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IDI

CR
Bloomberg   IDIP FP
Holding Companies  /  France  Web Site   |   Investors Relation
A challenging environment for private equity after a record year
Target
Upside 59.8%
Price (€) 49
Market Cap (€M) 355
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Other news/comments28/06/2022

ESG: IDI unveils it all

While greenwashing has become a priority for regulators with the adoption of the revised version of MIF2 in Europe and the SEC’s ESG investigations in US, we believe it is increasingly essential for investment funds and asset managers to have defined ESG practices. With a clear ESG policy, the ability to engage with portfolio companies, and the implementation of quantifiable metrics, IDI is well positioned in this environment of increasing ESG-related regulations, where ESG has become a priority for many investors.


Fact

In just the last few months, the SEC has opened new investigations into the ESG commitments of big names such as DWS, Goldman Sachs AM and BNY Mellon IM. These investigations attest to the growing importance of ESG and the need for clear metrics to track ESG progress. In this context where even the AMF has made greenwashing its priority, IDI’s ESG policy and its willingness to establish clear metrics to measure its ESG progress in alignment with the PRI is more than appreciated.


Analysis

To address ESG issues, IDI has created an ESG Committee at the Supervisory Board level and created an internal ESG working group. IDI has also implemented an internal roadmap with defined objectives to begin measuring its ESG performance and to be able to report its results. As a holding company with no economic or manufacturing activities of its own, IDI’s role consists of seeking long-term value creation and further ESG practices of its portfolio companies through active ownership.

IDI’s sustainability approach concerns all phases of the investment process: pre-investment, holding period, and exit. Thus, already in the pre-investment period, IDI takes ESG elements into account in its choices. Once in IDI’s portfolio, IDI assists its investees to adopt more responsible practices. To do this, IDI identifies ESG issues and defines with the companies the areas of improvement that will be used to measure progress. In the exit phase, IDI will include an ESG section in the documentation and the valuation as well as IDI’s contribution to the ESG performance of the holding.

As part of its ESG approach, IDI has become a signatory of the United Nations Principles for Responsible Investment (PRI). Within this framework, IDI seeks to improve its ESG practices further and strengthen its collaboration and communication with its holdings to implement more specific ESG roadmaps. Today, IDI has a methodical approach to ESG issues, with defined objectives and a horizon target. IDI has also put in place tools to monitor the ESG progress of its holdings, and is able to be truly involved through its active participation, something highly valuable in the current environment.


Impact

ESG and Holding Companies do not get along easily. The first is a hands-on business; the second is rather hands-off. IDI strikes an unusual ESG tone by offering a well thought out framework that it intends to use for ongoing controls.


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