The focus on responsible and sustainable investment has grown substantially since the financial crisis and is now one of the most pressing issues on the corporate agenda.
Many institutional investors, as signatories of the United Nations-backed Principles for Responsible Investment, now expect companies to strongly commit to ESG topics by having a coherent and structured framework in place – both to achieve environmental and social change and to safeguard the long-term performance of their investments.
As an investor, owner and operator, AURELIUS recognises the vital importance of sustainability to combine business success with ESG factors. We believe that focussing on sustainability is an important part of building lasting value. Therefore, AURELIUS incorporates ESG factors into its business activities on an ongoing basis and embeds sustainability aspects into its core business and its key processes.
With this proven investment and management approach, AURELIUS has grown from a local turnaround investor to an international multi-asset manager over the last ten years, investing in a wide range of sectors and across the capital structure. By incorporating ESG aspects into both our investment and operational decisions, we reduce costs, minimise risks and explore new opportunities to serve our stakeholders' interests and society at large. This framework aims to further formalise AURELIUS’s approach to sustainability, recognising that risk mitigation and value creation go hand in hand. Accordingly, AURELIUS has adopted a comprehensive set of responsible investment guidelines. These guidelines were developed by a group of the world’s major institutional investors in a dialogue which took place under the umbrella of the UN-backed Principles for Responsible Investment (PRI).1
ESG integration in the private equity investment cycle
Private equity is foremost an ownership model for investments in privately held companies of all sizes and at all stages of development. The nature of the long-term partnerships, formed through negotiations and ongoing interactions between the private equity investor and its portfolio companies, is fundamental to defining how the industry operates and what sets it apart from other asset classes. Given its hands-on, active stewardship of businesses and long-term ownership timeframe, AURELIUS integrates ESG aspects into its investment cycle, i.e. throughout the duration of the partnership with the portfolio companies, from selection, due diligence, asset management through to exit.
ESG Aspects of Portfolio Companies
1 cf. American Investment Council (formerly Private Equity Growth Capital Council): “Guidelines for Responsible Investing“