Spreading ESG principles across Europe

To be sustainable, a society’s growth must be based on a responsible management system that addresses environmental, social and governance (ESG) factors. Operating at a European level, Argos Wityu encourages and supports all its portfolio companies on these issues.

01

Acting for a better environment

94% of our portfolio companies have engaged in environmental initiatives. These include reducing CO2 emissions, waste recycling and reducing their consumption of water and electricity.

Lineas, the largest private rail freight operator in Europe, has sustainable development at the core of its business. Supported by Argos Wityu since 2015, the company’s purpose for Modal Shift is to develop such superior rail transport solutions that customers shift their goods from road to rail, thereby improving their supply chain but also having positive impact on climate and mobility. Rail emits 9 times less CO2, 8 times less air pollution, and a single train keeps the equivalent of 40 trucks out of traffic jams. Lineas also has in place a strategy to make its own activities more sustainable. Based on the UN Sustainable Development Goals, the Lineas sustainability strategy looks at e.g. new brake systems for freight wagons to reduce noise pollution and eco-driving training for its train drivers which help to further reduce energy consumption. An upcoming project together with Belgian NGO Natuurpunt looks at planting trees in a 10,000 square meters nature reserve to help improve biodiversity. Lineas has been awarded the Voka Charter for Sustainable Business for the third year running in 2020 and will be receiving the UNITAR Certificate for Sustainable Business in October 2020.

Fabbri Group, an Italian industrial leader in the manufacturing and marketing of integrated solutions for food packaging, supported by Argos Wityu since 2017, has recently stepped up into a new approach to sustainability. Among its fruits is Nature Fresh, the first certified compostable cling film for automatic and manual packaging worldwide. Reducing the amount of single-use plastic while maintaining performance, Nature Fresh was awarded in October 2020 by the Italian Institute of Packaging the “Best Packaging” award.

Minimising the environmental impact is also the aim of Cohedron (formerly Future Groep), a Dutch service company that has its ISO 14001 certification renewed every year. Supported by Argos Wityu since 2017, the firm’s target is to be carbon neutral by 2025. To achieve this, given that 80% of its emissions are created by its vehicle fleet, Cohedron has developed an app for its 1,500 employees to help them monitor – and reduce – their fuel consumption. At the same time, a rolling programme of replacing diesel vehicles is underway and the company is encouraging staff to reduce the number of journeys and to use cleaner forms of mobility, such as public transport or electric bikes.

Cutting CO2 emissions is also a priority for Gantrex, a Belgian firm with a world-leading position in the market of crane and specialty rail track solutions. Supported by Argos Wityu since 2015, Gantrex aims to reduce its CO2 emissions by 33% each year in Belgium and by 20% worldwide. Planned actions include hiring electric bikes, replacing 10% of its vehicle fleet with hybrid cars, reducing car travel (10% more train journeys and 5% of all trips cancelled) and the introduction of remote working (one day per week).

Another aspect of ESG is being addressed by France’s La Compagnie des Desserts, which produces frozen desserts and ice cream for the B2B channel and food service market. Supported by Argos Wityu since 2016, the company pays particular attention to its choice of ingredients and favours shorter supply chains (with fresh milk from the Pyrenees and fruit from the Rhône Valley, both French regions) for its ice creams and sorbets, all of which are produced by artisan methods. For 2020, the focus is also on reducing waste, revisiting some of the recipes (removing palm oil or using clean label product) and increasing the number of electric cars in its vehicle fleet.

For Juratoys, France’s specialist in the design of traditional educational games and toys, supported by Argos Wityu since 2018, the first move to was carry out an ESG audit among its suppliers, customers and employees in 2019. The audit identified various ways to improve the firm’s ESG activities, including the use of environmentally friendly materials, reducing packaging through packaging optimization, encouraging eco-friendly habits among employees (in terms of travel, waste and sorting for recycling, etc.) and working out its carbon footprint in order to reduce and offset its CO2 emissions. Based in Orgelet in France’s Jura region, the company has joined in 2019 the Forest & Life! initiative, which participates in the protection of French biodiversity and restores damaged wooded areas with the participation of children from local elementary school.

02

Respect for Women and Men

Argos Wityu helps firms assess the quality of their social interactions, their staff training, the upholding of employee rights, gender balance, the proportion of staff from minority backgrounds, and the employment of people with disabilities.

Juratoys is committed to two associations whose values are common with those of the company. Petit Coeur de Beurre helps to improve the quality of life of children with heart disease. Juratoys also supports Dons Solidaires. This partnership allows the company to commit to two essential pillars: solidarity by helping those in need and circular economy by fighting against waste.

