Philippe Poletti: It confirms what we already believed intuitively: companies with the most advanced sustainability practices tend to be more resilient. Our initial post-Covid analysis shows a direct correlation between companies that fared well during the crisis and the companies with the best sustainability performance, as measured by our methodology.
We knew before the crisis that sustainable companies perform better, and the coronavirus crisis encourages us to continue on this road.
Philippe Poletti: Commitment to sustainability does not necessarily entail increased budgets. It can be about giving employees more responsibility for tackling sustainability issues in the workplace and in their daily lives. In fact, many sustainability measures, such as improving energy efficiency, can save considerable amounts of money.
Philippe Poletti: Sustainability is not a “nice-to-have”, it’s a “must-have” and it is key to companies successfully transforming themselves, so they can be more resilient.
Sustainability not only makes companies better businesses, it also addresses the concerns of investors, consumers and regulators, all of whom want to see firms do the right thing.
The Covid-19 pandemic has reinforced the importance of that.
Inula, one of our portfolio companies, is a prime example – it sells essential oils and natural therapies, and its sales have risen thanks to the increased focus on health and wellbeing. The company’s sustainability program and purpose-led strategy have also helped to motivate employees and make the business more resilient during the pandemic.
Philippe Poletti: Our Sustainable Buyout strategy bridges the gap between impact investing and ESG integration. We invest in companies that are not social businesses but still produce positive externalities. By investing, we can transform them into high-performing and resilient companies that provide measurable impacts on society and the planet.
We do this by providing companies with individualized support and ESG roadmaps, giving equal weight to the impact of their supply chains, their own operations and the goods and services they sell. When we invest in a company, we sit down with the managers and define a long-term roadmap, which we review every year to see what progress has been made.
Philippe Poletti: It is a first step towards providing a more rounded vision of our impact and that of our investments. One of our biggest priorities is to ensure that we can deploy this way of investing at a large scale.
And it is not a proprietary approach that we want to keep to ourselves. We have to engage with the industry on topics such as sustainability measurement methodologies, so that there is a global shift in best practice. Companies have a hugely important role to play in meeting global sustainability challenges and investors have a vital role to play in helping them to do so.