Sustainability: An ‘Infinite Game’

13-03-2024

A look at our ever-evolving approach to sustainability since our B Corp accreditation in 2022 by Nikhita Mistry, Sustainability Manager at Palatine

We believe that private equity can be a force for good and want to use our privileged position to generate returns in the right way, with a commitment to the environment and society. It’s a belief that aligns with the aims of the B Corporation (B Corp) community, which is why we are proud to be a B Corp.

B Lab is a non-profit organisation whose purpose is to create a community of certified B Corp companies that work towards ‘reduced inequality, lower levels of poverty, a healthier environment, stronger communities, and the creation of more high-quality jobs with dignity and purpose’.

These real-world outcomes are split into five impact areas: Governance, Workers, Community, Environment and Customers, representing all the stakeholders of a business. The B Impact Assessment assesses performance against these areas in line with best practice.

When we joined the B Corp community, our achievements across the five impact areas were externally recognised. While we were proud of our industry-leading ‘score’, this was not our only motivation for becoming a B Corp. At Palatine, ESG is an ‘infinite game’, iterative, ever-evolving and never ‘complete’. In this belief, we are aligned with the B Lab ethos that sustainable business is a transformation, and as a B Corp, we are committed to continual improvement.

A year on from B Corp, we reflect on the progress we have made across the five impact areas through implementing a stakeholder-first approach across our business.

  • We have implemented our Sustainability Strategy. The strategy focuses on three material themes: climate and nature, inclusion and diversity, and wellbeing and engagement. Under each theme, we have set objectives and targets for Palatine and our portfolio. The creation and rollout of this strategy improves our governance and the stewardship of our portfolio companies, strengthening the ESG reporting we can provide our investors (or customers to use B Corp language). 
  • The climate and nature strategy that feeds out of this has created vast improvements to the environmental impact area. We improved the accuracy of our carbon footprint calculation, which has enabled us to purchase carbon offsets for all emissions generated by our operations since 2021. We have invested in carbon reduction initiatives in the global south and UK agriculture through these credits.
  • We have also developed science-based targets for emissions reduction and are meeting the targets by engaging with our landlords to procure renewable energy. Across all three offices, our electricity is now traceably renewable and/or backed by a Renewable Energy Guarantee of Origin (REGO) certificate.
  • People make Palatine, so the final two themes in our Sustainability Strategy have targets to enable people to flourish. In the B Corp assessment, the Worker’s impact area focuses on employee participation in informing the direction of the business and implementing positive environmental and social change. Within Palatine, we all have ESG objectives, irrespective of team, and changes to the employee engagement survey mean that not only do we participate through completing the survey, but, before it has been issued, we can contribute to the questions too.
  • Creating the Inclusion & Diversity (I&D) strategy has also seen gains across the Community impact area. In addition to implementing an I&D policy, we have evaluated and updated six people policies with the B Corp standards in mind. We also issued our first diversity survey, and the gender diversity of our team has been strengthened through positive action in recruitment.
  • The external verification of our positive impact through the B Corp assessment and Operating Principles of Impact Management adds additional rigour.

Because the B Impact Assessment considers the sustainability of the whole business, the growth of Palatine and job creation generates some of our most significant impact; this has been greatly improved with the creation of our Growth Credit fund. In addition, as Impact Funds I and II have a written mission-locked legal governance structure that requires a positive outcome for the environment or society, the successful close of the new fund and growth of our impact investments continue to bolster our score.

We are very proud of the achievements that we have made over the last year, but we also consider them to be stepping stones in the infinite transformation of our business. By the time we recertify, we hope to be celebrating new gains and even more significant positive impact thanks to the targets and actions we have set today. The first glimpses of the new B Corp standards indicate that these achievements will put us in good stead for the increased rigour of the assessment. We welcome the next iteration of what it means to be a B Corp and are excited for future progress.

Find out more about the new B Corp Certification here.