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Cathay Capital Private Equity (CCPE) firmly believes that accounting for Environmental, Social and Governance (ESG) stakes in its activities is fundamental to its role as an investor. Integrating ESG factors in investment decisions is vital in determining risks and opportunities, and ensuring long-term, sustainable value creation for the company, for its portfolio companies, their management and employees, the environment, and society as a whole.
As such, CCPE formalized a responsible investment approach in 2017 by designing and implementing its ESG Management system. The approach which was decided upon strengthens CCPE’s consideration of ESG issues in all stages of the investment process, and also allocates Cathay’s roles and responsibilities with regard to accompanying portfolio companies in adopting sustainable practices and in implementing continuous improvement with regards to these issues.
CCPE implements France Invest’s recommendations regarding ESG disclosure.
Smallcap I and II, Sino-French Fund
Smallcap III and Midcap I
Complete implementation of the ESG Management system
Midcap II
Complete implementation of the ESG Management system
The ESG Management system defined CCPE’s commitments and sets out the criteria taken into account in investment decisions:
In 2018 and 2019, CCPE actively pursued this responsible investment approach, consolidating the ESG commitments formalized in 2017 and continuing to integrate ESG criteria into all stages of the investment process
As CCPE’s investments are carried out on a wide scope of activities and countries, notably in Europe and in China, the ESG criteria cover an exhaustive perimeter.
Internationally recognised referentials were considered in determining the criteria:
CCPE’s management system approach focuses on ensuring that ESG issues are accounted for at all stages of the investment process, from the pre-qualification to the exit stage.
In the initial stages of investments (deal qualification and LOI stages), potential portfolio companies’ activities are screened to ensure none figure on CCPE’s Exclusion List (see Appendix). A report on any material ESG matter the company is associated with is also formalised, based on the initial review and investigation of public information regarding any adverse impact on local communities or the environment. The findings from the ESG report are discussed at the Local Executive Committee Level to identify any potential no-go decision.
During the transaction stage, CCPE launches an ESG due diligence which is performed by qualified, independent, external experts in order to assess the ESG risks and impacts of the proposed Portfolio Company’s operations. This report notably contains an assessment of operations into high, medium and low risks, based on the Commonwealth Development Corporation (CDC) criteria and sector profiles.
The ESG due diligence includes:
The due diligence is presented to the Global Partners and Advisory Committee. No investment can be finalised unless the portfolio company has accepted the proposed action plan.
During the holding stage, the deal team follows up on the relevant Action Plan and more generally on continuous improvements on a regular basis, and ESG topics are addressed by the company’s Board on a minimum yearly basis. In addition, CCPE has implemented an annual ESG reporting framework in order to publish the consolidated ESG performance of portfolio companies. This reporting provides additional disclosure on the ESG impacts of portfolio companies and continuous improvement actions.
Lastly, at the exit stage, the Exit Memorandum for the Portfolio Company contain an overview of the ESG improvements made along the investment period.
For the funds in the scope of the ESG Management system, CCPEP provides its investors with:
For all general inquiries, please contact us at [email protected] or call the Paris office at +33 1 42 25 28 00
Paris Office
52 Rue d’Anjou
2nd Floor 75008 Paris FRANCE
Tel: +33 1 42 25 28 00
Fax: +33 1 58 28 52 25
Email: [email protected]
Shanghai Office
3001-3002 Kerry Parkside,
No.1155 Fangdian Road Pudong Shanghai P.R. CHINA
Tel: + 86 21 6888 8069
Fax: + 86 21 6888 8079
Email: [email protected]
Beijing Office
2317-2318, Beijing Kerry Centre,
No.1 Guang Hua Road, Beijing P.R. CHINA
Tel: +86 10 6505 6277
Fax: +86 10 6505 6297
Email: [email protected]
New York Office
150 East 52nd Street, 20th Floor
New York, NY 10022 – 4608 – USA
Tel: +1 212 858 9020
Email: [email protected]
San Francisco Office
Cathay Innovation
101 Mission Street,
Suite 1630
San Francisco, CA 94105, USA
Email: [email protected]
Munich Office
Cathay Capital Advisory GmbH
Theatinerstraße 7
80333 Munich GERMANY
Tel: +49 89 26 20 446 10
Email: [email protected]
Singapore Office
5 Shenton Way,
#22-04, UIC Building,
Singapore 068808
Email: [email protected]
Tel Aviv Office
Cathay Innovation
Hanechoshet St.6
Tel Aviv
Yafo 69710
Email : [email protected]
Press contact : Yoann Besse – [email protected] – +33 (0)6 63 03 84 91
Cathay Capital Group is a global investment platform specialized in cross-border development with a focus on Northern America, China, Europe and Africa. The group identifies investment opportunities with the potential to impact the world and accompanies portfolio companies in their international expansion through its ecosystem of partners and the local expertise.
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