Equite’s primary purpose is to create long-term value for our shareholders and investors. We can only achieve this goal by combining excellent financial performance with responsible and sustainable business practices that take into account investors, employees, business partners and society.
Equite is committed to sustainable investing. Environmental, social and governance („ESG“) factors are fully integrated in our everyday operations across all areas of our business.
Equite’s responsibility is to create long-term value for our shareholders and investors. We can only achieve this goal by combining excellent financial performance with responsible and sustainable business practices that take into account investors, employees, business partners and society.
Equite is committed to sustainable investing. Environmental, social and governance (“ESG”) factors are fully integrated in our everyday operations across all areas of our business. ESG processes and procedures focus on non-financial performance indicators that address a company’s approach towards responsible investment, sustainability, its impact on society and the environment, as well as other ethical and corporate governance considerations.
Responsible investment, and subsequently responsible ownership, require proper analysis, judgement and mitigation of risk. Equite aims to invest in companies that take a responsible approach towards the environment, society and corporate governance.
Equite’s Core ESG Principles are set out below and are regularly reviewed.
- Developing financial solutions that drive action on climate change and generate other positive environmental impacts.
- Managing environmental risks, including climate-related risks.
- Minimizing the environmental impacts of our physical operations.
- Acting in the best interest of our clients.
- Protecting human rights.
- Developing financial solutions that improve quality of life and generate other positive social impacts.
- Expanding economic opportunity in the communities where we do business.
- Investing in our human capital.
- Promoting diversity, equity and inclusion.
- Cultivating a strong risk and control environment.
- Fostering a culture of transparency and ethical behavior.
- Maintaining effective leadership and management processes.
- Safeguarding privacy and cybersecurity.
In addition to these Core Principles Equite has agreed to the six Principles of Responsible Investment (Principles) which are to:
- Incorporate ESG issues into our investment analysis and decision making processes
- Be active owners and incorporate ESG issues into our ownership policies and practices
- Seek appropriate disclosure on ESG issues by the entities in which we invest
- Promote acceptance and implementation of the Principles within the investment industry
- Work together to enhance our effectiveness in implementing the Principles
- Report on our activities and progress towards implementing the Principles
Before acquiring a business, Equite’s team identifies whether there are any ESG related key risks or opportunities. Equite may also use specialist external consultants to help assess specific risks. Equite’s ESG considerations may be company-specific or common to the industry/subsector or geography as a whole, and include political and regulatory developments. The considerations are researched through a variety of sources, including regulatory/compliance filings, investor disclosures and/or media reports. With support from legal advisors, Equite also assesses anti-bribery and corruption risk and seeks assurance that the company is fully compliant with the ESG laws and regulations in the relevant jurisdictions, for example health and safety, labour and energy usage. This initial ESG assessment is an integral part of Equite’s due diligence and overall risk and value creation assessment of the business.
If material ESG issues or risks are identified during the due diligence process, Equite initially prioritises those which are most material. Equite determines on a case-by-case basis whether further assessment is required, and may seek independent analysis and expert advice from specialist external consultants, for instance environmental experts, if required.
Equite‘s team considers whether it deems the risk(s) unacceptable, and thus rejects the investment opportunity on those grounds, or determines that any risk(s) identified need to be addressed, managed or rectified during its ownership. In cases where material ESG risks are identified and deemed acceptable, a plan is developed by Equite and agreed with management to prioritise, address, manage and/or remedy the issues.
Equite’s portfolio companies are required to participate in a post-acquisition ESG review and monitoring process. This includes the completion of a Equite ESG portfolio questionnaire in order for Equite to confirm or identify the main ESG risks and opportunities. The completed questionnaires are reviewed by Equite, if necessary, with external advisors.
Equite completes a full assessment of the portfolio companies existing policies, practices and reporting and how effectively they are communicated and implemented.
As part of this review process, the Equite team works in close collaboration with the portfolio companies management through a series of calls and meetings to discuss and agree priority next steps.
Equite team regularly receives ESG performance information and consider it in conjunction with the financial performance of the respective investment.