We have been vocal about our ambition to be best in class for a non-impact fund of our size for many years and have systematically adhered to best ESG practice throughout the deal-making cycle from pre-deal screening through to exit.
During 2023, each portfolio company had its carbon footprint assessed and committed to reducing emissions and achieving Net Zero. Target years for portfolio companies range from 2035 to 2045, well ahead of the government’s target year of 2050.
We have also introduced more stringent measurements and now collect key ESG metrics from over 150 data points for each of our portfolio companies.
James MacLeay, investment director and ESG lead at WestBridge, said:
“Those of us in the private equity sector are uniquely positioned to actively influence the rate and pace at which a company improves its ESG footprint. We should take our collective responsibility extremely seriously – not just because it delivers tangible financial results but because it is the right thing to do. As a firm, we don’t simply invest in companies that already have good ESG credentials. Instead, we actively look for companies that are ripe for improvement as we know our systematic approach can make a big impact.
“Each of our companies undergoes a comprehensive analysis to establish a benchmark and to highlight areas for improvement. We then collaborate with management to create a tailored roadmap setting out the steps to improve their ESG footprint. Progress is monitored in real-time to ensure they are hitting their performance targets. Such dynamic reporting means any issues are identified quickly and additional support provided promptly.”
Alongside environmental considerations, our latest report reveals that:
“It stands to reason that there are innumerable benefits to implementing best ESG practice which go beyond environmental considerations. A recent study by PWC, for instance, revealed that 79% of investors believe ESG risks are an important factor in investment decision-making. Other studies have shown that a 10-point increase in a company’s ESG score can lead to a 1.8x higher exit multiple, and that’s without taking other value creation activity into account.
“At WestBridge, we go above and beyond the regulatory requirements because we passionately believe in the benefits of ESG excellence and are keen to future proof our investee companies by staying ahead of legislative change. The impact of our approach is evident at all our companies. For instance, since we invested in Techex in June 2022, its ESG score has already increased by 29%. This improvement has been achieved by introducing a number of seemingly small but effective changes to daily practices, such as overhauling the staff benefits package and setting up an ESG taskforce. It is worth adding that everyone at WestBridge leads by example and we set our own ESG bar as high as that of our investee companies.”
James Stander from Sustainable Advantage said:
“WestBridge stands out as one of the few non-impact funds in the lower-mid market that has a fully comprehensive ESG programme as part of its value creation model. The way individual companies are being assessed, then constantly monitored and reviewed using the firm’s ESG portal, is absolutely class leading.”