ESG as an investment priority

Invest to support the prosperity and transformation of companies that are respectful of society and the environment.

ESG performance is embedded in Wendel’s approach as a long-term investor. Its permanent capital and the stability of its shareholder base gives it the time and ability to carefully develop and transform the companies in which it invests, delivering both return on investment to its shareholders and lasting benefits to society.

The framework for assessing investment opportunities used by Wendel provides for a systematic analysis of ESG risks and opportunities. In strict compliance with its role as a shareholder, Wendel encourages policies and decisions that contribute to the creation of shared and sustainable value, as well as transparency and regular communication in terms of ESG performance.

Responsible investment policy

Building sustainable companies

In order to support Wendel’s teams in integrating key sustainable development issues into investment decisions, portfolio management and exit processes, several steps and tools have been defined. The approach is both ambitious and pragmatic.

Investment phase

All investment opportunities are systematically assessed through a newly defined exclusion list and a business model resilience test. The ESG maturity of the companies is then assessed as part of an in-depth Sustainability due diligence.

Holding phase

An ESG transformation roadmap is defined for each portfolio company, based on ESG due diligence carried out in advance. This roadmap systematically includes items related to operational eco-efficiency with a strong focus on climate change issues as well as the ESG innovation of products and services. Investment teams at Wendel and portfolio companies’ management teams are also held accountable for progress against this roadmap with an alignment of variable remuneration with performance.

Exit phase

The transformation achieved within the company will be highlighted and showcased through an exit memo and presented to the Supervisory Board. When circumstances allow it, Wendel ensures wherever possible, that it associates the teams of the divested company with the value created.

Exclusion policy

Wendel has formalized an Investment Exclusion Policy which applies to all new investments following the signature of this policy by Wendel’s Executive Board on March 11, 2020. Key elements of this policy are summarized below.

In addition to refraining from investing in entities involved in the production, marketing or use of, or trade in, illegal products or activities, Wendel will also not invest in entities directly and significantly involved in the production, distribution, marketing or trading in:

  1. Tobacco;
  2. Pornography;
  3. Controversial weapons, as defined by the following treaties:
    – The Treaty on the Non-Proliferation of Nuclear Weapons (1968),
    – The Biological Weapons Convention (1975),
    – The Chemical Weapons Convention (1997),
    – The Ottawa Treaty (1997) on anti-personnel mines,
    – The Convention on Cluster Munitions (2008);
  4. Gambling facilities or products;
  5. Coal mining and coal-based power generation;
  6. Drugs for recreational use.

ESG performance of our companies

As an investor for the long term, Wendel’s key goal is to support and transform companies with the potential to develop in a changing world and t deliver both return on investment to its shareholders and lasting benefits to society.

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