Our Commitment to
Responsible investment is an integral part of our investment strategy.
Latin America offers ample opportunities to make a positive impact on the environment and on society while earning an attractive investment return. Our goal as investors is to allocate capital to businesses that not only have the potential to grow and become more valuable, but that can do so in a sustainable and socially responsible manner. We are convinced that by investing with responsibility and purpose, we are creating an additional value driver for our portfolios. Our efforts in this area have earned recognition from the Latin American private capital association and others in recent years.
We actively integrate environmental, social and governance considerations throughout the investment process.
At the screening stage, we filter prospective investments based on their exposure to excluded activities, industries or geographies deemed high risk or specific business practices considered unethical. During due diligence, we evaluate environmental and social policies and practices, as well as the societal impact of each prospective investment, to identify risks and opportunities within the company. This results in a roadmap for initiatives to be implemented if the investment materializes. The investment committee discusses environmental and social findings in depth and weighs them when making investment decisions. If significant red flags are found, we may choose to withdraw from a transaction. During ownership, the Linzor deal team establishes impact goals and sustainability action plans in collaboration with management and monitors day-to-day progress on initiatives, while an Impact & Sustainability Committee comprised by in house and external experts reviews the companies’ progress and performance annually.
We are signatories of the Principles for Responsible Investment and use the Sustainable Development Goals as a framework for our impact and sustainability targets.
We have been well-aligned with the principles of the PRI throughout the firm’s history given our investment approach. Each Linzor investment has an SDG-aligned impact thesis that undergoes review and refinement annually. We track the evolution of a set of environmental, social, and governance indicators, including some that apply across the portfolio and others that are company-specific, and we report the results to our investors annually. In 2021, we became the first signatory in Latin America ex-Brazil of the Net Zero Asset Managers Initiative and all our portfolio companies measure their emissions (Scopes 1, 2 and 3) in alignment with the GHG Protocol. We have been recognized by PRI as a case study on active and responsible ownership in emerging markets private equity.
Our monitoring framework includes the following topics, with each indicator tied to specific Sustainable Development Goals:
Environmental
Energy consumption
Energy efficiency
Renewable energy use
Carbon footprint
Climate change awareness
Waste management
Supplier policy
Social
Job creation
Employee health & safety
Quality employment
Diversity
Non-discrimination
Profit-sharing
Community engagement
Governance
Board composition
Board committees
Audit and internal controls
CEO succession
Business integrity
Anti-bribery
Whistleblower channel
Risk management
Company-Specific
SME financing
Higher education payback and employability
Internet access in
underserved areas
Quality of care and
affordability in healthcare
Fuel efficiency gains
Road accidents prevented
We care deeply about the impact of our investment activities on all stakeholders and take our responsibility as stewards of capital seriously.
Our responsible investment policies and practices are the product of our evolution as a firm. While we have always sought to instill the best practices in transparency, corporate responsibility, and ethics throughout our portfolio, our approach has matured over time to become more proactive, ambitious and structured with respect to impact and sustainability targets. We are convinced that this will have a positive impact on our communities and environment, while enhancing the long-term value of our portfolio.
Read more about the award-winning impact and sustainability programs at some of our portfolio companies