Our approach to ESG management

As majority owners, we recognise that we have a significant role to play in improving ESG performance at our portfolio companies. Integrating ESG considerations within all aspects of our businesses allows us not only to manage risks and deliver on opportunities but ultimately to generate greater value for our investors. We achieve this through taking an active role in the operations of our investments, working in partnership with the management team to jointly solve problems and deliver potential opportunities which will drive better overall ESG performance.

Our approach is formalised through a comprehensive ESG Policy and Principles document. This provides a framework for the interactions we have with many different stakeholders. In line with these principles, we aim to pursue all ESG considerations in a seamless way, from our origination efforts, through due diligence, deal completion and then value growth during ownership to exit.

Our dedicated ESG Manager is Chair of TDR’s Responsible Investment Committee. This Committee provides a strong level of governance to ensure we are delivering against the commitments set out in our ESG policy and principles. The Committee meets quarterly to review portfolio company performance and discuss opportunities and risk mitigating activities arising during the quarter.

Individual deal teams are accountable for ESG monitoring in their companies, working alongside the management teams to ensure initiatives become embedded in the company reporting discipline. Each company is requested to report quarterly on progress against key material ESG risks and opportunities. In addition to this, companies are required to report at least annually against several Key Performance Indicators. These reports are reviewed by our Responsible Investment Committee with feedback provided to TDR partners and the deal team regarding any concerns or further opportunities.

Our ESG manager also takes a hands-on approach to working with our portfolio companies. This includes attending company ESG committee meetings, completing ESG performance reviews, acting as a critical friend, sounding board and sharing best practice activities across companies.

Case studies

We continue to facilitate best practice sharing across the portfolio in a number of important fields. In February 2020, TDR held a Human Resources Forum bringing together HR professionals from across all portfolio companies. This one-day event covered a range of issues, including Diversity & Inclusion, Performance Management and Employee Wellbeing.

During the lockdown closures, our portfolio companies focused significantly on maintaining employee engagement and supporting their wellbeing in a remote-working environment. Our portfolio companies launched online portals to maintain regular communication with employees, as well as offer wellbeing initiatives such as meditation classes, home fitness challenges, support with managing finances during the pandemic.

One of our key ESG focus areas during 2020 has been increasing portfolio company awareness of climate change and measures that can be taken to address various climate risks. In late 2020, TDR facilitated a Climate Risk Webinar for our portfolio companies which included presentations on carbon foot printing, setting carbon reduction targets and identifying opportunities for carbon reduction.