For 26 years, we have built on our majority shareholder status to help companies carry out their growth and transformation projects. We are convinced that in order to be sustainable, a company’s growth must encompass all its aspects and be based on a responsible management system that integrates environmental, social and governance issues. As a private equity firm, we are in the forefront of efforts to encourage these values in the companies that make up our portfolio.
AT ARGOS SODITIC, WE AIM TO SUPPORT SUSTAINABLE GROWTH AND VALUE CREATION,
GOING BEYOND A PURELY FINANCIAL APPROACH
More than a means of managing environmental, social and governance risks, our ESG approach extends this conviction and is a pivotal part of our relationships with the companies in which we invest. It enables us, alongside management teams, to identify both areas of risk and drivers of growth and value creation, those strategic or organisational levers related to the social and environmental issues that businesses face today.
Set out in our Responsible Investment Code, we deploy our ESG approach every day, simply and practically.
This, our first ESG report, is an integral part of this approach.
OUR RESPONSIBLE INVESTMENT PRINCIPLES
Our Responsible Investment Code sets out the principles, objectives and policies deployed to integrate ESG issues into our business and that of our portfolio companies.Our Responsible Investment Code requires these companies to:
OUR INVESTMENT APPROACH
Challenge:identifying the main risks and opportunities
Approach: ESG issues are an integral part of our investment criteria. An ESG questionnaire enables Argos Soditic’s teams to identify the main ESG-related risks and growth drivers. The questionnaire is based on the documents available and on the results of our due diligence measures, as well as discussions with the management team.
• A summary document outlines the main ESG risks and opportunities.
• Identified areas of risk are then subject to additional due diligence.
• Opportunities are explored in depth and where appropriate integrated into the business plan.
• ESG clauses are included in the shareholders agreement; the portfolio company recognises the importance of ESG principles, commits to compliance with the Responsible Investment Code, and agrees to issue quarterly reports.
Challenge: identifying material ESG challenges and preparing an action plan
Approach: an ESG review is systematically carried out by an external advisor, which provides its expertise to deepen the analysis of ESG risks and opportunities, propose practical action plans that limit these risks and capitalise on these opportunities, and identify key performance indicators
• The ESG review is driven by the portfolio company with the strong support of Argos Soditic’s teams.
• The action plan promotes a practical approach that focuses on meaningful ESG risks and opportunities for the company.
Challenge : monitoring and supporting improvement
Approach : During the period when a company is held, quarterly reporting makes it possible to monitor the deployment of action plans and improvements in key performance indicators. Operational ESG reviews are carried out on a regular basis.
• Our equity investments result in the deployment and monitoring of ESG indicators, with our support.
• Within Argos Soditic, the approach includes quarterly “ESG Coffees”, meetings during which our teams share updates on progress made in deploying each equity investment’s ESG action plans.
• Our investors are regularly informed of our investments’ ESG performance
Challenge: reviewing the situation and capturing value
Approach: when the creation of value related to the applied ESG approach becomes material (or in business sectors with powerful social or environmental challenges), an outside advisor may prepare a vendor ESG due diligence report.
• Thanks to the quarterly reports prepared during the period when we hold the investment, it may be possible to demonstrate and to capture the value of the improvements made through the various ESG action plans.