A Business imperative that creates value
As our planet and society faces unprecedented challenges, we see private equity as a force for good.
For Palatine, sustainability isn’t a trend or a label, it’s a proven value-creation strategy embedded in our core. Some call it ESG, we call it good business.
Being a responsible corporate citizen is important, but ESG is more than ethics; it is a strategic driver of value. Sustainability strengthens businesses while delivering positive social and environmental outcomes. In other words, doing the right thing and doing well are mutually reinforcing.
As a sustainable investor, we use our expertise and network to inspire, guide and educate mid-market management teams to make sustainability improvements that drive financial performance, unlock value and deliver strong returns. We’ve been doing it for over a decade, and our sustainability model has consistently proved its worth.
Driving sustainable growth that delivers returns
Doing the right thing and acting sustainably is no longer a nice-to-have. We are in the decisive decade for tackling climate change, making sustainability an existential concern for every business. Consumer and societal expectations around business ethics have also never been higher.
As the regulatory environment strengthens, our focus has always been on thinking beyond compliance, pushing boundaries and improving outcomes – not just because it’s the right thing to do, but because it’s a financial imperative.
There is a clear correlation between companies with a high ESG rating and strong financial performance. Our own experience over the last decade has shown us first-hand that improved ESG outcomes contribute to sales growth, talent retention, brand value and strong returns.
Sitting still is not an option if you want to build a profitable business today, with a lasting legacy for tomorrow.
Our leading position in delivering sustainable business growth is reflected in our B Corp accreditation. We scored 111.3 out of 200 in the B Impact Assessment, making us the fourth highest-scoring private equity firm in Europe.
Focus on Carbon
We are in the decisive decade for tackling climate change, and the years until 2030 will be make or break in achieving climate stability. All businesses have a role to play in moving the UK towards a low-carbon future, and at Palatine, we are committed to supporting the transition and reducing our emissions.
We are the first private equity firm to become a carbon literate organisation, achieving Silver-level accreditation. We have educated over 310 people in Palatine, our portfolio companies and our investors, demonstrating significant dedication to carbon reduction, with carbon-literate citizens typically realising carbon savings of 5-15% (Jacobs 2018).
Palatine’s 2024 carbon footprint is 45.6 tCO2e, which equates to 0.95 tCO2e / person. We have identified a route to net zero; however, in the interim, we have offset 46 tCO2e to achieve Beyond Net Zero through purchasing carbon offsets with Organic Carbon. Organic Carbon works with UK farmers to generate carbon credits through long-term sequestration whilst enhancing and protecting our natural soils.
Read more about our commitment to managing climate-related risks and opportunities in our Task Force on Climate-Related Financial Disclosures (TCFD) aligned Climate Report.
An award-winning ESG Framework
Our comprehensive pre-deal to exit framework enables material ESG matters to be identified and proactively managed by our investment and value enhancement teams and means that we start identifying opportunities to improve performance right from the due diligence stage.
At the outset of an investment, each company undergoes a baseline review against our ‘Six Pillar’ ESG strategy, which includes everything from climate impact to diversity and inclusion and employee wellbeing.
From here, we set outcome objectives and bespoke key performance indicators (KPIs), so that we can monitor success and recalibrate when we need to.
Continuous improvement
Our in-house sustainability, investment and value-enhancement teams support management teams on their proactive ESG journey. Working collaboratively, we ensure continual improvement throughout the lifetime of our investment and help create value to produce resilient, sustainable companies that generate the best returns for our investors.
In addition to our own team, we draw on our network of sustainability experts to ensure that we innovate and evolve our approach, and tackle challenges as they arise.
Robust evaluation
The depth and transparency of our monitoring and reporting are unique for a private equity firm of our size.
By annually monitoring improvements from the baseline assessment to exit, we are able to evidence and communicate successful outcomes and tackle underperformance. We regularly review our strategy to ensure that the most pressing and relevant environmental and social challenges are being addressed in our ESG programme.
In addition to bespoke KPIs for each portfolio business, we also map performance against the UN Sustainable Development Goals (SDGs) to help us achieve the greatest positive outcomes across the portfolio.