2024 BLUE BOOK

A BLUEPRINT FOR THE LONG TERM

A Blueprint for the Long Term
Since our founding, FCLTGlobal and its members have investment landscape. Through the combined efforts of
steadfastly believed in the power of long-term thinking our members, we present a curated collection of real-
to forge a future that benefits both present and future world examples that demonstrate how more capital can
generations. The journey from concept to realization be focused on the long term. Each story, each strategy
has been both challenging and rewarding, marked by within these pages, serves as a guide for companies and
a steadfast commitment to moving beyond theoretical investors towards practices that not only yield immediate
discourse towards tangible, actionable strategies. Our benefits but also secure a prosperous future for all
members, through their dedication and innovative stakeholders involved.
approaches, drive the movement towards a more It is our fervent hope that this book will serve not only
sustainable form of capitalism – one that values long- as a source of inspiration but also as a call to action.
term gains over fleeting successes. We invite readers to explore, to reflect, and to take on
Prioritizing the future is not just an option but a necessity. models of long-term decision-making that resonate from
The examples set forth by our members, and the broader the examples featured herein.
community, underscore a universal truth – that focusing This edition of the FCLTGlobal Blue Book is the latest
capital on the long term is imperative for achieving a of the many milestones on our shared journey towards
sustainable and prosperous economy that works for all a future where long-term thinking is not the exception,
who rely on it. but the norm. Our gratitude extends to everyone who
The second volume of the FCLTGlobal Blue Book is more has contributed to this project; your insights, efforts, and
than just a publication; it is a blueprint for long-term visions have been instrumental in bringing this work
decision-making in today’s complicated business and to life.

2024 BLUE BOOK

Contents

4 AON 38 Kempen
6 APG 40 KPMG
8 Baillie Gifford 41 Libery Mutual Investments
10 Bain Capital 43 Mastercard
12 Barclays 45 McKinsey & Company
14 BlackRock 46 MFS
16 Bloomberg 48 MSCI
18 Bunge 50 Nasdaq, Inc.
20 Carlyle 52 NBIM
22 Caisse de dépôt et placement 54 Nuveen
du Québec 56 ONEX
24 CPP Investments 58 OTPP
26 Dow Inc. 60 PwC
28 EY 62 Schroders
30 GIC 64 State Street
32 Goldman Sachs 66 Temasek
34 Hillhouse 68 Vista
36 IFM 70 Votorantim

2024 BLUE BOOK

AON
Gregory C. Case, Chief Executive Officer

RESILIENT HUMAN CAPITAL

At Aon, we exist to shape decisions for the better – to We are also realizing that addressing these challenges
protect and enrich the lives of people around the world. with traditional approaches is no longer enough:
As our world becomes more volatile – economically, 1. Managing programs and budgets alone is not
socially, and geopolitically – organizations and moving the dial – business leaders must use data,
individuals are under constant pressure to make advanced analytics, and technology to optimize
complex decisions, sometimes without the necessary sustained workforce impact.
facts, almost always at speed, and with a new degree
of meaning and purpose. 2. New compliance regimes like pay transparency
require urgent attention and create exciting
According to our recently-released Global Risk opportunities for transformational change.
Management Survey, the inability to attract and retain
talent now ranks as a top risk for leaders, highlighting 3. The links between wellbeing and sustainable high
the increasingly critical role of business leaders, performance is no longer theoretical with the
including people (HR) leaders, in driving interconnected emergence of new ways to measure and report on
and interdependent decisions around what enables human sustainability are emerging.
people to thrive. As a result, organizations are rapidly
OPPORTUNITIES TO ADDRESS HUMAN CAPITAL
reevaluating their workforce plans in a more holistic
Our research demonstrates that organizations are more
way by introducing new operating models, improving
interested in wellbeing than ever before, however part
location strategies, redesigning rewards and benefits
of that interest stems from the fact that access to health
programs, and exploring how new technologies like
care remains a challenge and costs are at an all-time
artificial intelligence (AI) will influence future workforce
high. For employees to be engaged, productive and
requirements – all with an increasingly personalized
successful, they need to be well. Despite evidence
and inclusive lens.
that improving employee wellbeing increases company
A NEW ERA OF THRIVING performance by between 11 and 55 percent, many
Wellbeing is top concern for employees and employers organizations are still uncertain how to capitalize on the
alike. Aon’s Global Wellbeing Survey identified that opportunity.
50 percent of global employees are resilient, which At Aon, we have developed a data-driven approach to
demonstrates significant untapped potential in talent wellbeing that integrates our Human Capital – health,
productivity and performance. Employees continue to wealth, and talent – expertise in a simple way that
express a strong desire for improved work-life balance, focuses on connected value for our clients. This
greater inclusivity, and mission-driven work. People includes a spectrum of solutions that meets clients
are also living longer, meaning both their careers and where they are:
retirement years are getting longer and retaining tenured
• Health solutions: We provide world class support
employees presents new considerations.
to employees in times of need. By using data-driven

2024 BLUE BOOK | 4

 insights we can identify specific population health learning and coaching interventions to specific needs as
risks and offer targeted and inclusive solutions for they arise, and to identify skills gaps for the future.
clients, including the connection to appropriate and We now leverage the HSI dashboard to help us meet
affordable care. This approach can reduce costs by and monitor real time challenges, such as our wellbeing
up to 24 percent and increase colleague health by response to climate disasters for affected colleagues and
10 percent or more. teams, as well as the long-term sustainability of our talent
• Wellbeing solutions: Through employee listening, and its impact on our sustainable business performance.
digital assessments, data-led strategic insights, This helps us to report on and ultimately predict what
and scalable learning solutions, we educate investments and interventions will have the greatest
colleagues, managers, and leaders on how to impact going forward.
empower themselves and their teams to thrive in To learn more about our Human Sustainability Index,
today’s world. Collectively, this approach drives visit https://www.aon.com/en/capabilities/workplace-
wellbeing, inclusion, and sustainable performance wellbeing/human-sustainability-index
and can improve individual and team wellbeing by
20 percent.
• Human Sustainability solutions: We reimagine
organizations with a human lens by integrating
our health care and wellbeing data into core
talent strategies. We visualize this via our Human
Sustainability Index (HSI) dashboard, which links
organizational HSI data with benefit, diversity,
engagement, ways of working, and performance
data to drive new insight and holistic strategies for
talent and sustainability outcomes. These solutions
are leading edge and enable organizations to
identify optimal factors that drive sustainable
performance, such as flexible working arrangements
versus compensation.

