Responsible investing is integral to our identity. We believe that as corporate leaders, and particularly in our market, it is our duty to care about, and make active contributions to, our society in ways that are sustainable. At Verod, we achieve this through two principal routes: enshrining Responsible Investment standards across our processes and practices, and ensuring that our partner companies do the same, as well as, through the societal interventions that we drive using the Verod Foundation.
We are generating attractive returns and creating substantial co-investment opportunities for our investors, while developing positive economic, environmental and social impact for the local economy.
– Eric Idiahi
Responsible investing is truly part of our DNA at Verod. We do not pursue this trajectory simply because we have to, we do it because we want to, because we are convinced that it is the right thing to do and that it is beneficial for us and all our stakeholders. We believe that a committed focus on sustainability and impact is essential to successful investing. Accordingly, we have intentionally encoded, and ascribed strong weightings to, Environmental, Social and Governance considerations across all aspects of our investment process, from the initial investment analysis and decision making through, to value creation with partner companies.
Environmental, Social and Governance Policy Summary
This is a summary of Verod’s ESG Policy. The information contained here is intended for information purposes only and should not be relied on for completeness.
At Verod, we recognise that it is critical for our investments to contribute to building sustainable societies and environments to achieve a return on investment. To this end, we are committed to developing, implementing and continuously improving management of ESG issues and to structuring investments with the policies, governance structures, targets and reporting systems to effectively manage the risks and opportunities that sustainable development presents.
In line with our ESG commitments, we will strive to ensure that adequate human, technical and financial resources are constantly available to ensure implementation of our ESG Policy.
2. Management Commitment
Verod’s board and executive management are committed to ensuring that adequate human, technical and financial resources are available to ensure implementation of the firm’s ESG Policy and to procuring that all firm, and portfolio company activities are carried out in a socially responsible and environmentally sustainable manner.
In order to meet our ESG objectives, we have set the following ESG operational requirements:
We will conduct induction sessions to educate and inform new Verod personnel of the operational requirements and other aspects of the ESG policy and will continually enlighten and update our team on ESG issues and risks;
We will screen our prospective investee companies for ESG risks, impacts and benefits prior to approving any investment through a well-defined due diligence analyses and decision-making process;
We will strive to ensure that our portfolio companies comply with any agreed Environmental and Social Action Plans (resulting from our screening and due diligence) based on the IFC Performance Standards, AfDB Integrated Safeguard System and Operational Safeguard Standards and other applicable requirements, within an agreed time period;
We will require the adoption of ESG and business integrity Standards by all of our portfolio companies, as well as their business partners and participants in their supply chains;
We will monitor and report on our contribution to ESG development of our portfolio companies in a transparent, credible and timeous manner, based on a “three tier” framework involving a Director of Verod, a designated Fund ESG Manager, Senior Investment Officers, and Portfolio Company ESG Officers.
4. Applicable Codes and Standards
In implementing this ESG Policy, Verod has recourse to internationally recognised standards, national laws, ESG policies and standards of investors, and ESG requirements of side letters executed with investors.
In particular, Verod will have recourse to the International Finance Corporation Performance Standards, the African Development Bank’s Integrated Safeguard System and Operational Safeguard Standards, FMO’s ESG Policy and the World Bank’s General Environment, Health and Safety Guidelines.
Verod strives to ensure compliance and compliance by portfolio companies, with all applicable national laws, rules and regulations of any government, regulatory body, organisation and licensing agency but in the event of an absence of national standards and/or regulations in a relevant country, or a conflict between international standards or investors’ codes & standards, Verod and its portfolio companies comply with the more strict law, rule or regulation.
5. Resources and Capabilities
Financial resources required for implementation of Verod’s ESG Policy are incorporated in our annual budget and deal fees and expenses for potential investments always include estimates of ESG deal fees proposed to be incurred in relation to the relevant investment.
As a rule, external consultants are always engaged to perform, implement and oversee Social and Environmental Due Diligences for all Category A and Category B projects, whilst Social and Environmental Due Diligence studies for all Category C Projects will be conducted internally by the ESG Manager and Senior Investment Officer.
