At Livingbridge, ESG is not viewed as a new(ish) trend, even if the acronym is a relatively recent addition to the proliferation of TLAs (Three Letter Abbreviations) that we all have to contend with in PE-land. We may all be scrambling to keep up with the ever expanding web of regulations, frameworks and “industry standards” that responsible investors are meant to be complying with, but the fundamentals of ESG – a responsibility to consider the environment and society when making business decisions, and having the governance in place to ensure that this is done effectively – have always been important.
Since inception, Livingbridge has sought to partner with management teams who want to build “best in class” businesses because we believe that these are the businesses that will command a premium price on exit. We know from having made more than 165 platform investments over a 25 year period that these market leading businesses really understand and take into account the impact of their activities, not just in the short term or from shareholder value creation perspective, but in the long term and across a broad set of internal and external stakeholders, ranging from employees, customers, suppliers, the society which gives the company licence to operate and, of course, the environment.
It is through backing management teams who share this fundamental belief that we, as a private equity fund manager, are able to make a difference. We work closely with each of our portfolio companies to identify the ESG factors that are important to them, having regard to what they do and the values and culture that is unique to them. We are also open about the ESG factors that are important to us and our desire to leverage the scope and scale of our portfolio to amplify our impact.
By having this open dialogue, we can provide the sponsorship and support our portfolio companies need to make progress against their ESG objectives during our hold period and they can help us to achieve our objectives too. A great example of this is our recent commitment to set science-based carbon reduction targets across 100% of our investments by 2035 in accordance with the SBTi framework. We are looking forward to working collaboratively with current and future portfolio companies to achieve this ambitious target.
Authored by Matt Jacobs
Partner, Livingbridge, and member of the BVCA Vision 2023 judging advisory panel
This article was originally published in 2023 as part of the BVCA's Vision Awards, and some of the content may now be out of date. Please contact the BVCA if you have any queries or need further assistance.