Lastly, Moro, Italy’s largest fresh cheese producer and distributor, has similarly focused its efforts on staff well-being. Supported by the fund since 2019, the company reviewed its pay policy and subsequently improved the management of employee overtime, while also introducing a new incentive scheme and other benefits for its teams.

A different focus can be found at Olinn, European professional equipment services group with a sustainable and responsible approach supported by Argos Wityu since 2018. The company has adapted to its 60 workers with disabilities, representing now a third of the total Group employees. They are in charge of reconditioning IT and mobile phone equipment in the company’s workshops. Olinn also attaches a great deal of importance to the training and on-boarding of new employees, along with the integration of teams from its build-up operations. In 2019, several of the group’s employees opted to help a charity, Marion, La Main Tendue (‘Marion, the helping hand’) that fights harassment.

03

Transparency and independence in Governance

For the companies in its portfolio, Argos Wityu monitors the transparency of executive pay and both the independence and the degree of female representation on their boards of directors.

LoQu, a major optical and hearing aid retail chain in Germany, has always put compliance at the heart of its overall strategy. Supported by Argos Wityu since 2018, it established a code of conduct that set out strict rules for its stores and suppliers to ensure sustainable, ethical behaviour throughout the supply chain.

For its part, Wibit, the world’s leading floating water park brand based in Germany, has applied to join the United Nations Global Compact. Supported by Argos Wityu since 2018, the company has introduced numerous measures to comply with the compact’s principles. These include the 10th and final principle, which enjoins companies to develop proactive policies and programmes to combat corruption, both internally and within their supply chains.

04

[Ashoka Interview]
Social entrepreneurs: accelerating the societal transformation of companies

Maylis Trassard, Communications Director

Maylis Trassard,
Communications Director at Ashoka.

 

Ashoka, an NGO created 40 years ago, is a global network of changemakers working to promote social innovation in collaboration mainly with commercial companies. Interview with Maylis Trassard, Communications Director.

Could you tell us briefly about Ashoka?

For 40 years we have identified and assisted entrepreneurs – we call them Ashoka Fellows – who have chosen to devote their talents to solving specific social, environmental or societal problems. We do this by working on the sustainability and hybridization of their model, and especially by helping them to increase the impact on their ecosystem. This accelerates what we call systems change.

We are a supportive community created in 1980 by Bill Drayton, at the time a consultant for McKinsey. Whilst travelling in India, Bill Drayton encountered individuals who were approaching societal problems in innovative ways, and who aimed to fundamentally transform societal structures and behaviour. From the idea that we cannot depend solely on government to solve societal problems was born the notion of social entrepreneurship.

Ashoka today counts more than 4,000 social entrepreneurs in 90 countries. How can people get involved?

We have a network of nominators who identify potential Fellows. The nominators are themselves social entrepreneurs or experts in a given sector. We endeavour to combine the social and the expert dimensions, as we are not focused on a single cause. We’ll meet with any social entrepreneurs working on the United Nations’ 17 Sustainable Development Goals.

We search worldwide for entrepreneurs capable of improving their area of specialisation, be it the environment, healthcare, food, employment, technology, research etc. Today 30% of Ashoka Fellows work with young people – proof that societal transformation and its challenges are in the hands of the next generation.

You describe social entrepreneurs as innovation drivers for companies. How do you encourage win-win partnerships between Ashoka Fellows and organisations?

We work with Ashoka Fellows in numerous ways. First, we offer training for systems change, which helps social entrepreneurs identify the strategy to be adopted in order to achieve large-scale impact. Second, our network of volunteer mentors provides expertise in areas such as fund raising, human resources, marketing and legal issues. Third, skills patronage from major firms provides assistance to social entrepreneurs (e.g. Kearney for strategy, Rothschild & Co for fund raising, Capgemini for digital transformation, Latham & Watkins for legal aid related to economic-model hybridization). And fourth, we place great importance on peer-to-peer relations.

As Oussama Ammar, founder of The Family, often says, “Don’t take all the advice you are given . . . unless it’s from another entrepreneur!” This also applies to social entrepreneurship. Changes in systems, mentalities and laws which Ashoka Fellows endeavour to accomplish are so ambitious and complex that connections with other entrepreneurs on related themes can sometimes boost the impact much more than an advisor, consultant or mentor from the business world could.