AON’S INVESTMENT IN HUMAN SUSTAINABILITY

Aon is committed to advancing our approach to
wellbeing. Since 2020, Aon has invested in innovative
ways to accelerate this mission with its own colleagues
and clients, including developing a Human Sustainability
approach. Drawing on our existing health care approach,
we designed a data strategy that would enable us to
progress over time. This meant further developing the
HSI, a tool that measures wellbeing, resilience, and
sustainability at the individual, team, and organizational
levels. HSI is now fully integrated into our early careers,
(new and existing) manager and high-performance
programs. The data enables our firm to tailor digital

2024 BLUE BOOK | 5

APG
Ronald Wuijster, Chief Executive Officer

INNOVATION THROUGH THE SUSTAINABLE DEVELOPMENT INVESTMENTS ASSET OWNER

PLATFORM (SDI AOP)

SETTING A STANDARD FOR SDG INVESTING INFORMING CAPITAL ALLOCATION BY INVESTORS

In 2020, APG Asset Management, together with According to research by the Principles for Responsible
AustralianSuper, British Columbia Investment Investment (PRI), an increasing number of global
Management Corporation (BCI), and PGGM jointly investors consider the SDGs to play a key role in
established the Sustainable Development Investments their investment strategy, policy, asset allocation, and
Asset Owner Platform (SDI AOP). This platform seeks investment decisions. They also influence how investors
to accelerate investments that deliver on the UN implement active ownership. By providing a globally
Sustainable Development Goals (SDGs) and contribute to consistent SDG methodology and assessment framework
better financial and social outcomes for end beneficiaries. the SDI AOP standard and its underlying classification
These goals, set by the UN in 2015, aim for a better, more helps investors to embed the SDG themes more
prosperous world, by addressing urgent global issues effectively into their investment processes.
such as water scarcity, healthcare access, and protecting Collaboration with other initiatives is key and the Chair of
the environment. the SDI AOP has been instrumental in the development
We have created a community of investors who promote of the Model Mandate by the International Corporate
the SDI AOP standard for investments in products or Governance Network (ICGN), and the UN supported
services that contribute to realizing the SDGs. These Global Investors for Sustainable Development (GISD)
Sustainable Development Investments (SDIs) are Alliance. Its primary purpose is to provide guidance
underpinned by a clear definition of SDI and an SDI to asset owners to ensure that their stewardship and
taxonomy. The definition and taxonomy can be applied sustainability objectives are fully reflected in their
to both public and private market investments and are agreements with the managers of their assets, and to
publicly available. The SDI AOP enables asset owners provide practical assistance to enable them to do so,
and their managers to understand and more effectively with specific reference to the SDGs.
communicate on the contribution their investments make
to sustainable value creation through the SDGs. ABILITY TO ACCOUNT FOR INVESTMENTS IN THE
SDGS TRANSPARENTLY AND CONSISTENTLY
In response to investor demand, the initiative has
For the SDI AOP, the primary focus is on companies’
expanded its offering to cover more than 10,000 capital
contribution to the SDGs through their products and
market equity and fixed income investments globally and
services (the “what”), while standard ESG assessments
across sectors. Moreover, in the last year or so, we have
typically focus on conduct (the “how”). For example:
introduced a number of innovations such as thematic
making solar panels (SDI) versus having operational
tagging on biodiversity and climate solutions, and a
policies, management systems, targets, and disclosure in
forward-looking innovation outlook.
place (ESG). This approach enables investors to monitor
and manage their global portfolios according to their

2024 BLUE BOOK | 6

contribution to the SDGs and to report to clients and
external stakeholders transparently and consistently.
It provides them with a common and auditable
standard that incorporates concrete investment
targets and examples.

DRIVING INNOVATION AND ENHANCING

THE METHODOLOGY
The SDI AOP has developed an SDI Methodology
to quantify the contribution of an investment to such
goals. This includes detailed taxonomies and guidelines,
SDI classifications, and a rating methodology. The
process uses structured and unstructured data, artificial
intelligence, and machine learning, combined with
human validation. The SDI AOP is committed to driving
innovation in the investment industry and is constantly
evolving and improving.
In response to the growing demand for customized,
sustainable index products, in 2021, APG, BlackRock, and
index provider Qontigo launched the iSTOXX APG World
Responsible Investment Indices. Philips Pensioenfonds,
Qontigo, and BlackRock also launched a customized
index (iSTOXX® PPF Responsible SDG Index) in the
same year.
A more recent addition, in late 2022, is the SDI
Innovation Outlook. This assesses the alignment of a
company’s patent portfolio with the UN SDGs, giving
a forward-looking metric on how future products and
services could contribute to the SDGS and increase
potential for higher returns. A separate section has been
added in the taxonomy to cover negative contributions
– factors that go against achieving the SDGs. In 2023, a
new overlay was introduced to help investors who prefer
to take a theme-based approach to potential investments
(biodiversity, climate change, financial inclusion, etc.)
rather than targeting individual SDGs. For 2024, the
focus will be on further developing our methodology to
effectively calculate real-world outcomes and deliver
impact, and to further structure our solution to enhance
its application and value in private markets.

2024 BLUE BOOK | 7

Baillie Gifford
Andrew Telfer, Joint Senior Partner

WHEN IS ”LONG TERM” NOT ENOUGH?

It’s probably safe to assume that the majority of readers reduced valuations of the same stocks appear to imply
of FCLTGlobal’s Blue Book are committed to the idea that that growth is a thing of the past and that companies
investing is a task that revolves around real-world capital will revert to their pre-pandemic state, as if the uptake
allocation and should be treated as a thoughtful long- of new technologies has ceased altogether. Layered on
term exercise. Actual investing involves understanding top of all that is the as-taught-in-your-finance-degree
the interaction between real-world capital deployment, mechanical application of a higher discount rate to future
productivity gains, rising living standards, and investment profits as interest rates have risen sharply.
returns. To work well it requires that multiple parties What’s wrong with this? Firstly, the over-simplified
in the investment chain (asset owners, investment extrapolation of recent history into the future on both the
managers, company management, end beneficiaries) upside and the down. The missing part of ‘long termism’
have alignment on time horizons and sufficient of late has been the acknowledgement that underlying
information to measure progress. We should never take trends matter far more than short-term boom and bust.
this for granted. Cutting through the noise, are these companies adapting
The phrase “sufficient information” is key. Proponents to changing realities? Are they making progress, whether
of efficient markets theory will tell you that the only early stage advancement of science in laboratories,
information required to measure progress is the share or next stage growth in market share and earnings?
price of a company, arguing that it represents the distilled Secondly, there’s the lack of nuance around discount
wisdom of investors, taking into account all relevant rates. Companies that offer better value than their
information. This idea is questionable at the best of times, competitors through the application of technology and
but it is a particular problem for the long-term minded business models have pricing power which they can
when long-duration growth stocks display the kind of exercise to offset the impacts of higher inflation and
volatility we have seen in the past few years. Ignoring the interest rates. This doesn’t seem to be reflected in the
short term is all but impossible in the face of share prices uniform reduction in valuations.
doubling and halving in relatively short order. What’s the takeaway? One is that communication is
key at all points of the investment chain to make sure
CHALLENGES OF LONG-TERM INVESTING IN VOLATILE
that long-termism doesn’t fall apart just when it’s most
MARKETS
needed. One of the most valuable things long-term
Ironically enough it could be argued that long-termism
investors can do is to encourage the management of
has in part been the cause of such high levels of volatility.
companies to invest for future growth even in the face
High pandemic-era valuations implicitly assumed that the
of an unappreciative short-term market.
virtual-world stocks with rocketing revenues and growth
would continue to expand in this way for a prolonged
period, as alternatives were restricted and pricing power
was strong. Fast forward three years and the much-

