It's as easy as ESG
Building in sustainability

“The private equity sector globally, which manages trillions of dollars on behalf of clients and their beneficiaries, has a huge opportunity to make a difference to the way businesses operate and, in particular, to instill sustainability into the core business. I was brought in as the first dedicated resource on ESG to Cinven, an international private equity firm of some 50 years’ standing which is headquartered in London and with offices in Spain, Germany, France, Italy, Luxembourg and the US, as well as London. It’s a diversified firm investing across six sectors.

While Cinven has a history of incorporating ESG, nevertheless, it was felt that we could take this to a new level. I now lead a team of three which partners with different sector and regional teams. I sit on committees with senior people within Cinven where we are making decisions about embedding ESG into the investment process. 
Our focus in the team is two-fold. First, we analyse new deals and assess the relevance of sustainability to the business with the deal teams. What that means is that is we look at the potential for sustainability transformation, how we can take the business from good to great such that they meet the high standards of sustainability from customers, regulators and future investors. 

This is because customers these days demand sustainable products, whether they are retail customers or those operating in the B2B space. That, in turn, is being driven by various forces. Customers themselves are choosing to buy products that do not adversely impact the environment. There is much stronger regulation addressing products. But, above all, achieving sustainability, which can be defined in several ways, makes sound business sense. As part of Cinven’s overall value creation approach we see sustainability as a no-regrets move whereby we can enhance the value of the company in which we invest. 

Second, there is the internal dimension. At Cinven, we have set ourselves climate targets and other goals to help enhance our sustainability performance. We have loans for the funds linked to those targets. My team is responsible for ensuring these targets are met with support from our senior leadership team.

The issues that sustainability seeks to address are sizeable. As Richard says, organising the data is a challenge of and in itself. On top of that, we can face inertia and people’s reluctance to change. It can sometimes feel like it’s two steps forward, one step back. 

But, like it or not, we have to change. We are all increasingly being affected by climate change, for example. Some properties in Australia are now uninsurable because of flooding. And there will be many other examples. 

I am optimistic that private equity has the capacity to make our investments more sustainable. Much hinges on investment in the right technologies and buy-in from senior leaders.” 

Allegra has always had an interest in social and environmental issues. She was with HSF in the private equity practice from 2012 to 2014. She made the move into sustainability in the wake of a transaction she learnt about while at HSF on the restructuring of ABC Learning Centres in Australia. One of the consortium partners in the deal was Social Ventures Australia, a social impact organisation that works with partners to solve challenging social problems through consulting and impact investing. Allegra subsequently joined Social Ventures Australia in 2014. 

She worked there for two and a half years, increasingly becoming engaged in climate and indigenous issues. She moved to the UK in 2016, studying an MBA at Oxford University after which she joined a UK government-backed impact investor, British International Investment (formerly CDC Group), as a manager with a focus on climate change. Allegra joined Cinven in 2021.