Sarona honoured as ‘Best for the World’ for exceptional positive social and environmental impact

Sarona was recognized by B Lab as Best for the World for the third year in a row!  In 2012, the inaugural list was sourced from approximately 500 B Corps.  This year, Sarona has again been recognised in the Overall Best for the World category by scoring in the top 10th percentile of more than 2,000 Certified B Corporations. The B Impact Assessment evaluates environmental performance, employee relationships, diversity, involvement in the local community, the impact a company’s product or service has on those it serves, and more.

We were also recognized as Best for the World in the following categories:

  • Best for Workers
  • Best for Customers
  • Best for the Long Term (corresponding to the Governance impact area)

Sarona’s tagline is “Growth that Matters” and this distinction from B Lab  reinforces our belief that sound investments supported by strong Environmental, Social and Governance (ESG) practices can make a significant difference in local communities.

B Lab is an independent non-profit organization founded to create and support a global community of Certified B Corporations that meet the highest standards of verified social and environmental performance, public transparency and legal accountability. The selection criteria for 2017 Best for the World Lists are available here: http://bit.ly/2hKSQPc.

Sarona awarded top scores by PRI for excellence in ESG integration

Sarona has received top scores from the United Nations-supported Principals for Responsible Investment (PRI), following the assessment of its latest Transparency Report. We have received the highest score of A+ for Strategy and Governance as well as for integrating ESG factors into our Indirect Private Equity investment process. We also received an A in the Direct Private Equity category.

We are committed to a process of continuous enhancement of our internal ESG capabilities and to encouraging the investment industry to adhere to best practices. Sarona has been a PRI signatory since 2010. The PRI is a network of more than 1,750 organizations, from over 50 countries, representing approximately US$70 trillion. Signatories commit to contributing to the development of a more sustainable global financial system by incorporating ESG factors into their investment practice.

Announcing Sarona’s 2017 Values Report

We believe that applying ethical, social and environmental values to each investment decision builds a better world and helps us generate attractive returns for our investors.

We strive to influence the investment industry to incorporate best practices and work with fund managers and investee companies to improve their Environmental, Social, Governance & Impact (ESG&I) performance. To report on our progress, since 2012, we have been publishing an annual Values Report.

In the 2017 Values Report, we consolidated the data on 22 IRIS metrics, measuring the impact of over 200 of our portfolio companies across more than 50 countries in Frontier and Emerging Markets. We also included 11 case studies that provide a window into how our capital is creating impact on the ground.

A few highlights from the report include:

  • Sarona is leading the way on how progress towards the SDGs is measured and managed. We have recently signed the Stockholm Declaration alongside leading European investors and government entities, representing over $200bn AUM. Co-led by the UN Global Compact and GRI, and supported by UNPRI, this initiative represents a first-of-its-kind commitment by private and public sector players to work together on setting measurement and reporting standards
  • Sarona evaluates how its investments contribute to the SDGs.  We mapped each of our 200+ investee companies’ alignment with the individual Goals and found that we are most closely aligned with Goal 8 (Decent Work and Economic Growth), Goal 16 (Peace, Justice and Strong Institutions) and Goal 5 (Gender Equality)
  • We take a disciplined approach to ESG integration. In 2016, Sarona completed the development of the Social and Environmental Management System to ensure that our investee funds and companies understand the ESG issues and implement best practices
  • Our investments continue to generate economic opportunities and improve lives in local communities. In 2016, Sarona’s portfolio companies employed over 127,000 people, 27% of whom were women; the vast majority of the companies provide high-quality jobs, benefits and working conditions. 85 million people benefitted from our companies’ activities. 100% of the companies are in full compliance with local labour, tax and environmental regulations and two-thirds of the companies have an official policy documenting their commitment to the environment

To read the full report, please click here.

Sarona signs the Stockholm Declaration

The investment community, including large institutional investors, is increasingly adopting the UN Sustainable Development Goals (SDGs) as a framework for sustainable investing. According to a recent report, the SDGs present a $12 trillion investment opportunity.  However,  for the capital to flow, the world needs a  common framework on how to manage, measure and report on progress towards the Agenda 2030.