2024 BLUE BOOK | 8

NURTURING LONG-TERMISM THROUGH EFFECTIVE We don’t usually seek to tell the companies in which we
COMMUNICATION invest what to do – rather we invest in companies where
In the past year, our investment teams have been we think management is already strong and aligned with
spending time with the management teams of hundreds our vision. But we know that they appreciate and gain
of companies, encouraging them to keep that long-term confidence from discussions which aren’t about how
focus even as average investor horizons are as short as next quarter’s earnings are looking. Even if we don’t
they’ve ever been. Some examples of this are: always agree on everything, offering management the
freedom to think long term is a hugely valuable gift which
• A well-known innovative health company asked
ultimately benefits savers. We will keep on engaging.
us for input on the proposed methodology and
calibration of their proposed equity awards. We met
with them to discuss the challenges and importance
of setting long-term targets, and appropriate
board composition.
• We met with a chip company to discuss how they
gather insight from customer feedback and in
particular the needs of AI developers to feed into
long-term product development.
• We met with an Asian e-commerce platform to
reassure management that market concerns over
their lack of near-term profitability were misplaced.
We understand and encourage their desire to take
advantage of opportunity and that foregoing near-
term profitability will multiply future earnings.
• We met in the US with a payments processing
platform which has just switched to quarterly
reporting from six-monthly in the wake of a share
price fall. This had the hallmarks of unwelcome
short-termism, so we discussed it. In the event,
management seemed to be striking a pragmatic
balance intended to better inform investors without
being distracted from what looks to us like sensible
counter-cyclical expansion.
• We presented research to a medical device
manufacturer in which we showed untapped
opportunities for them in emerging markets,
demonstrating that their device facilitates had
considerably higher per-unit savings than in
developed markets, and why achieving market
penetration may be less complicated than it seems.
This led the firm to create a dedicated role to
address the opportunity.

2024 BLUE BOOK | 9

Bain Capital
John Connaughton, Co-Managing Partner

CATALYZING SUSTAINABILITY AND RESILIENCE

Bain Capital’s enduring commitment to lasting impact metrics for our investments to track progress. Over 80
has remained the heart of our work since our inception. percent of our Global Private Equity portfolio companies
We’ve sought to partner differently and help our portfolio have already quantified their Scope 1 and Scope 2
companies realize their long-term potential as more emissions. We are actively engaged in advancing
sustainable leaders in their industries and stronger this initiative, striving to expand Scope 3 emissions
supporters of their employees and communities. measurement and moving to develop decarbonization
Simply put, these principles are good business and goals that align with Science-Based Targets (SBTi)
result in companies that achieve long-term growth where possible.
and performance. Two of our recent private equity investments highlight our
From this foundational belief, we codified five core ESG commitment to Sustainable Growth & Reducing Climate
commitments in 2021 as priority areas where we believe Impact over the long term. We completed a significant
our impact can be both meaningful and aligned with our equity investment in EcoCeres, a leading bio-refinery
skillset, value, and experience: active governance specializing in 100 percent waste-based advanced
and stewardship; sustainable growth and reducing biofuels, in January 2023. EcoCeres is the largest
climate impact; fair employment, engagement, and renewable diesel producer in Asia and one of the only
wellbeing; diversity, equity, and inclusion; and two Sustainable Aviation Fuel (SAF) producers globally.
community engagement. The company is evaluating various forms of agricultural,
waste, and processed residue forms of feedstock to
ADDRESSING THE PRESSING NATURE OF CLIMATE further SAF production going forward. Through our
RISKS AND OPPORTUNITIES partnership, EcoCeres benefits from our deep industry
Across our firm, we are acutely aware of the immediacy experience and resources to scale and advance
and scale of global challenges, especially those related renewable fuel technologies globally.
to climate change. Climate change poses a systemic risk
Additionally, in December 2023, Bain Capital Private
to the global economy, presenting not just a strategic
Equity agreed to acquire a controlling stake in Eleda, a
and business challenge for all companies and investors,
leading Nordic infrastructure development and services
but also an opportunity for those that align their
provider. The company is the market leader within
portfolios and operations towards decarbonization.
several segments, many of which address the needs
Over the past two years, as part of our commitment to of the green transition including water and sewerage,
Sustainable Growth & Reducing Climate Impact, we power distribution, district heating, roads, data centers,
have progressed our firm-wide climate ambitions and railways, and electric vehicle charging stations. We
curated tailored pathways for decarbonization through are focused on the sustainability trends contributing to
close engagement with our portfolio companies and Eleda’s opportunities, including electrification, renewable
investments. Together, we work to ensure that climate energy, and water preservation. Through our partnership,
risks and opportunities are assessed and to curate

2024 BLUE BOOK | 10

we are excited to help drive Eleda to the next stage and future, we have a unique opportunity to grow businesses
scale the foundational infrastructure for sustained growth. for the long term, drive real value and resilience across
our investments, and help our companies become more
Climate-related considerations are critical to investment
sustainable leaders in their industries.
evaluation in our Credit and Special Situations business
units. With comprehensive diligence processes and the
incorporation of material ESG factors into our investment
decision-making framework, we diligently assess
physical and transition climate risks.
An outcome of such an approach led to our investment
in Reconomy, a next-generation provider of tech-
enabled services with a mission to serve the circular
economy. The company empowers leading global brands
to transform sustainability ambitions into competitive
advantages. Reconomy uses data and analytics to help
clients meet and achieve zero waste goals, navigate
complex regulatory policies, and create circular logistics
networks. Since 2018, Reconomy Group has helped
its clients reduce CO2 emissions by 35,000 tons and
generated £331 million in social and economic value in
over 80 countries. In 2023, Reconomy took a step further
by completing an acquisition of Combineering –
a green technology development company scaling waste
recycling and recovery solutions.
Sustainability is also fundamental to our portfolio
company Cuisine Solutions’ long-term growth. Its facility
in San Antonio, Texas was awarded the 2021 Sustainable
Plant of the Year by Engineering Food Magazine. It
has one of the largest solar installations in the city,
meticulously devised stormwater management systems,
and a water recycling program. The facility also uses
natural, non-toxic materials – like compressed earth
blocks made from subsoil, clay, and aggregate – to avoid
further disrupting its surrounding environment.

