Strategies in focus:
We know that every portfolio company is different, so we take the time to understand their business model, exposure to ESG (environmental, social and governance) risks and opportunities, key stakeholders, and their actual and potential positive and negative impacts on society and/or the environment. These insights inform our engagement with management teams and help us identify the areas where we can support them in achieving their sustainability ambitions and building lasting value across our portfolios.
For any new investment where we have sufficient influence, we conduct a structured ESG onboarding process to align with management teams on ESG governance, key ESG areas of focus for the business, and KPIs and progress monitoring. Typically, ESG is a regular agenda item at Board meetings, and we review ESG progress and performance with all portfolio companies at least annually.
While topics of engagement vary for each portfolio company, we focus our engagement on the following three topics:
Climate change
Key aims and drivers
- Reduce carbon intensity of portfolio companies
- Set ambitious GHG emissions reduction targets in line with a 1.5oC global warming scenario
- Sustainable business growth
Progress and impacts
64%1
of portfolio companies have assigned board or management responsibility for climate change-related risks and opportunities
(2021: 61%, 2020: 42%)
78%1
of portfolio companies have set or are in the process of establishing climate change or energy-related objectives and targets
(2021: 67%, 2020: 55%)
80%1
of portfolio companies have assessed, or began assessing, the business risks and opportunities associated with climate change
(2021: 58%, 2020: 39%)
76%1
of portfolio companies have assessed their carbon footprint
(2021: 61%, 2020: 32%)
Science-based targets
7
(out of 9 across ICG) relevant2 portfolio companies have set SBT in the last 12 months, with 4 being approved by the SBTi and 3 awaiting approval
13
other relevant2 portfolio companies have started developing their SBTs
Next steps
- Encourage the exchange of best practices, innovation and ideas among portfolio companies
- Continue to drive decarbonisation across the portfolios and support the setting of SBTs by relevant portfolio companies
Diversity and inclusion
Key aims and drivers
- Promote a more inclusive and equitable working environment that supports attracting and retaining best talent
- Improve diversity at senior management and board level
- Sustainable business growth
Progress and impacts
75%
of portfolio companies in European Corporate Fund VIII, the latest fund in the strategy, have improved gender diversity at board level since ICG’s investment
76%1
of portfolio companies have a D&I policy in place
(2021: 69%, 2020: 55%)
87%1
of portfolio companies are implementing initiatives
or targets to improve D&I
(2021: 64%, 2020: 48%)
76%1
of portfolio companies run regular employee engagement surveys
(2021: 69%, 2020: 68%)
Next steps
- Encourage the exchange of best practices, innovation and ideas among portfolio companies
- ICG will continue to promote and encourage greater diversity at strategic decision-making levels
Cyber resilience
Key aims and drivers
- Ensure appropriate cybersecurity governance, tools and processes – in line with best practice
- Enhance transparency on risk detection
- Encourage cyber training for portfolio company employees
- Continuously improve cyber resilience in the context of changing threat landscape
Progress and impacts3
(across the European Corporate portfolio)
100%
Cyber due diligence completed on all new investments in European Corporate Fund VIII. No red flags were identified and portfolio companies took mitigating actions to address key potential risks.
100%
of portfolio companies, where we have sufficient influence, have discussed cyber risk at board level at least once in the last 12 months.
94%
of portfolio companies, where we have sufficient influence, have completed or launched an internal audit of cyber capabilities. This includes having a clear plan of remedial actions.
Incidence response
Retainer established to ensure immediate support in the event of a cyber attack.
Next steps
- Encourage the exchange of best practices, innovation and ideas among portfolio companies, where appropriate
- As cyber-attacks become more frequent and sophisticated, full immunity is very difficult to achieve so we will continue to reinforce our efforts and monitor cyber risks and capabilities
1. Source: ICG’s Annual ESGs survey of portfolio companies across European and Asia Pacific Corporate.
2. Relevant companies are those where ICG has sufficient influence (i.e. at least 25% of fully diluted shares and a board seat).
3. Figures as at 31 December 2022. Data excludes any sponsor-led deals and recent exits.
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