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Sustainability: Making an Impact with Private Equity

Sustainability pays off in private equity investments. Investments that are not designed for maximum short-term profits can typically generate stable income over the long term if, in addition to economic criteria, environmental and social factors are taken into account in the firm's management.

As a market, sustainability offers excellent opportunities for development. Products and services in the field of environmental protection and those that support the conservative use of natural resources are experiencing rapid growth.

We help investors develop and implement concepts to meet their sustainability goals as part of their private equity strategies and investment policies. 

Investor benefits

A sharp upswing in sustainable investments has been seen in recent years due to pressing environmental problems such as climate change. Companies specialized in new technologies for improving energy efficiency or in renewable energies have demonstrated favorable growth. Today, for example, energy suppliers with low CO2 emissions are valued more highly in the market than industrial enterprises with high CO2 emissions.

Sustainable investments and sustainable management give investors the opportunity to achieve their social and economic goals while adding value.

More and more institutional and private investors are setting such goals. Sustainability is thus becoming increasingly important in the area of retirement funds and investment vehicles. paprico has helped to position the „New Value“ private equity fund as a sustainable investment product. As a result, various sustainability analysts have added the company to their lists, including the sustainable investment universe of Zürcher Kantonalbank and the investment universes of INrate and oekom-Research.
Private equity offers excellent opportunities for investors to promote sustainability in their portfolio companies through first-hand involvement. Through impact investing, the positive effects of the business can be further increased.
Impact Investing – Investor Involvement
  • Participate in corporate strategy development
  • Definite of economic, environmental and social criteria and objectives
  • Conduct a sustainability analysis
  • Support the implementation of sustainable management
  • Receive implementation support from our network of specialists
Impact Investing – Returns for the Investor
  • Help develop environmentally and socially responsible companies
  • Create environmental value-added
  • Increased value, improved financial performance
  • Improved basis for risk management

Sustainability analysis

We support investors who wish to add sustainability criteria to their investment policies by incorporating these requirements into the private equity investment process.

Sustainable investments require the careful review and selection of investment opportunities. Every investment is reviewed for sustainability, i.e., environmental, economic and social tolerance, based on select criteria. These criteria also play a part in the preliminary review of financing requests. This allows us to narrow down financing requests to those from companies with environmentally and socially responsible products. Sustainability is confirmed once again in the due diligence process.
For the investor, this process reduces potential risks such as the clean-up of inherited burdens, a poor public image or extremely high employee turnover. 
A detailed sustainability analysis is conducted for each portfolio company before or immediately following the investment. The analysis covers the areas of corporate management/policies, environmental policies, social responsibility and corporate governance and delivers an accurate picture of the current state of the company in each area. Deviations from targets, such as clearly defined environmental standards for suppliers or guidelines for internal energy and resource handling, are recorded and compiled for rating purposes.
Opportunities for improvement, such as regular employee briefings and staff involvement, are highlighted for implementation by the company. The sustainability analysis serves as a guideline and measuring tool for the long-term development of the company. It is intended to help the company handle resources responsibly, implement corporate governance guidelines and treat interest groups (such as employees, clients and suppliers) with fairness and respect. This instrument has proven excellent in the past and is considered a unique selling point by many investors. Our goal is to manage risk more conscientiously and to better maximize opportunities with positive effects on financial performance.

paprico is a signatory to the Principles for Responsible Investment