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Sustainability gives an investment edge

The business case for sustainability does not usually begin in private equity, but when the numbers add up it should

Ambienta is the largest pan-European firm focused on investing in businesses with a sustainability edge. It pursues a specialised environmental growth strategy, investing into niche leaders in resource efficiency and pollution control. Its ten-year track record proves that combining sustainability achievements and outstanding financial returns (over 20 per cent) is possible.

As a leading European private equity manager, the firm boasts a track record of thirty-one investments across eight countries. It has €1.2 billion in assets under management, the largest such capital pool in Europe, plus a blue chip, international investor base representing more than €10 trillion.

The firm sees sustainability as a universal theme across sectors and its investments span industrial, services and consumer goods companies, from natural flavours for the food industry (Aromata) to sustainable packaging for cosmetics (Pibiplast) and machine vision technologies (ImageS).

This strategic focus and proven expertise in environmental sustainability issues is Ambienta’s key differentiator, says head of sustainability and strategy Fabio Ranghino.

“Over ten years, Ambienta has always invested in products and services that deliver both solid, measurable environmental impacts as well as growth prospects and returns,” he says. “As a source of long-term competitive advantage, sustainability drives value. We are successful because of our focus on sustainability, not in spite of it.”

Impact and returns

The results generate strong returns for the planet, too. These returns are measured each year through Ambienta’s proprietary ‘Environmental Impact Analysis’ against 11 key performance indicators.

As of 2018, the cumulative environmental benefits from Ambienta’s investments accounted for roughly six million tonnes of CO2 emissions reduced and 170,000 tonnes of pollutants avoided. In other words, the portfolio generated total materials savings equivalent to the weight of 630,000 SUVs, conserved energy to power approximately 4.3 million refrigerators for a year and saved as much water as 97 times the annual consumption of New York City.

Naturally aligned with United Nations Sustainable Development Goals, this strategy represents a key driver for successful exits. 2018 saw the sale in Germany of Oskar Nolte, an environmentally friendly water-based wood coatings supplier for the furniture industry, plus Lakesight Technologies, a leader in machine vision learning, which generated ten-fold returns and an internal rate of return of more than 50 per cent.

In light of its expertise, Ambienta has partnered with Sky Ocean Ventures in its journey to protect marine environments from plastic pollution.

Responsibility to create shared value

Such sustainability-driven success, however, happens neither overnight, nor by accident. Founded on robust principles and practices, Ambienta’s approach to portfolio growth recognises the relationship between long-term investment performance and the integration of environmental, social and governance (ESG) issues.

‘ESG in Action’ is Ambienta’s proprietary approach to using ESG integration as a shared value-creation tool across stakeholders. Ambienta commits to following the United Nations-supported Principles for Responsible Investment, as a well as aligning with the Ten Principles of the UN Global Compact, when managing its portfolio.

When it comes to individual portfolio companies, ‘ESG in Action’ can inspire profound shifts in performance. Safim, a €52-million specialist in hydraulic components, became one of the first five companies in Italy to achieve the TUV ISO 45001 occupational health and safety standard and was among the first 100 in Europe. Ambienta helped double production and boost personnel by 58 per cent.

For 2019, Ambienta has raised the bar still higher, committing all new portfolio companies to achieve internationally recognised ISO certification and undertake carbon footprinting.

Accolades and awards

This depth of engagement around sustainability is reaping rewards for Ambienta, most recently named Continental Regional Private Equity House of the Year by Real Deals. This accolade follows a streak of awards, including Private Equity International’s Firm of the Year in Italy and Swen Capital’s 2018 ESG Best Practices Honours.

Ambienta strategy is a proven winner, says managing partner and founder Nino Tronchetti Provera. He concludes: “Ambienta has consistently shown that sustainability-driven businesses are more competitive than their peers. Investing in them can deliver both top-tier financial returns and environmental impact gains. It is investing the way it should be.”

To find out more please visit www.ambientasgr.com

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