Climate Change Data

Environmental Metrics

ESG Focus Areas

• Responsible investing
• Environmental, Social, and Governance (ESG) issues

Environmental Achievements

• Actively managing direct footprint by reducing greenhouse gas emissions; obtained CEMARS certification

Social Achievements

• Won the Corporate Citizenship award at the 2015 Private Equity Awards, recognizing best practice in corporate social governance; focus on identifying high-quality and sustainable businesses, supporting their growth for the benefit of shareholders and wider society

Governance Achievements

• Transparent reporting to shareholders; independent Board; commitment to transparent and regular reporting; adoption of anti-corruption and business ethics policies; effective board structure and committees; active risk management procedures

Climate Goals & Targets

Environmental Challenges

• Adverse currency impact on NAV (primarily from a weak euro and weak Nordic currencies); vulnerability to economic downturn; weakness of other European currencies against sterling

Mitigation Strategies

• Taking on debt in relevant currencies to mitigate currency risk; prudent use of borrowing to fund acquisitions; focus on chosen sub-sectors to outperform wider European economy; holding investments longer that offer predictable growth; taking advantage of opportunities to realize other assets; negotiated a right to opt-out of any new investment (made by the HgCapital 7 fund) where certain conditions exist

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: International Private Equity and Venture Capital (IPEV) Valuation Guidelines

Certifications: CEMARS

Awards & Recognition

• Corporate Citizenship award at the 2015 Private Equity Awards

Environmental Metrics

ESG Focus Areas

• Charitable giving
• Sustainable business practice
• Job creation

Environmental Achievements

• Becoming carbon neutral

Social Achievements

• Building diverse teams, both internally and amongst portfolio companies
• Generate employment growth across our portfolio
• 1% of LLP profit donated to charity annually

Governance Achievements

• A fully independent NED Board that makes all decisions on the level of commitments made to Hg Funds (all investment decisions are made by Hg)

Climate Goals & Targets

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI

Environmental Metrics

ESG Focus Areas

• Sustainable business practice
• Charitable giving
• Job creation

Environmental Achievements

• Becoming carbon neutral

Social Achievements

• Hg donates 1% of firm profits to charitable causes through the Hg Foundation
• Building diverse teams, both internally and amongst portfolio companies
• Generate employment growth across our portfolio
• Online tutoring pilot initiative across the UK
• Long-term strategic partnership with Imperial College

Governance Achievements

• Board of 6 NEDs with a wide range of skill sets and strong focus on strategy and governance who make all decisions on commitments to Hg funds
• 2020 UNPRI rating AA++

Climate Goals & Targets

Environmental Challenges

• Headwinds from lower global growth in 2020

Mitigation Strategies

• Focus on operational improvement
• Cautious and disciplined investment activity into businesses tracked for many years
• Bolt-ons and strategic M&A within the portfolio remain a key focus

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Carbon neutral since 2019 (through offsetting)
• Long-term goal of NetZero by 2050 with Science Based Targets (SBTs)

Social Achievements

• Commitment to be a best-in-class employer, creating a diverse and inclusive workplace
• ESG is integral part of onboarding process and value creation planning

Governance Achievements

• Signatory to the UNPRI since 2012
• ESG is reviewed by the Risk and Audit Committee quarterly and reported to the Board

Climate Goals & Targets

Environmental Challenges

• Identifying and managing ESG risks and opportunities across portfolio companies
• Ensuring consistent adherence to RI commitments
• Supporting portfolio companies in setting and achieving ESG targets

Mitigation Strategies

• ESG due diligence embedded into legal due diligence process
• Ongoing monitoring of investee companies’ performance against Sustainable Business Framework
• Providing portfolio companies with support, templates, and resources for ESG improvement

Supply Chain Management

Responsible Procurement

• Focus on modern slavery across supply chains

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI, SASB, UN Guiding Principles on Human Rights, UN’s Convention against Corruption, Ten Principles of The UN Global Compact, UN’s Sustainable Development Goals (SDGs)

Environmental Metrics

ESG Focus Areas

• Governance
• Social
• Environmental

Environmental Achievements

• Hg is compensating for its firm-level carbon emissions and has a long-term goal to be NetZero by 2050. 50% reduction in Scope 1 and 2 emissions by FY31; 26% of invested capital covered by SBTs by FY27, 100% by FY41.

Social Achievements

• Focus on creating a diverse and inclusive workplace; support for portfolio companies in improving employee diversity, equity, and inclusion; commitment to be a best-in-class employer.

Governance Achievements

• Implementation of a Responsible Investment Policy; ESG due diligence embedded in legal due diligence process; annual ESG reporting; quarterly ESG risk review by Audit & Risk Committee.

Climate Goals & Targets

Environmental Challenges

• Identifying and managing ESG risks and opportunities across a diverse portfolio of companies; ensuring consistent adherence to RI commitments; managing cybersecurity risks.

Mitigation Strategies

• ESG due diligence, ESG onboarding process with assessment against ~200 metrics, ongoing monitoring of portfolio companies' performance against the Sustainable Business Framework, support from Hg's ESG team, cybersecurity assessments and remediation plans, incident reporting guidelines.

Supply Chain Management

Responsible Procurement

• Focus on modern slavery across supply chains

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: UNPRI, SASB, UN Guiding Principles on Human Rights, UN’s Convention against Corruption, Ten Principles of The UN Global Compact, UN’s Sustainable Development Goals (SDGs)