Key achievements in 2021/22
We recognise the importance of constantly moving forward with ESG improvements. The world does not stand still and we continually assess what we are doing on ESG to stay ahead. In 2021/22 we are particularly proud of the following achievements:
Collaboration and standardisation
Collaboration is absolutely crucial to drive improvement and ESG performance across the private equity sector, which is generally known for being slightly behind listed companies when it comes the ESG reporting and standardisation. Hg has always been involved in and supportive of collaboration across our industry, through partnerships like the BVCA, ILPA and Invest Europe. In past years we have signed up to a number of new collaborative initiatives including the ILPA Diversity Action initiative, ESG Data Convergence project, Partnership for Carbon Accounting Financials (PCAF) and initiative Climat International (iCI). With the lack of consistent standards for ESG in PE, we recognise the great work done by the Value Reporting Foundation and are happy to have adopted their SASB standard for software businesses into our portfolio ESG assessment.
Societal contribution
Hg donates a percentage of its annual profits and carried interest from all its funds to charitable activity via The Hg Foundation and through our internal charity committee. The Hg Foundation, launched in 2020, supports people from disadvantaged and underrepresented backgrounds in accessing education and training that will ultimately help them to get sustainable, long-term careers within the technology industry. Since launching the Foundation we have committed $8.5 million and now directly support more than 8,000 students, working with eight top educational establishments and charities across the UK, Europe and US. In the last year we have announced four major new partnerships with upReach in the UK, Generation France, Merit America and the Technical University of Munich in Germany. In addition to the work conducted by The Hg Foundation, in 2021 our charity committee launched the Hg Giving platform, an online platform via Benevity, to facilitate donations and volunteering events for employees. This year we collectively donated over £300,000 across 272 charities.
Diversity, equity, inclusion
We continue to make strides on making Hg a diverse and inclusive workplace. Building on our own experience and achievements, we are increasingly supporting portfolio companies in this space too. In 2021 we launched our Portfolio DEI Council consisting of about ten individuals from our portfolio. The Council is working collaboratively to develop a DEI Toolkit that can be shared with the rest of the portfolio companies to make their organisations more inclusive too.
Climate change
We are very proud to have worked collaboratively with a number of our peers in the iCI to develop the first ever guidance for science-based carbon reduction targets in PE. The work was led by the Net Zero working group of iCI, supported by the World Resource Institute and Sustainability consultancy Anthesis. As part of the launch of the standard, Hg was one of the road testers and one of seven PE firms that had their targets approved by the SBTi in November 2021, just in time before COP26.
Materiality
The topic of ESG constantly evolves and with our vision to be a leader on ESG it is important that we stay ahead. In the past year, Hg’s Responsible Investment team took the opportunity to conduct an in-depth review of our ESG framework and approach, including engaging with all Hg partners to gain their input and to conduct a formal ESG Materiality assessment with granular input from external and internal sources. We are happy to share the results of this assessment in this report. As you would expect, cybersecurity, anti-trust, climate change and diversity & inclusion continue to be some of the most prioritised topics for Hg and our stakeholders.
