ENVIRONMENTAL SOCIAL & GOVERNANCE OVERVIEW Advent International ESG Overview
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Front cover image: Universidade Federal do Rio de Janeiro/AquaRio research team boat in the Abrolhos archipelago, where they are applying probiotics to save threatened coral from bleaching. Photo credit: Universidade Federal do Rio de Janeiro/AquaRio research team.
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CONTENTS
04“ ” 05 06 07 10 MESSAGE FROM OUR GLOBAL OUR APPROACH ENVIRONMENTAL: CATARATAS OUR PARTNERS APPROACH TO ESG IN THE MANAGING IMPACTS CASE STUDY INVESTMENT PROCESS
12 15 17 19 22 SOCIAL: RESPECTING CROMPTON FIRST WATCH GOVERNANCE: RÖHM COMMUNITIES AND CASE STUDY CASE STUDY ENHANCEMENT THROUGH CASE STUDY HUMAN CAPITAL EXPERTISE, PROCESSES AND CULTURE
24 25 26 28 GOVERNANCE OUR INTERNAL SUPPORTING A ADVENT IN THE APPROACH TO ESG CULTURE OF DIVERSITY COMMUNITY
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MESSAGE FROM OUR PARTNERS
Advent’s investment philosophy is centered Ensuring a healthy future for our portfolio Ensuring a healthy around responsible investing, managing risk companies is at the heart of our strategic and creating and protecting value for our investment approach, and good management investors and our portfolio companies. of ESG issues is essential to a healthy future. Uncovering opportunities, unlocking value, future for our portfolio STRONG GOVERNANCE achieving sustained revenue and earnings PARTNERSHIPS growth, realizing potential, strong execution; companies is at the heart these are the cornerstones of our We are active partners with our portfolio operationally-intensive, sector-focused companies, working closely with high-quality investment strategy. management teams and supporting them with of our strategic investment our operational experience, insights and deep OUR PROCESS sector knowledge. Advent has long implemented a rigorous, In Advent’s experience, value is created approach. sophisticated and disciplined investment through operational expertise rather than process which we believe fully leverages our financial engineering. Part of creating value sector focus, regional footprint, and operating through excellence involves managing expertise to deliver attractive absolute returns. environmental impacts, respecting True partnerships with a shared sense of communities and human capital, and ownership catalyze the growth and success enhancing corporate governance through we create. This is why we partner with expertise, processes and culture. management teams to build successful Throughout our active ownership phase, we companies for the future. With our portfolio work together to realize excellence in our companies, we build long-term value through portfolio companies. revenue growth, profit improvement and acquisitions. OUR COMMITMENT This ESG Overiew report illustrates our OUR INVESTMENT PHILOSOPHY commitment to integrating ESG throughout Core to our investment approach is our belief the investment process and reflects Advent’s that active identification and appropriate active approach to value creation. management of Environmental, Social and Governance (“ESG”) issues are fundamental to The Advent Partners risk management, operational excellence and ultimately value creation. This is the reason elements of ESG are embedded throughout our investment process: • Deal screening and due diligence; • Active ownership; • Through to exit.
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OUR GLOBAL APPROACH
EUROPE Being a responsible investor 84 INVESTMENT means managing risk, respecting PROFESSIONALS communities, transparently NORTH communicating and creating AMERICA ASIA value through operational 70 London INVESTMENT 21 excellence. PROFESSIONALS Frankfurt INVESTMENT PROFESSIONALS We recognize the importance of Paris Luxembourg frequent and transparent Boston communications with our investors, Shanghai New York Madrid our portfolio companies and our Palo Alto employees. This overview report is Mumbai designed to provide insight into our approach to ESG and a snapshot of Hong Kong Mexico City various innovative initiatives within our portfolio. Bogotá This enables us to see improvement opportunities, successes and best practices we can share across our Lima portfolio and leverage as governance tools in our toolkit.
LATIN São Paulo AMERICA 40 INVESTMENT PROFESSIONALS
15 OFFICES 12 COUNTRIES 430 $54bn 215 350+ 4 CONTINENTS EMPLOYEES ASSETS UNDER INVESTMENT INVESTMENTS MANAGEMENT PROFESSIONALS ACROSS 41 COUNTRIES
All data as of 30 September 2019, except AUM which is as of 30 June 2019.
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OUR APPROACH TO ESG IN THE INVESTMENT PROCESS
We believe that active identification INVESTMENT SOURCING ACTIVE OWNERSHIP ESG REPORTING and appropriate management of ESG issues are important to risk management, operational Advent identifies, targets and sources the At Advent, we view ourselves as good stewards At Advent we communicate regularly with our excellence and value creation. most compelling investment opportunities of businesses who build and position companies limited partners. In addition to our annual through a disciplined origination process. for long-term success. We assist our portfolio investor meeting, we now issue a twice-yearly Advent’s goal with respect to ESG We employ strict due diligence standards to companies in adopting appropriate corporate ESG Portfolio Company Report that is to ensure that applicable issues ensure alignment with Advent’s investment governance procedures, taking into consideration summarizes updated information about key established best practices as well as local legal are identified during the due thesis, its value creation approach, and ESG topics for the portfolio companies in our and regulatory requirements. diligence process before any stewardship commitment for the long term. four most recent funds (GPE VIII, GPE IX, recommendations to invest are These standards incorporate sector expertise As a follow up to the ESG diligence screens, Advent Tech and LAPEF VI). Our ESG Advent conducts a post-acquisition review, Overview report serves to describe Advent’s made. Risks and opportunities are and regional perspective into the decision- to be completed once we have full access to approach to ESG within the firm and with then managed during our making process to ensure a consistent approach. management, with the goal of identifying regard to our investment process. The report ownership period, thereby leaving company-specific risks and opportunities. We features selected short case studies on a As a responsible investor, Advent screens all the company better positioned for map company-specific issues against the variety of portfolio companies that are new investments for potential non-financial an exit from an ESG perspective. applicable Sustainable Accounting Standards addressing challenging environmental, social risks in areas such as health and safety, labor Board (SASB) materiality sector index and and governance issues in interesting and relations and the supply chain. We engage recommend actions, as appropriate. Advent meaningful ways. These case studies illustrate with external consultants to perform an ESG engages third-party experts to conduct these the range of creative approaches taken by screen for all investments as part of the due post-acquisition reviews, with access to company some of our portfolio companies. diligence process. documents and discussions with senior Anti-Corruption, Anti-Money Laundering management and our deal teams. The output (“AML”), economic sanctions, legal and from these reviews informs action plans, serves insurance due diligence are also standard as a baseline for our ESG profile, and provides INVESTMENT REALIZATION parts of the diligence process for all new material for our regular reports for Advent’s investments. Additional environmental and limited partners. social diligences are performed by external During our ownership phase, we typically Advent engages external advisors, when experts for specifically identified ESG issues, work in close partnership with our portfolio appropriate, to perform vendor due diligence, as applicable. companies’ management teams and sit on which addresses various ESG considerations as Investment decisions are made by consensus their boards of directors as well as on audit, part of the exit process. We aim to ensure a and are determined over a series of compensation and other committees. We work healthy future for our portfolio companies, investment committee meetings where risks with portfolio companies to support them in realizing our investment value and handing on and opportunities are thoroughly assessed, driving operational and strategic improvements, a more robust, valuable, better-managed including ESG considerations. Once an including identifying and managing company at the close of our investment period. investment has been made, we work with the environmental, health and safety risks. portfolio company to help realize value Advent supports our portfolio companies’ efforts creation opportunities and successfully to give back to the communities in which they manage risks. operate, to develop their human capital, and to manage ESG opportunities and risks. We provide guidance and resources to our portfolio companies as they undertake these initiatives under our active ownership model.
