Sustainability Policy

Background and Purpose

STAR Capital Partnership LLP is a UK headquartered mid-market private equity firm specialising in building businesses in Western Europe with a focus on businesses that utilise strategic assets to provide essential services to end users.

STAR is committed to the integration of sustainability management practices into our business, recognising the potential for material Environment, Social and Governance (ESG) factors to affect the value, resilience and success of our investments and their associated assets, and their potential impacts on the environment, society and the economy.

The policy sets our principles and objectives for how we will undertake this commitment, which we will apply across all the funds which we manage or advise as well as our own business operations.

Our Objectives

To equip and empower our team to implement our principles below, through management support, training and provision of tools and guidance that enable us to operate a robust and well defined sustainable investment system.
To play our part in building awareness and action in relation to the net zero carbon agenda and resilience in the face of the potential impacts of climate change on our businesses and our wider stakeholder.
To seek to integrate consideration of the challengers that lie behind the UN Sustainable Development Goals and the principles UN Global Compact within our investment and stewardship.
To be a sustainable operator ourselves through the proactive management of our direct ESG impacts as a business.
To support portfolio companies on the delivery of their sustainability strategies.

Our Principles

STAR has a commitment to responsible investment and ownership principles and became signatory of the UN Principles for Responsible Investment (UN PRI) initiative in 2017. STAR’s sustainable investment policy and approach closely aligns with the firms ESG strategy.

Environment Principles
STAR aims to manage the impact of climate risks in our investment decisions and portfolio management, seeking to improve the portfolio company’s climate performance over the ownership period to ensure future-proof business growth.

Social Principles
STAR aims to establish the right procedures and policies to ensure safe working environment and drive human capital development.

Governance Principles
STAR aims to ensure a future-proof system for data privacy, data security and ethical business conduct on both the group level and within the portfolio.

The main material sustainability topics for STAR are displayed below.

Enviroment	Social	Governance
Greenhouse gas emissions	Talent attraction, retention and development	Cyber security and data protection
Climate risk	Health and safety	Business ethics

Integration of ESG Management into the Investment Cycle

Throughout the investment lifecycle, STAR seeks to implement and consider ESG through all stages.

During the pre-investment phase STAR:

Undertake exclusionary/ negative screening of potential investments in accordance with the relevant fund’s investment policy and restrictions.
Develop awareness of potential material ESG issues in the deal-flow pipeline that may mitigate against investment.
Profile ESG risks to identify material adverse factors and value creation opportunities as part of our pre-deal assessment and due diligence and provide well-considered analysis for the Investment Committee evaluation process.
Document our ESG profiling, decisions and agreed action plans to carry forward into the stewardship phase.

During the stewardship phase STAR:

Use our governance role to engage with the senior management teams and Boards of our portfolio companies to promote sustainable practices and outcomes, including focus on material ESG issues in the 100-day plan, and by setting a longer term agenda for sustainable value protection and creation throughout STAR’s hold period and beyond.
Undertake a review of business to build a baseline ESG performance assessment with which to evaluate risks and opportunities, engage with the management team on setting objectives and performance standards and the creation of actions plans to address the most material matters, and offering support where appropriate.
Seek to ESG KPI data (including carbon footprint), and an update against the baseline ESG performance review, on an annual basis to document progress, identify any new issues and opportunities and report to our investors. We will also use this data to make an analysis of performance change during our stewardship and any remaining risk and opportunity at exit.

Reporting

For more information regarding how sustainability is integrated into our investment processes, please see our annual Sustainability Report.

Roles and Responsibilities

The Board and senior management of STAR Capital are committed to the proactive implementation of this policy and to providing the support and resource necessary to do this. We will continue to review this policy on an annual basis.