Our approach
Responsible, sustainable investing has been an important priority for us since our foundation. Our aim is to identify and mitigate all sustainability and ESG risks as early as possible. And we support our portfolio companies to take advantage of ESG opportunities – for example, by providing specific knowledge, access to a pool of best practices and a broad network of external specialists.
Thereby, we consider the material sustainability aspects across all three ESG areas.
Material Sustainability Aspects
Our engagement extends over the entire investment cycle, starting with deal sourcing, through the due diligence phase, to ongoing monitoring of ESG performance and a conclusion of the improvements achieved during the investment period.
DPE ESG Approach
During the investment phase, we mandate independent external consultants to conduct an ESG Due Diligence process for new fund investments alongside the traditional due diligence assessments. All findings are compiled in a standardized report, where materiality, risks and opportunities are assessed and categorised.
Following the acquisition of a target company, the company’s advisory board (or similar body) shall implement or amend a set of internal compliance guidelines and ensure that the portfolio company incorporates and adheres to ESG standards. ESG issues are regularly discussed at board meetings. It also encourages management teams to formulate specific annual ESG value creation targets for the portfolio company. Examples include reducing energy consumption, waste, absenteeism or implementing an anti-bribery policy and training. Achieving these targets can have a positive impact on profitability (e.g. by reducing energy costs) and reduce or remove barriers to growth (e.g. by becoming an attractive employer for highly skilled employees). Progress is monitored by management, the company’s advisory board and shareholders.
During the holding phase, we collect and report ESG data from our portfolio companies on an annual basis, including measuring the company’s carbon footprint according to recognised standards and with support of an expert advisors.
We have signed up to the United Nations Principles of Responsible Investment (UNPRI) and the ESG Data Convergence Initiative (EDCI), in line with industry standards and best practices.
We are a member of EDCI since 2021, contributing to its goal of introducing performance based on ESG standards. This allows general partners and portfolio companies to benchmark and measure progress against standardised metrics.
https://www.esgdc.org/
As a PRI member, we are committed to integrating ESG considerations into our investment decisions and portfolio monitoring.
https://www.unpri.org/
Data Sources and Processing
We aggregate all data from the ESG pre-screening, due diligence and monitoring of target and portfolio companies. We and our external ESG advisers process the data as required. During the holding phase, we collect and report ESG data from our portfolio companies on an annual basis, including measuring the company’s carbon footprint according to recognised standards and with support of an expert advisor.
Our ESG policy
Our ESG Policy describes our sustainability-related management processes and tools. By applying the policy, we aim to prevent negative impacts of our investment activities on the environment, social standards and compliance, and to minimise respective material risks for our portfolio over the entire investment life cycle.
Our investment decisions should have the least possible impact on the environment. To this end, we support our portfolio companies to
- Continually measure and assess their environmental impact and establish appropriate reporting and management systems,
- measuring their carbon footprint and developing and implementing measures to reduce it, and
- adopting established environmental standards.
We want to make a positive social contribution by:
- Excluding investments that have a negative impact on the well-being of society, for example through child labour or other forms of forced labour.
- Assessing and minimising social risks through review of management’s compliance with all relevant laws and regulations.
- Supporting our portfolio companies in implementing best practice standards in occupational health and safety and considering the well-being of employees as an important success factor.
We uphold the principals of steady governance and solid business integrity by:
- Excluding investments that are known to severely lack business integrity,
- Evaluating risks related to governance and ensure that portfolio companies follow the applicable standards, in particular abiding anti-corruption laws as well as any data security regulations
- Upholding a culture of good governance and engage positively with key stakeholders of our investments.
Our own performance
Environmental
We determine our carbon footprint every year with the help of an independent, external partner in accordance with the Greenhouse Gas Protocol Corporate Accounting and Reporting Standards (GHG Protocol) and offset all our emissions with certified voluntary carbon credits. We measure the GHG emissions of the portfolio companies separately and do not include them in our Scope 3 footprint – in contrast to Category 15 of the GHG Protocol.
Social
As part of our Equality and Inclusion Policy, we have set ourselves the goal of continuously increasing the proportion of female managers. In addition, our equal pay policy ensures that the level of salary depends solely on the employee’s experience and job-level.
Governance
Our governance and risk management principles and guidelines ensure that our business processes are continuously improved – they also provide the sufficient transparency. This approach minimises risks and strengthens employee ownership. The following functions ensure compliance at DPE:
Roles:
- Chief Risk Officer
- Compliance Officer
- Risk Controller
- Information Security Officer*
- Data Protection representative*
- Money laundering Officer & deputy
- ESG Officer
- Internal Revision*
- Outsourcing Officer
*Functions outsourced to 3rd party
Good Governance & Citizenship
Ukraine Relief
In April 2022, the DPE team delivered two truckloads of relief goods for refugees from the war in Ukraine to the Red Cross distribution centre.
Geschenkregen
As part of the Charity Meets Challenge e.V. Christmas campaign “Münchner Geschenkregen”, we fulfilled a small Christmas wish for 102 socially disadvantaged children in a home run by Diakonie München und Oberbayern and a community home run by Caritas.
Deutschlandstipendium
Since 2022, we’ve partnered with Deutschlandstipendium, which aims to support talented and high-achieving students. We awarded eight Germany Scholarships to students at the Ludwig Maximilian University in Munich for the winter semester 2022/23 from a variety of disciplines, including medicine, economics, natural sciences, and languages and literature. The scholarships were awarded based on first-class grades, social commitment and special personal achievements.
Since 2011, the Deutschlandstipendium supports talented students of all subjects at state and state-recognised universities in Germany. To date, around 30,000 scholarships have been awarded, just over half to women.
