Michael E. Porter, George Serafeim and Mark Kramer share “Where ESG fails” in their latest article in the Institutional Investor
Michael E. Porter, a world-renowned economist, George Serafeim, a professor at Harvard Business School and Mark Kramer, have throughout their careers brought economic theory and strategy concepts that address the most challenging problems facing many corporations and industries.
In the article “Where ESG Fails” published in the Institutional Investor 16 October 20190 the Porter, Serafeim and Kramer address new models of understanding the positive correlation between investment performance and social impact. We are proud to see that the article use Summa Equity as an example of a company that is built on the Creating Shared Value concept, which we call Private Equity 4.0.
You can read the full article here. http://bit.ly/2VZ5wFX
Below are the excerpts that mentions Summa Equity from the article.
“Summa Equity, a Scandinavian private equity fund, also begins its analysis with themes drawn from the SDGs to identify areas of investment opportunity. Within these broad themes investment teams then examine specific companies and industries in terms of both social and financial performance. The firm has developed its own framework for sourcing, investing in, and exiting companies in which the leadership of each portfolio company is responsible for measuring, managing, and reporting on the company’s social impact. This framework, Via Summa, holds management accountable for taking a hard look at the company’s competitive advantage and how it can be leveraged to create social impact through the core products and services of the company. This clarifies the firm’s strategy internally to new hires and is integral to raising new capital and sourcing new deals.”
“Generation and Summa Equity look for positive social impact that reinforces exemplary financial performance by combining a deep understanding of social issues with traditional security analysis. Yet such an integrated analysis remains rare. For far too long the vast majority of conventional investors have ignored social impact, and most SRI and ESG investors have overlooked the tools of rigorous security valuation, such as free cash flow, P/E ratios, and barriers to entry. Merely investing in the most highly rated ESG companies is no assurance of superior returns. It is the integration of social factors with the conventional economics of highly disciplined security analysis, as well as attention to both long-term competitive advantage and short-term results, that leads to superior investment performance.”