We champion a responsible investment approach focused on creating long-term, sustainable value and are conscious of the responsibilities we have towards all our stakeholders.
We believe that a business approach to ESG is a solid indicator of its prospects of long-term, sustainable value creation. During our ownership we work with each business to address material ESG issues relevant to their strategy and our investment case.
Our commitment to responsible investment means that we aim to consistently contribute to building great businesses and creating long-term, sustainable value for our investors, while having a positive impact on society.
We embed ESG through our three-stage approach of ‘prioritise, invest and contribute.’
ESG is at the heart of Bregal’s investment strategy and fundamental to generating attractive risk-adjusted returns. As we grow the Bregal platform, we are committed to driving positive impacts across our ecosystem. This means supporting our companies in their transition to a low carbon economy, ensuring they are great places to work and enabling them to act as good corporate citizens.
Post investment, Bregal deal teams work closely with portfolio company management to prepare a value creation plan, which includes an ESG plan, to guide strategic direction and prioritise initiatives.
The main elements of the ESG plan are prioritisation of ESG issues, an overview of short- and medium-term initiatives to improve ESG performance, and KPIs to report and monitor progress. The purpose of this ESG roadmap is to support management in embedding material ESG aspects in their operations and strategy.
The Board of Directors of each of our portfolio companies is Bregal’s primary platform for monitoring ESG performance and progress. We engage with all portfolio companies on a regular basis to assess progress, identify support needed and reset objectives. In addition to regular progress updates, comprehensive annual reviews are conducted.
We are also funding and supporting certain Bregal portfolio companies’ ESG ambitions via the Sustainable Development Fund (SD Fund) by providing loans at attractive terms to finance improvement initiatives aligned with the UN Sustainable Development Goals.
The SD Fund is a €40 million fund intended to support portfolio companies in transitioning their business models towards greater environmental and/or social sustainability by providing funds to invest in improvement projects which meet strict ESG criteria.
Achieving any substantial ESG improvements often requires funding. However, the payback period for ESG-related improvement projects may be too long for portfolio company management and Boards to decide to deploy scarce equity or operating cash to these projects. The SD Fund encourages our portfolio companies to realise tangible ESG improvements.
Projects funded to date have helped to achieve a reduction of carbon emissions, improved water management, enhanced quality of care and enabled renewable energy generation.
We actively support Bregal portfolio companies to engage with their local communities and address social causes and business-relevant impact.
Through our Social Impact Initiatives, in partnership with the COFRA Foundation, we aim to support our portfolio companies to engage with their local communities and to create positive social and environmental impact. We believe such positive impact is relevant for the long-term prospect of any business.
Most recently, in response to the ongoing pandemic, together with the COFRA Foundation, our senior Bregal employees established a €3 million Bregal Helps Initiative to help our portfolio companies support their local communities affected by Covid-19.
Addressing climate change
Climate is a cornerstone of our ESG programme and as such we work closely with our portfolio company management teams to develop carbon reduction plans and accelerate the transition to a low carbon economy.
As part of this commitment to climate action, Bregal spearheaded the development of the Private Equity Sector Science Based Target Guidance. In addition, Bregal joined the Net Zero Asset Managers (“NZAM”) initiative, an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner.
Our climate targets include:
- Reducing our own (direct) emissions by 50% by 2030
- Ensuring 40% of our portfolio companies have set science-based targets by 2025
- Ensuring 100% of our portfolio companies have set science-based targets by 2030
As active members of the initiative Climat International (iCI) we continue to support the development of private equity industry-wide solutions to measuring, assessing and mitigating climate-related financial risks and support best practice sharing. We are also seeking to actively invest in mission-driven companies solving the climate crisis and other interrelated challenges via our new dedicated impact platform – Bregal Sphere www.bregalsphere.com
Diversity, equity and inclusion
Bregal is committed to being a socially responsible firm promoting diversity and equal opportunity both across the Bregal platform but also portfolio companies.
We believe that by playing our part as the investor, we can also help our portfolio companies to become more resilient and responsible businesses.
We have expanded our charitable matching programme by supporting organisations addressing social injustice and racial inequity.
Bregal is a proud sponsor of Level20, an initiative that supports greater representation of women in the private equity industry.
Examples of how we are collaborating with our portfolio companies to improve their ESG performance.
Our Philanthropy Programme is designed to encourage our employees to become more active in charitable organisations.
Bregal Helps Initiative
In early 2020, together with the COFRA Foundation, senior Bregal employees also established a €3 million Bregal Helps Initiative to help our portfolio companies support their local communities affected by Covid-19.