How Permira seeks to build lasting value
Permira takes a proactive approach to responsible investment in seeking to build lasting value. We take different approaches by strategy and fund and, in certain cases, environmental and social characteristics are promoted as part of the fund’s strategy,1 whereas for other funds our focus is on ESG risks. We also aim to apply Permira’s own values of Partnership, Integrity and Creativity to our practices, including our approach to responsible investment.
Our ESG approach
Permira’s responsible investing policy and ESG framework aim to reflect the 10 principles of the UN Global Compact, addressing topics including (but not limited to) those listed here.2
- Energy and greenhouse gases
- Climate risk and natural hazards
- Resource use and waste
- Hazardous materials and contamination
- Product regulation and risk
- Natural / cultural heritage and biodiversity
- Labour and working conditions
- Diversity, equity and inclusion (DEI)
- Employee engagement
- Community impacts
- Animal welfare
- Responsible marketing and customer protection
- Human rights
- Product safety
- Health and safety
- Supply chain
- Genetically modified organisms
- Charitable donations and activities
- Policies (e.g., anti-bribery and corruption, whistleblowing, etc.)
- Control and risk management
- Board structure
- Internal audit
- Transparency and disclosure
- Cyber security and data protection
We take a tailored approach, focusing on the ESG risks, or opportunities, which are most relevant to a company. We believe that companies that manage these ESG issues well will be more successful in the longer term, helping to deliver better returns for the funds’ investors. We have also further developed and are implementing ESG action plans for Permira VIII portfolio companies to seek to drive long-term positive outcomes and support greater alignment with the UN Sustainable Development Goals.
As an active signatory of the PRI since 2011, Permira compiles an annual PRI transparency report, except for 2021/22 when the PRI did not hold its annual reporting process. The most recent report (2020/21) highlighted some opportunities for us to develop and improve our ESG programme. Since this report, we have developed our approach in a number of areas. We are also licensee members of the IFRS Foundation (formerly, The Value Reporting Foundation) as we consider the SASB principles in our approach.
Towards values-based investing
Our values-based investing framework and philosophy aim to help guide origination and due diligence in our latest buyout fund.
Embedding values-based investing
Permira’s vision is to bring ESG and responsible value creation to the heart of the Permira buyout funds’ investment approach. Our values-based investing framework (VBI framework) was developed during 2021 and in 2022 continued to gain traction, becoming more widely embedded in our approach, starting with our most recent buyout fund, Permira VIII. This VBI framework and philosophy sets out our “North Star”, aiming to help investment teams to identify ESG risks during the due diligence process. The VBI framework provides guidance for investment teams on investment exclusions and potential grey areas (sectors or activities which may have heightened ESG risk profiles and therefore may need early review or discussion with the ESG team earlier in the investment lifecycle).
In 2022, we started applying this approach to our latest buyout fund, Permira VIII, where it plays an important role in facilitating decisions during origination and screening. We have also set ESG targets for this fund, relating to governance of ESG (i.e. ESG policies or strategies, ESG working group or committee, agreed KPIs for the portfolio company board), along with targets relating to climate change and board gender diversity. This is an important milestone in our ESG journey, elevating the importance of ESG for the fund and portfolio companies and using it as a means to drive value.1
1 Permira has determined that Permira VIII is a financial product that falls within Article 8 of SFDR on the basis that it promotes environmental and / or social characteristics. In 2023, Permira Credit’s latest direct lending fund, PCS5, was reclassified from Article 6 to Article 8. Further information regarding Permira VIII’s and PCS5’s environmental and social characteristics and the binding elements of their investment strategies with regard to such characteristics will be made available to relevant investors in accordance with applicable requirements of SFDR. Any reference to Permira VIII’s or PCS5’s approach to such characteristics is qualified in its entirety by reference to their respective SFDR disclosures.
2 This list is a sample of potential topics which Permira may address. Not all topics have been or will be addressed.