ESG: Sharing best practice
ESG can be a tricky discipline to retrofit onto a business, but doing so is a journey that ultimately benefits everyone involved. Inflexion’s ESG Director Jennie Galbraith invited a number of Inflexion portfolio companies to share their experiences of embracing ESG and what they learned along the way at a recent portfolio ESG Exchange event.
One thing is clear, when done effectively, implementing good ESG practices drives value for all stakeholders. While ESG means different things to different businesses at different stages of their ESG journeys, there are some key lessons that are universally applicable. Detectortesters, ITM, Chambers and Partners and Sparta Global share their learnings with us below.
Like managing any change within a company, it is always best to communicate with your employees frequently and early on. “We knew that to maximise the outputs of our ESG journey we had to start our communications really early,” recalls John Mortimer, Operations Director at Detectortesters, a fire detector testing equipment manufacturer backed by Inflexion in 2021. “We told everyone we were incorporating ESG into the strategy and explained its importance to our employees to help them engage with the process. But by doing so, we also found we were already doing a lot of great stuff, so it was about formalising it and giving it structure,” he continues.
Others also found more communication was needed earlier on in the process. Leah Saunders, Secretary to the Board at ITM, a pensions and financial services business backed by Inflexion in 2018, explains, “a big learning for us on our journey was around gaining staff and supplier buy in. When we started making data requests, people were not fully engaged and even a little bit sceptical. We’ve worked hard on this, educating colleagues and suppliers on the importance of collecting this data to inform important strategic decision making that will ultimately benefit all stakeholders.”
Engage through authenticity
As a business all about people, Chambers and Partners understands the benefit of having a diverse and engaged workforce. The world’s leading legal ranking and insights intelligence business backed by Inflexion since 2018, started their ESG journey over a decade ago.
To help engage their employees, Chambers established INSPIRE, and internal diversity committee with 50 members, representing c. 10% of the entire business. “INSPIRE spans the whole business and brings people together who normally wouldn’t work together. But what is most critical is that employees are truly able to affect change. Allowing people to get involved and contribute towards creating the solutions gets people to buy in to the solutions and that’s when the change really happens,” explains Matthew Taylor, Chief People Officer at Chambers.
Aliola Balla, ESG Manager at Detectortesters recalls “we’re building ESG into the internal culture through open and honest communication. In doing so, we are learning how deeply our colleagues care for the topics covered. You’ll be amazed by how much people genuinely care.”
Each business will have its own unique ESG journey, and the key to success is to be adaptable. “We had to be flexible and strategic with our resources. Did we have the talent and bandwidth to address the depth and breadth of ESG topics? Is that still applicable a year into the journey?” John recalls. Investing in both internal talent and partnering with external consultants is enabling Detectortesters to effectively address their ESG impacts and add value.
Purnima Sen, Operations, People and ED&I Director at a technology and training services provider Sparta Global, concurred. “You really need to be able to make adjustments in your business. For example, if you want to attract a more diverse group of talent, you must be able to create that adjustment – whether it’s in your job descriptions, in how you hire, in how you interview – you need to make sure your business is genuinely prepared to make the changes.” Sparta has been backed by Inflexion since 2020, with diversity a core tenet of its success.
Confidence is key
To have confidence that what you are doing is right, getting the right ESG data is critical. “When we first started looking at our carbon footprint, we were using assumption-based data created by a third party. But we didn’t understand how it had been compiled or feel confident in reporting it. Now we’ve implemented a lot of rigour into how we collect our data, and it has given us a great amount of confidence in making firm decisions and communicating those decisions,” says Leah.
Purnima agrees, having recently undergone B Corp certification. “We were sure about what we were doing for diversity, but we cemented this confidence by getting external authentication. We gained B Corp status earlier this year which gave everyone at the company a boost that we were doing the right thing. We’ve also applied for and won multiple industry awards like Women in Tech. It was a great external authentication that we’re on the right track, we’re doing the right things, and we need to continue doing this.”
Inflexion actively supports its portfolio companies to advance their ESG journeys. A centralised ESG centre of expertise provides frameworks, guidance and training to support portfolio companies in addressing climate change, diversity and other material ESG risks and opportunities. Performance is continually monitored, and companies receive bespoke feedback to encourage value creation across all aspects of E, S & G.
Inflexion recently published its first annual ESG Report, outlining our approach to responsible investment and how we manage ESG across our portfolio. You can read more about this here.
All Inflexion portfolio companies, regardless of size or ownership stake, have full access to our value acceleration resources covering ESG, digital enhancement, international expansion, M&A, commercial strategy and talent management.