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ENVIRONMENTAL: MANAGING IMPACTS
Advent partners with our portfolio companies to create companies ENVIRONMENTAL METRICS that are better positioned for the AND GOALS future – including a focus on ESG The Czech Republic-based Zentiva, a leading management for the long term. European generics pharmaceutical company, We recognize that our portfolio offering generic medicines across all key companies are subject to therapeutic areas, has developed environmental increasingly stringent regulation management systems (EMS) and metrics with respect to their impact on tracking programs tailored to its business air quality, water quality and structure and strategy as a standalone REDUCING WASTE company. availability, and waste disposal Several Advent portfolio companies have In partnership with the World Wide Fund for in all geographies, particularly in Zentiva is initiating its own environmental pursued programs focused on reducing waste Nature, Cataratas created a plastic recycling developing economies. program, which will reside within Zentiva’s across the lifecycles of their products and program called “Remolda.” Residents of Brazilian newly established social responsibility function. promoting a healthier and more sustainable favelas in Rio de Janiero run the operation, using Advent portfolio companies implement In this first year as an independent company, environment. a recycling machine to transform plastic waste innovative approaches to operational Zentiva is setting its baseline for metrics such into miniature Christ the Redeemer statues. excellence, using energy efficiently and as water consumption, wastewater and solid Bojangles’ © restaurants joined forces with two football teams – the NFL’s North Carolina The recycled souvenirs are sold in the shops reducing consumption of natural waste discharges, and packaging. In keeping operated by Cataratas, with part of the revenue resources, reducing costs and with their ISO certified EMS’s, Zentiva’s Panthers and the University of Tennessee – to collect waste after football games. In the donated to the community. As part of a improving their environmental profile. manufacturing sites set goals for reducing campaign to honor World Environment Day, Companies such as Grupo Cataratas water usage in its manufacturing processes, first season of this program, 2014-2015, Bojangles’ © collected 45.4 tons of waste. Cataratas committed to drastically reducing its (“Cataratas”) and Sovos Brands have eliminating single-use plastics, and offsetting use of disposable plastics in its operations. They developed creative solutions to protect greenhouse gas (GHG) emissions from product This waste was recycled and diverted from being sent to landfill. Bojangles’ © recycling succeeded in reducing the volume of disposable the ecosystems where they operate. transport. plastic by 63%; four million disposable plastic These companies and others, such program continues to partner with these Additional environmentally oriented initiatives teams in their program. items were replaced with biodegradable items or as Zentiva, Bojangles’ © and Faerch, are are also underway at the company. For other alternatives. Cataratas’ main operations are working to recycle and reduce waste. example, the company is planting thousands now plastic free. of trees to offset GHG emissions and mitigate deforestation. Solar pilot programs have been initiated to explore the feasibility of further reducing the company’s GHG footprint. As Zentiva grows through acquisitions, these best practices in improving the company’s overall environmental footprint are being extended to newly acquired manufacturing sites as well.
These Environment, Social and Governance case studies reflect initiatives at selected companies that were owned for all or part of calendar years 2018 and 2019. Note that since January 1, 2018, several of these companies have been divested and noosa has merged with Sovos Brands, a food and beverage company backed by Advent. The divested companies include: Bojangles’ © and Ammeraal Beltech.
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REDUCING WASTE continued Innovative food packaging companies have Unfortunately, to date, many food packaging Two innovative programs recycle and reuse started to combine recycling capabilities with materials consumers use every day are based For years, Faerch has been production waste from Zentiva’s operations. the traditional objective of keeping food safe on different material types or mixed with promoting sustainability, and all of One program uses blister pack manufacturing from in-transit contamination, avoiding food other packaging materials, hindering an our products are designed for waste. At the packaging facility, tablets are waste from spoilage and increasing shelf-life. efficient recycling process. As a result, recyclability. The acquisition of the packaged into blister packs, using PVC backing Faerch, a leading food packaging producer packaging materials are often “downcycled” recycling company 4PET Group in and aluminum blisters. The machine waste based in Denmark, is at the forefront of the post use, i.e., recycled into lesser quality, 2018 was an outstanding opportunity from this process is collected and sent to a food packaging industry with “true circularity” non-food types of products. Faerch’s for us to close the loop and leapfrog supplier that separates and reuses the recycling of its rigid food packaging materials. packaging product range is a notable in terms of sustainability. With the materials. The PVC is reused as PVC raw exception, providing food packaging solutions materials input and the aluminum is used in “True circularity” in this industry means that a modern infrastructure in place at which can be recycled into equivalent quality the production of pyrotechnics. product is made entirely from recycled material 4PET, we are able to transform used products, which provide superior barrier and is entirely recyclable itself – without trays into raw material for new food The second program recycles rejected printed properties to extend shelf-life and reduce needing any additional virgin material – into contact products. packaging materials. Rejected cartons and food wastage. Most importantly, Faerch the same level of quality, again and again. leaflets are sent to a supplier that shreds the ensures efficient recycling of its products Lars Gade Hansen CEO, Faerch Group material and uses it as cavity wall insulation in through its in-house recycling operations. the building industry.
Recycling
PVC and aluminium from blister pack packaging.
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CONSERVING RESOURCES – WATER MANAGEMENT Sovos Brands, which has merged with rapidly- growing premium yoghurt producer noosa, creatively manages its water use. At the noosa farm, innovative practices across several parts of its production and lifecycle, maximizes its use of water withdrawals and minimizes its water consumption.” Because noosa is not connected to a municipal water treatment plant, the company built its own water treatment facility to treat the wastewater generated from the yoghurt production plant. Part of this treated water is returned to the Poudre river, fulfilling permit requirements. The rest is used to flush the dairy barns. The runoff from flushing the dairy barns is collected, solids are filtered out, and the remaining nutrient-rich water is used to irrigate crops grown for the dairy’s cattle. Treating and reusing process water reduces the need for additional withdrawals from the municipal water supply and helps conserve local water resources. Sovos Brands’ innovative water re-use at the noosa farm is an example of sustainable water management practices. In 2017, noosa won the Colorado Environmental Leadership Award for water savings. Award winner
In 2017 noosa won the Colorado Environmental Leadership Award for water savings.
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CATARATAS CASE STUDY
Cataratas was founded in 1999 to CHALLENGE STRATEGY manage and operate parks and natural Brazil is home to some of the most biodiverse Because Cataratas’ parks and attractions attractions in Brazil. Since then the ecosystems in the world, such as the Amazon maintain some of these ecosystems in a company has acquired a set of six assets and the Atlantic Rain Forest. There is extensive protected environment – in a zoo or in an that enable nearly five million visitors public awareness of some of the threats to aquarium – they have become laboratories each year to access, enjoy and learn species and ecosystems in the Amazon. for conservation, reproduction, reintroduction More than 340 about Brazil’s natural treasures. While less widely publicized, the Cataratas and research on maintaining biodiversity. species of birds properties’ ecosystems face similar challenges. At AquaRio, experts from all over the world Cataratas is committed to responsible and mammals in And so, consequently, do the plant and animal come to study the variety of rare marine life tourism and works with the national Brazil are species that can live only within these and collaborate with Cataratas scientists to parks to ensure the ecosystems that are threatened. ecosystems. For these reasons and more, so central to these natural treasures research marine ecosystems under various some species no longer exist in the wild; controlled conditions. remain protected and preserved. the only living specimens are found in zoos. At RioZoo, research focuses on endangered More than 340 species of birds and mammals Cataratas provides ticketing, land animals, such as golden lion tamarins, in Brazil are threatened. transportation, parking, retail stores, tapirs, alligators and the agouti, as well as food and beverage, and other services Marine life around the world is experiencing birds, such as the blue macaw, the yellow changes in ocean temperatures and pH to millions of visitors at iconic natural chat, the jacutinga and the harpy eagle. balances. These changes potentially threaten Some projects aim to understand threatened wonders, including Iguaçu National Park the ecosystems from which the fish, plants and and the neighboring Marco das Três species’ reproduction and how we can best animals come that are displayed at AquaRio. re-introduce these species into the wild Fronteiras, the Fernando de Noronha The foundation of much marine life, coral reefs (“re-wilding”). Several Cataratas researchers archipelago, the Corcovado Christ the are experiencing bleaching due to warmer are pursuing an intensive program on the Redeemer statue, AquaRio and the ocean waters. Some reefs are no longer able genetics of conservation. RioZoo. to host the intensity of life and variety of With jaguars, for example, scientists believe species they once did. that if they are able to map the jaguars’ genetic Protecting biodiversity is essential to Brazil’s materials and use biotechnology to breed national parks and treasures, and to Cataratas. them in the zoo, they will be able to help the population in the Cataratas do Iguaçu National Park to thrive. Now they are expanding their expertise and this approach to other types of ecosystems and species. More than 30 research collaboration projects were underway at Cataratas locations in 2018.
