measurement & reporting

In brief: Permira’s €17bn Fund 8 mixes ESG targets into portco management

All portfolio companies will need to establish an ESG policy, an ESG committee and have a woman on the board during Permira’s ownership.

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Permira’s latest fund – which has just closed on €16.7 billion – has ESG targets baked into the portfolio company management plan. The firm is taking what it describes as a “values-based investing approach” for its eighth flagship buyout fund, which focuses on the technology, consumer, healthcare and services sectors.

We’ll bring you more details next week about exactly how the ESG targets work, but here’s what we know so far. Within two years of Permira’s investment (according to a source familiar with the fund):

  • All companies must have an ESG Policy, an ESG committee and KPIs
  • Eighty percent of companies must have set a net zero or percentage-based decarbonisation targets
  • Eighty percent of companies must have conducted carbon footprinting at Scopes 1, 2 and 3
  • Eighty percent of companies must have an energy efficiency plan approved by their boards

And within three years of Permira’s investment:

  • All companies must have at least one woman on the board.
  • Fifty percent of companies must have at least two women or 30 percent women on their boards

The firm included some interesting disclaimer language in the notes accompanying an emailed version of the fund close press release:

“Sustainability or ESG is only one of many considerations that Permira takes into account when making investment decisions and managing assets, and other considerations can be expected in certain circumstances to outweigh sustainability considerations,” Permira wrote. “Accordingly, certain P8 investments and strategies may exhibit characteristics that are inconsistent with any principles, initiatives, standards, or metrics described herein.”

Find the online version of the press release here.