In an effort to address this challenge, Sarona signed the Stockholm Declaration.  Co-led by the UN Global Compact and GRI, and supported by the UNPRI, the initiative known as “Action Platform Reporting on the SDGs” represents a first-of-its-kind commitment by leading investors and government entities to work together on setting measurement and reporting standards for the SDGs.

The Declaration includes the following:

“… Achieving the SDGs will require an annual investment currently estimated to $5-7 trillion which urgently demands the mobilization of mainstream capital. Investors should see the 17 goals as 17 business opportunities, where investors can move beyond exclusion criteria to inclusion based investment strategies focused on investing with a positive impact on the SDGs.

The 17 SDGs provide an opportunity for responsible investors to establish how they incorporate issues such as climate change, working conditions and board diversity into their investment approach to minimize negative impacts and foster sustainable development.

The SDGs also provide investors with an insight on how government decision-making and company behaviour will shape the development of the global economy over the next 15 years. By setting policy makers’ priorities, the SDGs could be a key driver of global GDP growth and source of investment opportunities.

To achieve real impact on the ground, focused and coordinated effort and accomplishments are key. This however needs to be complemented by a set of well-defined and relevant reporting indicators linked to the SDGs to support investors and companies in achieving the Goals. Impact and real change should be measured and managed.”

To read the full Declaration and for the list of signatories: Stockholm Declaration.

Sarona tackling FX risk in F&EM

Fear is a strange thing – never more so than for private equity investing in emerging markets.  Investors fear what they don’t know, and local currency risk is a big unknown.  With nearly 75% of F&EM PE funds being denominated in USD, local currency depreciations can have a material impact on investor’s returns.

It’s clear that existing hedging tools don’t work to reduce currency risk for private equity investors.  These tools are designed for debt, where cash flow amounts and timing are easier to predict.  For private equity, we need new tools and new thinking.  That’s why Sarona has joined forces with USAID, EMPEA and Crystalus to seek innovative solutions that, by mitigating FX risk, could catalyse private capital flows into developing economies.

This study is an important first step to unlocking billions of dollars currently on the sidelines as it underlines the substantial demand from private institutional investors for local currency risk mitigation and provides clear and compelling guideposts in developing solutions.  The first progress report of the Sarona-led research project “Expanding Institutional Investment into Emerging Markets Via Currency Risk Mitigation” is now available for review and we welcome your comments and suggestions on the matter.

Read the full report here.

Bloomberg Brief: Sustainable Finance - Sarona Raising Third Impact-Focused PE Fund

In today’s publication of Bloomberg Briefs focused on sustainable finance, Sarona’s third fund was highlighted as we continue our efforts to generate superior risk-adjusted returns alongside high ESG standards adoption in small to medium enterprises in Frontier and Emerging Markets.

Sarona in the Trump Era: Steady as She Goes

Sarona: A private investment firm with a heart

John Hoffmire, Director at SaÏd Business School at Oxford University, writes about Sarona’s unique investment approach targeting high financial returns based on ethical, social and environmental values.

Read the full article here.

Drivers of returns from private equity in Frontier and Emerging Markets: Are geopolitical risks an issue for Sarona’s portfolios?

Vivina Berla, Co-Managing Partner of Sarona Asset Management, speaks about investing in Frontier and Emerging Markets, a mindful approach to portfolio construction, and the importance of picking the right fund managers in an interview recently published by Private Equity International.

Full interview

Private Equity International is a global publication focusing on the relationship between private equity investors and fund managers.

Sizing Up ‘Blended Finance’: A Guide to a New Financing Approach to Fuel Sustainable Development

Sarona’s pioneering role in Blended Finance was highlighted in a recent article published by Joan Larrea, CEO of Convergence, in ImpactAlpha’s Full Stack Capital.

Full Stack Capital chronicles the people and institutions that are blending, layering and stacking capital to drive social and environmental impact at scale.

Convergence is the world’s first deal sourcing platform exclusively focused on blended finance transactions in emerging and frontier markets.  Ms Larrea pays tribute to Sarona for its work and discusses how blending private and public capital can contribute to meeting the global Sustainable Development Goals (SDGs).  The overall objective is “to grow the flow” into sustainable development and profitability.

Read the full article here.

Picture: Joan Larrea, CEO of Convergence