Our Ethos

• Corporate Governance
• Employment
• Environment
• Financial & Operations
• Social & Community

We make investment decisions based on the balance of these elements and our ability to influence positive long-term outcomes.

By successfully addressing business sustainability across our investment cycle, we maximize stakeholder value while enhancing social, environmental and economic development in the broader South African community.

We achieve this by:

• Growing our portfolio investments through strategic insight, operational effectiveness and capital.
• Adopting ‘best-in-industry’ corporate governance and reporting practice.
• Facilitating greater ownership and participation of black people in the mainstream of the South African economy.
• Attracting foreign capital to South Africa and the broader sub-Saharan region.

Ethos prescribes to the IFC and World Bank Environment & Social Guidelines in all of its investments.

Ethos seeks to ensure that portfolio companies respond strategically to ESG issues with an enduring value creation lens and avoid short-term fixes that may ultimately destroy long-term value. The Firm has a Social and Environmental Management System (“SEMS”), which is a framework for risk management throughout the investment process. The Ethos’ SEMS sets out the philosophy, processes and systems that are followed for the effective management of ESG issues and opportunities through each stage of the investment cycle. A key principle of the SEMS is that it forms part of the core investment strategy and active ownership of portfolio companies as opposed to a distinct and isolated initiative.

As custodians of policyholder, pensioner and shareholder capital, and forerunners in our field, Ethos drives responsible investment best practice and upholds Ethical Leadership.  We hold the view that Ethos has a responsibility to address societal and environmental issues – beyond legal requirements – through our activities. 

Importantly, Ethos believes that the private equity model is perfectly aligned with this philosophy, especially in emerging markets where fund managers tend to focus on investing behind growth strategies.  This investment approach, when correctly applied, enables the parallel achievement of commercial gains while addressing societal and environmental concerns; long-term success is symbiotic.

From pre-acquisition due diligence to portfolio company exit, ESG parameters are assessed throughout Ethos’ investment process. 

ESG perspectives present some of the most material risks and opportunities for Portfolio Companies.  As part of our active-ownership model, we have developed a robust Social and Environment Management System (‘SEMS’) to ensure that ESG issues are effectively managed.  SEMS is managed by a dedicated ESG team who, together with our investment and Value Add teams, ESG champions, external specialists (when required) and portfolio company executives, ensure that ESG issues are effectively identified, monitored and resolved.

In line with our long-term mission and typical 10-year investment horizon, we seek to ensure that our Portfolio Companies respond strategically to ESG issues with an enduring value creation lens and avoid short-term fixes that may ultimately destroy long-term value.  

Ethos’ Annual Sustainability report documents the findings of an annual ESG Review and informs our ESG-related decision making.   The report is compiled it in consultation with portfolio companies and findings are shared enabling the co-creation, implementation and adaptation of sustainability planning.

This approach ensures that governance structures are in place to safeguard overall compliance while ensuring that ESG is integrated into the investment thesis and strategy of each portfolio company. ESG risks and opportunities are monitored on a quarterly basis by the ESG team. On an annual basis, a comprehensive questionnaire is sent to all portfolio companies to collect both quantitative and qualitative information.

The main objectives of a SEMS is to address the following priorities:

• Environmental and social compliance and risk management
• Good corporate governance and integrity management
• Climate change mitigation and adaptation (including water management)
• Broad ESG risk analysis and stress testing
• Adding value to investee companies and strengthening portfolio performance through ESG improvements
• Business and Fund leadership on sustainability

All material ESG related incidents are reported to the Firm as soon as companies become aware of them. In terms of our Limited Partnership Agreements, we formally report all material incidents to our investors.