DEEPENING OUR IMPACT ACROSS PORTFOLIOS

We continuously strive to deepen our decarbonization
impact, make significant strides in our core ESG
commitments, and measure progress over time. These
progressive initiatives underscore our dedication to
responsible and impactful investment practices that we
believe will further drive value creation. As we look to the

2024 BLUE BOOK | 11

Barclays

INNOVATION OF CLIMATE TECHNOLOGIES

The International Energy Agency estimates that 35 aims to power aircraft with zero-emission engines,
percent of emissions reductions required globally and Agricarbon, an agri-tech company specialising in
by 2050 will have to come from new technologies.1 scalable, high-accuracy soil carbon measurement.
Innovative climate technologies will be needed to As climate technologies scale, they will need to harness
support the transition to renewable energy sources – the power of capital markets to obtain larger volumes of
especially in high emitting sectors, such as aviation and finance. At Barclays, we have a dedicated team, Energy
manufacturing. We believe that many of these climate Transition Group, which provides holistic and cohesive
tech companies, once scaled, will conceivably change strategic advice and financing solutions through the
the way the world operates, from how we build our energy value chain, with a particular emphasis on
homes, to our means of travel and food production. decarbonisation.
However, global progress in scaling these technologies In April 2023, Ohmium International, a leading green
is disparate as access to capital remains the largest hydrogen company that designs, manufactures and
barrier to wide-spread adoption. Funding needs to deploys advanced proton exchange membrane
increase by at least 590 percent to $4.35 trillion annually electrolyzer systems using renewable energy to produce
by 2030 to meet climate targets.2 Whilst there are pressurized high-purity green hydrogen, partnered
existing programmes helping to accelerate investment with teams across Barclays’ Corporate and Investment
into climate tech – like the US Inflation Reduction Act – Bank to help successfully close a $250 million Series
we need to see further activity on a global scale. C growth equity financing round. Barclays served as
Placement Agent to Ohmium on the capital raise. The
BARCLAYS’ SUPPORT FOR CLIMATE TECH FINANCING
funding will be used to support Ohmium’s expansion
At Barclays, we have a target to facilitate $1 trillion
to 2GW in annual manufacturing capacity and the
of Sustainable and Transition financing by 2030,
deployment of projects for the company’s growing
encompassing the long-term Green, Social, Transition
global customer pipeline in key regions. The investment
and broader Sustainable financing requirements of our
will also provide significant capital to scale Ohmium’s
customers and clients. We are focused on supporting
business, including accelerating its pioneering research
climate tech companies at every step in their lifecycle, as
and development programs to reduce the cost of green
they scale from ideation through to IPO.
hydrogen production. At that time, this transaction
As part of our Sustainable Impact Capital mandate, we was the 5th hydrogen deal in 13 months for Barclays’
aim to bridge growth stage funding gaps by investing Sustainable & Impact Banking Group, now known as the
£500 million of our own equity capital into climate tech Energy Transition Group, highlighting our deep sector
companies, helping to scale their technologies. Since knowledge across the entire hydrogen technology value
the launch in 2020, we have deployed over £100 million chain and ecosystem.
into more than 20 climate tech companies. These
At Barclays, we continue to explore opportunities for
include ZeroAvia, a hydrogen aviation company that
collaboration to unlock more capital for climate tech

2024 BLUE BOOK | 12

companies. We are clear that to build a better tomorrow,
action to scale these climate technology companies
needs to take place today.

2024 BLUE BOOK | 13

BlackRock
Mark Wiedman, Head of Global Client Business

THE LOW-CARBON TRANSITION

The heart of BlackRock’s business model is helping For those clients wanting to align their portfolios
clients invest for the long-term, through strategies with a net-zero pathway or track global temperature
ranging from retirement target date funds to growth increases, we provide whole portfolio solutions, product
equity and infrastructure. As we look ahead, the most choice, and transparency about a fund’s alignment to
capital-intensive force shaping the global economy is the sustainability metrics. And for those who want to limit
low-carbon transition: materials, production, transport, or exclude exposure to particular sectors, we offer
agriculture, and energy systems. screened funds or bespoke implementations.
In the energy system alone, BlackRock estimates that TRANSITION INVESTING FOR THE UNITED ARAB
companies’ demand for capital will soar from $2.2 trillion EMIRATES — AND BOLSTERING BLENDED FINANCE
per year today to $3.5 trillion3 per year by the end of this
At COP28 in Dubai, the United Arab Emirates’ ALTÉRRA
decade.4 The bulk will be centered on decarbonization —
climate action fund selected BlackRock as one of three
supply (oil and gas extraction and processing, renewable
initial managers for a new $30 billion investment vehicle.
power plants, electricity transmission and distribution)
We were awarded $2 billion, split between BlackRock
and demand (automobiles, factory equipment, and
private debt and infrastructure equity.
building energy equipment).
ALTÉRRA has committed $100 million to co-invest
Our clients sense this opportunity and are asking us how
alongside our blended finance fund, Climate Finance
to invest. In a survey of 200 global institutional clients
Partners (CFP). CFP is one of the world’s leading private-
that we conducted in June 2023, 56 percent said they
public partnerships for investing in decarbonization
plan to increase decarbonization investments over the
projects in emerging markets. Its blended finance
next three years, and nearly half said it was their top
structure utilizes catalytic capital, including from
priority. In the United States alone, 65 percent of clients
governments and philanthropies, to mobilize a broader
are seeking fresh investments.5
institutional fundraise and accelerate flow of capital into
To meet this need, BlackRock’s sustainable investment emerging markets. BlackRock announced a $673 million
platform offers 500+ dedicated sustainable products final close of CFP at COP26 in Glasgow in 2021. To date,
and solutions with a combined $802 billion in AUM. CFP has invested in the largest onshore wind farm in
Our transition suite offers private and public strategies Africa, an independent power producer and renewable
with $138 billion in AUM, including $20 billion in private electricity developer in the Philippines, an operator and
investments, $43 billion in liquid active, and $75 billion developer of solar PV power projects in Thailand, and
in index strategies. BlackRock has made more than a distributed solar developer and energy company in
130 private markets transition investments in over 20 Brazil – with a projected combined pipeline of 4 GW of
countries, including in emerging markets across Asia, renewable capacity.
Africa, Latin America, and the Middle East.6

