Environmental, Social and Governance

Only a few years ago the acronym ESG (environmental, social and governance) would have meant very little to most private equity practitioners. Today the reverse holds true with ESG firmly established in the lexicon of industry terms. ESG is now an established part of day-to-day working life for private equity firms and the funds and companies they invest in around the world.

Pioneering ESG in private equity

As one of the first private equity practitioners to sign the Principles for Responsible Investment (PRI) we are convinced that sustainable investment practices help drive long-term value creation for our clients, employees, and society at large.

Reducing risk and increasing performance potential

We also believe that private equity is the best method of delivering ESG-influence changes to underlying companies and investments. Increasingly investors in private equity have come to recognize the importance of ESG too. They have come to recognize that actively managing sustainable investments can reduce risk and may increase performance potential.

Quality Jobs

Schroder Adveq is working with a leading North American foundation to help invest in small to mid-sized US businesses that promote fair labor practices through a Quality Jobs investment strategy. In the US, over 46 million Americans work in a position where the median wage is less than $15/hour with limited benefits and little opportunity to develop further. We see an opportunity to address this large social issue in the US of too many workers unable to meet basic needs through their employment. Furthermore, companies employing these workforce practices are move likely to experience higher turnover and lower work engagement. The Quality Job strategy is an opportunity to improve a workers job and life while also improving company performance.

ESG fully integrated into the investment process

Today, ESG analysis is integrated into all steps of Schroder Adveq’s investment process. Which means that we conduct ESG audits throughout our investment evaluation. Over the years we have rejected a number of investments purely for ESG reasons. Once investments have been made we monitor the underlying managers and companies with regard to ESG criteria.

In fact, ESG at Schroder Adveq has developed from being a compliance and risk management topic to being strategic value creation lever.

Corporate governance

We ensure that our business practices comply fully with all applicable laws and regulations, and we incorporate best practice governance measures into our processes. We also strive to maintain Schroder Adveq’s reputation by exhibiting diligence, honesty, fairness, and openness in all of our business dealings. While embracing transparency, we recognize the need to respect commercial and personal confidentiality. We also seek to ensure that our target fund managers and their portfolio companies have appropriate frameworks and measures for corporate governance in place.

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