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CATARATAS CASE STUDY
RESULTS Jaguar populations are slowly coming back Cataratas scientists are learning that damaged from the brink of extinction, with the help of the coral reef ecosystems may be able to be partnership between conservation experts and partially restored. Scientists explain that Cataratas. A new tracking app and camera shallow-water tropical corals build the structural traps help park rangers protect jaguars from frameworks that support the enormous macro- illegal hunting in Iguaçu National Park and local and microbial biological diversity found in reef farmers in the Iguaçu area can preserve their ecosystems. They have recently published land. research, with partners from academia and In Fernando de Noronha, Cataratas sponsors other organizations, that demonstrates using the largest sea turtle conservation project on native bacteria that have proven beneficial to the planet, and the sea turtle population is now other organisms may be able to partially reverse thriving. the deterioration of coral due to bleaching. Last year, a group of tapirs bred in the RioZoo In the future, investors and others may be able was reintroduced in some Rio de Janeiro parks. to come to Brazil and observe some of these Tapirs had been extinct in the wild in the Rio activities, such as the release of animals into area for more than 100 years. the wild. The jacutinga, considered to be “the gardener With more than 90% of Brazil’s population living of the Atlantic Rain Forest,” is a bird that is in urban areas, providing people access to being bred to be reintroduced in the Tijuca experience nature and see wildlife is essential to National Park, under the open arms of the raising people’s awareness and enlisting their Through transformative experiences and Christ the Redeemer. support in protecting Brazil’s unique and fragile ecosystems. positive impact, we are reframing people’s Another rare bird species, the harpy eagle, is relationship with nature to generate greater Cataratas believes the most important thing extinct in the wild and Cataratas’ experts are awareness of conservation. helping to nurture them in controlled they do is introduce nearly five million people Fernando Sousa environments and planning to “re-wild” them. annually to the beauty and wonder of the natural world and inspire them to help protect it. ESG Director, Grupo Cataratas
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SOCIAL: RESPECTING COMMUNITIES AND HUMAN CAPITAL
Company growth and execution of the value creation plan often COMMUNITY OUTREACH depend on obtaining community Culligan International partners with the and stakeholder support as well American Diabetes Association (ADA) to as maintaining a reputation for promote hydration and education about the being a partner of choice. We importance of clean water at the ADA’s Tour believe that positive employee de Cure cycling events. relations and the ability to The Culligan Cares Committee continues the The success of these recent efforts has fueled Employee-driven initiatives in AccentCare’s pilot attract, retain and develop talent company’s existing philanthropic practices employee engagement and satisfaction at a community engagement programs also include contribute to the future success and explores partnerships to promote access company dedicated to caring for those scholarship funds for nursing and therapy of our portfolio companies. to clean water. In addition, Culligan created struggling in its communities. While certain students, including children and grandchildren of As transparency and global an interactive website to strengthen elements of the core patient- and employee- employees, and engaging with veterans and their communications have increased, communication between stakeholders and support programs may be the same across families in all hospice offices including the under- community relations and the company and publicize the company’s the 16 states where AccentCare operates, it is construction Killeen, Texas location. employment conditions for local activities. Culligan Cares partners with the fundamental to their community outreach to AccentCare also raises money to provide Water Well Trust a non-profit organization identify the needs in a small local community workforces have increasingly meaningful help for patients and employees. The that dig wells for U.S. families living without and respond, rather than implement a top- become an area of focus. AccentCare Hospice Foundationhelps to cover easy access to safe potable water. down program designed at corporate such expenses as flying a family member to see Rapidly expanding post-acute healthcare headquarters. a loved one before that person passes away; services company AccentCare® is piloting an At AccentCare subsidiary Texas Home Health, The AccentCare Employee AssistanceFund helps extensive community engagement program employees recognized that when school gets employees who suffer distaster beyond their this year. Inspired by the positive community out for the summer, many families struggle to control, such as providing financial assistance impact achieved by their recent acquisition, provide three meals a day for their children. in rebuilding after a house fire. Accolade, AccentCare launched a series of Fiftenn AccentCare locations in Texas Based on lessons learned through the pilot employee-driven community efforts last year. participated in a Summer Food Drive, far phase, AccentCare plans to encourage all its While AccentCare has always been committed exceeding their initial goal and collecting more local operations to identify and address needs in to taking care of employees, patients and their than 3,000 lbs. of food for local families. Some their communities to build even greater cohesion local community, there is new energy behind local AccentCare employee groups focus on around the fundamental message that emulating Accolade’s employee-driven small- meeting other needs of struggling children and AccentCare people care about people. scale community engagement efforts. families. Fourteen AccentCare locations AccentCare’s business and its employee base provided children 600 backpacks with school both focus on being helpful to others in need supplies so they could be ready for school in and their community engagement efforts are September. Some AccentCare employees now an extension of this focus. carry one of the 570 “care kits” for the homeless – Ziplock® bags with toothbrush, toothpaste and other daily items – they can simply hand to 600 backpacks people when they encounter someone in need.
Fourteen AccentCare locations provided children 600 backpacks with school supplies.
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KEEPING WORKERS SAFE Keeping employees safe and reducing Ammeraal’s increased safety awareness local community. Viakem embarked on an workplace accident rates is a priority for program has led, since early 2016, to a tripling intensive Total Quality Control (TQC) program Advent portfolio companies. Companies like of the reporting of near-misses, and the which has led to greater employee Ammeraal Beltech (Ammeraal), allnex and number of accidents resulting in hospitalization engagement and a steady annual reduction in Viakem have reduced their OSHA incident has dropped by one-third. Work areas were its OSHA incident rates. With the recently rates far below the average incident rate in noticeably more organized, and property introduced SafeStart® program, company their industries and are sharing best practices. insurance premiums at three key locations have culture is shifting to observe potentially unsafe decreased by 11% since 2016. Ammeraal’s conditions and ‘near misses’ when an accident executives looked to adopt safety strategies could have occurred and to recognizing from other Advent portfolio companies that common contributors to safety incidents such faced similar challenges. For example, they as fatigue. Safety observations help everyone have studied how others dealt with hydraulic address prevention and precursor conditions machinery using hot oil. before accidents occur. These observations In addition, specialty chemicals manufacturer increased 25% in 2018 while the company’s allnex has reduced its OSHA incident rates to OSHA incident rate remained below 1.0 for below 25% of the chemicals industry average. three consecutive years. Around the world, allnex applies a systematic, On a larger scale, 20 years ago, Viakem helped proactive process hazard assessment found a committee in the state of Nuevo Leon methodology to its plants. Every location has a to focus on local emergency planning. scorecard that measures key leading and Currently, representatives from 27 companies lagging environmental and safety performance across the region, representing industries such indicators. The timely execution of as chemicals, metal working, recycling, plastics improvement action items is tracked regularly. and paints come together to coordinate Viakem, a specialty chemicals manufacturer in prevention of and planning recovery from Mexico, takes safety and incident prevention various emergency and disaster scenarios. seriously, both within the company and in the
below 1.0
Viakem’s OSHA incident rate remained below 1.0 for three consecutive years.
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ACCESS TO HEALTHCARE Zentiva, a leading generic pharmaceuticals The Parc brings three leading Czech Zentiva is part of an industry-academia company based in the Czech Republic, is universities together with the company to research consortium, Open Research helping to shape the European generic facilitate PhD students’ work experience and Biopharmaceutical Internship Support pharmaceuticals industry through its the opportunity to be mentored by some of (ORBIS). participation in Medicines for Europe (MfE). the leading academic scientists in Central ORBIS links students from four European Zentiva’s CEO was recently named to the MfE Europe. universities, Rutgers University in the U.S., executive leadership team, which is working The Parc also collaborates with other leading Instytut Farmaceutzzny in Poland, and four to provide high-quality cost-competitive European universities, including Dublin, other European pharmaceutical companies, medicines to millions of patients in Europe Copenhagen, Helsinki and London among including Zentiva. This collaborative and around the world. others. Over the last five years, eight students consortium supports the exchange of young Zentiva is actively working with a variety of have completed their 4-year PhD programs in researchers between academic and industrial initiatives and programs in the industry to help part through their work experience at the Parc. sectors, accelerates professional development develop the next generation of scientists in Four of these Parc participants have joined and facilitates breakthroughs, discoveries and biopharmaceuticals and promote access to Zentiva’s Development Center. There are world-firsts by taking great ideas from the lab medicines. currently 25 PhD students participating in the to the market. My PhD experience at Zentiva was a great Parc program. As part of ORBIS, Zentiva is proud to be In 2014, Zentiva initiated a pharmaceutical opportunity to combine academic and recognized for its scientists’ expertise, active cluster between industry and leading academic industry training. This experience opened the approach to problem solving, and enthusiasm programs aimed at accelerating the careers pharmaceutical world for me. I am happy to Parc represents a unique research platform for the drug product development process. of graduate students in critical steps of drug say that our collaboration with Zentiva is as connecting the whole process of drug product products development in solid-state chemistry, active and productive as ever. development. Some of the products our drug design and process development, pharma Eliska Skorepov students worked on already help to cure technology, biopharmacy and preclinical Head of Single-Crystal Diffraction patients throughout Europe. in-vivo testing, and clinical research. In honor Laboratory, Institute of Physics of Pavel Sebek of the program’s 5th anniversary, the the Czech Academy of Sciences Head of Development, Zentiva Pharmaceutical Applied Research Center (Parc) announced a Parc Awards program this year, which recognizes promising young scientists. 8 students
have completed their 4-year PhD programs over the last five years.
