We believe sustainable growth within a business cannot be achieved without considering environmental, social and governance (ESG) issues. Palatine has applied an ESG approach to managing our investee companies since 2010 through our innovative and award-winning framework, and we can demonstrate the value ESG has created in every business, including our own.
Palatine’s reputation for balancing sustainability and ESG with market leading returns is unrivalled. Our primary focus is on ensuring that ESG management contributes directly to the long-term success and sustainability of our portfolio companies. Transparency on ESG is clearly communicated to our investors.
Palatine’s approach to investor reporting is based on three factors:
- Systematic and meaningful ESG management processes that are well understood by the investment team and the portfolio companies
- A high degree of engagement on ESG management and evaluation so that quality data is fed into reporting
- A commitment from the top to use the process to drive value in each company, the appointment of an ESG ambassador on every board and recognition for companies that try hard and do well
The process begins with a baseline review of ESG performance on acquisition, leading to a full management report containing performance highlights and recommendations. The summary is used to help guide the board throughout the holding period and is updated annually for Palatine’s Investors’ Report.
A graphic report of some 20 thematic ESG KPIs is also used to show annual progress across the whole portfolio, illustrated with portfolio case studies. We believe this regular monitoring and feedback keeps ESG high on management team agendas, helps drive momentum and value and provides transparency for our investors.
Commitment to portfolio companies
We have developed a Responsible Investment (RI) framework for embedding ESG into our portfolio. The framework ensures rigour and consistency in the way we focus and action ESG activities and opportunities. It includes:
- Our investment code setting out our principles and objectives regarding responsibility and ESG
- Our 6 Pillar thematic framework of Impact and ESG
- RI manual outlining our investment strategy and the responsibilities of our investment team
- RI tools to help us identify key ESG risks in our investments at the pre-deal stage
- Consistent expert processes to evaluate and improve post deal ESG performance
ESG outcomes from the portfolio
have taken steps to reduce energy use and carbon emissions
took steps to reduce emissions associated with business travel
of those with high volume purchasing have a defined ESG screen process in place
have below national average employee absence rates
hours employees spent supporting local communities and charities
of companies have one or more women on the main board of directors
At the top of our agenda is transformation in ESG management. Palatine is a perfectly placed investor to support our brands given the team’s strong ESG know-how and track record. The team contributes ideas, highlight opportunities and provide rigorous monitoring which has helped our management team and staff to achieve significant strides in ESG.
Paul Campbell – Non-Executive Director
The Alchemist and Gusto