RESPONSIBLE INVESTMENT
"Making contributions to industrial growth, employment and society is what will distinguish an industry and sustain it over a long period of time"
Peter Brooke - 1996Founder, Advent International
Our founder, Peter Brooke, understood the importance of responsible investment when he started the business more than 35 years ago. For us, it has always been about thinking longer term and seeing business performance through a wider lens. As the role of business in society continues to evolve, we believe our focus on responsible investment drives positive change as well as improved performance.
We recognize that our success hinges on the smooth functioning of society. Our commitment to our employees, portfolio companies, investors and the broader community reflects this conviction.
RESPONSIBLE INVESTMENT
Limited Partners
Colleagues
Portfolio companies
Communities where we live and work
Environment
Other stakeholders
EMBEDDING ESG ACROSS THE INVESTMENT CYCLE
Our investment philosophy is centred around the sustainable growth of the businesses in which we invest. We believe that the consideration and thoughtful management of ESG risks and opportunities at all stages in our investment process helps to protect and enhance reputation and financial performance and create stronger, more valuable companies.
ENVIRONMENTAL / SOCIAL / GOVERNANCE
ENVIRONMENTAL
ADDRESSING CLIMATE CHANGE:
BUILDING A BETTER TOMORROW
Advent International is committed to supporting the transition to a low carbon economy through active engagement with our portfolio companies and by addressing our own operations.
Private equity has an important role to play in driving the transition to a low carbon economy and a more sustainable future for people, planet and the environment. As a long-term steward of investments, with a wide-ranging view across sectors and geographies, Advent is well-positioned to partner with companies to meet climate-related challenges.
PORTFOLIO COMPANY COLLABORATION
At Advent, we collaborate with our portfolio companies to integrate and achieve climate-related objectives, in alignment with both their core business strategies and the Paris Agreement’s limiting of global warming to 1.5 degrees.
Our approach explores innovative technologies and nature-based solutions, providing the potential for mitigating both the climate and biodiversity crises in parallel.
Establishing a baseline carbon footprint is the first step towards managing energy usage. We provide hands-on experience and guidance measuring GHG emissions as companies set, and work towards, their emissions reduction targets.
We are implementing industry-leading assessments and data management tools which help Advent and our portfolio companies track, monitor, and measure performance around critical ESG metrics, including climate. Regardless of how advanced in the process our portfolio companies are, we offer tailored support to help senior management teams to develop, and take forward, their climate plans. For instance, Advent’s proprietary Decarbonization Playbook provides a step-by-step guide to the decarbonization process, taking into account sector specific considerations.
ADVENT INITIATIVES AND INDUSTRY ENGAGEMENT
As we drive change through our portfolio companies, we are also committed to improving our own performance. Having established our firm-wide operational GHG footprint for 2018-2021, we are continuing to set reduction targets for our own global activities.
We are also strong advocates for industry collaboration, as demonstrated by Advent’s leadership role in the Sustainable Markets Initiative Private Equity Task Force (PESMIT), which sponsors a Working Group dedicated to Climate Change. We also participate in leading global private equity industry groups addressing climate change, such as the United Nations Principles for Responsible Investment’s Initiative Climate International (iCI).
ENVIRONMENTAL IMPACT
We recognize the importance of managing our impacts on the environment and have developed a rigorous process for assessing risks and opportunities at all stages in our investment lifecycle. We aim to drive efficient use of energy and natural resources, reduce waste and protect biodiversity during the course of our ownership.
ENVIRONMENTAL
STRATEGY IN ACTION
Cataratas manages some of Brazil’s most iconic national parks, helping more than five million people enjoy the country’s national splendor every year.
Since Advent invested in 2014, the company has enhanced its commitment to responsible tourism, ensuring these precious ecosystems are protected and preserved for future generations.
Some of the parks and zoos have become laboratories for conservation. Working with scientists from around the world, Cataratas has been at the forefront of protecting endangered species such as jaguars, tapirs and sea turtles, helping to reintroduce them to their natural habitats.
Find out more about Cataratas’ conservation initiatives:
Leading pan-European food packager Faerch is committed to increasing its in-house recycling operations without compromising on critical product features like extended shelf life and food safety.
The company is a sustainability leader and pioneered the use of food packaging with ‘true circularity’. Its mono-PET packaging next to being made entirely from recycled material, can be recycled into new packaging without the addition of any virgin material.
By contrast, many other packaging solutions can only be ‘downcycled’ – recycled into lower-quality, non-food-grade products – after use.
The strategic acquisition of the recycling company 4PET Group in 2018 has made Faerch a first mover in tray recycling and provided the company with the modern infrastructure and expertise to achieve its sustainability goals.
As a division of Sovos Brands, noosa yoghurt deploys a range of innovative practices to conserve precious water resources.
Because the noosa farm in Colorado is not connected to municipal water works, the company built an advanced treatment facility that reuses wastewater to flush out the dairy barns.
