ESG through the investment lifecycle
We aim to take a thorough, yet tailored, approach to ESG due diligence, monitoring and portfolio engagement across the lifecycle of investments. This is reinforced in our responsible investing policy,1 guided by our ESG framework, and designed to flex by fund, prospective investment (sector, region, maturity or size), the Permira funds' stake and level of influence, and ESG megatrends or regulatory developments.
Best practice approach
Our responsible investing policy and ESG framework aim to reflect the 10 principles of the UN Global Compact, with regard to topics such as8:
Environment
Climate risk natural hazards; resource use and waste; hazardous materials and contamination; energy and greenhouse gases; product regulation and risk; natural/cultural heritage and biodiversity.
Social
Labour and working conditions; diversity, equity and inclusion; employee engagement; community impacts; animal welfare; responsible marketing and customer protection; cultural heritage impacts; human rights; product safety; health and safety; supply chain; genetically modified organisms; charitable donations and activities.
Governance
Policies; control and risk management; board structure; internal audit; whistleblowing; anti-bribery and corruption; policies; transparency and disclosure.
Other
Cyber security and data protection.
As an active signatory to the UN-supported Principles for Responsible Investment since 2011, we aim to report regularly on our approach through the PRI transparency reports. We are further developing fund action plans for certain buyout funds to drive long-term positive ESG outcomes and support greater alignment with the UN Sustainable Development Goals.
Towards values-based investing
Our vision is for ESG and responsible value creation to be at the heart of the funds’ transformational investment approach. In 2021, we began a new chapter in our ESG story by starting to develop an approach for a values-based investing model exploring certain environmental and/social characteristics for the future buyout fund to promote and set out in the funds’ promotional and legal documentation. For future buyout funds, we have agreed fund-level ESG targets and plan to refine investment exclusions and align with the UN Sustainable Development Goals, where appropriate. We are also licensee members of the Value Reporting Foundation as we look to further integrate the Sustainability Accounting Standards Board principles.
1. The policy applies to the Permira funds across all strategies and is accessible to all employees via our intranet.
8. This list is a sampling of potential topics which Permira may address. Not all topics have been or will be addressed.
9. The focus is on PE buyout funds, where we have the greatest influence. With a focus on private equity buyout funds where we have the greatest influence. The focus is on buyout funds, where we have the greatest influence. Within the buyout funds, more focus is placed on companies with higher ESG risk or opportunity. Engagement in the PGO portfolio is more limited and may focus on ESG risks identified during due diligence or emerging post-investment, as relevant. For direct lending, there are fewer opportunities for direct engagement and has previously been focused on companies where the funds have equity or there is no sponsor.
10. We assessed the Permira funds against SFDR and there is currently a combination of unclassified (raised prior to 10 March 2021) funds, ‘mainstream’ funds (Article 6) and a ‘light green’ fund (Article 8). The remaining funds, raised prior to 10 March 2021 are currently unclassified; however, this is under review following additional guidance from the European Commission on the treatment of funds raised prior to the 10 March 2021. We continue to keep classifications under review as market practice around SFDR evolves, particularly now the underlying details of the Regulatory Technical Standards have been finalised. Find the latest on SDFR and the Permira funds here.