Responsible investment is a key part of our long-term investment philosophy.
We commit to constructive, long-term engagement with the companies and funds in which we invest, believing that careful and thoughtful stewardship is essential to addressing Environmental, Social and Governance (‘ESG’) risks and to driving positive change.
Our approach
Overview
We believe that responsible investment and business success go hand in hand. We are committed to building businesses for the long term and consider the ESG impact of the investments that we own.
We expect to invest in businesses and private equity funds that will:
- Grow, provide employment and generate economic benefit in an environmentally and socially responsible way, both during and after our ownership
- Take a responsible approach towards the environment and society, based on good governance practices
Responsible investment / responsible corporate working group
Chaired by our CEO, the RI/RC Working Group advises and assists in the development and implementation of Caledonia’s approach to sustainability matters, including climate-related issues. The group meets regularly throughout the year.
Public Companies
We aim to invest in global businesses with recognised brands, intellectual property and strong market positions that have a good track record of delivering attractive returns.
In line with our selective, quality-driven investment approach:
- we exercise our voting rights judiciously, ensuring that we cast votes on all our holdings ahead of shareholder meetings
- while we generally vote in support of management’s recommendations, we will abstain or vote against proposals that we believe do not serve the best interests of our shareholders
- we will use influence through engagement and voting to encourage companies to proactively plan for and demonstrate the measures they have implemented to address climate risks and opportunities.
Private Capital
We look to invest in established businesses with strong financial metrics operating in markets that present attractive opportunities for growth.
Working closely to support the management teams of portfolio companies, we look to:
- Elevate corporate governance standards through the appointment of seasoned, non-executive chairs and by establishing audit and remuneration committees
- Embed our team in non-executive roles, fostering close partnerships with management to drive performance whilst managing risk
- Hold regular formal and informal meetings with management that encompass a wide range of topics, including ESG policies, and performance metrics that are reviewed annually
- Actively assess and manage their social and environmental impacts, fostering responsible stewardship of their businesses
- Encourage investment in technologies to improve energy efficiency and support a successful transition to a low-carbon future
Case study
The Butcombe Group is a high-quality premium pub, brewing and drinks business that extends all the way from London through the South West English countryside across into the Channel Islands, employing over 1,900 people.
The business has been in Caledonia’s portfolio since 2016. We continue to work closely with Butcombe’s management team to support its long term ESG strategy. The CEO, Jonathan Lawson, has an ambition to operate and grow the business in an inclusive and sustainable manner to deliver a positive impact on regional and local communities and their environment.
Butcombe’s ESG strategy ‘Our Ambition, Your Future’ is focused on three pillars, as detailed in the download below, and has ambition to be carbon neutral by 2030.
Funds
We invest in private equity funds across North America and Asia, with a bias towards lower mid-market buyouts. The portfolio provides attractive diversification, comprising 80 funds managed by 45 experienced managers, providing access to more than 600 underlying companies operating across a range of sectors.
Reflecting our long-term, values-led approach to fund selection:
- We expect our fund managers to consider all factors including ESG considerations, when seeking to optimise returns while effectively managing risk
- We will encourage our fund managers to consider climate change factors in their selection criteria, both in terms of identifying potential risks and capitalising on emerging opportunities, and to explore initiatives that help reduce emissions within the underlying portfolio