SME Investing

Our private equity team is committed to working towards a smarter future through growing small businesses around the UK.

Underpinning our SME investing approach are five ESG Principles, which we have identified as the main areas where it is possible to evaluate, monitor and encourage portfolio companies to develop their ESG standards.

Our Five Principles for SME Investing are

Awareness:

Does the business demonstrate a good awareness of corporate social responsibility? Is this reflected in its processes and management structure?

Environmental:

Does the company follow good practice for limiting or mitigating its environmental impact, in the context of its industry? How does it encourage the responsible use of the world’s resources?

Social Engagement:

What impact does the company have on its employees, customers and society as a whole? Is it taking steps to improve the lives of others, either directly, such as through job creation, or indirectly?

Governance:

Does the company and its leadership team demonstrate integrity and are the correct policies in place to ensure it meets its legislative and regulatory requirements?

Third Party Interactions:

Is the principle of corporate responsibility evidenced in the company’s supply chain and customers and how does it promote ESG values and share best practice?

The ESG progress made by a particular company is regularly monitored and a Five Principle analysis of each portfolio company, supported by quantitative and qualitative data, is undertaken prior to investment and annually throughout the life of the investment. This evaluation involves the company’s track record, current position, potential (the opportunities available), as well as the risks. The investment’s absolute ESG impact is considered alongside the potential for the company to improve its ESG record and the progress it makes with targeted improvements.

Sustainable Development Goal Contribution

While not all companies can be expected to make an active contribution to the targets of the SDGs, across the spectrum of its private equity investment activity Foresight sees its portfolio as most closely aligned to the following three SDGs on an aggregate level.

No Poverty

Economic growth must be inclusive to provide sustainable jobs and promote equality. This means creating jobs in local communities, operating an inclusive business model and running high impact social programs

Decent Work and Economic Growth

Sustainable economic growth will allow communities to create the conditions that allow people to have quality jobs. This means competitive salaries for employees and protected labour rights.

Reduced Inequalities

To reduce inequalities, policies should be universal in principle, paying attention to the needs of disadvantages and marginalised populations.