Actis takes steps to measure ESG

The pan-emerging markets firm has developed an ‘energy impact model’ to track difficult to quantify non-financial drivers of value.

Actis has unveiled an “energy impact model” designed to capture in a systematic way non-financial drivers of value within its energy portfolio.

Alongside management, Actis will score and track each portfolio company twice a year on its contribution to surrounding communities, impact on the environment, corporate governance, working conditions and other key pillars of responsible investment.

The model “will help to build value in our portfolio companies that is meaningful and increases the financial worth of each company”, Torbjorn Caesar, co-head of energy at Actis, said in a statement.

The emerging markets firm said similar sector-specific frameworks were being developed for its non-energy portfolio and that other GPs were welcome to its model for energy investments as a way of boosting the industry’s environmental and social governance (ESG) considerations.

Actis said it took nearly two years to construct a framework that it felt could be used repeatedly, would be able to withstand academic scrutiny, be easy to communicate, innovative and not overly bureaucratic.

Details of Actis’ energy impact model were initially revealed in our 2012 Responsible Investment Handbook, which can be found by clicking here.