matters

Environmental and social (ES) performance is increasingly material to business success. An important part of the value add that we provide involves active support to companies and funds as they begin to implement and adopt more sustainable business practices.

We work with companies to enhance their ES performance so that they can compete in international markets and supply chains, for example in situations where evidence of good labour practices defines access to markets. We help companies build stronger relationships with local communities that deliver mutual benefits to the company and the community, we work to reduce climate change impacts and  increase energy and resource-use efficiencies, we effect cost savings, and we help companies become more attractive to investors as a result.

The Business Case

Our experience in hundreds of investments across Africa and South Asia gives us a unique perspective on where and how ES performance is most material to business performance. Examples of each of these areas are below.

Labour relations and employee safety

We work closely with companies we invest in to reduce health and safety risks to staff and local communities.  We recognise that health and safety in this sector is a critical issue and we are helping companies develop safer working practices as well as communications and outreach programs to educate local people and reduce risks to communities.  We have also developed good practice guidance for our fund managers so that they can apply similar approaches to their investments, helping to reduce real costs incurred by poor practices, such as operational downtime, loss of production, low staff morale and adverse publicity. 

Energy and resource use efficiency

Working through a fund manager in Africa we have helped install the largest real estate solar panel array on the continent. The solar installation will deliver significant energy cost savings for the property managers and occupants, reducing pressure on public utility supplies as well as reducing greenhouse gas emissions.

Supply chains

We're working with textile companies in South Asia to improve labour practices and worker safety in supplier factories. Our involvement has led to the adoption of Ethical Trading Initiative (ETI) standards at a direct equity investment in India and has the potential to give the business enhanced access to larger international markets as well as to a broader range of investors. As the first India-based company to join the ETI, the reputational benefits arising from publicity are expected to further brand recognition and thus commercially benefit the company.

Interactions with local communities

In the Democratic Republic of Congo we are working with an agribusiness company to build stronger and deeper relations with local communities and rehabilitate post-conflict social infrastructure. Through enhancing trust and creating mutually beneficial relations with the labour force and community, the company expects to see lower staff turnover and avoid business costs associated with community grievances. 

Brand equity

Working through fund managers in Africa we have helped textile and security service companies leverage their brand value through credible demonstration of superior ES and business integrity (BI) performance.  

Innovation

Working through a major financial institution we are exploring ways to increase the ES impact of trade finance facilities that support the export of agricultural and industrial commodities.

Market transformation

Using lessons learnt from our funds portfolio we have developed high quality good practice guidance on how to reduce serious incidents and accidents in the workplace, as well as how to improve the quality and impact of ES due diligence   these materials are freely available to private equity investors and help to drive better practices  in the private equity sector.