Our approach
There is a strong link between companies that have high environmental, social and governance (‘ESG’) standards and those that are able to achieve long-term sustainable business growth.
Responsibility starts when we first consider investing in a company. The Investment Manager is a signatory to the UN Principles for Responsible Investment and has embedded responsible investing policies into its investment and asset management processes. The Responsible Investment policy sets out the businesses in which the Company will not invest, as well as minimum standards in relation to ESG matters which we expect new portfolio companies to meet, or to commit to meeting, over a reasonable time period.
The Investment Manager is committed to constructing and managing the Company's portfolio in accordance with the Investment manager's Responsible Investment policy, which covers a range of ESG issues including climate.
For more information on the Investment Manager’s sustainability policies, please refer to the 3i Group website. The adoption of these policies by the Investment Manager meets the Company’s objectives in this area.
Our strategic ESG focus areas
Carbon and climate
Climate change and the transition to the low-carbon economy are significant macroeconomic trends impacting the sectors in which we invest.
In March 2024, 3i Group plc set sciencebased emissions reduction targets, which were validated by the SBTi. These targets cover both direct emissions and downstream indirect emissions associated with all the portfolio companies that 3i manages. Throughout the year, the Investment Manager has communicated these targets to portfolio companies and has supported them in developing the business case for setting their own sciencebased emissions reduction targets.
Strategy and leadership
Stakeholder expectations and regulations related to sustainability are growing. Strong sustainability governance is essential to meet these increased demands.
The Investment Manager encourages all portfolio companies to assign clear responsibility for sustainability at both board and executive management levels, supported by appropriate resourcing throughout the organisation. Linking executive remuneration to ESG objectives is one way to formalise this accountability. Each 3iN portfolio company investment team includes an ESG lead, tasked with monitoring the portfolio company’s sustainability progress and following up on any incidents as they arise.
All portfolio companies are expected to conduct a materiality assessment to identify the sustainability topics most relevant to their business.
The Investment Manager actively supports companies in developing robust strategies aligned with these priorities and in progressing towards defined targets.
Health & safety and people
The health and safety of 3iN portfolio companies’ employees, as well as that of others impacted by the companies’ activities, is the Investment Manager’s top priority.
Each portfolio company board is responsible for overseeing health and safety. Incidents are reported and discussed during board meetings, while serious incidents are immediately escalated to the Investment Manager, with updates monitored as needed.
The Investment Manager encourages companies to set leading and lagging indicator targets and monitors performance monthly. Annual metrics are captured through the annual ESG survey. Where results indicate a negative trend, the issue is followed up with the management team.
In FY24, the Investment Manager’s focus was on fostering a strong safety culture. In FY25, the focus narrowed in on mitigating the risk of serious incidents. In December 2024, the Investment Manager’s team participated in immersive, in-person training, which included a practical workshop on safety leadership, with a particular emphasis on effective
communication.
Dedicated ESG team
The Investment Manager has a dedicated team to lead ESG and sustainability initiatives across the portfolio. The ESG team’s role is to ensure the Company’s approach is right for the portfolio and to drive genuine ambition and progress at portfolio company level.
Dedicated ESG resource enables us to identify, monitor and realise the value-creation opportunities linked to sustainability for relevant portfolio companies more effectively and to identify and manage sustainability risks.
The team supports each portfolio company in enhancing its ESG maturity, in line with the sustainability pathway described on page 56 of our annual report. The team also leads ESG reporting for the Company and delivers the annual ESG review of the portfolio.
Sustainability
We support our portfolio companies to become more mature in their sustainability efforts and invest in decarbonisation challenges. Find out how.
Investing in the evolving sustainable energy market
Unsubsidised low-carbon energy now serves a large market of corporate off-takers says 3i’s Tim Short
