TOWARDS A SUSTAINABLE FUTURE
Sustainability Report 2018
Home
TOWARDS A SUSTAINABLE FUTURE - Sustainability Report 2018

Fund of funds GPs' core trends

GPs strengthen their commitment to sustainability
CSR Policies

The vast majority of GPs now have a formal CSR policy (78%), although they rarely go beyond general principles – just 30% of CSR policies include specific investment guidelines. GPs based in Western Europe (87%) are the most likely to have a CSR policy, although GPs in North America are adopting them rapidly (73%, up from 51% in 2015).

Only 20% of GPs in our survey have an ESG Board, but this proportion has risen from 16% in the previous year.

Diversity

Two-thirds of the GPs in our survey say that between 30% and 49% of their staff are women. But the proportion of woman in executive positions remains low: in this group, just 6% of staff at executive levels are women.

Overall, only one GP reports having at least 50% of its executive positions occupied by women.

Philanthropy

70% of our respondents say they pursue philanthropic initiatives. Of this group, a third come from Western Europe, a quarter from North America, 10% from Asia and 32% from the rest of the world.

Some 33% of respondents said their companies’ philanthropic programs were overseen by Executive Board members.

In 40% of cases (up from 28%) employees contribute to the management of the GPs’ philanthropic projects.

TRENDS AT THE PORTFOLIO LEVEL

Our survey findings demonstrate a number of positive developments in our Fund of Funds portfolio, including widespread integration of ESG considerations at every stage of most GPs’ investment process.

93%

of respondents say they incorporate ESG assessment into their due diligence, with 77% doing so on a systematic basis
(up from 68%)

In the due diligence phase, exclusion of certain activities is still the most popular approach (62%), but we are also seeing growing uptake of specific ESG due diligence (47%) and the use of ESG questionnaires for management teams (19%). These were the two fastest growing answers over the past year, increasing from 39% and 11% of respondents respectively.

92%

of GPs integrate ESG considerations into their investment decisions
(stable since last year)

In investment decisions, the most frequently used tool is an ESG section in the Investment Memo (57% versus 48% previously). However, the great majority of GPs who integrate ESG into their investment decisions say they do so informally (83%). Some 29% say they include ESG targets in their 100-day plan for each investment.

77%

say they assess ESG during their holding period
(up from 66%)

During the holding period, some 77% of GPs say they monitor ESG issues (up from 69%), with informal assess - ments (72%) and ESG moni tor ing questionnaires (66%) being the most popular tools. Sustainability Officers sit on the management committees of portfolio companies in 17% of cases, though these are mainly part-time CSR Officers who also have investment responsibilities.

  • 60% of GPs have a part-time CSR Officer (up from 47%);
  • 13% have a full-time CSR Officer (stable).

67%

say they assess ESG on exit
(up from 61%)

At Exit, GPs increasingly integrate ESG issues into their processes (67% of respondents, up from 51%). A third carry out vendor due diligence that includes an ESG section, 24% assess the ESG impact of potential buyers, and 19% measure value creation due to improvements in ESG practices.

In the due diligence phase, exclusion of certain activities is still the most popular approach (62%), but we are also seeing growing uptake of specific ESG due diligence (47%) and the use of ESG questionnaires for management teams (19%). These were the two fastest growing answers over the past year, increasing from 39% and 11% of respondents respectively.

In investment decisions, the most frequently used tool is an ESG section in the Investment Memo (57% versus 48% previously). However, the great majority of GPs who integrate ESG into their investment decisions say they do so informally (83%). Some 29% say they include ESG targets in their 100-day plan for each investment.

During the holding period, some 77% of GPs say they monitor ESG issues (up from 69%), with informal assess - ments (72%) and ESG moni tor ing questionnaires (66%) being the most popular tools. Sustainability Officers sit on the management committees of portfolio companies in 17% of cases, though these are mainly part-time CSR Officers who also have investment responsibilities.

  • 60% of GPs have a part-time CSR Officer (up from 47%);
  • 13% have a full-time CSR Officer (stable).

At Exit, GPs increasingly integrate ESG issues into their processes (67% of respondents, up from 51%). A third carry out vendor due diligence that includes an ESG section, 24% assess the ESG impact of potential buyers, and 19% measure value creation due to improvements in ESG practices.