How responsible investment can transform businesses

ESG, environmental, social, and governance has been a term that's been around for some time now what it means in practice for a firm like ours at collar is we take into consideration all the relevant esg factors that might present an issue for all the underlying companies we may be exposed to esg issues are almost like stepping stones towards becoming a more sustainable business sustainable business for me is financially successful but also successful from an environmental and social perspective.

ESG is increasingly important to companies and it's really a core part of how they think about risks to their business opportunities but also it's really important as they scale and grow so i think this can really deliver a positive outcome for the business.

Best secret was founded in 1924 and it's headquartered in munich it is a members only destination for offprice fashion so it's only by invitation we are offering over 3 000 designer brands with attractive discounts. The fashion industry has some well known challenges and clearly they understand that there's no hiding from those issues and they're giving it careful consideration and thought so the secret is understanding what are the issues that matter most to a business they'll be looking at the low hanging fruit obviously maintaining license to operate looking after their people but ultimately it'll come down to the product the supply chain how responsible they are as a business.

Best secret is really on a journey and how it's looking at esg and sustainability most companies will go through a process typically starting by looking at esg risks they then start to look at opportunities and quick wins and then at that point they can start thinking more strategically about how they're approaching esg and sustainability as part of their overall business strategy. Since i joined best secret we actually put esg onto more strategic footing there are few focus areas that became very apparent for us for example on the environmental side it includes greenhouse gas emissions minimizing waste selling more sustainable products or circularity in the fashion industry but there are also quite a few topics on the social side like diversity and inclusion or talent development.

When people don't get esg right or when they pay lip service to it they end up polluting the environment losing market share if you're a well run company you're more likely to attract a higher valuation in the markets the exit process the sale process will be smoother. Mandate is very much at the level of the underlying manager so we scale up by reaching out to as many managers as possible with the touch of a button we can reach out and send them our thoughts on a particular esg topic whether it's climate change valley creation crisis management a whole range of issues.

Karla capital creates an environment that is very appreciative for the esg developments in the private equity industry and thanks to the growing importance of esg we receive a lot of support from premiere i've been working closely with julia as she's been developing the esg and sustainability strategy for the business. We've been looking at what the priority initiatives are for the firm and how they should relate to the overall strategy we've implemented quite a few initiatives mainly with focus on environmental topics the first one focused on the reduction of the size of the packaging for example we were able to exclude bubble wrap from almost all orders. We focused on switching to 100 recycled and recyclable cardboard for our boxes and we introduced shipping bags smaller packaging of course means more efficient shipping which means less co2 we also did quite a bit in terms of energy consumption. We're all proud that we can influence the direction this secret is taking but it's a lot we still have to do and we still want to accomplish everyone's on their own journey and so we do not expect perfection but we do expect a route map towards a business that's much more sustainable.

I'm encouraged by what we've seen over the last 10 years the fact that we now see more companies embracing esg that's incredibly powerful and a great outcome.