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CROMPTON CASE STUDY
For more than 70 years Crompton JOB TRAINING AND Greaves (Crompton) has been a leading SKILLS DEVELOPMENT Indian manufacturer and marketer of a The company has established seven Skill Since its initiation, the Residential Multi-skill wide spectrum of consumer products. Development Centers in the Indian states of Training program has sponsored 30 training Because Crompton manufactures Himachal Pradesh, Gujarat, Maharashtra, Tamil sessions for 900 youth at its centers across consumer electrical and water Nadu, Odisha, Jharkhand and Assam. These India. 80% of these trainees subsequently appliances which require maintenance programs have been strategically developed found employment with established local and repair over their lifetimes, the along with three of Crompton’s major skill companies. development partners. company saw an opportunity to Another of its programs, located in three provide valuable skills training. Due to Each center focuses on slightly different centers, is focused on underprivileged youth water scarcity issues near their populations and training programs. Trainees from tribal communities. This program has are exposed to structured curricula on industry trained 117 candidates in installing fire locations, Crompton also wanted to practices, safety, measurement, electric protection equipment and plumbing. 83% help the local populations learn more Crompton’s appliance repair, plumbing, and pipe fitting. of program graduates found employment about how to collect, conserve and programs have Many Crompton employees volunteer as after completing the curriculum. best use water. now trained trainers at these centers. A third program, based in Maharashtra, Since its initiation in 2017, of Crompton’s more than 1,200 The number of people trained has increased has trained 108 youths from challenging Corporate Social Responsibility (CSR) people in the many-fold since the first 40-50 trainees circumstances in home appliance repair, program has built initiatives around four seven skill entered the program in September 2017. as well as coping skills and positive self- central objectives: development Together, Crompton’s programs have now development. centres across trained more than 1,200 people, approximately • Vocational and skills training; India. 900 of whom have found employment as • Water and waste management; a result.
• Positively impacting the lives of those who live near their processing facilities;
• Employee engagement in volunteering in CSR activities.
Crompton has pursued these objectives over the last two years in association with several key implementation partner organizations. Crompton’s CSR Committee has been tracking the success of the employment skills programs primarily by measuring the number of people who secure gainful employment after completing the Crompton program. They track the success of the water and waste management programs by the number of people and places who have been introduced to best practices through these programs.
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CROMPTON CASE STUDY
TEACHING GOOD WATER MANAGEMENT Recognizing increasing water scarcity, another catchment areas of the buildings, i.e. roof, In addition to producing cleaner water, this of Crompton’s programs educates people pathways and courtyards. This water is then program will provide silt to area farmers, about water resources, rainwater harvesting collected in filtration tanks and either used by which should lead to increased agricultural and good water management. Nineteen the building or collected in percolation tanks production. sessions were held at more than 10 locations, to increase the ground water recharge. Finally, in the aftermath of the devastating including schools, villages, a medical college Crompton also sponsors watershed floods in the state of Kerala in 2018, the and community centers, which altogether development activities aimed at increasing the company contributed approximately $142,000 reached more than 2,300 people. groundwater level and stabilizing the water to the Kerala Chief Minister’s Disaster Relief The sessions talked about rainwater harvesting table. In agricultural settings, secure access to Fund victims’ recovery, of which one third practices at the household and community water means increased employment on farms. was donated by employees. levels: To increase water conversation in the rural Moving forward, Crompton plans to maintain Household level: Solutions for residential regions, watershed development is the key and expand its existing programs in skills buildings, collection and reuse of wastewater, focus of Crompton-sponsored agricultural training and water conservation and improve need for conservation, understanding the water programs. its tracking of programs, successes, and relationship between topography and water Watershed development activities included impact analyses. Crompton will continue to scarcity. constructing embankments, reviving springs report on the evolution of its programs and Community level: Solutions for public and wells, developing nullahs, preventing soil impacts in its CSR Report, published for the buildings such as schools, community halls, erosion through tree planting, and enhancing first time this year at the close of the office buildings, increasing awareness through percolation of water. Crompton also supported company’s fiscal year on March 31, 2019. street play and community action. refurbishing existing wells and monitoring dams to ensure efficient water conservation. Schools and children were the primary Six hundred eight landholdings and families in recipients of these educational programs. the region benefitted from Crompton’s Awareness sessions related to water needs watershed efforts for the FY 18-19. This year and best practices were carried out in Delhi Crompton aims to bring these initiatives to five and Himchal Pradesh. The objective was to more villages and promote sustainable galvanize support for the community initiatives solutions for the communities. and environmental studies in the school. To further promote water resource The second major group of participants were management, Crompton contributes resources community leaders and decision makers who to a program led by the Government of supported the partnering organizations in Maharashtra which aims to remove silt from implementing rainwater harvesting systems in water bodies in drought prone areas. the communities. The rainwater harvesting systems now collect water from all the possible
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FIRST WATCH CASE STUDY
CHALLENGE In keeping with its mission statement, First Watch partners with organizations and harnesses its normal business and purchasing practices to benefit quality suppliers investing in their own communities. In 2017, First Watch partnered with an organization called Mujeres en Café – Women in Coffee – to create Project Sunrise, the new First Watch First Watch branded coffee. Coffee is the contributes number one product at First Watch and is key 25 cents from to the restaurants’ image, brand and customer every kid’s meal loyalty. sold at every First Watch Corporate Chef Shane Schaibly and VP of restaurant to Marketing Cari Trimyer traveled to the Share Our renowned coffee region of Huila, Colombia to Strength’s explore creating a new coffee blend for First Watch. Together with their partners at Royal First Watch Restaurants, Inc., a large and No Kid Hungry Cup Coffee Roasters, the First Watch team fast-growing daytime-only restaurant concept campaign, There’s growing evidence that found the Mujeres en Café organization in in the U.S. with more than 275 restaurants in year-round. consumers look for companies that Huila and the balanced, flavorful coffee beans 26 states. The company was founded 30 years integrate social and environmental they produce. ago in Pacific Grove, CA, and has won many factors into their business plan, and Mujeres en Café is a Colombian association of customer, industry and local awards for best the way we look at it is, it’s just good female coffee growers established to help breakfast, most innovative menu, best healthy business to do those things. restaurant, best family restaurant, and others. women navigate the coffee business in a Chris Tomasso traditionally male dominated society and The focus on fresh ingredients is essential to CEO, First Watch industry. Many families lost husbands, fathers, First Watch, as is its commitment to providing brothers and sons during the civil conflict in a homey, relaxing experience for its customers Colombia over the previous decades. Without with each person’s very own pot of freshly male heads of household, these women brewed Project Sunrise Coffee, free struggled to continue their family farms and newspapers, free WiFi and the ability to tailor raise their children. Through Mujeres en Café, each meal to the customer’s preferences. these women are now collectively becoming a It’s all part of First Watch’s You First™ service stronger force in the local market, improving philosophy - doing whatever it takes to make their ability to negotiate compensation, and customers’ visits memorable and to keep increasing the productivity of their farms and them coming back for more. quality of their coffees.
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FIRST WATCH CASE STUDY
With Royal Cup’s coffee tasters, the First Watch RESULTS team created a unique blend of coffee that would In 2018, Shane and Cari returned to Colombia Our performance and our financial success be consistent at every First Watch restaurant to check in with the farmers in person. They really is just an outcome of our focus on our across the U.S. First Watch made a multi-year wanted to ensure the program was working mission and our values, and this program is a commitment to source 100% of its coffee from well for all involved – the farmers, Royal Cup, part of that. Huila, Colombia to consistently produce this and First Watch – and make any needed Chris Tomasso, perfect blend: this is Project Sunrise. improvements. They were able to see firsthand CEO, First Watch STRATEGY – PROJECT SUNRISE the impact the program was having after just one year. Project Sunrise pays a small premium for the The women were able to invest in coffee grown on women-owned farms and they improvements in their farming operations due pay bonuses to the female farmers whose coffee to the small premiums they were paid through beans exceed a specified quality threshold. the Project Sunrise multi-year program. Those The Project Sunrise program and multi-year farmers whose beans earned the extra quality commitment with First Watch provides these bonus through Royal Cup’s quality standards women with income security and enables them and source tracking program received bonus to invest in their farms – buying drying houses or checks directly from Cari and Shane. In better transportation – to make the farms more addition, the First Watch team brought a productive for the long term. computer and printer to the San Adolfo school The women in these communities also support as a donation for the local children. their local schools with the money they earn from First Watch’s commitment to the relationship coffee farming. For various reasons, funding for with the people of this region and to using their schools in Huila has been poor, inconsistent, and clout as a buyer to improve the lives of the often unavailable. The coffee farmers send their farmers they buy from makes a big impression children and grandchildren to these schools and on the women coffee farmers. They truly invest in improving their education. Before Project appreciate the in-person visits and the personal Sunrise, the San Adolfo school did not even have attention to the things that help the growers a calculator or a printer. achieve their overall goals – such as providing education for their children. Advent is proud to partner with a company with such a mission to use their power as a For us, it’s the bridge we need to be able to business to promote excellent high-quality start from the beginning, because what we are coffee, support efforts of women farmers to doing is starting. We are taking off from the grow and improve, and invest in the ground and we want to continue to rise. community’s future. Deryi Visit First Watch’s website to see videos Coffee Farmer profiling some of the women farmers participating in Project Sunrise.
