Responsible Investment

The responsible and effective ownership and management of a company can create benefits for all stakeholders: from employees to customers, suppliers to shareholders, and the wider community at large.

Implementing best practice behaviors, mindset, culture and finally actions with respect to environmental, social and governance (ESG) factors contributes to both mitigating risks and capturing opportunities that enhance the long-term success of companies.

Cobepa is therefore committed to investing responsibly by integrating ESG considerations into its investment strategy and processes.

Guiding principles

Our ESG approach is based on three dimensions that guide us throughout the entire investment process:

ESG awareness
(management)

The extent to which a company is currently aware of ESG and the (potential) positive impact (opportunities) and negative impact (risks) it has on its business, and takes action accordingly.

ESG compliance
(risk)

The extent to which a company controls or manages the compliance aspects of ESG (e.g. GDPR, non-discrimination, fraud, ethics and regulations).

ESG opportunity
(competitive advantage)

The extent to which a company integrates ESG aspects in its business model compared to its competitors.

Cobepa applies the concept of materiality when determining which ESG topics to address for each company. This approach allows us to remain pragmatic and ensures that ESG efforts are focused on what matter most to the companies' business and stakeholders.

Commitments and tools

Our Responsible Investment Policy within the deal cycle is based on four core principles:

01
We incorporate relevant ESG aspects into investment analysis and decision-making processes.
02
We are active owners and incorporate relevant ESG aspects into our ownership policies and practices.
03
We seek appropriate disclosure on relevant ESG aspects by the entities in which we invest.
04
We work to enhance our effectiveness in implementing our ESG principles.

In order to implement these principles in our day-to-day practice, specific actions and tools have been defined for each step of the deal cycle:

Deal sourcing

We confirmed in an exclusion list the sectors in which Cobepa has always refused to invest.

In addition to these excluded sectors, Cobepa refuses to invest in companies of which management teams' awareness and willingness to tackle ESG issues would be considered as too low or inadequate.

Due diligence

When looking at a potential investment, a preliminary ESG review is systematically performed. This review is facilitated and formalized by our ESG due diligence tool covering the three ESG dimensions and applying the concept of materiality.

For selected ESG topics, external experts are consulted.

Investment decision

ESG considerations form a mandatory part of the investment approval process and must be documented at each stage of the process.

Post-closing

Cobepa shares the Responsible Investment Policy with new portfolio companies upon closing.

Specific ESG action plans are set up with management when due diligence identified relevant ESG factors that needed to be remedied, improved or enhanced.

Ownership

ESG considerations are being discussed at least once a year at the Board of Directors of each portfolio company.

Annual reporting is expected by each portfolio company on the progress of qualitative and quantitative ESG performance.

Read more by downloading our full Responsible Investment Policy.