3 questions to smart minds
Photo: And Small

Building Better Businesses — by managing ESG factors

For this 3 questions to Andi Klein

TRITON Part­ners in Frank­furt a. M.
Photo: And Small
23. Novem­ber 2022

Today, compa­nies are expec­ted to operate sustain­ably and to analyze, address — and trans­par­ently commu­ni­cate — their ecolo­gi­cal and social impact on the envi­ron­ment, the economy and society. The frame­work for this is ESG, which stands for Envi­ron­men­tal, Social, Gover­nance. Medium-sized and small compa­nies often lack the finan­cial means, exper­tise and resour­ces to tackle this feat. — What can be the solution?

For this 3 ques­ti­ons to Andi Klein, Part­ner at TRITON Part­ners in Frank­furt a. M.

1. To what extent can finan­cial inves­tors support the imple­men­ta­tion of ESG regulations?

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.

2. What do compa­nies usually lack?

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.

3. What is the approach to ESG at TRITON?

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. 

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