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GOVERNANCE: ENHANCEMENT THROUGH EXPERTISE, PROCESSES AND CULTURE
Advent believes that strong After making an investment we work with MANAGING RISK our portfolio companies to help them review corporate governance is essential Ocensa manages Colombia’s largest crude to the financial integrity and and evaluate their corporate governance, oil pipeline, a critical strategic asset handling success of our portfolio regulatory compliance and risk management about 60% of domestic crude production and capabilities. All our portfolio companies are companies. We understand how more than 70% of crude exports. required to have boards of directors and to important it is for our portfolio have anti-corruption policies and programs. The pipeline spans 830 kilometers between companies to operate in We offer our portfolio companies support Colombia’s Llanos region and the Atlantic accordance with not only legal to implement best practices in corporate Coast and constitutes the backbone of the and regulatory requirements but governance as well as in non-financial areas country’s oil transport system. also ethical business practices. during our ownership period. Ocensa created a comprehensive framework During due diligence on Advent focuses on ensuring that our portfolio for thinking through all the potential ethical and compliance risks that could arise across its investment opportunities, we companies incorporate best practices with regard to risk management and governance, operations – covering everything from bribery evaluate the governance practices and fraud to oil spills and other health, safety of potential targets and review while meeting the highest performance standards. Ocensa, INNIO, YDUQS and Röhm and environmental hazards. Given its vital role with prospective management GmbH provide good examples of governance in safeguarding Colombia’s oil flows, Ocensa teams their capabilities to best practices within the Advent portfolio. needs to ensure that its suppliers and vendors appropriately manage risk. match its own policies, including vigilance in vetting and supervising their employees. The company now undertakes stronger It is easy to write a check – but, in order to be due-diligence, and its contracts with suppliers self-sustaining, a meaningful CSR effort has to require compliance with Ocensa’s policies. be something people care about and it needs to tie to the business. Shantanu Khosla Managing Director, Crompton Greaves Consumer Electrical Ltd
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MANAGING SECURITY Advent recently acquired INNIO, a former At their 42-acre headquarters site in Jenbach, When visitors check in at INNIO’s headquarters, GE business that is a leading provider of gas Austria, INNIO has long recognized the they must participate in an interactive safety engines, power equipment, a digital platform importance of safety and security on their large and security training and successfully complete and related services for power generation and headquarters site, where manufacturing takes a quiz before they are issued a photo ID gas compression at or near the point of use. place and where suppliers and logistics trucks visitor’s badge. Because INNIO’s visitors come The photo ID Under the INNIO umbrella, the Waukesha and are on site every day. from all over the world, this training is available badges include a barcode, Jenbacher businesses serve their segments In addition to the more than 1,600 INNIO in 11 languages. The photo ID badges include a which enables and customers around the world. employees at headquarters, approximately barcode, which enables the company to check the company to 500 trucks come through the location every the status of each visitor and to check-in for check the status week and approximately 40,000 individuals revisits within seconds. of each visitor. visit each year. Many visitors are on site INNIO’s system is now a model admired by several times a year; so there are approximately vendors, customers and peer companies alike. 130,000 visits annually. With the check-in system, INNIO Jenbacher Disheartened by the wastefulness and has saved countless hours and tons of paper ineffectiveness of paper safety and security by evolving past ineffective paper safety brochures used in the past, INNIO decided to brochures and allowing frequent visitors easy do something different. They were determined repeat access. to create a next generation visitor entry protocol. Together with an IT company, INNIO engineers developed an effective and secure, electronic check-in system.
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MANAGING SUSTAINABILITY /CSR PROGRAMS YDUQS (formerly known as Estácio), one of Youth and adults learn to read, write and solve Communication and transparency are essential the largest private educational institutions in mathematical problems through YDUQS’s new, to YDUQS’s corporate strategy. The company Brazil, has developed a comprehensive 140-hour, hybrid (face-to-face and mobile takes corporate citizenship (ESG) seriously and sustainability management program and learning) youth and adult literacy program. has been committed to publishing annual extensive stakeholder engagement. At four locations in Rio de Janeiro, one in São Global Reporting Initiative (GRI) based YDUQS was recognized as the best education Paulo, one in Brasilia and one in Rio Grande sustainability reports for six years. company in Brazil in 2018, scoring highest in do Norte with classes of 24 students each, YDUQS follows many corporate best practices the categories of financial performance, early reports indicate this program is very including having a Code of Ethics and Conduct, corporate governance, innovation, people, effective and the company is looking forward independent board members, specific sustainability and vision of the future. With to expanding it in the coming years. committees and/or individuals accountable for more than 500,000 mainly middle- and lower topics including labor relations, student loyalty, middle-class students enrolled annually, teaching model, organizational atmosphere, roughly 40% of whom are online students, pricing and collection, risks and labor YDUQS is making educational advancement management. Since 2016 the company has possible for many across Brazil who would not established compliance practices, and otherwise be able to continue their education. corruption-related risk assessments. Five hundred youth athletes are provided YDUQS’s CSR Policy establishes guidelines and The company tracks and is able to leverage support and flexibility in their studies so they priorities for the vast number of community data about its own workforce composition, can train and compete – and still finish their engagement projects it will support. These corporate structure, turnover, training education. Having this support enables track efforts focus on five pillars: sport, education, programs, safety and health, and more. The stars, gymnasts, swimmers, and many other culture, innovation and entrepreneurship, and YDUQS Sustainability Report communicates its athletes to have good qualifications and job citizenship. This last pillar focuses on working environmental, social, governance and financial prospects once their competition days are over. with NGOs, seeking to generate positive impact performance. Recognizing the relationship and contribute to the development of Working each year to continuously improve between stakeholder communication and communities surrounding their units. these activities and their positive impact sustainability performance, YDUQS has a Vice reinforces the YDUQS brand, increases In 2018, more than 112,000 students and 7,300 President of Institutional Relations and employee retention and improves community employees participated in the company’s Sustainability to ensure the company’s efforts relations. broad variety of volunteer activities, and an continue to address stakeholder priorities. estimated 3.3 million people benefitted. Some of these efforts included programs aimed at alleviating hunger, providing dental care, engaging older people in healthy activities, and working with disabled people.
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RÖHM CASE STUDY
Röhm GmbH was an integral part of German Röhm’s products are shipped to industrial chemicals company Evonik Industries AG until customers all over the world, by truck, train and Advent’s investment in July 2019. Advent’s ship, for use in a wide variety of industries expertise in the chemicals sector meant we including paints and coatings, precious minerals were uniquely positioned to understand the mining, automotive and transportation, building complexity of the handling requirements and and architecture, and health care. risk management techniques needed for even As part of Evonik, Röhm developed extensive, the most sensitive of Röhm’s products. Our complex systems to ensure compliance with deep industry knowledge and diligence legal, regulatory and industry requirements, and process allowed us to get comfortable with best practices. Going beyond compliance to Röhm’s best-in-class risk management ensure safety and protect its reputation is a processes, an example of which is described priority for Röhm in production, product safety, below; and, our previous experience with transportation and the handling of all its Evonik and our strong track record in other products. Röhm’s transportation risk analysis chemical investments gave the seller process is now considered best-in-class. confidence in Advent as a responsible owner.
Founded 112 years ago, the company has CHALLENGE STRATEGY evolved from leather goods to chemicals and invented the novel acrylic glass (polymethyl Three of Röhm’s products – low stabilized To fully identify and mitigate safety risks in the Notes and photographs are taken to document methacrylate (PMMA)), which later became MMA (methyl methacrylate), NaCN (sodium transportation of these hazardous chemicals, the entire route and support the auditors’ known around the world under the brand cyanide) and ACH (acetone cyanohydrin) Röhm developed its own Transport Risk Analysis observations and commentary on the desktop name Plexiglas®. Through its long history in – require special handling. These products are (TRA) process. This process and associated assessment of the transportation risk. All of this the chemicals industry, Röhm has not only used commercially in applications such as analyses are based on voluntary Responsible research is compiled into a TRA report, which developed unique production processes but chemical synthesis, electroplating, mining and Care guidelines, as well as the Zürich Hazard can run into the hundreds of pages. also very sophisticated logistics and the production of plastics, paints and coatings, Analysis (ZHA) methodology, and makes use of Röhm also requires customers to respond to a transportation capabilities. and pharmaceuticals. DHL’s Resilience360 technology. questionnaire assessing their safety and legal Through its global distribution network, Röhm For these products, a complete Röhm TRA is standards and submit to an audit before it will transports several thousand tons of ACH each conducted: all transportation routes and deliver any product to that customer’s site. In year. Ensuring safety not only at its own vehicles to be used by the logistics companies this way, the TRA covers the entire chain of facilities, but for personnel, vehicles, and the are examined in detail. Extensive desktop custody from the Röhm manufacturing site to general public throughout the delivery process research is conducted by the designated team unloading at the customers’ facilities. is a daunting challenge. This effort requires to identify potential risks in each route. A wide These TRA reports compile risks identified in vetting of and collaboration with third-party range of risks is considered – from political risk, both the desktop research and the in-person logistics companies as well as customers. patterns of crime, recent incidents along the assessments. This compilation of information is route, potential for natural disasters and weather then put through a risk analysis in which each patterns – in addition to the inherent risks individual risk is assessed and prioritized based associated with each route and mode of on potential impact and potential likelihood. transportation. The team then plots the risks on an impact- Next, Röhm sends people out to travel the route probability risk matrix and assesses the – to inspect, in person, each step of the way. appropriate Risk Tolerance Boundary.