This water is then filtered to remove solids, and the remaining nutrient-rich water used to irrigate some of the crops grown to feed dairy cattle.
This process has significantly reduced the volume of water that noosa needs to draw from the mainline supply. In 2017, the company received a Colorado Environmental Leadership Award.
Based in the Czech Republic, Zentiva is one of Europe’s leading manufacturers of generic pharmaceuticals.
Since becoming an independent company in 2018 with Advent’s backing, Zentiva has established its own environmental program. Its manufacturing sites have set goals to reduce water usage, eliminate single-use plastics and offset greenhouse gas emissions.
Company sites have launched initiatives to recycle and reuse production waste from drug packaging, and to plant thousands of trees to help mitigate deforestation.
As Zentiva grows through acquisition, its environmental practices will be deployed at new manufacturing sites.
SOCIAL
Our business, and that of our portfolio companies, is built on solid partnerships. That is why, as investment professionals, it is important for us to build strong employee relations and be a responsible member of the communities in which we operate. We believe that we and our portfolio companies have important roles to play in the community and that our reputation as an employer helps to attract, retain and develop the talent that is vital to our future success.
SOCIAL
STRATEGY IN ACTION
In 2017, Advent invested in First Watch – a California-based company that now has more than 400 daytime-only restaurants across 29 states of the US.
The company has partnered with Mujeres en Café, a Colombian association of female coffee growers, to create Project Sunrise – a branded coffee sold in all First Watch outlets.
The program provides the women with income security, allowing them to invest in their farms and support their local communities.
First Watch also contributes 25 cents from every kids’ meal to Share Our Strength’s No Kid Hungry campaign, providing meals for vulnerable children.
GOVERNANCE
Strong corporate governance is essential to the financial integrity and success of our firm and that of our portfolio companies. Across our platform we abide by high ethical and legal standards.
GOVERNANCE
STRATEGY IN ACTION
INNIO’s gas engines provide critical grid loading balancing, thereby facilitating renewables energy and a quicker transition to green energy. At the same time, INNIO is the leading supplier of engines for the conversion of biogas to electricity, providing a carbon neutral power source to the grid and income to farmers.
Looking ahead, INNIO is keen to enable the hydrogen economy. Built on its leadership in the conversion of gaseous energy carriers to electricity, in 2020, Jenbacher announced the final approval of a hydrogen cogeneration plant in Germany. The plant can flexibly switch between 100% hydrogen or natural gas inputs, or anything in between, paving the way to a carbon neutral future.
In 2014 Advent invested in Ocensa, Colombia’s largest crude oil pipeline and a critical strategic asset for the country.
During Advent’s investment period, the company created a comprehensive risk framework for potential ethical and compliance issues. Given its vital role in safeguarding Colombia’s oil flows,
Ocensa needs to ensure that its suppliers and vendors match its own policies – including vetting and supervising their employees.
At the time of Advent’s exit, the company undertook strong due diligence and its contracts with suppliers required compliance with Ocensa’s own policies.
Headquartered in Germany, Advent portfolio company Röhm is a major global supplier of methacrylate chemicals.
To ensure safety while transporting thousands of tons of hazardous chemicals each year, the company has developed a rigorous Transport Risk Analysis (TRA) process. After conducting desktop research on potential risks, Röhm sends inspectors out to travel and document each route.
The results are compiled into a comprehensive report that can run into hundreds of pages.
Röhm also requires customers to submit to an audit of their own storage facilities – thus ensuring the TRA covers the entire chain of custody, from manufacturing plant to point of delivery.
Backed by Advent, YDUQS is among Brazil’s biggest providers of post-secondary education, with more than 500,000 students enrolled at its institutions each year.
Communication and transparency are central to YDUQS’s corporate strategy. The company publishes a yearly sustainability report based on Global Reporting Initiative standards, detailing its environmental, social, governance and financial performance.
YDUQS’s Corporate Social Responsibility policy establishes guidelines and priorities for the vast array of community engagement projects that the company supports. In 2018, more than 112,000 students and 7,300 staff participated in volunteering activities, helping more than 3.3million people.
TRANSPARENCY AND COMMUNICATIONS
As a responsible investor, we recognize the importance of transparency and communications to facilitate ongoing dialogue and promote strong partnerships. In the coming years, we plan to enhance this communication as we continue to build upon our Responsible investment programs.
Founded more than 75 years ago, Crompton is one of India’s best-known brands in consumer electricals.
The company’s Corporate Social Responsibility (CSR) program currently focuses on three areas: training over 3,200 youths (FY 19-20) across India in such skills as electrical appliance repair and plumbing; watershed development in the drought prone regions of
Maharashtra to increase the availability of water for drinking and irrigation; and providing lunch to more than 7,000 children across 31 schools in Vadodara.
The company has plans to expand its programs and it makes regular audits of their ongoing social impact. Further details are available at the CSR section of the Crompton website:
www.crompton.co.in/csr