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Excellence in ESG

The importance of ESG and Responsible Investment has never been more pertinent for the private equity and venture capital industry. The spread of the COVID-19 pandemic has led to ESG issues taking on new shapes and has reinforced the need to place climate change, health and safety, and other important environmental, social and governmental issues at the heart of the recovery plan.

This year, the BVCA will be recognising ‘Excellence in ESG’ across three categories: GPs, LPs and portfolio companies.

Winners

GP category: Tikehau Capital

The judges said ESG was clearly a part of Tikehau’s DNA. Special praise went to their sustainability-themed investing, and their comprehensive reporting, which sets out what they are doing with the companies they invest in. They have clearly demonstrated that ESG is an important point through all their workstreams. Hugely impressive.

LP category: HarbourVest

The judges commended HarbourVest’s demonstration of how they are driving improvements with their GPs, using strong, evidence-based results. One particular highlight was the creation of scorecards, stretching back over 10 years, looking at fund managers’ overall ESG performance. They already have an excellent standard, but demonstrated they have invested and improved over the course of this year.

Portfolio company category: TTC Group, backed by Palatine

The judges applauded TTC’s commitment to utilising Palatine’s six sustainability pillars. They have adopted a holistic approach to ESG, and it is clear that Palatine has had, and is continuing to have, a very positive influence over the direction of the business.


Due to the strength of the nominations this year, we also made two special commendations:

Special commendation – GP category: Oxford Capital

The judges said Oxford Capital demonstrated very effectively how they are embracing ESG, and deserve special recognition for showing that it does not matter how big you are, any firm can make a difference.

Special commendation – LP category: Coller Capital

The judges were impressed by how Coller demonstrated their engagement with GPs and pushing them to become better. Coller have a long and strong history of ESG commitment, and their consistent high-level of performance should be commended.


Categories

There are three categories:

1. Excellence in ESG – open to all sizes of GPs

2. Excellence in ESG – open to all sizes LPs

3. Excellence in ESG – open to any portfolio company backed by a BVCA member

Submission guidance

The judges will be looking for evidence of good practice of an overall ESG framework by the firm, as well as examples to illustrate the firm’s engagement with portfolio companies. The judging panel will consider submissions against the following criteria:

  • How responsible investment is embedded at the firm level, including why it is important to the firm, existence of an ESG policy, and commitment by senior management
  • How ESG is considered as part of origination and due diligence
  • Regularity and depth of post-acquisition / funding engagement with portfolio companies / GPs on ESG matters
  • Evidence of ESG reporting to LPs / investors or other stakeholders (formal or informal)
  • Examples of value creation at exit / capital distribution due to ESG engagement
  • Support for external initiatives such as the PRI

Please provide a one-page summary addressing the above criteria. Your submission may extend to 2-3 pages if you also choose to submit relevant supporting evidence, however please keep this concise in order for the judges to take this into consideration.

Criteria for GP category (all sizes of GP)

The judges will be looking for evidence of best practice in ESG integration and engagement by GPs during June 2019 and June 2020.

This could include one (or more) of the following:

  • How the firm has enhanced and developed its overall ESG framework during the year, either the first-time adoption of a framework, or the refreshing of an existing framework
  • Thematic engagement across its portfolio on one or more ESG topics
  • Specific engagement by the GP with one or more portfolio companies to address any ESG risks or opportunities (this may include responses to the pandemic, but does not necessarily need to do so)

The submission should give details of the development or engagement which has taken place, covering how and why the GP has taken action, and what the outcome has been. The judges will be looking for a clear explanation of the GP’s rationale, commitment to responsible investment principles, linkage to investment strategy, and why the outcome has been positive.

The submission should be no longer than 1 page. Your submission may be accompanied by one or two relevant supporting documents if referred to in the submission, but please keep these concise.

Criteria for LP category (all sizes of LP)

The judges will be looking for evidence of best practice in ESG integration and engagement by LPs during June 2019 and June 2020.

This could include one (or more) of the following:

  • How the firm has enhanced and developed its overall ESG framework during the year, either the first-time adoption of a framework, or the refreshing of an existing framework
  • Thematic engagement across its portfolio on one or more ESG topics
  • Specific engagement by the LP with one or more managers to address any ESG risks or opportunities (this may include responses to the pandemic, but does not necessarily need to do so)

The submission should give details of the development or engagement which has taken place, covering how and why the LP has taken action, and what the outcome has been. The judges will be looking for a clear explanation of the LP’s rationale, commitment to responsible investment principles, linkage to investment strategy, and why the outcome has been positive.

The submission should be no longer than 1 page. Your submission may be accompanied by one or two relevant supporting documents if referred to in the submission, but please keep these concise.

Criteria for Portfolio Company category

This category seeks to recognise portfolio companies that have demonstrated good practice in embedding the management of ESG issues in their day-to-day commercial activity and have been supported by their investors to do so. This category is to open to any portfolio company with a UK presence which is currently backed by a BVCA member (or which was backed at some point during 2019 or 2020 and has now been exited).

Submissions should set out:

  • How ESG is considered within the portfolio company’s day to day commercial activities
  • Either evidence of the portfolio company seeking to minimise negative ESG impacts or examples of positive impacts on the environment, workplace, marketplace and/or community (or both)
  • How the portfolio company’s approach to ESG has changed or evolved as a result of the BVCA member’s investment
  • Evidence of engagement on ESG with wider stakeholders (including employees, suppliers, customers, and/or local communities
  • The submission may include particulars of the company’s response to the pandemic, but does not need to do so

Submissions can be made by either the portfolio company or by the investing BVCA member, or jointly, and should be no more than 1 page in length. Your submission may be accompanied by one or two relevant supporting documents if referred to in the submission, but please keep these concise.

Selection process

Nominations for Excellence in ESG 2020 will open on 21 July 2020 and close on 21 September 2020.

All submissions should be emailed to responsibleinvestment@bvca.co.uk

The winners will be selected in September by an independent judging panel and presented at the BVCA Summit on the 8 October.

In association with


Further information

FOR FURTHER INFORMATION PLEASE CONTACT THE BVCA

 +44 (0)20 7492 0400

 responsibleinvestment@bvca.co.uk