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RÖHM CASE STUDY
RESULTS Once the identified risks are plotted on a To further ensure that any leading indicators of matrix, the company works to minimize or issues during transit are handled appropriately, mitigate all risks above the identified Risk Röhm works with its logistics companies to Tolerance Boundary. develop emergency and disaster response Röhm’s risk mitigation actions typically include plans. Röhm has incident teams ready to finding ways to change the route or changing respond to any issues with these highly the mode of transportation (for example, from hazardous products during transit. The trucking to rail) or making other adjustments logistics companies also have access to a TUIS at transfer points to reduce risks. In a few 24/7 call center system, which all German instances, risk mitigation involved working with chemicals companies participate in. Wherever local authorities to prevent theft of trucks in the world they operate, there are equivalent Röhm has along to delivery route. Any incidents or near- logistics emergency support systems – such as incident teams misses are investigated to uncover root causes CHEMTREC in the US, and NRCC in China. ready to respond and use learnings to improve future risk Röhm provides similar support for the to any issues with mitigation. management of waste from its facilities as a these highly In addition to requiring GPS monitoring during portion of the waste also contains hazardous hazardous transit, Röhm may employ additional measures materials that can be life threatening if not products such temperature monitoring of their handled properly. Waste management during transit. products, when appropriate. Temperature companies are held to similarly high safety monitors can be beneficial on shipping routes process standards and are regularly audited. to mitigate risk of fires on board during transit. Finally, as part of Evonik, Röhm contributed to KPIs collected for the company’s annual sustainability reports. These KPIs included many transportation and process safety- related and product stewardship-related metrics and goals, as well as discussion of performance.
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GOVERNANCE
Establishing strong corporate To support in the implementation of an The impact of the toolkit can be seen in the governance systems, policies and appropriate corporate governance structure, types of initiatives the team has helped procedures at Advent’s portfolio members of Advent’s risk management and companies execute. These include: companies is critical to creating legal teams meet with portfolio company senior • Providing critical knowledge to assess and management and key stakeholders to long-term value. Integrity, social build anti-corruption and economic sanctions understand their current governance and risk compliance programs; responsibility and high ethical management framework, review policies, • Enhancing risk management frameworks; standards as well as transparency identify gaps and areas for improvement, and are at the center of everything we do. to share Advent’s governance toolkit. • Ensuring adequate insurance coverage to mitigate risk and support growth; When Advent invests in a portfolio Advent’s governance toolkit was created to We build great, sustainable company, clear, distinct roles and assist our portfolio companies in managing • ESG assessments that identify risks and companies that generate long-term responsibilities are established their corporate governance in a responsible and opportunities and lead to subsequent health value for stakeholders. That’s due to with management, the board and compliant manner. The toolkit provides and safety assessments and the the very strong culture we build in these companies, where proper shareholders. We work with senior practical guidance on key topics such as development of new CSR initiatives; governance is a pillar for this – and executives to form boards with formalizing board structure, designing a • Identifying CSR objectives such as creating suitable code of ethics, adopting appropriate that remains long after we are gone. independent board members, transparency in the supply chain, increasing anti-corruption programs and developing Patrice Etlin implement appropriate sub-committees, employee and community engagement and appropriate CSR policies. It contains improving energy efficiency and waste Managing Partner, create limits and controls, and ensure background materials and sample policies that management practices. Advent International that transparent reporting functions companies can customize to fit their unique The interaction between the portfolio are properly structured. These needs. The toolkit also serves as the platform company and Advent’s risk and legal teams principles are of particular importance for our engagement with portfolio companies provides the foundation for opening another to better understand their ESG initiatives. in some emerging markets in which line of communication with portfolio we operate, where family-run Since its development in 2013, the Advent team companies and another way in which Advent operations and evolving businesses has shared the toolkit with 76 portfolio supports them throughout the life of the are more prominent. companies spanning all five industry sectors in investment. 22 countries across North America, Europe, By strengthening corporate governance, risk Latin America and Asia. The response from management and regulatory compliance, portfolio companies has been extremely Advent aims to reduce risk at both the When you put governance in place, you are positive. Senior management views the portfolio company and fund levels. We believe immediately creating value. You start forming relationship with Advent as a partnership and this approach to governance, ethics and risk 76 a company that can be identified by a strategic appreciates both the resources and the best in management differentiates us as a responsible buyer, often a multinational corporation, and class guidance the toolkit provides. owner. We see the importance of this portfolio that can be easily integrated into an approach reflected in our reputation in the international business. For us, corporate companies marketplace, in the deal flow that comes to us governance is a major part of what we do to and in the success of our companies following create value. our exit. 22 Patrice Etlin Managing Partner, Advent International countries
Governance toolkit rollout.
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OUR INTERNAL APPROACH TO ESG
ENVIRONMENTAL SOCIAL GOVERNANCE STAKEHOLDER IMPACT CONSIDERATIONS COMMUNICATION
As a firm, Advent is mindful of the We appreciate the importance of We apply a rigorous governance We recognize the importance of frequent impact of our business on the human capital and seek to create an approach not only to our investment and transparent communications with environment and we seek ways to environment that promotes personal process, but also to the management our investors, our portfolio companies lessen our day-to-day impact. growth and encourages retention. of our firm. and our employees. We strive to use our resources efficiently to In 2017, we established a Global Diversity Advent International Corporation is registered For our investors, we provide timely fund reduce cost, manage risk and improve our & Inclusion Committee which focuses on with, and regulated by, the Securities and financial reports as well as certain information environmental profile. Like our portfolio assessing and promoting diversity within our Exchange Commission (“SEC”) in the United on non-financial matters as required by our companies, we implement innovative Advent team and ensuring our corporate States, and our UK advisory business is fund documents and best practices. approaches to operational excellence, using culture fosters the diversity we need. We registered with, and regulated by, the Financial At our annual investor meeting we present and energy efficiently, reducing consumption of strive to demonstrate our dedication to our Conduct Authority (“FCA”) and Luxembourg discuss portfolio company progress openly. natural resources, and creating environmental employees in order to create an environment advisory business and funds are registered Our portfolio companies look to us to share benefit where possible. in which our employees feel respected and with, and regulated by, the Commission de best practices and provide tailored support to Within Advent’s office locations, we continue valued. Surveillance du Secteur Financier (“CSSF”.) management as they implement their value to seek new opportunities to improve the way Many of our employees are committed to Advent is required to abide by all applicable creation plans. we manage our impact on the environment. causes which are personally important to SEC, FCA and CSSF rules including those them and are independent of their role with associated with responsible behavior, risk Advent. We enthusiastically support the management and transparency. individuals who commit time and resources Each of our investment funds has a dedicated to these causes. We support those who wish advisory committee of limited partner to use their professional skills and experience representatives who meet with us periodically to benefit non-profit organizations. Below in to review the portfolio and monitor important this report, our employees’ core efforts with actions. Our funds are supported by dedicated Partners in Health and other organizations investment advisory committees which are are featured. comprised of local partners and at least one partner from another region to ensure consistent application of Advent standards and the sharing of knowledge and best practice. We have a global risk committee and an operational audit committee which manage our operational risks worldwide.
