We invest in early stage companies aiming to leverage technology for the purposes of automating processes, making them easier, cheaper and if possible more energy efficient. These type of companies do not rely in any meaningful manner on fossil fuels nor other non-renewable resources for the core of their business. These companies with small teams usually do not have tools nor structures to negatively impact ESG aspects. For the reasons set out above, we so far have not found it sufficiently meaningful and value-enhancing to define parameterized criteria and tools to evaluate sustainability parameters of early-stage investments.
bValue also provides growth capital for innovative later-stage businesses which have well-defined technology-based growth initiatives. The growth equity investment strategy targets markets and business models with large potential offering new or upgraded solutions to old, resource-intensive ways or processes. Scale-ups, we invest in, have usually a few dozens of employees and running operations and thus may have a noticeable impact at ESG aspects. During investment process in these companies we put ESG issues on the top of our due diligence and investment assessment agenda.
We also built-in ESG compliance process into our Value Creation Plan which we develop during investment process and implement after investment closing.
We follow exclusion lists when we consider our investment targets. Exclusion lists include sectors that are not recognized as ESG friendly by generally approved standards and frameworks. We regard companies that have future-proof business models and sustainable operations. They have to fit in a theoretical future sustainable scenario to ensure a potential investment is viable in the long-term.
If the investment target passes the above filters we proceed to ESG due diligence with purpose to assess the ESG risk and opportunities so the investment committee can make an informed decision considering ESG factors and the company’s and fund manager’s capacity to address risks and capitalize on opportunities.
A scope of due diligence may vary and it depends on the nature of business and findings of initial analysis. Setting the scope of Environmental & Social analysis we consider aspects around: Investee company/group structure; Physical assets; Labour; Supply chain; Time; Standards; Cumulative impacts.
The key considerations when defining the Governance part of due diligence are: Company/group structure; Business integrity; Anti-corruption and whistleblower considerations; Economic sanctions; Documentation.
The outcomes of the due diligence process, apart from the report and understanding of ESG issues within the target, are:
- Short- and long-term goals based on the ESG standards in force at bValue,
- ESG action plan for the target.
After an investment is made, bValue introduces reporting and control mechanisms in each portfolio company for purpose of monitoring and managing companies’ ESG performance following an investment.
Within post-investment monitoring process, bValue is able to capture the ESG footprint of the Funds’ portfolio companies and determine areas where input from investment team should add value or mitigate risk. This involvement should enable to put in place the appropriate people, processes and technology.
Given our aspiration for sustainability and realizing that we can hardly demand awareness for sustainability if we do not lead by example, we aim to continuously improve and strengthen the sustainability aspect in our own operations.
bValue is committed to make a positive impact internally in following ways:
- We have zero tolerance for all forms of corruption, hold the highest standards of conduct and make active efforts to ensure that it does not occur in any of our business activities.
- Employees have opportunity to participate in training on sustainability topics. ESG principles capacity building in the team is to be achieved through internal workshops and external trainings, conferences.
- bValue is obliged to have a whistle-blower policy which allows employees to flag concerns and allows us to be aware of any concerns about breaches of internal policies or best ESG practices.
- We are committed to promoting diversity in the workplace. bValue is an equal opportunities employer and respects the diversity of people. We would like to attract, develop, and retain a diverse talented people and create a supportive working environment.