Mergers & Acquisitions names the 2021 PE Innovators in ESG, including, TZP Group.
TZP Group, a lower-middle-market PE firm in New York with $1.7 billion under management, sees ESG not as disparate environmental, social and governance practices. Instead, ESG is about a commitment to constantly improve and the responsibility of business to act better, the firm’s head of ESG says.
“We encourage all businesses to pursue ESG, not as a check-the-box exercise, but as a crucial part of the value creation process,” says Justin Kulla, head of ESG for TZP, which was founded in 2007. “Great businesses are not built with a short-term focus; they have big ambition and long-term perspective.”
TZP’s ESG program focuses on seven primary stakeholders: management, employees, partners/suppliers, customers, the community, the environment and investors. For each group, the firm has defined a set of metrics.
“We define ESG as a toolkit that any business can utilize to de-risk and unlock value, taking into account its full set of stakeholders,” Kulla says.
TZP has developed a proprietary ESG stakeholder matrix that maps the seven stakeholder groups to risks, strengths and opportunities to unlock value. The risks are aligned to Sustainability Accounting Standards Board and Task Force on Climate-Related Financial Disclosures frameworks.
TZP assesses the quality of jobs from a company based on pay, benefits, upward mobility, durability, portability and accessibility. The firm has a proprietary sustainability scorecard to assess the environmental impact of a company.
The TZP Cares Foundation, which is financially supported by TZP employees, has supported more than 400 non-profit organizations designated by its portfolio companies in their communities with nearly $900,000.
Over the past year, the firm issued its inaugural ESG report, benchmarked its portfolio with more than 1,000 ESG questions and implemented a firmwide recruiting effort, an intern-to-analyst program, weekly social justice readings, a diversity and inclusion steering committee, and employee engagement surveys.