Good practice examples

Founded nearly 30 years ago, Coller Capital is one of the world's leading investors in private equity's secondary market. The firm acquires interests in private equity funds and portfolios of private companies from their original owners.

Coller Capital understood early on that ESG considerations and sustainability play an important role in investment management processes. “We view responsible investment as fundamental to our business and key to delivering long-term investment performance for our investors. We believe that the best managed companies manage ESG well and that poor ESG is an indicator of poor management and company performance.”

Since 2011, when their original ESG Policy was formalized and an ESG Committee established, they have made steady progress in implementing a framework where their Policy can play a vital role in protecting and creating value for their investors, reducing risk and enhancing long-term returns.

“Our values (delivering for investors, innovation, empowerment, fairness & respect, and one firm; one team) neatly capture what it means to be a responsible investor, and which is why our Policy and approach is in harmony with our values, and why there is an emphasis on our involvement throughout the lifecycle of our investments (irrespective of type and the level of influence we have as a secondaries investor).”

In 2014, Coller Capital became a signatory to the United Nations-supported Principles for Responsible Investment (PRI) and have achieved and retained A+ for all rated sections of their recent reports.

They seek to influence underlying General Partners (GPs) and their portfolio companies through integrating ESG into their investment process, thereby amplifying the impact of their Policy. Their objective is to achieve appropriate behaviour of underlying GPs and emphasize the importance of impact (both financial and ESG). Since ESG can be integrated into all stages of the investment process, for all transaction types and asset classes, they conduct some level of ESG analysis for every investment they consider. They also have the requisite processes in place to notify investors of material ESG-related incidents should they arise and engage where needed post-investment.

Coller have helped to develop ESG policies and programmes at underlying GPs, developed notes on a range of ESG topics and provided these to over 100 GPs through their platform. They have also run workshops, visited underlying GP portfolio companies, and assisted in crisis situations. In addition, all their investment professionals have been trained on ESG in investment decision-making and management (in-house training, on the job training and an ESG e-learning course offered by the BVCA).

They track ESG performance through various formal and informal mechanisms (bespoke, quarterly, annually) and communicate this to their investors. They also believe in the power of advocacy, outreach and thought leadership, and are active with the UN PRI, the BVCA, Invest Europe and the Hong Kong Venture Capital Association (amongst others).

Oversight of their ESG Policy is the responsibility of the Head of ESG & Sustainability, with the support of an ESG Committee. Affiliated to the Committee are Associates, Senior Associates and employees from across the Investment Team, Facilities, Marketing, Legal and Compliance, and the Administration Team (who operate as champions for ESG throughout the business).

Coller also firmly believe in ‘walking the talk’ acknowledging that if they are to meaningfully influence underlying GPs they should also actively engage in tackling their own sustainability impacts at the firm level. Selected key initiatives on Coller Capital impacts include:

• Establishing a Coller Capital Sustainability Team comprising employee representatives from across the organization (including Facilities given their responsibility for office and travel footprints);
• Undertaking an independent measurement of their global carbon footprint and subsequently achieving carbon neutrality at the global firm level;
• Implementing responsible food sourcing policies;
• Initiatives on single use plastics; and
• Becoming Stonewall Diversity Champions as part of their Diversity and Inclusivity programme.

“We are making steady progress and continue to believe that ESG and private equity secondary investing do not receive enough focus. We believe our ongoing efforts are making a difference in promoting better practice and influencing GPs and other industry stakeholders.”