Mergers & Acquisitions names the 2021 PE Innovators in ESG, including, The Vistria Group.

The Vistria Group, a Chicago-based middle-market private investment firm founded in 2013 that focuses on the healthcare, education and financial services sectors, is an ESG “impact firm, devoted to advancing purpose alongside profit in all that we do,” says Jon Samuels, who leads ESG at Vistria.

Jon Samuels, Partner, Impact & Policy, The Vistria Group

Vistria, with $3.5 billion under management, measures and manages ESG impact for each portfolio company and at each investment stage, Samuels says, and this makes the companies more valuable and less volatile. The firm evaluates ESG factors to understand company conduct, with an emphasis on climate; diversity, equity and inclusion; job creation; and compliance. Vistria applies third-party standards to measure ESG standards, including the Impact Management Project, the Sustainability Accounting Standards Board, the UN Principles for Responsible Investment and the UN Sustainable Development Goals.

Vistria reports annually to its investors on the ESG impact of its portfolio, and it has three full-time staffers dedicated to ESG who report to the company CEOs, an internal impact committee and external impact advisors. The firm has also supported several peer working groups, including the recently launched company Novata, a multistakeholder impact measurement technology platform.

Over the last year, the firm required its portfolio company boards to have at least one female and one minority board member, with female and minority members accounting for 25 percent or more of each company’s board seats. The portfolio companies also engaged the mayors of the cities where they are headquartered to advance racial equity.

Among the best practices that Vistria supports, Samuels says ESG impact management must be systematic, authentic and supported throughout the organization. It is also critical to integrate ESG impact from the beginning of the investment process.

Also, Samuels says, ESG impact drives value, so any partnership with a company’s management team should emphasize the value of focusing on business conduct, quality and outcomes.