Sustainability has been a key factor of value creation for Apax since the company was founded. In 2021 and moving forward, the firm wants to take this approach even further. Grégory Salinger, Operating Partner Digital & Sustainability, and Dominica Adam, Chief Sustainability Officer, offer their insights on this ambitious commitment.
Apax’s support for Environmental, Social and Governance (ESG) issues is nothing new. It started in 2011 with the development of an ESG strategy and the signing of the Principles for Responsible Investment (PRI). The firm also became an active member of the ESG Commission of France Invest. “Sustainability is a key area of focus for Apax, both in its analysis of investment opportunities and in the monitoring of its portfolio companies,” explains Grégory Salinger, Operating Partner Digital & Sustainability. “It’s one of the four main levers that we are developing to create value, along with M&A activities, internationalisation and digital tech.”
Sustainability, a central focus for the investment process
“In our view, companies that fully embrace sustainability will be better placed to meet the challenges of today and tomorrow,” adds Grégory Salinger. “It’s a key issue, not only for preserving value – but also for creating a competitive advantage. There is a clear correlation between companies engaged in sustainability, business performance, and value creation.”
Since the Apax France VIII fund raising in 2015, the firm has included Sustainability at every stage of its investment process:
- Before an acquisition: by conducting a sustainability due diligence and by integrating sustainability principles into its offers and shareholder agreements
- During the shareholding period: by defining a company strategy and roadmap, by encouraging the appointment of a project manager, and by helping with the implementation and monitoring of results
- At exit: by carrying out a sustainability vendor due diligence.
To monitor the delivery of its sustainability priorities, Apax uses the ‘Reporting 21’ tool, a digital platform that efficiently collects data from all its portfolio companies, ensuring that the reporting process is both accurate and complete.
Appointment for the newly created position of Chief Sustainability Officer
To embed sustainability even further in its plans for value creation, Apax has created a Portfolio Value Creation Hub, led by Grégory Salinger. “Digital transformation and sustainability are the major challenges facing companies today,” he explains. “We want to make these aspects even more strategically important, by aligning them with business strategies to generate performance and long-lasting value creation.”
In May, Dominica Adam, with more than 15 years of experience in sustainability and innovation, joined Apax as Chief Sustainability Officer. Her role is to manage the firm’s sustainability approach by creating solutions that meet the growing needs of all stakeholders (e.g., customers, employees, shareholders, the environment, etc.). “Apax is a historical player on sustainability issues within Private Equity,” she says. “A lot of initiatives have already been put in place, but there remains significant potential for transformation, namely on the alignment of sustainability with portfolio companies business priorities and the tracking of performance through accurate and timely reporting. The objective is to work individually with each company and their management teams to define the key strategic objectives, which can be implemented throughout the investment period.
Maison Routin – 1883, a new corporate strategy embracing sustainability
In 2019, Apax became a majority shareholder of Maison Routin – 1883, a company in the production and distribution of flavoured drinks and cordials. Supported by Apax, in 2020, the company developed a new corporate strategy putting sustainability at its heart, which resulted in the ‘Shake your TALENTS programme’. Each letter representing an action embodying this vision (Transmission, Art and creativity, Local, Environment, Naturalness, economic Tissue and Solidarity).
“Maison Routin – 1883 understood its sustainability challenges and integrated them into its business strategy, adding Key Performance Indicators to monitor progress monthly in areas such as CO2 emissions, water consumption per litre of cordial produced, and employees trainings,” explains Dominica.
Another portfolio company, Europe Snacks, a producer of aperitif snacks for various distributor brands defined in 2021 a new strategic sustainability plan with 2025 targets. Among its initiatives, the company is looking to create healthier products, adopt 100% recyclable packaging and reduce manufacturing waste by 50%.
The Sustainability Lab and the Apax Philanthropy Fund, Apaxs teams getting involved
Apax’s commitment to sustainability is not limited to its portfolio companies. The firm has established an internal “Sustainability Lab” with more than 15 employees working on three important topics: environment and climate, diversity and inclusion, and philanthropy. “The idea is to bring together the employees who want to get involved to define the firm’s sustainability priorities and objectives,” says Dominica. “There is a strong level of engagement and desire to contribute. Everything we can experiment with internally gives us legitimacy to better support our portfolio companies.”
Furthermore, in June 2021, Apax launched the Apax Philanthropy Fund, which seeks to support charities whose objectives are aligned with the activities of Apax’s portfolio companies. 20% of the funds raised and a third of the profits will be donated to these charities. The remainder of the profits will be reinvested by the Apax Philanthropy Fund to generate new gains and donations. The Apax team, along with their portfolio companies, can also help by donating their time and professional skills.
