Caroline Löfgren joined Hg as Head of Responsible Investment in 2017, with eight years of experience in strategy consulting and in-house sustainability roles from various industries. Most recently, Caroline was leading the global supply chain sustainability team at GlaxoSmithKline.
“Since joining the Private Equity industry I have been reassured to see how much action and conversation there is around environmental, social and governance (ESG) issues.
Keeping on top of ESG is not easy for investment companies. With varied portfolios and a broad range of issues to consider, it’s possible to fall into the trap of passive reporting, rather than actively working on the issues relevant to them and their investments.
2018’s PRI-ERM guidance* was another positive step towards active reporting on ESG issues, and investment firms should build on this to help manage how they can make a positive impact on wider society and the environment.
Hg provided a case study for the PRI-ERM report, explaining how our Responsible Investment Framework – a collaborative effort across Hg’s teams with input from both portfolio companies and investors – is a keystone element of our investment philosophy. We consider it to be both an innovative tool to communicate ESG metrics with our LPs, and a way of highlighting areas where we can support improvements in our portfolio companies.
For Hg, Responsible Investment means growing sustainable businesses which are great employers and good corporate citizens, whilst also generating great returns for the millions of pensioners and savers who are invested with our clients.
Clearly, different aspects of ESG are more relevant for different industries. As such, Hg’s position as a sector-specialist investor is a big advantage. We focus on businesses within the software and services sectors. This, in turn, has allowed us to compose a focused and specific framework with which to assess and improve our companies and ourselves.
The Hg Responsible Business framework – created collaboratively between Hg’s internal teams, portfolio companies and investors – is a keystone element of our investment philosophy. We consider it to be both an innovative tool to communicate ESG metrics with our LPs, and a way of highlighting areas where we can support improvements in our portfolio companies. It focuses on three key elements:
- Employees, and
In line with these areas, Hg will encourage, stretch and support the companies we invest in to develop and improve their practices, for example by developing employee engagement programmes, increasing cybersecurity (using experts within Hg) and improving risk management.
In addition, this week Hg will host our first ever Hg Rising Female Leadership Forum to support talented women from across Hg’s family with the chance to learn new skills, network and get involved with Hg’s mentoring programme.
Today there is increasing pressure on businesses to address the climate change agenda. It is important to consider, and take action, around potential risks to individuals and businesses as well as to focus on the overall reduction of carbon emissions. Hg is taking its responsibilities in this regard extremely seriously and we conduct full climate change risk assessments across our portfolio. We are also proud to be leading the way by becoming carbon neutral as a business ourselves from 2019.
Hg continues to host our annual Rising Female Leadership Forums to support talented women from across Hg’s family with the chance to learn new skills, network and get involved with Hg’s mentoring programme.
We will expand our work in the diversity and inclusion space by hosting a Diversity & Inclusion Forum for our portfolio companies later this year.
Responsible Investment should never be about ticking boxes. It’s about the active engagement of issues relevant to you and the businesses you invest in.”