Mergers & Acquisitions names the 2021 PE Innovators in ESG, including, Phatisa Group.
Phatisa Group, a development-focused private equity firm based in Port Louis, Mauritius, that invests in sub-Saharan Africa, is committed to delivering strong financial returns through creating and supporting inclusive businesses that address sustainable development challenges like poverty, hunger, inequality and climate change, says Gwendolyn Zorn, ESG leader for the firm.
“Driving positive change is not something we do additionally; it is core to our strategy and how we define success,” Zorn says.
Phatisa, which has $400 million under management and launched in 2005, invests in two sectors: food and agribusiness, and affordable housing. The firm assesses portfolio companies against the requirements of the IFC Performance Standards, including the IFC Environmental, Health and Safety Guidelines and the sector-specific guidelines. Phatisa also evaluates performance by the requirements of the International Labour Organisation, the UN Guiding Principles on Business and Human Rights, the UK Modern Slavery Act and the Task Force on Climate-Related Financial Disclosures.
For each of its portfolio companies, Phatisa develops environmental and social action plans that identify gaps, risks and issues in detail, along with the required corrective action. The firm also monitors ESG corrective action plans and provides support to the companies to resolve any issues.
ESG standards in sub-Saharan Africa are typically low, so Phatisa provides training and support both from its own staff and from an ESG service provider on retainer, and it ensures there is buy-in from company executives, Zorn says. The firm has four full-time ESG staffers, including an ESG manager hired within the last year.
One lesson learned by the firm in its ESG investing is to be transparent and open with limited partners, who can provide guidance and knowledge to help solve problems, Zorn says. “ESG is a team sport, where the greatest impact and learning happens in collaboration between investors, the fund manager, and portfolio executives.”