Sustainability in our portfolio

Resources usage

The Apax Fund portfolio consists of a large number of “asset light” businesses which do not have a signi cant environmental impact. The majority of resources usage is reported by a small number of companies. In 2015, 89% of CO2 emissions were generated by only 6 portfolio companies with the other 19 portfolio companies reporting energy data accounting for the remaining 11%.

Electricity usage in the ESG Group reduced by 15% with 6 portfolio companies accounting for over 80% of the Group’s electricity usage and 20% being reported by 14 portfolio companies. On a like for like basis the 15 companies reporting data both in 2014 and 2015 reported an increase in usage of 5.7% or 39 million kwh.

Overall CO2 emissions by the ESG Group increased by 38% in 2015 due to the addition of Quality Distribution, a North American chemicals distributor with a large eet of trucks and as a result high fuel usage, to the ESG Group.

The Apax Funds’ portfolio is focused on reducing its global environmental impact with 20 portfolio companies reporting to have energy reduction initiatives in place. The insight into where the majority of the usage in the portfolio is, enables the operational excellence practice to work with the largest users and identify reduction initiatives.

The portfolio’s environmental stewardship initiatives will help protect the planet while improving ef ciency, reducing costs and preserving their ability to do business in the future. Sustainability is not just the right thing to do, it can also boost innovation and pro table growth. This is why we continue to see it as a key differentiator and a competitive advantage.

Breakdown of CO² emissions

C02

Examples of environmental initiatives

Across the Apax Funds’ portfolio, we have a high number of initiatives in place that reduce complexity, waste and energy consumption. These initiatives range from: reducing electricity usage via replacing traditional light bulbs to led, reducing paper usage by setting default double sided printing in all of the of ces and reducing water usage by investing in low ow xtures, auto shut off faucets and other water reducing features.

Energy And Paper

Employee Health and Well Being

Days lost due to illness is tracked by almost all companies. In 2015, 28 out of 29 companies in the ESG Group provided this information, or over 96% of the respondents. This is up from 21 companies or 80% in 2014. Across the 28 companies on average 3.4 days were lost per FTE due to illness compared to 3.5 days in 2014. Roughly 33,000 individuals chose a voluntary exit and there were c. 17,000 redundancies at year end 2015.

Health and Safety

A Health and Safety policy is in place at 24 out of the 29 portfolio companies reporting in 2015, a positive change from 2014 where 21 companies had an H&S policy. There were around 3,600 work related accidents reported across the ESG Group, a substantial decrease from the 6,100 work related accidents reported in 2014. Two companies reported a fine for health and/or safety non-compliance, relating to issues with regard to Occupational Health Certificates.

Employees

Gender balance

The ESG Group workforce by year end 2015 was equally balanced in terms of gender. Roughly 49.8% female and 50.2% male. On a like for like basis there was a 4.6% decrease in female employees and a 4% increase in male employees relative to year end 2014 but the addition of several new portfolio companies adjusted the balance of the workforce to be roughly equal.

Social impact summary

The ESG Group workforce decreased by more than a quarter in 2015 and stood at 152,000 FTE’s at year end 2015. This was due to the exits of a few large employers such as iGate, New Look and Capio; combined over 58,000 FTE’s left the ESG Group. Employee growth across companies reporting in 2014 and 2015 was constant at 0.6% or 800 FTE’s from a core group of 21 companies; 8 new companies in the portfolio brought just over 9,000 additional FTE’s to the ESG Group total.

The Apax ESG Group contains a few large employers. Two companies employ around 30,000 FTE’s and 6 companies combined account for over 69% of the overall ESG Group workforce with the remaining 31% of the workforce employed by 23 other portfolio companies.

A diversity policy is in place at two thirds of the portfolio companies and workers councils are active at 15 portfolio companies unchanged from 2014.

Examples of social impact initiatives

The Apax Funds’ portfolio companies have put in place many initiatives to make an impact on their workforce by conducting regular employee surveys, implementing improved training programmes and putting in place career development practices. In addition, the portfolio companies make an impact on the communities in which they operate through their community engagement. A few examples of each are set out below.

Socialimpact

Improved governance and policy implementation

Throughout 2015, 8 new companies were added to the Apax Funds’ portfolio and, as expected, a number of these companies did not yet have mature governance systems in place. The Apax OEP and Compliance teams are working with these companies in order to ensure that going forward they will apply best practice amongst others with regard to their codes of conduct and anti-corruption policies.

Governance

Governance summary

At Apax we realise that good corporate governance is the foundation of effective corporate management. For us, corporate governance means the application of international and national values and principles of responsible and transparent company management and control that are geared towards sustainable added value. We target full compliance with the laws and regulations of each country in which we operate, as well as with international standards. It is the necessary condition for our engagement with society. We are convinced that good corporate governance strengthens the trust placed in Apax Funds’ portfolio companies by their business partners and employees and also by Apax Funds’ institutional investors.

Robust corporate governance systems are in place across the Apax ESG group. Virtually all companies have a code of conduct and/or a code of ethics which guides their business activities. Portfolio companies that are new to Apax Funds’ or which have historically had less focus on governance are actively encouraged to adopt appropriate codes and processes.

Examples of corporate governance and supply chain improvements

Governance is a key area of focus for the Apax Funds’ portfolio companies and companies are encouraged to focus on continuous improvement of their governance practices from the start of the Apax Funds investment with a particular emphasis on anti-corruption practices and establishing robust codes of conduct. Likewise, supply chain improvements are a key focus area for portfolio companies with exposure to supply chain risk. A number of examples of improvements are outlined below

Corp Governance