2024 BLUE BOOK | 14

GROWTH EQUITY WITH DECARBONIZATION NEW ZEALAND INITIATIVE – A MODEL FOR PRIVATE
PARTNERS AND PUBLIC SECTOR COOPERATION
We entered the growth equity space in 2021 by New Zealand is one of the global leaders in climate
launching a joint venture with Temasek, the Singaporean finance and renewable energy. Over the coming years,
sovereign investor. Decarbonization Partners is a we believe there will be significant investment to bring
dedicated late venture capital and growth equity in more wind, solar, and geothermal plants, as well
platform, targeting de-risked technologies in the clean as improved transmission and storage. Last year, we
energy, electrification, and green materials spaces. It announced plans to launch a New Zealand-focused
addresses a current gap in the climate capital stack: climate infrastructure strategy, created on behalf of
scaling innovative decarbonization technologies globally. the country’s institutional clients – including the New
The Decarbonization Partners Fund I has completed Zealand government. The initiative aims to provide
six investments to date, raised over $1.3 billion from access to greater pools of capital for the New Zealand
institutional investors and is actively deploying capital. companies building the country’s renewable energy
The team has made investments in areas such as battery future. With a target raise of NZ$2 billion, it’s the largest
technology, low-carbon hydrogen, advanced mobility single-country low-carbon investment initiative we’ve
platforms, and sustainable materials. created to date. As the world looks for ways to bring
the private and public sectors together in the transition,
BROWN TO GREEN MATERIALS – A PUBLIC MARKETS BlackRock and New Zealand’s climate infrastructure
EQUITY APPROACH strategy can serve as a model.
The transition is dependent on the raw materials that
BlackRock’s low-carbon transition strategies and
undergird it – requiring substantial investment in metals
partnerships embody our fiduciary duty to our clients. By
and materials. Sourcing them is a major contributor to
nurturing innovative solutions through Decarbonization
global carbon emissions in itself. Decarbonizing how we
Partners, focusing on the ‘brown to green’ shift with
source material - and investing in materials at the core of
targeted funds, and fostering development through the
the transition, like copper - is part of the “brown to green”
New Zealand initiative, BlackRock is helping our clients
transition. In May 2021, the International Energy Agency
shape a low-carbon future.
projected that up to $450 billion investment a year would
be required for materials alone by 2050. BlackRock
evaluates companies in this space to identify firms that
are best positioned to decarbonize their operations and
have the resources and capacity to implement changes
in realistic timeframes. We brought this approach to
market through our “Brown to Green Materials Fund,”
launched in June 2023.

This material is provided for educational purposes only and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation,
offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are subject to change. All financial investments involve an
element of risk.

2024 BLUE BOOK | 15

Bloomberg
Shawn Edwards, Chief Technology Officer

PROVIDING ALTERNATIVE DATA ALONGSIDE TRADITIONAL FINANCIAL DATA BRINGS MORE

TRANSPARENCY TO THE MARKETS

Alternative data, including consumer transaction data, companies on a mere seven-day lag. This new feature
geolocation data, app usage, and web traffic has seen allows all Bloomberg Terminal clients to see alternative
an increase in investor demand over the last few years data analytics alongside traditional market data,
as firms seek to glean unique insights and generate broker research, estimates, and news for the first time,
alpha in new ways. Alternative data helps paint a higher providing Bloomberg clients with a more comprehensive
resolution picture of the impact major events may have understanding of how companies are performing across
on a company’s sales, while tracking trends in customer multiple sources of information.
engagement in near-real-time. Alternative data is all about bringing in richer data-driven
According to a report from research firm Coalition insights that help analysts and portfolio managers at
Greenwich, 44 percent of investment firms already use our clients answer questions about companies and
alt data to support portfolio construction or trading, and about what’s going on in the world with more speed and
a further 19 percent of respondents plan to start using it depth than ever before. Our strategy is about getting
over the next 12 months. Grand View Research estimates the highest-value datasets and bringing them directly
that hedge funds spent billions of dollars on this type of to the Terminal alongside existing research workflows.
data in 2022. Acquiring Bloomberg Second Measure in late 2020 was
the beginning of this strategy – that acquisition gave us
Currently, the alternative data market depends on high-
access to consumer transaction data, which is the most
cost data that only the biggest, most technical players
in-demand type of alternative data among our clients.
are able to employ. Those players have dedicated data
science teams to expertly clean the data for investment When Bloomberg acquired Second Measure, it was
use cases. a web application that deployed analytics based on
billions of credit card and debit card transactions to help
LOWERING THE BARRIER TO ENTRY THROUGH subscribers answer questions about consumer trends
TRANSPARENCY in near-real-time. By merging Second Measure’s team
Bloomberg’s goal is to lower those barriers to entry by of data scientists with Bloomberg veterans, Second
creating transparency and democratizing alternative data Measure’s startup mentality found extensive institutional
to make it accessible alongside more traditional financial support within Bloomberg. The team became something
datasets. Better data lets companies make more agile of a startup-within-a-business, moving quickly to bring
decisions in the near term and better-informed plans for ALTD <GO> to life.
the long term.
ALTD <GO> also includes data from location analytics
With that objective in mind, this year, Bloomberg leader, Placer.ai, which analyzes foot traffic data. Placer.
launched ALTD <GO>, an alternative data tool ai utilizes a privacy by design approach to incorporate
integrated into the Bloomberg Terminal that provides an data from a panel of tens of millions of mobile devices,
unprecedented look into the operating performance of

2024 BLUE BOOK | 16

applying machine learning and AI algorithms to make
estimations on visits to retail locations across the
U.S. Bloomberg plans to strategically add additional
alternative data sources based on customer demand.

