4 February 2022

Celebrating the acceleration of ESG standards in emerging markets

As we announce the winners of the inaugural ESG Performance Award for Private Capital Funds, the high standard and significant number of nominations places emerging market fund managers at the forefront of global ESG standards.

As an impact investor for over 70 years, we believe integrating good ESG brings added value to portfolios and increases business sustainability. In recent years, we’ve noticed the significant strides that emerging market private capital funds have made to integrate ESG into investment decisions, and how these efforts are more effectively managing risks as well as successfully supporting employees, helping to build sustainable businesses and communities.

To celebrate this progress, we partnered with Global Private Capital Association (GPCA) in 2021 to launch the ESG Performance Award for Private Capital Funds. Our aim with this award, was to showcase leading ESG practices that private capital funds in emerging markets have developed and how these investment houses are making progress in adopting and integrating ESG standards into their day to day operations.

Today, we are pleased to announce the two winners of the ESG Performance Award for Private Capital Funds:

Watch the video to meet the winners of the inaugural award.

The award submissions were reviewed by an external panel of judges, who we thank for their input: Adam Black (Coller Capital), Shami Nissan (Actis), Mark Goldsmith (FiveOak) and Natasha Buckley (Harbourvest) and Shruti Chandrasekhar (IFC) . Click here for more details about the judges.

We were delighted by the quality of submissions received, which is why upon reviewing the submissions, the judges decided to split the Performance Award into two categories – an award for generalist managers and an award for sector-focussed managers – to account for the different approaches to ESG strategies.

Congratulating the winners, Natasha Buckley, Vice President, ESG, HarbourVest, said: “It was extremely difficult to select winners from such a high quality group of applications. The longstanding commitment of emerging markets funds to ESG principles is evidenced in these clear examples of operational excellence. Moreover, the measurable contribution towards the UN Sustainability Development Goals could not be more important as we emerge – inequitably – from a devastating pandemic.”

Adding to this, Mark Goldsmith, Managing Director and Sustainability Specialist, FiveOak, remarked on Silverstreet Capital’s award for sector-focussed managers: “Silverstreet’s bespoke ESG approach to agri-investments in Africa and how it has been able to demonstrate the impact in each portfolio company over several years”

On Adenia Partners’ win of the award for generalist manager, Adam Black, Partner, Head of ESG & Sustainability, at Coller Capital congratulated the fund manager, noting: “Adenia has a long-standing and highly formalised commitment to ESGI and this came across in their submission.  I was particularly engaged by their approach to ‘theory of change’ at each portfolio company and the emphasis given to performance improvement in respect to both DE&I and climate change”.

We congratulate all the award nominees on a sophisticated showcasing of their ESG-lens approaches. We received 33 award submissions, representing close to $33 billion committed capital and with the experience of investing in over 700 portfolio companies. Over 280 exits had been achieved, some with a clear ESG lens in mind.

Commenting on the overall standard of submissions, panellist Adam Black, Coller Capital, said: “Reflecting upon my career within private finance I have been impressed at the progress made over recent years.  However, it is the adoption and integration of ESG within the emerging markets that so often stands out, something that was clear to see from the very high number of quality submissions received for this award”.

Shami Nissan, Head of Sustainability, Actis, shared: “I was struck by the impressive quality and number of submissions – the diversity of funds, geographies and sector was also notable. All in all, these submissions clearly demonstrate the significant progress emerging market private capital funds have made to integrate ESG into their strategies”.

Shruti Chandrasekhar, Africa Regional Lead, PE, IFC/World Bank Group, also commented that: “What was striking across most of the entries was how integrated ESG was to the overall growth and performance of the investments, highlighting that strong ESG is quite correlated to financial performance”.

Overall, the submissions demonstrated the range of varied and complementary strategies being taken toward achieving the commercial benefits of an ESG-lens approach.

A key factor that was observed during the review process was how more fund managers are working to be more transparent about their ESG processes as well as their sustainable impact – evidenced by two fund managers’ being signatories to the Task Force on Climate-Related Financial Disclosures (TCFD), 13 are currently signatories of Principles for Responsible Investment (PRI) signatories, and nine are members of the Operating Principles for Impact Management (OPIM).

The quality of submissions demonstrates a move towards greater transparency and a trend of increased integration of ESG risk and impact narratives by emerging markets fund managers, in their operations.

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