Assessment, investment exits, distribution and windup

Fund managers could consider the following issues and actions to ensure that ESG is sufficiently considered and integrated during the assessment, investment exit, distribution, and windup stage:

The right buyers

Exit stage is the time to bring together all the efforts spent during the life of the investment.

All the information on ESG policies and processes; ESG human resources and technologies; KPIs; information on how KPIs were met and how much the tangible and intangible benefits were in terms of cost saving, injury reduction, market expansion and brand value enhancement etc., need to be brought together. Collecting all this data will be imperative to find an ESG-motivated buyer that is prepared to continue the journey to the next stage and thus is willing to pay the right price.

Recommended action:

Target the right buyers, i.e., ESG-motivated buyers that are prepared to continue the journey to the next stage.

ESG achievements

Exiting an investment is not the end of the ESG journey for your firm but the beginning of another cycle of ESG efforts.

All the lessons from the life of an asset and its exit need to be analysed and fed into the ESG life cycles of other assets. Your firm should look to draft case studies, based on the successful implementation and improvement of ESG strategy, which can assist in external marketing or reporting to investors. This can be beneficial to your firm, enabling you to generate additional outside investment and to show the value that you have added to companies in your portfolio. Case studies could also act as a reference point for your firm, helping you learn from your past performance and provide stronger governance when implementing your strategy across future investments.