Inspiring others by investing responsibly
As a pioneer of Responsible Investment in private markets for more than a decade, we believe it is crucial that we continue to innovate.
During 2018, we not only undertook the most comprehensive ESG analysis to date of our portfolio companies, but for the first time we expanded our work to assess their impact on society, using the UN’s Sustainable Development Goals. This takes into account not only how they manage their operations, but also the impact they have on society through their supply chains and the products and services they sell.
Next year we plan to go further by developing a methodology to measure this impact more precisely, so that we can monitor it and improve our portfolio companies’ performance during our period of ownership.
This is an important step because the major shareholdings we acquire as a private investment manager give us direct responsibility and influence over many companies. As a result, our efforts to improve their social and environmental impacts enjoy a ‘multiplier effect’ far greater than other businesses of our size.
This matters because we believe companies that create positive social and environmental impacts will enjoy increasing competitive advantages in future, as well as exposing their investors to lower risks.
As well as gaining a competitive edge, viewing their performance through the wider lens of impact allows our portfolio companies to increase their resilience and understand better how they can contribute positively to society, taking into account a wider variety of stakeholders.
“Impact and ESG are about identifying opportunities to create sustainable competitive advantages. If we think of them just as risk management tools, we miss the bigger picture.”
Viewing our activities in terms of their impact allows us to see the common themes that unite our work as an investment manager and our involvement in social causes through the Ardian Foundation.
During 2018, we formalized our vision of sustainability into a mission statement that encompasses all our activities, both professional and philanthropic: ‘Ardian empowers individuals to collectively create sustainable value for all stakeholders’.
We apply this idea of individual action and collective achievement everywhere: at the corporate level and within our fund portfolios. Our profit-sharing policy is a good example of our commitment to share sustainable value across all stakeholders. Since 2008, we have shared more than €48 million of capital gains between 20,250 employees from 27 portfolio companies and assets that Ardian has exited.
This vision also applies to Ardian as a company. For example, the Green Challenge that we launched in 2018 asks every employee to change their behavior in small but concrete ways that will improve Ardian’s environmental impact, for example by giving up disposable drinks cups and using mugs instead.
Our Sustainability roadmap for Solina, the food ingredients company we acquired in 2016, included extending the procurement policy to give more weight to health & safety concerns, securing the supply chain, ensuring quality, and addressing fair trade concerns.
Key successes, in light of current challenges in the industry:
Imported pepper presented a challenge because up to 40% of pepper imported into Europe breaches EU rules on pesticide concentration. To address this issue Solina:
First crop in 2019, reaching full capacity in 2021 to meet 100% of Solina’s needs.
Nitrite Salt, widely used as a preservative and colorant in ham, is classified by the International Agency for Research on Cancer as potentially carcinogenic. To address this issue Solina: