>>> RESPONSIBILITY

Investing responsibly – our promise

Thierry Biggoer, Associate

Entrepreneurship means taking on responsibility: not just in the company’s own value creation chain, but also beyond it. CGS has developed a pragmatic approach that goes much further than responsibly allocating its investors’ capital and anchors this philosophy in the portfolio companies.

CGS highly values sustainable and responsible management that goes far beyond financial considerations. CGS’s compass for this is the ten ESG principles of the United Nations Global Compact. ESG (Environment, Social, Governance) considerations play a key role at CGS in developing portfolio companies and assessing their risks, from due diligence to the investment phase and the exit.

Universally applicable
In 2017, CGS summarized its values and principles for business conduct throughout the entire investment process in an ESG guideline. This guideline applies to both CGS and the companies in which it invests. It covers the investment strategy and processes as well as the management of the portfolio companies, including minimum standards that all companies must defi ne and meet. The guideline applies to everyone, from the directors and senior managers to the employees.

Focus on core risks
The main goals are ensuring harmonized assessment of the companies regarding ESG topics and creating a joint starting point from which to systematically develop further measures. From 2019, each company is to issue monthly reports on eight ESG performance indicators. This raises risk awareness, increases transparency, and improves corporate governance in all portfolio companies.

CGS’s ESG policy focuses on core risks and opportunities that arise while conducting actual business. It prioritizes issues with the greatest economic impacts, including the avoidance of expensive damages. Each company may move beyond the minimum standard and adopt further focuses.

Three pillars
The ESG policy is based on the following three pillars: an ESG risk matrix, a code of conduct, and reporting. Each portfolio company adapts the policy to its own context, determining corresponding guidelines and objectives. Here, all levels of the company must fulfill their obligations, from the board of directors and advisory board who set certain guidelines to the individual employees who sign the code of conduct. All portfolio companies have defined an ESG action plan for 2019 or are about to do so.

ESG performance indicators
All portfolio companies report monthly on eight performance indicators: electrical energy efficiency, staff turnover, work time lost due to accidents, and absenteeism rates as well as indicators of corruption risk, concentrations on procurement and customer sides, and innovation.

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