Committed to responsible investing
As a private equity company, we carry responsibility: we invest the funds of our shareholders and of the DBAG fund investors, and we become shareholders of companies with significant employee numbers. What is more, we bear responsibility towards other areas of society and the environment. In order to underscore this responsibility, we have committed ourselves – as an investor and as a fund manager and advisor – to bindingly comply with the Principles for Responsible Investment (“UN PRI”) that were defined jointly by investors and the United Nations.
As part of an extensive project, DBAG and its portfolio companies also defined fields of action in the past financial year to improve our sustainable development, and determined key performance indicators to achieve this. “Our aim is to underline our understanding of sustainable investment,” says Torsten Grede, Spokesman of DBAG’s Board of Management, adding: “Signing the PRI is a start. The portfolio companies will now determine target values, and we will check how we can refine our investment strategy, for example, by integrating ESG aspects such as the reduction of carbon intensity into our considerations on corporate development.”
Supported by the United Nations, the PRI network was founded in 2006 and is today the leading advocate worldwide for responsible investing. More than 4,000 institutional investors from around the world have signed the PRI, thus proving that they back the six Principles which offer an approach for incorporating ESG (Environmental, Social, Governance) aspects into investment practice.
DBAG has always interpreted its business model in a “sustainable” manner and encourages its portfolio companies to implement long-term, value-enhancing corporate strategies. “Companies everywhere are increasingly being called upon to have their business performance measured by the extent to which they are in line with globally defined targets to protect the environment and improve working conditions,” Torsten Grede states. Sustainability aspects are becoming more and more important for availability of capital: fund investors tie their capital commitments to compliance with ESG criteria within the investment process, and increasingly expect a higher level of commitment. The same applies to equity investors. Finally, banks grant interest rate benefits for acquisition financings if certain ESG-related criteria are met. “It thus makes sense for us to re-focus on the sustainable success of the companies within our portfolio.”
Portfolio companies managed under consideration of ESG aspects
The portfolio companies and DBAG have defined five overarching key fields of action: greenhouse gas emissions as a central challenge in the Environmental area; safety at work, employee satisfaction and gender ratio as Social aspects; and compliance as a Governance criterion. Key performance indicators make these fields of action measurable; company executives will be able to use these indicators to manage their businesses.
Greenhouse gas emissions, employee satisfaction and compliance as key fields of action for DBAG
Deutsche Beteiligungs AG will also report on these fields of action henceforth. In addition, DBAG manages its business with three further non-financial key performance indicators that DBAG’s Board of Management considers material for our Company success. Business travel accounts for more than half of DBAG’s carbon footprint. We aim to reduce emissions in absolute as well as relative terms, in relation to the number of employees. “Emissions that cannot be prevented will be adequately compensated for,” explains Torsten Grede.
DBAG surveys employee satisfaction on a monthly basis, using software developed by its portfolio company Cloudflight in cooperation with Austrian start-up TeamEcho, and aims for a continuous improvement of the calculated value. DBAG’s compliance system stipulates that all employees attend compliance training courses once a year. DBAG will measure success against fines or penalties imposed for compliance violations. The target value is zero euros.
For more information, please refer to the ESG chapter in our Annual Report 2020/2021