Building Better Businesses — by managing ESG factors
Financial investors, who can provide both capital and expertise, are often the right partner here for entrepreneur-led, small or medium-sized companies, as they can support the implementation of ESG factors and strongly promote their sustainable development strategically. Even today, lack of capital is a major reason why many ESG projects fail to get off the ground or make slow progress.
The cultural change that is taking place here should not be underestimated. At the same time, developing and implementing a sustainability strategy is a really big change management task for companies, requiring considerable capacities and also experience that are often not available internally. Nevertheless, there is no alternative to the topic of sustainability if a company is to survive in competition and in society. Of course, there are also professional providers who can develop an ESG strategy and assist in its implementation. But this solution also requires capital and resources.
For Triton , ESG is a critical element of corporate development. For this reason, ESG factors are incorporated as value levers throughout the investment cycle. The first step in developing an ESG strategy should be a thorough analysis for all companies. Possible topics here could be climate risks, environmental pollution, resource efficiency, health and safety, labor standards and supply chain but also anti-corruption, ethical behavior or data security, to name just a few.
At the beginning of our ownership, we first work with our companies to assign responsibilities for ESG management that do not necessarily lie operationally with the CEO, but are delegated accordingly to, for example, a dedicated sustainability function, the CFO, the legal department, the HR department, or those responsible for quality, health and safety. — For example, a sustainability report is a necessary evil for many. However, it can be instrumental in building trust with key stakeholders and inspiring individual audiences, such as employees, by creating transparency.
Implementing ESG means not only identifying risks but also opportunities, preserving value and creating value.
About Andi Klein
Andi Klein is Managing Partner at Triton and responsible for the Smaller Mid- Cap strategy of the investment company founded in 1997. Prior to joining Triton in 2009, he held various leadership positions at Procter & Gamble in Germany, Switzerland, Belgium and the United States for eleven years.