We integrate sustainability into our investment decisions through a responsible investment policy that spans the full lifecycle of our investments. Sustainability is not a separate consideration, it is embedded in how we identify, assess, manage and exit investments, reflecting our long-term commitment to creating enduring value while minimising negative impacts.
Sustainability in our investment cycle
Sofina Direct
For direct investments, sustainability is embedded across the full investment lifecycle, from screening to exit. As a minority investor, we influence through focused ESG due diligence, targeted engagement during ownership, and consistent integration of sustainability into every investment decision.
Originate and assess
Investment opportunities are identified within our sectors of focus using a positive screening approach, assessing both the impact of a company’s products and/or services and the way it operates.
At the origination stage, we apply our ESG due diligence framework to assess:
- The net impact of the company’s products and/or services, using the Upright platform;
- The company’s ESG maturity, governance and performance, including its sustainability ambitions and readiness to adopt SBTs where relevant; and
- Performance on financially material sustainability topics, using the SASB standards.
Where the initial assessment is positive, a confirmatory ESG due diligence is carried out, either internally or with external advisors, to further assess material risks, opportunities for value enhancement, and SBTi readiness.
Deploy
Investment decisions take into account the conclusions of the confirmatory ESG due diligence, alongside financial and strategic considerations. This includes an assessment of the company’s net impact profile and ESG performance.
Where appropriate, action plans may be agreed with portfolio companies at entry to address identified sustainability risks and opportunities and to support progress during the holding period.
Manage
During the holding period, Sofina integrates sustainability considerations into its active ownership approach. Where relevant, we monitor ESG performance, encourage appropriate disclosure and support continuous improvement through the development and implementation of sustainability roadmaps.
Our ability to influence ESG outcomes depends on our ownership position and governance rights. Where influence is more limited, engagement focuses on monitoring progress and raising sustainability topics through appropriate channels.
Exit
Sustainability considerations are incorporated into exit planning, considering Sofina’s level of influence as a minority shareholder. Where relevant, vendor ESG due diligence may be conducted to demonstrate ESG performance and progress achieved during the holding period.
Capital is redeployed into new investment opportunities that meet Sofina’s investment criteria, including sustainability considerations, ensuring consistency in our investment approach over time.
Sustainability Roadmaps
Sustainability roadmaps are a core component of our active ownership approach for Sofina Direct. They provide a structured framework for engaging with portfolio companies on material sustainability topics — supporting continuous improvement across governance, climate, social practices and supply chain responsibility.
Our approach is tailored to each company. We take into account the sector, stage of maturity, geography and financial profile of each portfolio company to focus our engagement where it is most relevant and where we can add the most value.
To support this work, we have invested in dedicated ESG data infrastructure, enabling us to collect consistent and comparable sustainability data across a significant portion of our direct portfolio.
Sofina Private Funds
Our approach to responsible investment in Sofina Private Funds reflects our role as a limited partner. As we have no direct decision-making power over portfolio companies, our influence is exercised through the assessment, selection and ongoing engagement of general partners.
Originate and assess
During the origination and assessment phase, ESG considerations are central to the evaluation of general partners. Using our Sofina Private Funds ESG framework, we assess in particular:
- The general partners commitment to responsible investment and the extent to which ESG principles are integrated into its investment strategy and decision-making processes;
- The operational implementation of ESG, assessed through a tailored scoring methodology;
- The maturity of ESG practices, with differentiated expectations for emerging and established general partners, reflecting their respective scale and resources; and opportunities for collaborative engagement with other limited partners, particularly European limited partners with similar priorities, to reinforce ESG expectations to general partners.
Deploy
ESG assessments of general partners play a material role in investment decisions and are discussed as part of Sofina’s fund commitment process for both new and existing relationships. Alignment on values and ESG ambitions is a prerequisite for participation in new fundraisings.
Where alignment is no longer sufficient, Sofina retains the discretion not to commit to future funds. We also seek to amplify our influence through collaborative initiatives with like-minded limited partners, aiming to promote consistent ESG standards across the private funds ecosystem.
Manage
During the holding period, ESG considerations form part of Sofina’s ongoing assessment of fund performance. Focus areas include, among others, climate-related impacts and diversity and inclusion.
General partners are encouraged to strengthen ESG practices through:
- Regular dialogue and targeted ESG discussions;
- Engagement during investor meetings and governance forums to maintain focus on ESG priorities; and
- Tailored engagement that recognises regional differences in ESG maturity, with additional support where practices are less developed.
Exit
Exit decisions and the continuation of investment relationships take into account the extent to which general partners actively pursue and demonstrate progress on ESG priorities. Sofina favours long-term partnerships with general partners that show measurable improvement over time.
Where alignment on ESG objectives deteriorates, investment relationships may be reassessed, as reflected in past decisions to discontinue commitments with general partners whose practices no longer align with Sofina’s responsible investment principles.
