The Apax Funds portfolio consists of an increasing number of “asset light” businesses which do not have a significant environmental impact. The majority of resources usage is reported by a small number of companies. In 2016, 95% of CO2 emissions were reported by only 6 portfolio companies with the other 14 portfolio companies reporting energy data accounting for the remaining 5%.
Electricity usage in the ESG Group reduced by 24% with 6 portfolio companies accounting for over 83% of the Group’s electricity usage and 17% of usage being reported by 12 portfolio companies. On a like for like basis the 16 companies reporting data both in 2015 and 2016 reported a decrease in electricity usage of 9% or 50 million kwh.
Overall CO2 emissions by the ESG Group decreased by 23% in 2016 due to a large number of exits from the portfolio accounting in total for over 11% of 2015 emissions combined with a decrease in like for like reported CO2 emissions of 10% and a number of new joiners in the portfolio not yet reporting CO2 data.
The Apax Funds’ portfolio is focused on reducing its global environmental impact with over two thirds of portfolio companies reporting to have energy reduction initiatives in place in 2016. The insight into where the main part of the usage in the portfolio is enables the Operational Excellence Practice to work with the largest users and identify reduction initiatives.
The portfolio’s environmental stewardship initiatives will help protect the planet while improving efficiency, reducing costs and preserving their ability to do business in the future. Sustainability is not just the right thing to do, it can also boost innovation and profitable growth. This is why we continue to see it as a key differentiator and a competitive advantage.
Breakdown of CO² emissions
Examples of environmental initiatives
Across the Apax Funds’ portfolio, we have a high number of initiatives in place that reduce complexity, waste and energy consumption. These initiatives range from: reducing electricity usage via replacing traditional light bulbs to LED, reducing paper usage by setting default double sided printing in all of the offices and reducing water usage by investing in low flow fixtures, auto shut off faucets and other water reducing features.
Improved governance and policy implementation
Throughout 2016, 5 new companies were added to the Apax Funds’ portfolio. A number of these companies did not yet have mature governance systems in place. The Apax OEP and Compliance teams are working with these companies in order to ensure that going forward they will apply best practice with regard to their codes of conduct and anti-corruption policies.
At Apax we realise that good corporate governance is the foundation of effective corporate management. For us, corporate governance means the application of international and national values and principles of responsible and transparent company management and control that are geared towards sustainable added value. We target full compliance with the laws and regulations of each country in which we operate, as well as with international standards. It is the necessary condition for our engagement with society. We are convinced that good corporate governance strengthens the trust placed in Apax Funds’ portfolio companies by their business partners and employees and also by Apax Funds’ institutional investors.
Robust corporate governance systems are in place across the Apax ESG group. Virtually all companies have a code of conduct and/or a code of ethics which guides their business activities. Portfolio companies that are new to Apax Funds’ or which have historically had less focus on governance are actively encouraged to adopt appropriate codes and processes within the first year of investment.
Examples of corporate governance and supply chain improvements
Governance is a key area of focus for the Apax Funds’ portfolio companies and companies are encouraged to focus on continuous improvement of their governance practices from the start of the investment with a particular emphasis on anti-corruption practices and establishing robust codes of conduct. Likewise, supply chain improvements are a key focus area for portfolio companies with exposure to supply chain risk. A number of examples of improvements are outlined below.