EMK Capital believes strongly in the principles of responsible investing, with a focus on ensuring high environmental, social and governance (ESG) standards across our portfolio and operations. We believe that improving ESG performance is a critical part of ensuring long term success for any business today.
Building better businesses through effective ownership and management benefits all stakeholders, from employees to customers, suppliers and shareholders, and the wider community at large by creating jobs and supporting local communities.
As a commitment to our stakeholders and the communities in which EMK Capital and its portfolio companies operate, we have adopted a Responsible Investing policy based on the UN Global Compact and the Principles for Responsible Investment.
ESG in Practice
Prior to making any investment, EMK assesses the sustainability of each company, documenting any material findings in our investment papers. Where required external specialist advisors are engaged at an early stage to input to the ESG due diligence process on any potential target.
- Monitoring and Partnering with Portfolio Companies
Immediately after the acquisition of a portfolio company, the EMK team work to ensure it operates from a strong sustainable platform, proportionate to its scale and focus of operations. The EMK team’s governance role is an essential component in the portfolio companies’ value creation. In order to do this, EMK has established the following guidance, recommendations and restrictions related to ESG matters for portfolio companies which are discussed with Management prior to completion and throughout the lifecycle of the investment. From day 1, portfolio companies are supported in improving their ESG performance, identifying and responding to opportunities for further improvement on an ongoing basis:
- ESG should be part of each company’s value creation agenda, including having specific ESG projects and targets;
- Each company should have/develop an ESG related policy, serving the company’s specific needs and fulfilling at least EMK’s minimum requirements. EMK encourages the portfolio companies to promote adherence to the UN Global Compact throughout their supply chain;
- EMK encourages each portfolio company to strive for long-term continuous improvement, aiming beyond compliance, with a vision to reach industry best practice;
- EMK requires the board of every portfolio company to discuss the company’s compliance with its ESG related policy. EMK and portfolio company teams will work together to ensure that EMK’s investors are updated on these matters at least annually;
- If potential ESG related risks are identified in the investment process or later, the portfolio company will address such risks and thereafter strive for continuous improvement;
- EMK’s portfolio companies shall comply with applicable local and international laws and regulations, and, where appropriate, give consideration to relevant international principles; and
- EMK promotes transparency on ESG matters and as ESG management within the portfolio company evolves, EMK encourages external reporting on progress.
- Transparency and Reporting
In addition to being a signatory of the UN’s Principles for Responsible Investment, EMK reports ESG-related topics to investors every quarter, along with an annual detailed ESG Review Report.
Collaborations for Sustainable Finance
EMK has been a signatory to the United Nations-backed Principles for Responsible Investment Initiative (UN PRI) since 2016, at our inception. The UN PRI is a network of international investors working together to ensure that ESG issues are given appropriate consideration in the investment process. Signatories incorporate environmental, social and governance principles into investment analysis, decision-making processes, ownership policies and practice.
EMK has been a member of UKSIF since early 2020. UKSIF is the membership association for sustainable and responsible financial services in the UK. Membership provides the ability to share best practises in sustainable investment over the wider financial services spectrum.
Diversity & Inclusion in Private Equity
We are delighted to be a Sponsor of Level 20, the not-for-profit organisation established to inspire women to join and succeed in the private equity industry. Our firm supports Level 20’s mission to encourage greater female representation across the private equity industry with the goal of having 20% of senior positions in the industry held by women and with a particular focus on increasing the number of women in investment roles. We support Level 20’s five key initiatives to achieve this mission: mentoring and development; networking and events; outreach; advocacy; and research.
We encourage our employees irrespective of gender to be active members of Level 20 by contributing to Level 20-led research, discussion groups and outreach events and participating in the annual mentoring programme. Our firm’s engagement with these activities is led by our internal Level 20 Ambassador.
We are also proud sponsors of Out Investors, a global organisation that was founded with the mission to make the private investing industry more welcoming for LGBT+ individuals. The OI network operates through local chapters in major financial city centres and is formed in partnership with investment organizations. Current chapters include New York, London and San Francisco. The role of these chapters is to foster community, hold networking events and facilitate mentorship in the industry.
Diversity within the private equity industry relies on fostering social mobility. Starting in 2019 EMK are working with the London Academy of Excellence, a state school that started in 2012 to serve the brightest pupils in one of the most economically disadvantaged areas of London.
The Academy model relies on sponsorship, and the Managing Partners are personally sponsoring a number of pupils.
The investment team are providing mentoring to those students keen to learn more about the world of finance.
EMK support the Paris Agreement and are working with our all stakeholders to:
- Scale up efforts and support actions to reduce emissions;
- Build resilience and decrease vulnerability to the adverse effects of climate change;
- Uphold and promote regional and international cooperation.
EMK is a supporter of the Paris Agreement and this year became a supporter of the Task Force for Climate-related Financial Disclosure (the TCFD) committing ourselves to improve and increase reporting of climate-related financial information.
In order to help us progress and align with the TCFD’s 3 phase action plan, we have become a signatory of the initiative Climat International (iCI), joining a global community of private equity investors who seek to better understand and manage the risk associated with climate change, reducing the climate impact of their own investment strategies, as well as the carbon intensity of their portfolios.
EMK measures and has offset its GHG emissions for Scope 1, 2 and 3 at the GP level (not including investments) for the last two years. We offset our emissions, and positively contribute to (donating beyond our emissions offset), two projects – one Verified Carbon Standard (VCS) avoided deforestation programme in the Brazilian Amazon and another regional tree-planting program in the UK planting native British broad-leaved tree species within schools in the South East of England.
We believe every business big or small should account for its impact on climate and has a responsibility to, as well as an opportunity to, work towards mitigating impact through both reduction strategies and carbon offsetting. Therefore, we are engaging with our portfolio companies to help them measure and understand their climate impact and climate-related exposure. From here we can analyse where they can make the biggest positive contribution towards mitigating climate change and craft their climate strategies accordingly.