THE GROWTH OF ALTD <GO> AND THE FUTURE

OF ALTERNATIVE DATA
ALTD <GO> currently provides consumer transaction data
analytics on more than over 360 public tickers, primarily
those with meaningful U.S. direct-to-consumer sales, and
the function is already seeing real-world results. There
have been strong levels of adoption from clients who
traditionally have not had access to alternative data, like
long-only asset managers and sell-side research firms.
Adoption has also increased with customers in regions
outside of the U.S.
The number of companies tracked in ALTD <GO> will
grow rapidly in the coming months, and the team has
already built infrastructure to significantly expand
the tool’s functionality — a crucial part of the initial
design process, given the number and types of
different alternative data sources Bloomberg plans to
make available on the Terminal. For example, clients
can now use Bloomberg Query Language (BQL) to
retrieve alternative datasets found in ALTD <GO>,
such as Bloomberg Second Measure and Placer.ai, for
further analysis in their own models, in Microsoft Excel
spreadsheets, or in BQuant.
And this is just the beginning of a long roadmap to bring
even more transparency to this space. Over the coming
months, Bloomberg will also provide alternative data via
different distribution mechanisms and delivery options.
For example, alternative data will soon be available as
part of Bloomberg’s Data License service.
By launching this product, we are empowering our
clients with the ability to gain faster and deeper insights
into the performance of companies and economies. The
future of investment research will be driven by data and
Bloomberg will continue to invest in innovative products
and technologies that enable our clients to make better
data-driven investment decisions.

2024 BLUE BOOK | 17

Bunge
Greg Heckman, CEO

ELIMINATING DEFORESTATION AND REDUCING EMISSIONS TO DELIVER VALUE

For companies that set long-term commitments and the Bunge Sustainable Partnership, the program helps
goals, the outcome in mind may be clear but the journey partners implement supply chain verification systems,
rarely is. That was the case in 2015 when Bunge set including satellite and farm-scale images.
its commitment to be free of deforestation and native This strategy has yielded highly promising results: At the
vegetation conversion in our value chains in 2025. It was beginning of 2023, we announced the traceability of
an ambition that would nudge us into new and uncharted over 80 percent of the soybeans acquired indirectly in
territory, but we’ve believed all along that having the areas at risk of deforestation in the Cerrado. In addition
right mix of talent, deep supplier relationships with to the Sustainable Partnership Program becoming a
farmers, and industry experience makes Bunge deliver. vital instrument toward our goal of deforestation-free
We soon realized that our non-deforestation commitment supply chains, the initiative also contributed to raising the
was part of an even bigger journey to do our part to standards of sustainability and transparency across the
decarbonize the food, feed, and fuel industries. This indirect soybean acquisition chain in Brazil, influencing
goal is now integral to our climate action plan and our the industry as a whole and promoting systemic change
long-term business growth strategy. Achieving this toward deforestation-free soy distribution in the country.
requires a company-wide effort and an investment in
expertise and resources. Establishing the industry’s CONNECTING OUR SUSTAINABILITY GOALS
most comprehensive monitoring and traceability system With increasing focus on ESG initiatives and emission
for crops across our value chains where deforestation reductions, our early investment in this long-term
is a greater risk was foundational to the success of our goal of eliminating deforestation in our supply chains
commitment and would unlock significant opportunities positioned Bunge to respond to stakeholder concerns
in the lower carbon solutions market while strengthening and investment priorities in a comprehensive, highly
our relationship with key producers around the world. impactful way.

We also knew our commitment would not be achieved Progress toward our commitment also set the stage for
solely within the walls of Bunge, so we engaged in more our science-based targets (SBTs) in 2021. These targets
robust outreach and support to farmers who would be are among the most ambitious in our sector and were
impacted by our decisions. We worked with our industry a natural next step in Bunge’s climate journey. They
peers and our customers to align our approaches demonstrate Bunge’s overall commitment to reduce
so we could achieve sector-wide success. Along our greenhouse gas emissions throughout our operations.
journey, we learned that seemingly small actions could Meeting our SBTs is a foundational part of our business
achieve major results. In 2021, Bunge launched an strategy. By meeting our pre-existing non-deforestation
unprecedented initiative in Brazil’s important Cerrado commitment, we will be on track to achieve our Scope
biome to share best practices with grain dealers, with 3 target.
the intention of gaining traceability and monitoring These efforts not only help to make our business more
capabilities into our indirect supply chain. Known as sustainable, but they also help our customers – including

2024 BLUE BOOK | 18

many of the world’s leading food companies – achieve engagement with sustainability-focused initiatives,
their commitments as well. What’s more, our ability to including the Soft Commodities Forum (SCF), which
provide deforestation-free solutions to our customers enables collaboration between agribusiness to identify
enables us to help shape industry-wide solutions to solutions to eliminate soy-driven deforestation and
common land use challenges. native vegetation conversion, as well as the Amazon
Soybean Moratorium, a globally recognized voluntary
ENGAGING FARMERS AND STAKEHOLDERS commitment prohibiting the purchase of soybeans from
Our ability to robustly monitor and trace our crops across designated areas.
the supply chain would not be successful without strong
partnerships with farmers. Bunge is steadfast in ensuring BUSINESS PROGRESS AND FUTURE VISION
farmers are equipped and rewarded for the essential role The journey we started on nearly a decade ago was high
they play in conserving forests and native vegetation. in ambition and risk, but the long-term approach was
Our relationships with farmers are built on trust and, executed well and has delivered significant opportunities.
over time, we’ve become partners in achieving our Together, our non-deforestation and SBT commitments
non-deforestation commitment. We have also provided have strategically positioned Bunge to be the preferred
resources to support farmers as they expand over partner for reducing carbon in food, feed, and fuel supply
previously cleared land. chains. Bunge’s unique expertise and scale within the
industry has allowed us to take risks and make an impact,
• In 2018, Bunge joined The Nature Conservancy
resulting in meaningful real-world results for both the
and a coalition of over 15 other companies, NGOs,
climate transition and our shareholders.
and government entities to launch Agroideal.
org, a free, online tool allowing users to integrate
agronomic, environmental, and social data to make
better decisions about how to sustainably expand
agriculture production.
• A mobile app in Brazil, Agroapp Bunge, serves as a
hub of information and tools to support sustainable
production, in addition to offering farmers easy
access to the data of the Rural Environmental
Registry of their farms.
• Through Abiove, we support AgroPlus, a program
that provides training, supporting materials and
technical assistance to participating farmers
in Brazil.
• Beyond our own monitoring, we offer public
resources including an anonymous hotline for
stakeholders to raise concerns about land use
changes in our supply chain.
We take an active role in some of the most important
networks and associations to align best practices
for traceability, reporting, certification, and carbon
accounting. We offer industry insight through

