esg – Covisory Holdings

Methodology

Methodology : E S G

Who we are

We sustain the environment we operate in

Our corporate strategy policy is formed to ensure sustainable investments through beneficial engagement that safeguards the interests of the environment, the community, and the government.

Since 2011, we have endorsed the UN’s Principles for Responsible Investment (PRI), and for the past four years, we have been given an A+ in both the Direct Private Equity Module and the Strategy and Governance Module. The Sustainability Report, which has been released annually since 2012, highlights the extensive Environmental, Social, and Governance (ESG) initiatives carried out at the portfolio companies of Covisory Holdings and the Covisory Holdings Funds.

Corporate

Ethics Program

Sustainability Focus

The Covisory Holdings ESG Sustainability

Sustainability has been ingrained throughout the investment process at Covisory Holdings for well over a decade, and the company has an unwavering commitment to responsible investment. This commitment was inspired by the conviction that a responsible investment strategy can produce net benefits for society and the environment in addition to maximizing financial returns for investors.

Environmental Highlights

Covisory Holdings Buyout Funds follow an asset-light approach, with electricity use as a key environmental factor. Several portfolio companies, like Wehkamp, TietoEvry, and Thoughtworks, are adopting …

Social Highlights

Covisory Holdings portfolio companies indirectly employ over 1,000 people, making employee welfare a key priority. By tracking workforce indicators, Covisory identifies best practices and areas for im…

Governance Highlights

Covisory Holdings emphasizes that strong corporate governance is key to sound management. Nearly all portfolio companies follow a code of conduct or ethics. Newer investments or companies with less fo…

ESG Integration & Risk Management

Incorporates ESG into investment processes for risk management

ESG factors are incorporated into our investment processes for risk management purposes. Using the following investment principles—target drivers of return supported by solid research—we first design our portfolios. When appropriate, diversify among issuers, industries, and nations; take into account daily price information; and methodically implement portfolios by carefully balancing expected returns, expenses, and risks.

Diversification is used in the approach described above to lower idiosyncratic risks, including risks related to ESG, but we also add a layer of ESG-specific risk management. For instance, because privately held businesses with significant strategic shareholders may not adequately represent the interests of all shareholders, we may choose to exclude them from our universe of eligible securities. We may also decide not to buy businesses where, based on available information, we think there is a higher risk of fraud or other actions that could render the financial statements of the business unreliable. Additionally, we monitor the news each day to find portfolio companies that are embroiled in disputes that could have a big effect on their bottom line, such as those involving social or environmental issues.

Enviromental Objectives

Increase the use of employee alternative transportation and decrease our scope 3 emissions
Publicize links of local transit opportunities Reduce or eliminate the production of waste Installing water dispensers and providing all employees with reusable water bottles Reduce or eliminate the use of paper products Promoting recycling

Social Objectives

Encourage employee involvement and open communication through the deployment of our annual employee survey. Facilitate better employee health and well-being through improved indoor air quality. Implementing casual dress Fridays for employees who donate $10 each Collaborate with our joint venture partners on implementing, tracking, and reporting our ESG initiatives Partnered with ThinkHR to conduct anti-harassment training for all employees

Governace Objectives

Regularly convene with our ESG Taskforce to discuss the goals, strategy, and management of our ESG Program Align our program with sustainability reporting frameworks such as GRESB to improve overall ESG performance and increase transparency Continue to participate in industry organizations and associations designed to facilitate communication, transparency, and the sharing of knowledge. Hold annual investor meetings for all active funds (including Advisory Board meetings) to ensure transparent communication

Serving a Broader Purpose

Commitment to ESG and Sustainable Growth

Our unrivaled expertise in the enterprise software market allows us to consistently fulfill our commitments to investors who have entrusted us with their futures by prioritizing ESG practices and policies.

Our ESG principles are ingrained in every aspect of our operations and aid us in making sure that our marketing strategy will endure for a very long time.

Broad Accountability

Accountability throughout the firm

At Covisory Holdings, we foster ESG understanding and accountability throughout the firm. Our investment professionals are responsible for managing and instilling the guiding principles of our ESG policy across our portfolio companies. In addition, Covisory Holdings Consulting Group (RCG) is actively involved in addressing potential ESG risks during the private equity investment process and within the Covisory Holdings firm. Our Compliance team provides oversight and ensures that employees at Covisory Holdings adhere to our ESG policy.

Responsibility:

From Sourcing to Exit

In order to reduce stakeholder risks and position our portfolio companies for sustainable growth and success, we integrate ESG analysis into our private equity investment process. RCG subject matter experts thoroughly examine the company’s technology, cybersecurity, and data privacy practices prior to every deal and add-on acquisition. In order to evaluate potential ESG risks and opportunities, we also work with law firms and consulting firms. The investment committee is informed of all important findings. Covisory Holdings keeps track of ESG performance and development over the course of each private equity investment after a deal has closed. Through ongoing discussions and written check-ins with Covisory Holdings portfolio company management and leadership, as well as board oversight during quarterly meetings, we make sure ESG measures are maintained.

Integrating ESG considerations into our investment process

Our PRI commitments call for us to take ESG considerations into account when making investment decisions, from the due diligence stage of potential investments to the exit procedure. For important ESG considerations, we develop post-investment remediation plans and customize our ESG due diligence for each investment. We identify important ESG factors for all potential investments using internal experts and a range of ESG frameworks, and when necessary, we bring in outside consultants. This analysis covers all aspects of our portfolio, from ensuring environmental, legal, and regulatory compliance to identifying opportunities to add value or reduce risk. To ensure that significant ESG risks and opportunities are taken into account, our investment teams follow an ESG due diligence procedure.

These teams then give the Investment Committee a thorough memo outlining the merits of the transaction, risk disclosures, including significant ESG issues, and potential mitigation strategies.

A strong governance framework

In order to maintain investor confidence, we are constantly striving to uphold sound governance practices. This necessitates a continuous evaluation of how our strategy should account for changing laws, regulations, and best practices. For instance, we have a zero-tolerance policy for bribery, including the payment of facilitation fees, and all Covisory Holdings staff members are required to attend an annual comprehensive anti-bribery and corruption (ABC) training seminar. To report suspected unethical, illegal, or unsafe behavior, Covisory Holdings keeps an ethics hotline open.

This link will take you to the reporting website. Our reporting hotline is staffed round-the-clock, every day of the week by an impartial third party.

Our ABC policy, which mandates that portfolio companies set up an ethics hotline within six months of acquisition, is also mandatory for all portfolio companies in which we hold a controlling interest.