Climate change and sustainability are the most important topics in the investment world today. But real change only happens when consumers demand it, and when capital is dependent upon it. The collective crisis we all face cannot be resolved by half measures, or by targeting only individual market segments. It’s all or nothing. So, from now on, Vala Capital will integrate fundamental sustainability considerations into all our investment decisions. We will drive change by making our capital dependent upon it.
Our manifesto pledge
We will only invest in companies that have aligned the interests of their shareholders with those of society and the environment. We expect companies to commit – meaningfully and tangibly – to sustainability, regardless of their products or services, or the sector in which they operate. We will apply the same sustainability assessment framework across all our funds, not just those focused specifically on sustainability.
Sustainability assessment framework
We will support the work of our internal sustainability experts with the ground-breaking sustainability evaluation and monitoring tool FuturePlus, from our partners The Sustainability Group.
We will assess each company’s sustainability performance against a comprehensive range of metrics, working with them to:
- Define the scale of their sustainability ambition
- Plot a clear pathway to tangible change
- Monitor and report on their achievements, milestones and performance.
By making our capital conditional on change, we are putting sustainability at the heart of our decision-making, and incentivising portfolio companies to do the same. This will help portfolio companies to access further funding, and to see being ‘Better’ as a competitive advantage.
We will also be reporting sustainability performance alongside investment performance for all our future investments.
Reframing the conversation
Reporting on sustainability practices is known to be difficult, not least because reporting metrics have up to now been inconsistent.
But by incorporating FuturePlus into our internal reporting processes, we believe we can effectively measure and monitor sustainability, and enable our portfolio companies to share consistent reporting metrics that helps them:
- Define sustainability goals, and understand how these goals fit within their organisation.
- Implement a sustainability strategy and demonstrate meaningful progress on sustainability targets.
- Consider the needs of key stakeholders, the community and the environment.
We want our approach to sustainability goal-setting and measurement to incentivise behavioural change and drive action within our portfolio companies, helping them to address the sustainability challenges they face while encouraging them to take ownership of their social and environmental impacts.