We believe responsible behavior has a positive impact on the long-term financial performance of our companies, and healthier companies, in turn, have a positive impact on society. We are committed to investing responsibly and advancing environmental, social and governance (ESG) interests in the communities in which we and our portfolio companies operate.
In 2012, we signed the United Nations-backed Principles for Responsible Investment (PRI) to demonstrate our commitment to ESG management and our fiduciary responsibilities. The principles are a voluntary framework which helps us to incorporate ESG matters into our decision-making and portfolio company ownership practices.
We commit to the following Principles for our private equity investments, as consistent with our fiduciary responsibilities:
- 1. We will incorporate ESG matters into investment analysis and decision-making processes.
- 2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
- 3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
- 4. We will promote acceptance and implementation of the Principles within the investment industry.
- 5. We will work together to enhance our effectiveness in implementing the Principles.
- 6. We will each report on our activities and progress towards implementing the Principles.
Our Investment Process
Throughout our investment process, we integrate ESG considerations in our decision-making. Prior to investment, we review how potential portfolio companies manage or are affected by ESG issues as part of our due diligence process, involving third party ESG experts if risk is identified. Post-investment, we incorporate ESG action plans or improvement programs into the regular “100-day plan” we develop with the portfolio company and encourage portfolio company management to adhere to the highest standards of ethical business and transparency. Through regular communication with our portfolio companies, we are able to assess the level of ESG implementation, partnering to find solutions to certain situations and to share best practices within our portfolio companies.
Our employees are responsible for identifying potential ESG issues and raising these issues during the pre-investment and investment phases. Recognizing the importance of building awareness and competence across the organization, we continued to integrate ESG management into the knowledge base of our private equity investment professionals in 2019 through ESG training, new employee orientation and firm-wide communication. MBKP also operates a code of conduct that stipulates the professional and ethical values for which the Firm stands and to which employees are expected to adhere.
Through our actions and the businesses we invest in, we recognize we have a significant opportunity to touch the lives of many people in the various communities around us. We will continue to engage closely with our neighboring communities and encourage equally active involvement on the part of our portfolio businesses in 2020 and beyond.