Corporate Social Responsibility
As a private equity company founded by German mid-sized entrepreneurs Allistro regards itself as an integral part of society.
We are convinced that successful investments must be driven by long-term and responsible actions.
A corporate culture defined by trust, respect and sustainability as well as raising awareness for resource-saving economic management are of our highest priorities.
The values of the German Mittelstand and its responsibility for society constitute the basis for our investment decisions.
Sustainability Related Disclosures
Investment Decisions at Allistro
Integration of sustainability risks in our investment decision-making process
All new fund investment opportunities are subject to negative screening in accordance with our exclusion of investments in ethically questionable businesses.
Once an investment passes the exclusion criteria and moves into the due diligence phase of the investment process, we review sustainability risks and identify ESG-related potential for value creation at the start of the investment, with ESG referring to the factors environmental, social and governance. The ESG due diligence findings will formally be taken into account in the investment decision.
Consideration of principal adverse impacts of our investment decisions on sustainability factors
Within our investment decisions, we are committed to minimizing any potential negative sustainability impacts by following our ESG management approach. This includes applying our exclusion list, conducting an ESG due diligence on potential investments, and monitoring the ESG performance of our portfolio companies.
Within the portfolio companies, the respective compliance/ESG officer (or, where applicable, the CEO) monitors and records material ESG-related incidents that occur and notifies their advisory board and Allistro without undue delay. In such case, the portfolio company’s advisory board will ask the management team to:
- Initiate countermeasures to mitigate risks.
- conduct an in-depth root cause analysis and provide the respective results.
- develop precautions to prevent the reoccurrence of such incidents.
- provide an action plan in case of a reoccurrence of a similar incident.
Once Allistro becomes aware of it and after a proper review, we will disclose (to the extent permitted) any material ESG-related incidents that occur at the level of Allistro, the fund and any of the portfolio companies to our investors.
Remuneration policies in relation to the integration of sustainability risks
The compensation policy for our professionals will also be subject to the consideration of sustainability opportunities and risks as well as the commitment towards a sustainable growth of our investments. The compensation model shall include a long-term variable component which considers, among others, the adherence to our sustainability approach, application of ESG principles in the investment process as well continuous monitoring and support of portfolio companies regarding the implementation of ESG performance improvement measures.
Environmental and Social Characteristics of Allistro’s Investment Funds
Our ESG commitment spans the entire lifecycle of an investment, from deal sourcing and due diligence to performance monitoring and exit (see Exhibit 1).
Exhibit 1: ESG integration along investment cycle
Within this approach and the separate steps in the investment process, we generally consider the key sustainability aspects in all three ESG areas (Exhibit 2).
Exhibit 2: Key sustainability aspects in ALLISTRO’s investment process and portfolio management
Each aspect in turn is based on several sub-criteria, which are assessed during the due diligence phase. The selection of the criteria serves to record the general ESG structures of the company and to identify the ESG aspects that are particularly relevant for the company.
Our investment strategy particularly fosters the improvement of social and environmental characteristics within our investments.
Due diligence process & methodology
Having passed the pre-investment phase, potential investments are subject to a more in-depth due diligence process. Alongside the standard commercial, legal, and tax-related aspects of the due diligence assessment, we perform desktop research, review relevant documents and conduct site visits and interviews with the management and relevant staff. Information gathered through these processes are the basis for our ESG performance monitoring.
Monitoring of ESG characteristics & engagement policy
ALLISTRO’s engagement approach is to encourage the management teams of the portfolio companies to formulate annual specific ESG performance improvement targets for their companies. Examples for such targets are the reduction of energy consumption, waste volumes or the introduction of an anti-bribery policy and respective employee training. Progress toward these targets is monitored by the management itself, the company’s advisory board and its shareholders. Achieving those targets can have a positive effect on profitability, and also reduce or remove growth obstacles.
Upon exit, we compile a final ESG assessment to assess our progress made.
Data sources and processing
ESG data is derived from the ESG pre-screening, due diligence and continuous monitoring process of target and portfolio companies, respectively.
The PRI acts in the long-term interests of its signatories, of the financial markets and economies in which they operate, and ultimately of the environment and society as a whole.