Verod provides the following categories of reports to its investors:
Major Incidents – The portfolio company ESG Manager is required to provide reports to Verod for further reporting to the Investment Committee and investors on significant incidents including Fires or explosions; Significant fuel/chemical spills; Significant pollution discharges above limits of normal operation; Major work-related injuries (including injured employees, contractors and members of public); Work-related fatalities (including deaths of employees, contractors and members of public); Incidents significantly affecting the health of employees, contractors or members of public); Regulator enforcement actions/notices; Major security breaches etc. Portfolio companies are to notify Verod of these issues as soon as they occur and Verod, in turn is to notify investors within 3 business days after becoming aware.
Quarterly Reporting – The Fund ESG Manager is responsible for compiling the quarterly reports in partnership with the Portfolio Company ESG Officer, which must detail all ESG policy processes and changes enacted during the period. Reports will include information on the categorisation of investments as well as details of progress with implementation of pre-agreed action plans and any corrective actions for identified noncompliance issues.
Annual Report – Verod will deliver to investors, an Annual ESG Performance Report and Development Impact Report within 60 days of the end of the financial year. The report will afford Verod an opportunity to review or adjust the ESG Policy and identify areas for improving their implementation as necessary. It will include updates on Implementation and operation of ESG policies; ESG performance of the all applicable Portfolio Companies over the last twelve months, illustrating progress and challenges encountered since the last annual ESG report, and Status of Portfolio Companies respective Environmental and Social Action Plans (if applicable).
7. External Engagement
Verod’s ESG Policy reflects the firm’s fundamental beliefs as regards Environmental and Social issues. Verod however also values the opinion of portfolio companies, regulators, business partners and other stakeholders and aims to engage stakeholders continuously. This exchange of ideas provides relevant input for internal discussions and positioning on ESG issues.
To provide feedback as regards any aspects of the ESG policy or in relation to any environmental or social impacts of any Verod financed companies or projects, please contact Chigozie Ejimogu, Sustainability Manager at firstname.lastname@example.org.
Verod’s ESG Policy is reviewed annually unless an earlier review is triggered by recommendations of the Investment Committee and/or the LP Advisory Committee of its Funds.
In 2017, we became the first West-African PE firm to sign up to the United Nations-backed Principles for Responsible Investment (PRI) and have been working closely with the organization to promote the principles within the West African investment community. As a signatory to the PRI, we commit to its Principles.
We will incorporate ESG issues into investment analysis and decision-making processes.
We will be active owners and incorporate ESG issues into our ownership policies and practices.
We will seek appropriate disclosure on ESG issues by the entities in which we invest.
We will promote acceptance and implementation of the Principles within the investment industry.
We will work together to enhance our effectiveness in implementing the Principles.
We will each report on our activities and progress towards implementing the Principles.
Since inception, DTRT has created over 4,200 new jobs, with 70% of its workforce being previously unemployed women. All employees benefit from ongoing professional development. DTRT has implemented its own leading sustainability standard – “DTRT: Do The Right Thing” – aimed at driving social change in the less developed communities.
DTRT, in partnership with Peace Corps, manufactures and donates thousands of re-usable sanitary pads to under privileged girls using scrap materials from its production process. Environmental sustainability is also at the core of the DTRT’s business model. DTRT’s WaterSave™ fabric reduces water use in fabric production by 80% and reduces energy consumption by 17% at similar cost as traditional fabrics by eliminating the wasteful dyeing process. This saves approximately 4,225 gallons of water per 1,000 shirts.
Right from the beginning of construction of the Shaldag fish farm, we prioritised sourcing and using materials, contractors and laborers from the local community. The farm utilises a recirculating aquaculture system, a considerable investment, but technology that allows Shaldag to utilise 10% the water usage of comparable farms in Nigeria. In a similar vein, Shaldag invested in a waste water treatment facility that reduced the level of effluent released by 50%. The company also constructed roadways that benefit the surrounding community.