We are aware of our broader societal responsibilities. Hence, we have committed ourselves to sustainable corporate governance, fulfilling high standards with regard to environment, social and sustainable governance (‘ESG’). In that context, we include ESG-related opportunities and risks in our investment decision processes thereby identifying companies that benefit from sustainable future trends and generate positive social value through their business models and ESG performance. Our funds do not invest in businesses, which are exposed to significant ESG related risks or pose such a risk themselves. We monitor that our portfolio companies adhere to these standards which form part of a sustainable value creation strategy.
In the following, we provide details on our philosophy with regard to environmental, social and governance aspects. Furthermore, we illustrate certain important indicators, which we consider in our investment decision processes and the strategies of our portfolio companies:
Integration of ESG standards at ECM
It is our conviction that a thorough review of the ESG criteria as laid out above provides for better investment decisions and impacts the development of our portfolio companies in a positive way. In this context, we have defined certain exclusion criteria, which prohibit any investment by our funds. Such exclusion criteria include gambling, pornography, weapons and tobacco. Further exclusion criteria are serious misconduct in the areas of environmental, social or governance. This includes, for instance, the cause of environmental damages, misconduct against employment law or human rights or damage to customers based on inadequate product safety or data security.
The central element of our sustainability review is always good governance to identify opportunities and risks at an early stage. Based on company and potentially third-party information, material aspects in the areas of environmental, social and governance are reviewed to identify their impact on the future business development.
During the investment period, we support the management teams of our portfolio companies in minimising ESG risks and identifying opportunities based on the specific company’s business model and its governance practice. It is our clear goal to enable the companies to continuously optimise their ESG performance. We support the management teams in developing suitable measures to achieve this goal.