Once the four pillars of assistance have been implemented, co-creation with companies occurs very quickly. We help the social entrepreneur identify target companies which aim to innovate in social or environmental areas. Conversely, we are often approached by companies eager to inject more impact into their business model, to reach new market segments, geographies or communities (e.g. those who are most vulnerable, about whom the companies lack data and experience). This is where collaboration with a social entrepreneur working on the ground takes on its broadest meaning.

Can you give a few examples of partnerships and projects which are both socially and economically innovative?

One example with significant impact was the collaboration begun in 2012 between the German company SAP and the social entrepreneur Specialisterne. The idea of this partnership sprang from an urgent, personal need. Thorkil Sonne, founder of Specialisterne, had an autistic son and was determined to change the mentality that views autistic people as a problem for society instead of as a source of skills. Among the personality traits typical of people with autism are a strong analytical sense and fear of change. At that time SAP was in fierce competition for tech talent and was experiencing very high turnover, especially for data scientists. That is when the collaboration began, which then attracted other companies such as Microsoft, EY, IBM and WillisTowersWatson. Today the Specialisterne model has expanded to 11 countries and employs 10,000 autistic people in jobs with high added value!

Thorkil Sonne

“This is part of our strategy that we help the companies get started. Then they use the knowledge to build internal capacity to tailor their recruitment and management. We stand by to assist them – in particular in new territories”

─ Thorkil Sonne, founder of Specialisterne

The Covid-19 crisis has put the spotlight on companies’ raison d’être, and for some has accelerated initiatives promoting ESG. Is this just circumstantial, or is there really an acceleration towards greater consideration given to these challenges?

There is no doubt that there is a real change in demand, even in the work we do to educate companies. Before we worked mainly on raising awareness. We felt that we still needed to convince commercial companies of the validity of confronting problems of public interest. I believe that question is no longer relevant. What matters is how to do something, and how to do it well. That is why we have created the Business for Impact movement, whose objective is to list all offers on the market and to connect all stakeholders so they can share best practices, become more efficient and increase impact.

How can your approach and that of investment funds be complementary in terms of ESG?
We have the same goal – growth – though the laws that govern impact are not the same as those of the market. The growth of the social organisation is only the starting point. We often repeat that for the public good we should pursue impact growth, but this is not achieved in the same way as internal growth.

Stanford, the leader in social innovation, has identified six strategies for achieving large-scale impact. Internal growth is the first we think of, but it is the most difficult to achieve because it is the most expensive. Then come adoption by the private sector, adoption by the public authorities, replication, open source and empowerment.

Social entrepreneurs need visionary partners and investors who share their ambition to solve long-term societal problems. As proven numerous times at McKinsey, the corporate costs saved amount to millions of euros. When we focus only on the growth of the number of beneficiaries of the structures involved, we completely miss out on the public good. Systems change is based intrinsically on the transmission of innovation from David to Goliath, which requires looking together for new ways of measuring impact.

Companies, do you want to get started co-creating impact? Contact Ashoka!

05

[Ashoka Case Study]
“Combining various worlds and lifestyles to bring out the best.”

An Ashoka Fellow since 2016, Lifeed, founded by Ricarda Zezza in Italy, works with companies to help them assist employees during the major stages of their personal and professional lives.

Ricarda Zezza joined Ashoka as a Fellow in 2016. Her heart was set on a project to equip Italian companies with training courses designed to help employees during all types of life changes. “For 15 years I had worked in management positions for large companies. When I became a mother I was faced with a huge paradox. Although my employer invested financial resources in training me on soft skills, what was happening in my real life went unnoticed, even though it provided fertile ground for challenging my skills”, recalls Ricarda Zezza. “So I decided to create my own company and to offer organisations training courses called ‘Life Based Learning’. These take life experiences, such as maternity, and turn them into training opportunities. Today more than 10,000 persons in 70 companies are registered on our digital platform. First called MaaM (Maternity as a Master’s), because initially focused on maternity leave, the company is now called Lifeed – Life Feeds Education and covers all life transitions.”

A close relation of confidence is forged between Lifeed and every company it works with. Once the training topics have been identified, the human resources department gives employees access to the platform. Through both online and in-person sessions, employees significantly improve their skills and well-being. Consequently, they too contribute to the expansion of social impact, as illustrated by the partnership concluded with Siram, an Italian subsidiary of Veolia. Collaboration and the sharing of objectives for the common good develop synergies and improve the work environment. We chose Lifeed training courses because their objective is perfectly suited to combining various worlds and lifestyles, and to bringing out the best in them”, states Emanuela Trentin, CEO of Siram.

06

Gilles Mougenot, Managing Partner, presents ESG at Argos Wityu

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