ESG Done Wholeheartedly with CVC’s Jean-Rémy Roussel
Oct 27, 2020
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The podcast explores the transformative impact of integrating an ESG strategy in a portfolio company. It discusses successfully executing an ESG strategy at a struggling consumer goods food company, creating value and growth through employee engagement and a patient approach. The significance of ESG integration in fundraising and investment is also highlighted, emphasizing the need for evidence of ESG integration and collaboration with portfolio companies.
ESG is not just a box-ticking exercise but an integral part of the value creation plan for private equity firms.
Successful private equity firms take a patient, long-term approach to value creation through ESG strategies.
Deep dives
The Value of ESG in Driving Sustainable Growth
The podcast episode highlights the importance of ESG (Environmental, Social, and Governance) strategies in driving sustainable growth. It emphasizes that ESG is not just a box-ticking exercise but an integral part of the value creation plan for private equity firms like CBC. By focusing on the right indicators and insights, companies can create better businesses and achieve financial success. An example is shared of how CBC transformed a struggling consumer goods food company by engaging employees, improving product quality, and reducing environmental impact, resulting in market share growth and increased profitability.
Patience and Long-Term Approach to Value Creation
Contrary to the common perception of private equity firms being focused on short-term financial gains, the podcast highlights that successful firms like CVC take a patient, long-term approach to value creation. This approach involves implementing ESG strategies that may take several years to yield results but lead to sustainable outcomes. While short-term measures may be necessary in certain situations, the focus remains on transforming companies through initiatives that improve customer satisfaction, employee engagement, and environmental responsibility.
ESG as a Key Factor in Fundraising
ESG considerations have gained prominence in fundraising efforts, with institutional investors and LPs increasingly demanding evidence of ESG integration in investment decision-making. The podcast reveals that CVC raised their eighth fund with a dedicated focus on ESG, and one-fifth of their investors conducted ESG audits to ensure ESG factors were being actively considered and addressed. Furthermore, CVC sought an independent rating from Ecovadis to evaluate its own ESG performance as a firm, intending to extend this evaluation to their portfolio companies. These efforts demonstrate a commitment to ESG as a priority for the firm and a way to attract investors.