Reflections on the past year
Last year, when we prepared our previous Responsible Investment report, it would have been hard to predict just how far ESG issues were to propel forward across the business world in just 12 months.
Stark warnings from the scientific community on climate change combined with the global attention surrounding COP26, the continued backdrop of Covid-19 and, more recently, devastating war in Europe – there cannot be anyone who has not seriously reflected on their ESG contributions as a critical part of business in 2022.
I am proud that at Hg, we are doing our part. This report highlights some of our achievements made possible by the efforts of our people, built up over many years of work, collaborating with a strong sense of purpose.
In such times we must reflect on our Purpose. Hg is trusted to improve the future of millions of investors by building sustainable businesses for tomorrow. These are carefully chosen words – trust, future, sustainable, tomorrow. Choosing how we do business. The Hg family of over 40 software and service businesses saw revenue and EBITDA grow by around 27% and 30% respectively over 2021. This was significant and responsible growth – with Hg welcoming 28% more employees to the portfolio family this year in high-quality, knowledge-economy jobs.
This stable growth, against such a volatile backdrop, is crucial to us. It means we can provide stability to those beneficiaries that we serve. They are teachers, public servants, first-responders and charities – there are pension savers all around the world that we serve and who are benefitting from this stability for their future.
This stability also means we can focus on wider objectives. This year Hg worked with a handful of other PE firms to fund and develop guidance on how PE can commit and set science-based targets, with the goal to be Net Zero by 2050. Hg also became one of the first PE firms globally to get approved Science Based Targets, leading the path for the rest of the PE industry. We recognise the importance of these actions and are targeting net zero across all our portfolio companies within the next 20 years.
We have also looked at our own wellbeing. A period of such high activity, governed by periods of strict lockdown, can take its toll. With so many of us working for home, blurring the boundaries of work and home, we have worked hard to address employee well-being, learning & development, diversity & inclusion, flexible working location and, of course, our Purpose. Hg has conducted a Great Place to Work survey every two years for a decade and we are delighted that, at the end of 2021, 89% of employees were so positive about the firm they work for, up 5% from our previous survey, and after a period of remote working and intense activity. Yet we still have room for improvement.
We are pleased by the progress of The Hg Foundation, which is already having a real impact on disadvantaged individuals looking to develop the skills required for employment within the technology industry. 2021 saw The Hg Foundation set up four more partner programmes taking the total number of partnerships to eight, investing $8.5 million into strategic funding serving more than 8,000 students across Europe and North America. The Foundation is still in its infancy, and we want to significantly scale funding and impact in the coming few years.
These are some highlights of our efforts, demonstrating the Hg team’s commitment to Responsible Investment. They reflect real action, not just within Hg, but also our wider family of businesses, across wider society and spanning global issues. They reflect why we are proud to work at Hg, and why responsibility continues to be embedded into the purpose of everything we do.
Matthew Brockman Hg Managing Partner
Over the past year, colleagues across Hg have gone above and beyond in our commitment to invest responsibly and build sustainable businesses. We strive to take an active approach to ESG within our portfolio. Through our annual assessment process, we have now gathered several years’ worth of ESG data from across our 40+ portfolio businesses to drive best practice and ensure we are making a real impact. This year has seen ESG issues rise to the top of the agenda for business leaders, and I’m proud to say that our portfolio companies have led by example in taking action.”
Dawn Marriott Partner in the Portfolio team, Hg
In 2021, not only was Hg one of the world’s most active tech investors, we also grew significantly as a Firm and continued to invest in our teams. Promoting equality, diversity and inclusion remains a key priority and last year we successfully onboarded one of Europe’s largest Analyst & Associate cohorts in PE, which is the most diverse we have had at Hg to date. The Hg Foundation is now in its second year and has committed $8.5 million since its launch under two years ago. It now directly supports more than 8,000 students in accessing education and training that will ultimately help them to get sustainable, long‑term careers within the technology industry.”
Martina Sanow Hg Partner and Trustee of The Hg Foundation
2021/22 was a big year for ESG. We saw an increasing interest in ESG from across our portfolio and clients. Largely driven by new legislation, increased pressure from employees and society, as well as a desire to ‘do the right thing’, our businesses are more enthusiastic than ever before about defining their ESG strategies, implementing the right policies and procedures and being the best employers they can be, doing right by their employees and society. As the world was preparing for COP26 running up to November 2021, we were delighted to work collaboratively with our peers in the initiative Climat International (iCI) to define what science-based targets mean for the PE sector. We were also delighted to then be one of the road testers of the new standard and have our targets approved by the SBTi.”
Caroline Löfgren Chief Sustainability Officer, Hg