A member of the ESG and Impact (“IESG”) team works on every portfolio company and forms part of each company’s deal team to improve sustainability performance, drive DPI’s Impact Agenda and bring the portfolio into line with DPI’s ESG standards.
DPI is a disciplined and process led firm, and we engage directly with each individual portfolio company to create value. We believe that applying best in class IESG practices leads to sustainable economic development, with a focus on benefitting Africa’s growing middle class. Beyond this, our investments also contribute to the UN Sustainable Development Goals (see Our Impact Agenda, below).
Our formal IESG management system enables better decisions through each step of the investment process. Through the system, we are able to implement an integrated approach to Impact and ESG that ensures our core commitments are maintained. A set of internationally recognised standards and guidelines inform our reference framework, on which our system was built. These include:
- IFC Operating Principles for Impact Management,
- The UN Guiding Principles on Business and Human Rights
- IFC Performance Standards
- 2X Challenge
- Task Force on Climate-related Disclosures (“TFCD”)
- SMART Principles for Customer Protection
- UN PRI
The global goals for sustainable development
- No Poverty
- Zero Hunger
- Good Health and Well-being
- Quality Education
- Gender Equality
- Clean Water and Sanitation
- Affordable and Clean Energy
- Decent Work and Economic Growth
- Industry Innovation and Infrastructure
- Reduced Inequality
- Sustainable Cities and Communities
- Responsible Consumption and Production
- Climate Action
- Life Below Water
- Life on Land
- Peace, Justice and Strong Institution
- Partnership for Goals
- The Global Goals
We established our Impact Agenda as part of the effort to formalise our commitment to impact. The agenda established three global impact themes – the areas where we can deliver impact outcomes consistently throughout our portfolio. The global themes, which link to the UN Sustainable Development Goals, are:
- Gender (Goal 5: Gender equality)
- Job Quality (Goal 8: Decent work and economic growth); and
- Climate Change (Goal 13: Climate action).
Each new investment will also include a fourth impact theme specific to each investment, dependent on the sector or geography.
Impact objectives, indicators and targets for each theme are identified in the pre-investment phase along with the corresponding United Nations Sustainable Development Goal and indicators. An Impact and ESG Action Plan is developed as part of the legal documentation for each new investment.
Incorporating impact indicators and targets into our regular data collection process ensures that, over time, DPI can assess the impact that the Fund’s investments have achieved on each Portfolio Company and its respective stakeholders. We will continually assess the most effective way to measure this, ensuring that best-practice models are incorporated into our measurement approach.
Currently, as part of the development of our integrated IESG management system, measurement of value add and impact is integrated into the broader ESG measurement and data management process. This approach is aligned to Principles 2 and 6 of the IFC Operating Principles for Impact Management.
DPI commits to having the results gathered through the measurement process verified, and to disclose these results to key stakeholders, including investors, in accordance with Principle 9 of the IFC Operating Principles for Impact Management. And along with our ESG performance, Impact will be reported annually to investors.
We recognise that adding our voice to industry-level conversations helps us, and others, to increase our impact. Some of the ways in which we engage are set out below:
- DPI’s CEO Runa Alam, created and chaired the African Venture Capital Association (AVCA) Sustainability Committee; and DPI’s Sustainability Manager, Michael Hall, became the Co-Chair of the committee in 2020.
- DPI has been a signatory to the UN Principles for Responsible Investment (PRI) since 2017.
- 2X – Gender lens investing and recognition of ADP III as a 2X Flagship Fund.
| Alignment to global priorities | Intent | Objectives | Interventions |
|---|---|---|---|
| 7 Affordable and Clean Energy | Manage impacts to and implications of Climate Change | Use of renewable and/or affordable, clean, reliable energy sources | Solar lights and solar water heaters/ rooftop solar PV panels |
| 9 Industry Innovation and Infrastructure | Drive improved resource and energy efficiencies | Energy efficient lighting/ efficient equipment/ smart system etc. | |
| 11 Sustainable Cities and Communities | Drive improved resource usage and security | Water conservation efforts/ biogas generation/ smart water meter system | |
| 12 Responsible Consumption and Production | Recovery, reuse and recycling of resources | Waste minimisation/ re-use of wastewater | |
| 13 Climate Action | Incorporate consideration of climate risk/ resilience | Storm water or wastewater design taking changing weather conditions into account |
| Alignment to global priorities | Intent | Objectives | Interventions |
|---|---|---|---|
| 5 Gender Equality | Improved gender balance | Increased number of female owned portfolio companies | Restructuring of shareholding to increase female ownership |
| 10 Reduced Inequality | Increased number of portfolio companies started by women | Actively approach companies started by women | |
| Increased % of women in senior leadership of portfolio company | Restructuring of board and senior management to include more women | ||
| Increased % of women in workforce of portfolio company | Women’s leadership, sponsorship and mentorship programmes | ||
| Increased number of portfolio companies that have products designed for women | Unconscious bias training for EXCO, HR and the board of portfolio companies | ||
| Support groups for women | |||
| Gender diagnostic (including survey) and appropriate action plan | |||
| Active approach of companies to design women-focused products/ services |
| Alignment to global priorities | Intent | Objectives | Interventions |
|---|---|---|---|
| 1 No Poverty | Improved Job Quality | All employees have access to employee benefits | Introduce benefits such as medical insurance, pension fund, etc. |
| 8 Decent Work and Economic Growth | All employees earn a decent living wage | Restructure salaries to ensure all staff earn enough to afford basic services | |
| 10 Reduced Inequality | All employees have access to employee wealth-building opportunities | Provide employees with access to shareholding opportunities in the company | |
| All employees have access to a fair and engaging workplace | Introduce a performance feedback mechanism | ||
| Introduce forums where employees provide feedback to management |