Last year, Oak Hill Capital Partners released its inaugural environmental, social, and governance (ESG) performance report. While you may have read about similar reports from private equity firms like KKR and The Carlyle Group on this blog, Oak Hill Capital’s report was significant because it were first among U.S. middle-market private equity firms to publicly release an ESG performance report. In doing so, the firm increased transparency and offered other mid-market firms a blueprint to follow. Last week, it issued its second annual report, offering an inside look at the firm’s progress to date.
A comprehensive approach
In its new report, Oak Hill Capital outlines its approach to ESG management, measuring progress in integration, results and leadership: three of the key building blocks for a successful ESG management program that are included in our ESG Management Tool for private equity.
For Oak Hill Capital, integration refers to the ways it embeds ESG management practices across the firm’s operations to ensure it can best deliver results at portfolio companies. Key examples from the report include its responsible investment policy, incorporation of ESG in due diligence, and its recently becoming a signatory of the United Nations Principles for Responsible Investment (UNPRI). Management of environmental performance is also woven into the management of the firm, through its ESG Committee, which is made up of senior executives and chaired by Oak Hill Capital’s general counsel.
Results speak to how the firm evaluates the ESG performance of potential new investments and how it tracks and supports the sustainability efforts of portfolio companies. This year’s report includes how the firm considered ESG factors in the due diligence process of three new investments and how existing portfolio companies have benefited from the firm’s expertise in ESG issues. One example is an energy efficiency project Oak Hill Capital initiated at its portfolio company, Dave and Buster’s, with Entouch Controls, a leading energy management solution for restaurants and schools.
Lastly, Oak Hill Capital takes a broad approach to leadership, both within the industry and in the communities in which it operates: promoting lessons learned among similarly-sized firms, as well as engaging employees in business-focused mentorship opportunities.
A diverse portfolio of sustainability initiatives Read more