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SUPPORTING A CULTURE OF DIVERSITY
Advent’s executive leadership team is leading the way for Advent to become a more diverse and inclusive place to work. Advent’s culture has always been one of collaboration and inclusivity; therefore, diversity is a natural BUILDING THE BEST CULTURE initiative for us internally. Advent’s Global Diversity & Inclusion (D&I) We promote an environment that views Being diverse and inclusive is critical to our Committee has been working hard to increase diversity objectives through the same lens as ability to hire, develop and retain extraordinary our internal awareness around diversity and any critical business objective. We recognize people, where everyone thrives and has the inclusion. Comprised of female and male that people from diverse backgrounds, a representatives from our global offices, across mixture of men and women, are truly valuable opportunity to succeed. We aim to maintain various tenures and levels of seniority, the to the firm and its decision-making when every an inclusive environment that values diversity Committee reflects diversity within Advent. individual feels welcome to express his or her of background, experience, ideas and opinions. Our approach to diversity and inclusion at views and where everyone feels valued and Diversity at Advent is embedded in the way Advent includes a D&I Mission Statement that respected. we see our future. puts diversity and inclusion at the heart of the While we are not yet satisfied with our Over the last two years, Advent has generated development, recruitment and retention of our performance on diversity, we promote the use renewed momentum to further enrich its people. Our internal policies and culture are of non-stigmatized diversity and inclusion shaped under four pillars – culture, culture and reassess the composition of the policies and benefit programs and look to set recruitment, development and retention. firm at every level. We are committed to precedents on these issues from senior levels promoting diversity and inclusion within our In order to continue to hold ourselves of the firm. accountable for change on a short-term and firm and our portfolio companies. We believe Leadership and collaboration around long-term basis, Advent’s Executive diverse organizations make better decisions embedding diversity and inclusion, internally Committee starts every meeting with a and externally, is important to Advent’s and recruit stronger teams. Ultimately, a more discussion around diversity. As with our continued success. diverse organization will contribute to creating portfolio companies’ growth plans, we want to better returns for our investors. monitor and measure our progress on diversity and inclusion so we can continue to develop in this area and provide regular input. We believe that the opportunity to be a better firm and a stronger magnet for talent comes from having a truly inclusive culture, which allows people to express their views in a completely open way. Having a culture where you can embrace a wide range of opinions allows you to make better decisions, which is critical to our success. James Brocklebank Managing Partner, Advent International
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SUPPORTING A CULTURE OF DIVERSITY
RECRUITMENT DEVELOPMENT We are building well-rounded global teams for Advent’s Women’s Inclusion Network (WIN) in We foster a creative environment that the future, to meet the needs of our North America is active both internally and promotes engagement through awareness employees, to create diversity of thought, externally to increase the number of women and training. especially around our investment decisions, applicants to, and employees at, our firm. Recognizing that Advent aims to promote ever and to connect with a wide-ranging group of Educating young women about opportunities greater numbers of senior members (women portfolio companies, investors and advisors. To in private equity, we sponsor a panel of current as well as underrepresented backgrounds) RETENTION do this we need to attract, interview and hire a and former Advent employees to discuss from within our own talent pipeline, we have diverse set of qualified candidates including real-life questions about working in private put greater emphasis on ensuring that The key to keeping the talented, diverse those in underrepresented groups. Interview equity and balancing personal objectives, such professional feedback, training opportunities, individuals we are able to attract is to ensure training and processes support a bias-free and as building a family. Private equity outreach to mentoring and sponsorship can help level the they are treated equitably as they advance in inclusive environment at Advent. talented young women aims to demonstrate playing field in advancement. Advent is the firm and that the firm’s programs and that our industry is compatible with other life committed to offering equitable career policies enable them to pursue a balanced life, goals and priorities. development opportunities, bias-free staffing, raise children and maintain outside interests. In Europe, Advent supports Level 20, a and support via sponsorship, mentorship and We are advancing these efforts by including The value is in creating a culture where we can non-profit organization established to inspire networking programs as well as leadership industry leading benefit programs and policies attract the best people, regardless of gender, and encourage more women to join and training and broader diversity training that provide all employees a career without race, background etc. We want Advent to be succeed in the private equity industry, at initiatives. limits. THE talent magnet in the industry, the firm board level and through a range of initiatives We help managers address and reduce where everybody wants to work and where including mentorship and sponsorship. The unconscious biases, break down stereotypes their career potential is limitless. London D&I team have also held a number of and avoid perceived barriers to advancement Success looks like a place where we have a Tricia Glynn successful workshops with senior high school opportunities for all underrepresented groups. strongly diverse workforce, where we have low women to introduce them to private equity turnover of women, particularly at senior ranks, Managing Director, Advent International Managing diversity in our ranks and at our and to encourage them to think about it as a and where we have great performance. portfolio companies requires an understanding long-term career. The format has included Because there’s no question in my mind that at of current demographics across several mock investment committees discussing real the end of the day, getting diversity right will dimensions of diversity: male/female, ethnic life investment opportunities that they present. ultimately drive performance for our investors. and nationality, and LGBTQ representation. Establishing a clear picture of where we are James Brocklebank today allows us to see our progress over time, Managing Partner, Advent International and to hold ourselves accountable.
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ADVENT IN THE COMMUNITY
Advent’s team culture is integral to how we operate We collaborate as one firm to support and extends beyond the workplace in the form of a GLOBAL organizations and charities that help build strong commitment to giving back to our local PARTNERSHIPS stronger, more sustainable communities, communities. As a firm, we take pride in dedicating our especially in the fields of education and healthcare. time and energy, as well as resources to help others worldwide. Advent proudly sponsors Partners In Health (PIH), an international medical organization At Advent, our leadership strives to lead by example. launched in 1987 that helps build and sustain Our partners individually and as a global group are public health systems in poor and underserved dedicated to supporting philanthropic organizations communities around the world. PIH now reaches that hold meaning in their lives whether they be more than seven million people in some of the educational, healthcare based, community service world’s most deprived areas. As one of many focused or the arts. Advent professionals across the organizations to which we contribute, our teambuilding events have raised a substantial world give generously of their time and resources to amount for PIH over nearly a decade of locally and personally significant causes under the partnership. Advent banner. This approach reflects our conviction that the individual is at the heart of giving and should drive our collective philanthropy given the important causes which require funding all over the globe.
Part of the fulfillment we experience from our work is being able to give back and help others by making a difference in our local communities. Advent is a firm that highly values and promotes philanthropy of all kinds. Our professionals are encouraged to embrace opportunities and support causes in ways that resonate powerfully and personally rather than solely as part of a corporate mandate. Over time, we’ve built a central tenet of our Advent mission statement that encourages all of our employees to strive to lead balanced lives which includes dedication to family and philanthropic support of the communities in which they live.” David Mussafer Managing Partner, Advent International
28 Advent International ESG Overview
GLOBAL TEAMBUILDING & FUNDRAISING
Given our culture of teamwork, cross collaboration and deep commitment to our goals, Advent RELAYS MUMBAI MARATHON has chosen to extend this ethos as RAGNAR RELAY AND The Advent team partakes in a number of In some communities in Mumbai and Pune, a way of coming together to raise REACH THE BEACH relay races around the globe, uniting our India, the lack of any quality state-sponsored Ragnar Relay and Reach the Beach are money for the charities which we strong commitment to giving back with our education leaves children of low-income families non-stop 200-mile overnight team relay races support. Advent encourages and equally deep commitment to teamwork. facing poor prospects, trapped in a cycle of based in New York State and New Hampshire, sponsors all of its employees, enormous struggle without the skills to fulfill respectively. Months of preparation and regardless of location or level of their potential and transform their lives. fundraising culminate in runners, drivers and seniority, across the globe to come volunteers from across Advent’s global offices The School Project, run by non-profit together and participate in these participating in the physically intense two-day organization the Akanksha Foundation, aims to global team building events as a event. Our relay teams complete the courses in break this negative cycle. Its driving force is a way of encouraging team work, an average of 30 hours, with each runner belief that an excellent education can bridge diversity, and cross collaboration. completing about 16.5 miles. The relay teams social and opportunity divides – a belief shared include our own Advent team members as well by Advent. as representatives from PIH and law firms, The Mumbai Marathon was identified as the investment banks and consultants with whom ideal focus for their fundraising. Running Our team at Advent is an incredible we work. through the streets of Mumbai, the marathon tapestry of professionals from over Every other year from 2011 to 2017, the Advent brought our team close to the grass roots of the 35 different nationalities and global teambuilding event participated in children they most wanted to support. The ethnicities, and we come together these relays to raise funds for PIH. These funds cause also drew a positive response from our with a passion for what we do and were used to purchase equipment for a offices worldwide, with colleagues volunteering take enormous pride in what our 205,000-square-foot, 300-bed, teaching their sponsorship, participation and goodwill. organization stands for. The culture hospital in Mirebalais, Haiti, build a maternity On 15th January 2012, 32 team members from and character of Advent makes us ward at a Malawi hospital, and support health 10 offices across Europe, USA, Latin America incredibly proud to be part of a clinics in Mexico. and Asia arrived in Mumbai to take up the company which values team building challenge of running either the 21 km half or events that are anchored in making 42 km full marathon through the crowded a big impact in the world for other streets. Before the race, our runners visited an people. It is core to who we are as Akanksha Foundation school in Mumbai to see a firm. for themselves the quality of education, values, David Mussafer integrity, teamwork and joy their efforts would Managing Partner, help to bring. Advent International
29 Advent International ESG Overview
GLOBAL TEAMBUILDING & FUNDRAISING
THE ADVENTURE CHALLENGE Having participated in Reach the Beach and Advent as a whole enjoyed a twofold success: similar running challenge events, Advent we were able to raise significantly more money decided to create a new version of our global for both global and local charities our firm is team building activity and shifted the event to committed to – Partners in Health, Proxité, Die the UK this year. We developed The ADVENTure Arche, Heads Together and Fundación Aladina Challenge, a new 2-day team-based event – and we created a unique opportunity for the involving running, cycling and kayaking starting Advent family to connect and work as a team in in the Cotswolds and finishing in London. More fun and challenging circumstances. This boost than 240 people joined in the challenge and in employee engagement – and engagement in another 150 people helped make the event our community efforts – is a double success for possible. Advent and our advisors from all of our the firm. regions around the world came to the UK to get Even better, participants across the board involved in the challenge. responded that they are extremely likely to Increased participation from Advent senior participate in this kind of event again. With leadership inspired many more Advent visible leadership from within the firm and employees and senior advisors to join in this inspired participants, Advent hopes to increase event than have participated in the past. In participation even further in the next event – addition, holding the event in the UK and raise even more money to help impressive encouraged many of Advent’s European organizations making a difference in our employees and advisors to participate for communities. the first time.