2024 BLUE BOOK | 19

Carlyle

ENERGY TRANSITION IN ACTION

Pursuing the energy transition requires managing the to understand risks and potential value creation
intersecting forces of energy availability, energy security opportunities related to their carbon footprint, and
and energy access – while simultaneously looking to then design and execute related decarbonization
decarbonize our energy systems. strategies that we believe drive financial performance.
We recognize that companies across all sectors of the
As the world looks to transition our energy systems over
economy have a crucial role to play in decarbonizing,
the coming decades, at Carlyle we believe investment
in order to remain competitive in the global economy.
opportunities will not represent a simple binary between
Hence, we are focused on providing the capital,
“green” and “brown” businesses, but instead a complex
expertise, and time to help global portfolio companies
interplay of our global economy and energy systems that
on this journey. This is why in 2022, Carlyle announced
will demand tremendous amounts of capital.
a goal to achieve Net Zero greenhouse gas (GHG)
To this end, at Carlyle, we leverage our global investment emissions by 2050 or sooner across Direct Global
platform to accelerate the energy transition by investing Private Equity and Global Credit investments, with two
across the full suite of electrons and molecules that near-term goals:
make up our energy systems. Through our Renewable
1. 75% of Carlyle’s in-scope portfolio companies’
and Sustainable Energy platform, we seek to increase
Scopes 1 and 2 emissions will be covered by Paris-
the amount of new renewable energy generation
aligned climate goals by 2025; and
capacity, along with grid-stabilizing technologies such
as storage and bi-directional charging; through our 2. Beginning in 2025, all new direct, majority-owned
Corporate Private Equity platform, we support transition Corporate Private Equity, Energy and Power portfolio
enablers, such as industrial opportunities manufacturing companies will set Paris-Aligned climate goals within
components needed for renewable energy development; two years of ownership.
and through our International Energy platform we invest Since setting the goal , 22 Carlyle portfolio companies
in businesses that we believe have potential opportunity have set Paris-aligned climate goals, and many more
for value creation through decarbonization, for example taking first steps to measure, report, and understand
through “gray-to-green” transformation of downstream their emissions.
oil & gas players to lower-carbon businesses. In our
Global Credit platform, we lend to companies in the AN EXAMPLE OF BALANCING ENERGY TRANSITION
energy transition value chain and support certain of our AND ENERGY SECURITY
borrowers with decarbonization activities. VARO is a leading European energy company that
manufactures, stores, and distributes conventional
THE CARLYLE CLIMATE GOALS
fuels and sustainable energies and services. Given its
Given that the energy transition touches almost scale, we believe VARO can play a key role in facilitating
every sector and geography, Carlyle teams seek to Europe’s energy transition. In 2013, a fund managed
assist certain portfolio companies across the globe by Carlyle acquired the company alongside the Vitol

2024 BLUE BOOK | 20

Group. Since then, both teams have worked closely with Engine 1 consists of manufacturing, storage, trading,
management to develop and implement a transformation marketing, and distribution. This segment’s priority is
strategy designed to capture opportunities associated to operate safely and reliably, reduce carbon emissions
with the energy transition, “future-proof” the company, and intensity, and provide the energy security that is
and respond to the needs of employees, customers, and essential for customers.
governments. VARO aims to be the energy transition Engine 2 consists of strategic growth pillars that VARO
partner of choice for reliable, accessible, and sustainable believes have the most attractive low-carbon growth
energy solutions, and is positioned to empower potential while also capitalizing on VARO’s core
customers to pursue their own decarbonization efforts. strengths. These pillars include:
VARO is playing its own part in this effort, with a goal to
achieve net zero emissions by 2040, in part through: • Biofuels: VARO seeks to become an integrated
producer of 2G advanced biofuels, including
• Expanding CAPEX investments to USD $3.5 billion Sustainable Aviation Fuel (SAF). The company is
between 2022 and 2026—with at least two-thirds targeting Biofuel production of more than 250,000
invested in biofuels, biomethane and bio-liquefied metric tons per year by 2026 with a long-term goal
natural gas (bioLNG), hydrogen, e-mobility and of more than 500,000 metric tons per year.
carbon removals;
• Biomethane & LNG: Aiming to be a leading producer
• Targeting to have 50% of group EBITDA come from of biomethane and bio-LNG to play a role in
the Sustainable Energies business by 2026; decarbonizing industrial and road transport sectors.
• Setting a near-term reduction goal of 40% absolute VARO plans to double the current facility capacity
reduction of Scope 1 and Scope 2 greenhouse gas from 300 GWh to 650 GWh by 2026.
emissions by 2030 and 15% reduction in Scope 3 • Hydrogen: Utilizing its position as a hydrogen
greenhouse gas emissions intensity by 2030, each consumer to develop hydrogen production hubs.
against a 2022 baseline.
Carlyle continues to work closely with VARO’s
With these ambitions in mind, the company announced management to support the implementation of this
its ONE VARO Transformation strategy in 2022, laying strategy and the advancement of its ambitious ESG
out its path to provide customers the sustainable and agenda along key pillars including leadership and
reliable energy solutions needed to reach net zero. governance, partnerships, and motivated employees.
VARO’s “twin engine” strategy balances both energy In a changing world, VARO believes that reorienting
security and energy transition requirements for multiple the company into the high growth, low-carbon sector
segments of its customers’ businesses. Here, “Engine will generate EBITDA growth, and place VARO at the
1” represents the Conventional Energies business forefront of the energy transition.
while “Engine 2” refers to VARO’s Sustainable Energies
business. In order to help accelerate progress on this
strategy, Carlyle worked alongside the VARO team to
serve as a thought partner in the overall construction of
the strategy. Carlyle also helped to recruit their current
CEO, Dev Sanyal, who has a demonstrated track record
in this work from his previous role as EVP of Gas and Low
Carbon Energy at BP.

2024 BLUE BOOK | 21

Caisse de dépôt et placement
du Québec
Charles Emond, President & Chief Executive Officer

INVESTING IS NO LONGER LIKE RUNNING A MARATHON

For decades, pension funds around the world were investment landscape can feel like competing in a
perceived as reliably boring institutions. Using the decathlon, where an ever-greater range of abilities and
same playbook, they rarely captured the spotlight. Few disciplines is required to achieve success.
among the public gave much thought to how these funds The pension industry needs a new, relevant, and
invested their money, as long as they delivered the consistent decision-making framework that is guided
desired returns. by key principles but also flexible enough to adapt to
But times have changed. a dynamic global environment. This framework should
encourage ambition for the future – forcing action and
Fifteen years ago, geopolitical discussions were not front
addressing our biggest challenges – while ultimately
and center. Today, they’re held everywhere – from the
delivering returns.
newsroom to the boardroom. Similarly, climate change
was accepted as a real but relatively distant peril. Today, And a crucial element of a new playbook, in my view,
it’s an undeniable concern. Cybersecurity was barely is the necessity to put our long-term capital to work in
– if at all – on the agenda. Today, it’s a serious and building the world we want to offer to future generations.
omnipresent risk. And all the while, the pension industry To be part of the solution.
has become subject to increased interest, pressure,
and scrutiny. REMEMBERING WHO WE INVEST FOR
The focus on Environmental, Social and Governance
A growing number of engaged stakeholders have
(ESG) factors is not a fad. Nor does it run counter to
emerged – with governments viewing pension funds
the fiduciary duties of a pension fund. At CDPQ, we
as potential partners in building critical infrastructure
are taking concrete actions. We now have one of the
and keeping their economies competitive. Interest
world’s largest portfolios of assets in renewable energy
groups attempt to leverage these funds to advance their
generation, and we are supporting companies from
agendas, and the broader public has become more
the highest-emitting sectors through our $10-billion
interested in (and, in some cases, critical of) how and
envelope dedicated to the climate transition. We are
where pension funds invest their holdings.
also one of the few investors in the world who have
A NEW PLAYBOOK FOR A NEW ERA committed to review our portfolio based on the minimum
tax rate recommended by the OECD and supported by
The playbook for pension funds needs to evolve
the G20.
because the game has fundamentally changed. Pension
investing used to draw parallels with running a marathon. To be successful over the long term, we must identify the
It demanded skill and stamina – but the parameters right actions to make a difference, display courage not
were clear and straightforward. Today, navigating the arrogance, innovate in the face of greater

