A decade of building market leaders in ESG

Achieving good environmental, social and governance (ESG) standards is crucial to the success of sustainable business. Not only do high ESG standards help to mitigate risk, but they also help to identify and maximise opportunities to add value to business. One of the ways we help firms to achieve these standards is through our ESG workshop programme, which provides hands-on support and practical advice.

When we first started the programme in 2010, we focused on helping fund managers to integrate ESG into their investment process. We realised there was a lack of expertise about the role that private equity funds could play to drive good ESG performance within their portfolios and that we could use our position as a leading investor to share experience and good practice. Since then, the workshop programme has become the largest of its kind in emerging markets, reaching a significant proportion of the private equity industry in the areas we invest, particularly in Africa.

As the programme has grown, we have adapted it to meet the needs of participants and expanded both the topics we cover, and the audiences we’re reaching. For example, the revised and expanded version of the programme that we’ve just launched caters not only to fund managers, but also to companies we invest in directly, and those we invest in through private equity funds. The inclusion of portfolio companies has brought diverse experiences and points of view to the table, which has led to dynamic and productive discussions.

We use a strong ‘learning by sharing’ approach during the workshops, building on shared experiences and using examples from participants. Businesses often have a small ESG team of one or two people, so these sessions are an opportunity to bring a much larger group together to talk about common challenges and ways they can create value in their business.

“Ultimately, we want to give people the skills and confidence to go back to where they work and do something a little bit differently,”

explains Guy Alexander, ESG Manager at CDC. “Whether that’s implementing a new HR policy, different ways of including employees in consultation with management, or an equity fund taking a new approach to climate.”

New technical sessions focus on climate change, human resource management, emerging ESG issues such as data privacy or the circular economy, and a session on integrating impact measurement. These complement our existing training on topics such as how to integrate ESG in the investment cycle, establishing an effective Environmental and Social Management System (ESMS), board oversight of ESG and women’s economic empowerment. These sessions continue to evolve to reflect emerging practice and knowledge.

The revised workshop programme also reflects our focus on supporting smaller and first-time fund managers in emerging markets, who often face tougher ESG challenges because of contextual risks and circumstances such as weak legislative frameworks or poor enforcement of ESG legislation. Our workshops aim to drive ESG value beyond compliance, by encouraging participants to think about ESG not just through the lens of risk mitigation but also through the lens of opportunity.

One example of a fund manager we’ve supported through our workshops is Ascent Capital Africa, which invests in promising businesses across East Africa through its Ascent Rift Valley Fund. The Ascent team – along with representatives from the fund’s investee companies – attended our training sessions in Kenya. One of these sessions formed the basis for how Ascent now incorporates ESG considerations into their investment process.

“We really used that training to set up a template for how we look at environmental and social considerations at screening, during due diligence, and also when we’re monitoring investments” explains Marieke Geurts, Investment Director at Ascent.

Ascent aren’t the only Fund Manager applying lessons from our workshops; in a follow-up survey to our most recent workshop, two-thirds of participants told us that they planned to apply lessons from the workshops in their work within the month, and over one-third confirmed that they had already implemented changes in their company’s ESG practice as a result of the training.

As a consequence of COVID-19, we are now moving our workshops online, to a virtual training that keeps as much of the interactivity and implementation focussed learning experience as possible. We recently ran sessions exploring how COVID-19 affects the ESG and business integrity investment processes of fund managers. For portfolio companies, the training focused on using the ESG management system as an essential tool to navigate changing social and environmental dynamics during the pandemic.

Over the past 10 years we have trained over 1,000 people from over 195 organisations, including fund managers, portfolio companies, DFIs and representatives from our shareholder, the Foreign and Commonwealth Development Office (FCDO).

For more information about our workshop programme, please contact us through esgtraining@bii.co.uk.