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K.R.Srivats
True North, which is the first private equity fund in India to become signatory for United Nations supported Principles for Responsible Investing, is embracing ESG (Environment, Social and Governance) framework in a big way and will ensure all its portfolio companies are on board in this regard by next year, Vishal Nevatia, Managing Partner, has said.
“Going forward every company that joins True North family has to implement ESG framework, especially those which are controlled by us. In companies where we will have minority holding, they are already committed to implementing it. Even in minority, we will end up implementing everywhere when it comes to new companies,” Nevatia told BusinessLine .
Firms to expedite
As for existing companies that True North is invested in, Nevatia said that all the nine companies of $1 billion Fund VI (launched in 2018) are already implementing it. For the earlier Fund V too, already half of the companies have done it and remaining will happen in next six months. “In a year’s time, every company or every partnership of ours would have signed up for ESG principles and implementing it. We have been on this journey since inception (for 22 years). But we started tracking it closely five years ago. Now we are formally getting frameworks that were not earlier available,” he said.
‘No regulatory obligation’
Nevatia highlighted that all its companies were unlisted ones and therefore there was no regulatory obligation for them to implement ESG principles. Asked if the adoption of ESG will help valuations of the ESG companies, Nevatia said “Not sure. People say that if companies implement ESG, it will give better valuation. But we are not doing this for valuation. If it happens, it’s a bonus for us. We certainly know it will not reduce valuation for us,” he said.
True North formally embarked on its ESG journey in 2018 when it adopted a comprehensive ESG Policy & Framework of Implementation for Fund VI benchmarked with national and global standards and regulations.
Since inception in 1999, True North has partnered with 60 plus businesses, invested $ 2.5 billion in various companies and raised over $ 3 billion.
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