Q: This year, ICG has reached a milestone in 10 years of responsible investing. What are your reflections on ICG’s sustainability journey?
A: It has been exciting to witness our sustainability strategy evolve as our business has evolved over the years. We have seen the private markets industry change in extraordinary ways during the last three-plus decades that ICG has been investing, and I’m pleased that the overall trend in the industry is moving toward more sustainability integration. Part of that is due to regulation pushing the industry and accelerating transformation. Client expectations have changed over time as well, and we have always sought to stay at the forefront of the market on critical environmental, social and governance matters – not just for the sake of it, but in order to have tangible impact in a way that is beneficial for our investments and for the world. Today, we are a truly global business, and manage nearly $100bn of AUM on behalf of 681 clients.
We invest across a wide range of private markets strategies, which means our sustainability approach must be equally distinct and adaptive, depending on our level of influence and the engagement capability we have available for each strategy. So, I’m delighted that ICG established a commitment to sustainability quite early on, and even more pleased that we have continued to grow more robust and more sophisticated in our approach over time.
Q: This was another challenging year for private markets. What role does sustainability play in competitiveness for the firm?
A: Despite the challenging market, the investment performance of our products has delivered significant value, and that is all without taking our eye off of our sustainability efforts. Indeed, in more challenging environments such as this, the benefits of strong investment discipline and a sustainable, long-term business model become more apparent. Our sustainable model is not only due to operational or economic resilience. We have truly endeavoured to integrate sustainability into our investment approach – from the way we assess potential investments, to the way we engage with companies, and our approach to supporting their growth. And, we are applying to ourselves what we encourage our investments to do.
We see this integration of sustainability considerations as an opportunity for value preservation – value enhancement, even – and a contributing factor to long-term growth, both for our portfolio companies and for ICG.
Q: What sustainability and people achievements are you particularly proud of?
A: Decarbonisation has been an area of particular focus for ICG over the last several years. In 2021, ICG was one of the first alternative asset managers to announce a commitment to reach net zero GHG emissions across our operations and Relevant investments by 2040[1]. That commitment is supported by two ambitious emissions reductions targets that were validated by the Science-Based Targets initiative (SBTi), and I am pleased with the progress we have made against those targets – supporting 65% of our relevant portfolio companies to set their own science-based decarbonisation targets, and substantially reducing emissions in our own operations – both well ahead of schedule.
I am also very proud of the work ICG has done on advancing our DEI agenda. Our people are the driving force behind our business, and we know that we will be stronger with employees with diverse perspectives and ideas. We also know there is still a long way to go to advance diversity, equity, and inclusion in the investment industry, so we are expanding our focus in a refreshed DEI strategy. I’m delighted that, for the second year in a row, we were the recipients of the Number 1 ranking by Honordex Inclusive PE and VC Index for our external transparency of DEI activity in private equity.
Q: What is next? How do you see sustainability playing a role in the next phase of ICG’s growth?
A: I believe that despite difficult market conditions, companies will continue to seek to raise capital to support their growth and ownership ambitions, and ICG’s range of products enables us to provide flexible solutions across the capital structure. That flexibility and partnership – like approach will be reflected in our sustainability strategy – seeking to embed sustainable value across our investments by building the right approach for each product. We are building resilience into our investments, ensuring they are more prepared for the next generation economy. We know that promoting sustainable growth in our investments will yield strong returns for our clients, more value for our stakeholders and shareholders, and will help companies to realise greater commercial success, even beyond our exit. That’s good for everyone.
1. Relevant Investments include all direct investments within ICG’s Structured and Private Equity asset class and Infrastructure Equity strategy, where ICG has sufficient influence. Sufficient influence is defined by SBTi as follows: at least 25% of fully diluted shares and at least a board seat.
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