At Ardent Equity, we treat environmental, social, and corporate governance (ESG) as true sources of competitive advantage, not ‘just’ a check in the box. Sustainability is a key lever in our approach to create long term sustainable value. By treating ESG opportunities and challenges as vital business topics we aim to drive sustainable growth, ensuring our portfolio companies have a meaningful contribution to their environments and remain relevant now and excel in the future.

PRINCIPLES

Ardent Equity seeks to act in the best long-term interests of its beneficiaries and stakeholders of its investments, in which ESG plays an important role. Ardent Equity therefore strives to commit to the following United Nations-supported Principles for Responsible investments:

Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.

Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.

Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.

Principle 4: We will promote acceptance and implementation of the Principles within the investment industry.

Principle 5: We will work together to enhance our effectiveness in implementing the Principles.

Principle 6: We will report on our activities and progress towards implementing the Principles.

INTEGRATION INTO ARDENT EQUITY’S INVESTMENT PROCESSES

Ardent Equity aims to integrate the ESG lens throughout its investment processes.

Pre-screening

Ardent Equity will not consider investments that inherently conflicts with its ESG principles and objectives. As such, Ardent Equity is to determine whether there are any critical ESG or reputational concerns linked (in)directly to target companies during the pre-screening process. To ensure the deal team and Investment Committee are actively considering any inherent ESG conflicts, Ardent Equity uses a standardized one-pager to discuss each potential deal. Besides a summary of the target company’s business operations and performance, a first view on the value creation opportunities and potential red flags, there’s a dedicated section in which any ESG-related opportunities and threats will need to be flagged by the deal team. Additionally, certain ESG sensitive industries such as oil & gas, production of weapons, tobacco, pornography, etc. are by definition excluded from our investment universe.

Due Diligence

Ardent Equity is to evaluate material ESG opportunities and risks applicable to the industry and/or target company in scope during the investment due diligence process. Therefore, Ardent Equity has integrated ESG into its standard investment approval process by the Investment Committee.

After acquisition, Ardent Equity strives to actively promote these good governance practices and, where needed, bring this to an even higher level.

HOLDING PERIOD

Upon the acquisition of a portfolio company, Ardent Equity aims to baseline all company’s emissions (incl. scope 3) using a third-party AI software in close cooperation with management. Establishing this baseline within the first weeks of the holding period will not only create more ESG awareness of the company’s emissions hotspots, it will also be used to formulate and quantify the company’s ambition to bring down emissions.

ESG-related initiatives are identified, and their impact quantified, serving as a roadmap to realize the company’s ambition to bring down emissions. Important to notice we strive to ensure these initiatives are also positively contributing to improved financial performance, to ensure overall incentives are aligned.

Yearly, to comply with the SFDR’s Article 8 requirements, Ardent Equity’s Sustainability Report is drafted and published, reporting across Ardent Equity’s portfolio companies all mandatory Principle Adverse Sustainability Impacts (PAIs) in line with the Sustainable Finance Disclosure Regulation.

Ardent Equity uses third-party reporting software to ensure its Sustainability Report is and remains compliant with the SFDR and EU Taxonomy guidelines.

LEADING BY EXAMPLE

At Ardent Equity we want to lead by example by minimizing our own carbon footprint and proactively contributing to a more sustainable world.

We aim to minimize our own carbon footprint by i) promoting travel in a sustainable manner, ii) ensuring our office(s) are in sustainable buildings, close to public transport hubs, and iii) vetting our suppliers on sustainability. We partner with a third-party to evaluate our total emissions year-end and compensate for this when needed to ensure we retain a negative CO2 emission balance.

To read our full ESG policy, click here

To read our 2023 SFDR periodic disclosure, click here