30 Advent International ESG Overview
SELECTED LOCAL TEAMS IN THE COMMUNITY
At ground level, we support our ADVENT INDIA local offices and employees’ Advent Mumbai financially supports and Each year, the Advent volunteers also give the passion for the causes that matter participates in activities at St. Jude India children goodie bags full of healthy and to them, encouraging their ChildCare Centres (St. Jude’s) as well as several hard-to-find foods such as dried fruits and own social initiatives such as other efforts aimed at protecting children in buttermilk biscuits. Additionally, on the day of fundraising, voluntary work, need. their visit, the Advent employees surprised the mentoring, external appointments St. Jude’s provides a home-away-from-home children and their families with a puppet show and memberships. As well as for rural and underprivileged families with at the Centre. helping local communities, children requiring cancer treatment at one of As part of Advent Mumbai’s broader support these play a vital role in team Mumbai’s urban medical centers. A child’s entire for children in need, the office also provides cohesion, making our employees family can be accommodated in the Centre’s financial support to several organizations more engaged and aware of 255 clean, safe living units during the course of focused on education and child protection. The the child’s outpatient treatment at Mumbai other such recipient organizations are Arpan, issues in society around them. hospitals. In addition to family living units, St. Nanhi Kali and Muktangan. All of these groups Jude’s provides nutritious meals, playgrounds, work towards education, recovery from abuse activities and a supportive staff. Families are and protection of extremely disadvantaged welcome to stay for the duration of their child’s urban children, often orphans, who may be treatment, which often lasts for many months. vulnerable to violence. The Advent team in Mumbai has participated in activities with and for the St. Jude children for the past several years. Last year the Advent volunteers brought caps for the children as a In the darkest time of their lives, many families gift, because cancer patients’ hair often falls out are fortunate to forge a new community of love during treatment, and conducted an art project and support at St. Jude India ChildCare Centres, in which the children could decorate their caps which offer free-of-cost hygienic, protective, themselves. This year, the Advent Mumbai team nurturing environment that gives these children returned for a day trip to visit the children at St. the best chance of beating cancer. Jude’s and their families. The art activity the Usha S Banerji Advent team hosted for the kids this year was a CEO, St. Jude’s Childcare Centre pouch painting session where the children painted the pouches and used them for multifunctional purposes such as storing medicine and stationery.
31 Advent International ESG Overview
SELECTED LOCAL TEAMS IN THE COMMUNITY
ADVENT GERMANY ADVENT BOSTON In recent years, Advent Germany has supported This year, the Advent team spent an educational For several years, Advent Boston team Throughout the year, Advent employees Die Arche’s “school care” program at the day with the children firstly at Frankfurt airport members have been working with and advising brought lunch for the volunteers periodically Berthold Otto elementary school in Frankfurt/ learning about travel and engineering with a City Year as the organization has expanded and hosted the team at the Advent Boston Griesheim. behind the scenes tour, and latterly at a nature within Boston, then across the United States office for meetings. During the summer, the Die Arche was founded in 1995 in Berlin to reserve, learning about the local environment and now internationally. Boston office participated in the annual support children in inner cities and has since and its ecosystem. Previous activities have City Year is a successful education focused Service Day. expanded to 24 German cities, as well as to included participating in sports, arts and crafts non-profit founded in Boston that has been At Service Days, a cross section of Advent select other Central European cities. Die Arche’s at the Arche center. helping school children stay on track, and employees and their families help improve motto is “Making Children Stronger For Life.” Every day at the Berthold Otto elementary graduate, for more than 30 years. the appearance and functionality of our The aim is for children to experience trust and school, close to 100 children receive free lunches Each City Year team is funded by a combination partner school, through activities such as library build a foundation for long-lasting self-esteem and homework support through the Arche of corporate sponsorship, and municipal and organization, painting inspirational quotes and at Die Arche, irrespective of their social or program. Together with the school, Die Arche federal funding. For the 2018 – 2019 school year, murals on the walls, and creating “test-prep” economic background. provides music, sports, and creative activities Advent’s Boston team financially sponsored a kits to assist students with upcoming This is the fifth year the program has been run for the children, making school more enjoyable City Year team at the James Condon School standardized testing. at the local Berthold Otto elementary school in and enabling them to feel valued and safe. (kindergarten through 8th grade) in South Advent employees also helped the teachers by Frankfurt/Griesheim, and the third year that Die Arche also offers assistance and advice to Boston. raising funds for and delivering “wish list” school Advent employees have spent time with the parents as a way of helping families become The school year at the Condon School supplies that are not covered by the school children by participating in activities with them more stable day-to-day environments to allow commenced with an in-person Welcome budget, such as dry erase boards, notebooks at the Berthold Otto elementary school. children to succeed. Event, organized by Advent’s Boston team. and other needed educational aids. Many of Advent’s Associates (closer to the students’ age range) develop informal mentoring relationships with the City Year team members. In the spring, end-of-school celebrations for students and There are few resources more valuable to a City Year corps team members school than committed, well-trained, focused are organized by Advent as well. corps members...City Year corps members develop strong relationships with students which deepens the student’s connection to the school and motivates them to achieve. Principal Robby Chisholm Condon K-8 School
32 Advent International ESG Overview
SELECTED LOCAL TEAMS IN THE COMMUNITY
ADVENT COLOMBIA Advent’s team in Colombia has supported In addition, we have provided financial support high-impact local entrepreneurs through its for two gala fundraising events; these events For Endeavor, the support received from partnership with Endeavor Colombia, since play an important role in connecting key players Advent in Colombia has been unconditional. 2015. in the Colombian business sector and are an The knowledge and expertise in analyzing Endeavor Colombia is part of the global important source of fundraising for Endeavor. high growth companies is very valuable, Endeavor network, whose goal is to have a Finally, Advent has facilitated win-win contributing to enhancing the selection process positive impact in local economies by partnerships between some Advent’s portfolio of the top entrepreneurs in our ecosystem. transforming entrepreneurs into highly companies in the country and Endeavor Moreover, the guidance and mentorship successful business leaders. Endeavor enables entrepreneurs. For example, Advent facilitated provided to Endeavor Entrepreneurs by a this transformation by leveraging a network of an alliance between Advent portfolio company highly qualified and recognized group of seasoned business leaders and implementing LifeMiles, one of the largest and fastest-growing leaders has helped to encourage them to think a support model that includes mentorship, loyalty coalition programs in Latin America, and big, be more focused and strengthen their knowledge sharing, connections with potential comparamejor.co, an online insurance portal. financial capabilities to better understand investors, and even, potentially, investment This alliance with LifeMiles enables the their business and the industry in which from the Endeavor VC fund. accumulation and redemption of miles in they operate. Most of Advent Colombia’s senior team comparamejor. Similarly, Advent helped develop Adriana Suarez members mentor Endeavor entrepreneurs in an alliance between startup company Spira and Managing Director, Endeavor Colombia areas such as corporate governance, strategy, long-established asset management and trust operations, finance and talent, drawing on our company Alianza Fiduciaria, a now exited experience growing and strengthening many Advent portfolio company. Spira developed diverse businesses. The Advent senior team customized training programs tailored to has donated approximately 130 hours to 54 improve job performance and employee companies over the last five years. Advent’s efficiency at Alianza Fiduciaria. leaders have participated as jurors in three Endeavor run panels to evaluate and select local entrepreneurs, one of which was hosted in the Advent Bogotá office.
33 Advent International ESG Overview
We recognize that our success hinges on the smooth functioning of wider society. Our funds’ portfolio companies employ thousands of people and benefi t from healthy communities. As a fi rm, we will continue to foster our unique culture and encourage our people to make a personal difference by contributing time and resources to benefi t non-profi t organizations, charities and other philanthropic initiatives to help build a better world.
34 WWW.ADVENTINTERNATIONAL.COM