Our ESG approach

Introduction

Gilles Mougenot, Managing Partner, presents ESG at Argos Wityu

« At Argos Wityu, we aim to support sustainable growth and value creation going beyond a purely financial approach. We firmly believe that corporate social responsibility enables a company to improve its outlook for growth and manage risks more effectively. Such an approach makes it possible to reduce resource consumption and to improve operational efficiency, working conditions and employee relationships. It’s a source of innovation and new opportunities. »


Argos Wityu is proud to have joined the UNPRI in 2021. While we have always committed ourselves to apply leading ESG principles in our practices, by joining the UNPRI, Argos Wityu has committed to making ESG part of its core mission.


In joining forces with UNPRI, Argos Wityu engages itself to apply the groups guidelines throughout its investment stages, portfolio management, divestment processes and management within its own firm.


Becoming a PRI signatory highlights Argos‘ efforts in sustainable and responsible investment.

Our approach

Since 1989, we have built on our majority shareholder status to help companies carry out their growth and transformation projects. We are convinced that in order to be sustainable, a company‘s growth must encompass all its aspects and be based on a responsible management system that integrates environment, social and governance issues. As a private equity firm, we inspire these values in the companies that make up our portfolio.


More than just managing environmental, social and governance risks, our ESG approach extends this conviction and is a pivotal part of our relationships with the companies in which we invest. It enables us, alongside management teams, to identify areas of risk and drivers of growth and value creation by focussing on strategic and organisational levers related to the social and environmental issues that businesses face today.


As set out in our Responsible Investment Code, we deploy our ESG approach every day, simply and practically.


Each quarter, the companies who make up Argos Wityu’s funds include a list of key ESG performance indicators in their business review. Further, each portfolio company focuses on specific ESG actions, defined in line with their own challenges and objectives. Our teams regularly monitor these KPIs and actions during meetings with the management teams.

Our Responsible Investment Code

1

Comply with all applicable laws

2

Endeavour to reduce adverse impacts and enhance positive effects of the business on the environment, employees and all stakeholders

3

Remain pragmatic and use ESG actions as drivers for value creation

4

Commit to continuous improvements with respect to environment, social matters and governance

5

Work over time to apply relevant international best practice standards, with appropriate targets and timetables for achieving them

6

Communicate to their partners and with Argos Wityu on their socially responsible initiatives and performance

Our Procedures

Pre-acquisition
IDENTIFYING THE MAIN RISKS AND OPPORTUNITIES

ESG issues are an integral part of our investment criteria. An ESG questionnaire enables Argos Wityu’s teams to identify the main ESG-related risks and growth drivers. The questionnaire is based on the documents available and on the results of our due diligence measures, as well as discussions with the management.

  • A summary document outlines the main ESG risks and opportunities
  • Identified areas of risks are then subject to additional due diligence
  • Opportunities are explored in depth and integrated into the BP when appropriate
  • ESG clauses are included in the shareholders agreement. The portfolio company recognises the importance of ESG principles, commits to compliance with the Responsible Investment Code and agrees to issue quarterly reports.
Pre-acquisition
IDENTIFYING MATERIAL ESG CHALLENGES AND PREPARING AN ACTION PLAN

An ESG review is systematically carried out by an external advisor, which provides its expertise to deepen the analysis of ESG risks and opportunities, proposes practical action plans that limit these risks while capitalising on these opportunities, and identifies KPIs.

  • The ESG review is driven by the portfolio company with the strong support of Argos Wityu teams
  • The action plan promotes a practical approach that focuses on meaningful ESG risks and opportunities for the company
During the Investment period
MONITORING AND SUPPORTING IMPROVEMENT

During the holding period, quarterly reporting makes it possible to monitor the action plans implementations, and improvements in KPIs. Operational ESG reviews are carried out on a regular basis. Further, one specific ESG action needs to be specified, and discussed at board level at least once per year.

  • Our equity investment results in the deployment and monitoring of ESG indicators with our support
  • Within Argos Wityu, the approach includes quarterly “ESG Coffee” meetings in which our teams share updates on progresses made in each ESG action plan.
  • Our investors are regularly informed of our investments’ ESG performance.
At Exit
REVIEWING THE SITUATION AND CAPTURING VALUE

When the creation of value related to the applied ESG approach becomes material (or in business sectors with powerful social or environmental challenges), an outside advisor may prepare a vendor ESG DD report.

  • Thanks to the quarterly reports prepared during the period when we hold the company, it is possible to demonstrate and capture value through the various ESG action plans.

ESG Regulation

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