2024 BLUE BOOK | 22

ambiguity, and determine the optimal speed to
drive change.
As pension funds, we must always remember our
purpose. Our responsibility to the people who entrust us
with their savings should lead us to achieve sustainable
performance. To deliver both performance and progress.
There is no doubt in my mind that we can aspire to do
well for our clients while also doing good for the world.
This is our opportunity to show leadership in confronting
global issues as we carry out our vital mission.
Three decades from now, when the new generation
asks, “Where were you when you could have made a
difference?”, I know what answer I want for CDPQ.

2024 BLUE BOOK | 23

CPP Investments
John Graham, President & CEO

INVESTING FOR THE LONG TERM BY ENABLING A WHOLE ECONOMY TRANSITION

CPP Investments is a global investor with a driving In 2023, we implemented our DIA on more than ten
purpose: to contribute to retirement security for companies in our portfolio, spanning the real estate,
generations of Canadians. We know that successfully infrastructure, agriculture, energy, and tourism sectors.
investing for the future requires skillful risk management We partnered with portfolio companies to help them
and a scalable approach to uncovering opportunities. reduce emissions from their operations, deepen our
Today, there are more factors to consider when understanding of sector-specific decarbonization
deploying capital than ever before. One of those levers, and enable ourselves to create decarbonization
many factors is sustainability. We carefully consider playbooks for a broad range of sectors while creating
business-related sustainability factors at every stage of long-term value. The CPP Investments Insights Institute
the investment process to maximize opportunities and recently published the Road to Zero: Decarbonization
mitigate risks. Investment Approach Progress Report. The report
provides details on our DIA, including how we chose
REDUCING EMISSIONS AND BUILDING VALUE IN OUR the initial cohort of companies, as well as early insights
PORTFOLIO THROUGH OUR DECARBONIZATION from our ongoing efforts to decarbonize our portfolio at
INVESTMENT APPROACH scale. We do this by supporting portfolio companies as
CPP Investments has committed our portfolio and they define their climate ambitions and explore the best
operations to be net zero of greenhouse gas emissions decarbonization pathways to achieve those goals. The
across all scopes by 2050. A company’s ability to DIA offers a rigorous and structured three-step process
navigate the transition to net zero has an enormous to yield comparable results that can be refined by
impact on its future value. Recognizing this, a key part sector. This process includes establishing the company’s
of our net-zero commitment is our Decarbonization emissions baseline and trajectory, assessing the current
Investment Approach (DIA), which we introduced in and projected abatement capacity, and defining a
December 2021 to seek attractive returns from assisting bespoke decarbonization action plan.
business transformations in high-emitting sectors.
Our DIA is rooted in our belief that the only way to EARLY LEARNINGS FROM OUR DECARBONIZATION
comprehensively decarbonize the real economy is to INVESTMENT APPROACH
empower capital market participants to finance emissions Our learnings confirmed that while companies in
reductions. While we may choose not to invest in similar sectors and geographies may share similar
particular companies on a case-by-case basis, we will emissions drivers, there is no such thing as a “one-
not engage in blanket divestment that excludes investing size-fits-all” decarbonization action plan. Furthermore,
in entire sectors of the economy – especially when those decarbonization requires a full-company transformation –
sectors need more help transitioning, not less. Blanket both top-down engagement, from the board and C-suite,
divestment also risks missing out on potential returns as as well as involvement across multiple departments
these sectors adjust in response to regulation, economic such as finance, procurement, operations, and facilities.
incentives, and shareholder engagement. Similarly, in order to ensure decarbonization plans

2024 BLUE BOOK | 24

are integrated into the company’s business plans, it carbon and associated permitting that is required for
is important to make them actionable by formulating the technology to be deployed at scale.
metrics to track progress and results. Integrating sustainability considerations into all phases
While all the companies in our initial cohort uncovered of the investment life cycle is fundamental to CPP
interventions that could quickly reduce emissions, their Investments’ commitment to reducing emissions in our
decarbonization opportunities differ considerably in portfolio and creating long-term value for contributors
terms of feasibility and cost, based on their individual and beneficiaries. Based on our efforts to date, we
circumstances. At a macro-level, however, clear insights believe that our Decarbonization Investment Approach
emerged about the decarbonization opportunities and can strengthen and accelerate our ability to meet
barriers companies face: that commitment.
• Efficiency is always the most economic
decarbonization lever and provides breathing room
to develop the final transition plan while engaging
the entire employee base in the company’s
decarbonization efforts;
• Companies can take scope 2 emissions reduction
in their own hands. As global efforts to decarbonize
grids are underway, the use of off-site offtake
agreements, such as power purchase agreements
(PPAs), serve as a strong near-term solution for
emissions reductions;
• In instances where technology maturity and/or
costs of low-carbon solutions are unfavorable
but quickly evolving, bridge solutions should be
explored to buy time as new technology improves.
Examples such as drop-in biofuels, purchase of
bio-gas, and in some cases, extension of the useful
life of equipment can provide a sufficient time
buffer until new low-carbon equipment becomes
commercially available; and
• Uncertainty around solutions goes deeper than
technical maturity. While many companies highlight
the technical challenges of certain decarbonization
solutions, e.g. carbon capture, utilization, and
storage (CCUS) and Green H2, there are also
several supply-chain dynamics that place additional
uncertainty on their adoption. For example, while
the technology for CCUS is still evolving, there is
uncertainty around storage and usage of captured

2024 BLUE BOOK | 25

Dow Inc.
Jim Fitterling, Chair & CEO

DOW’S APPROACH TO BUILDING A SUSTAINABLE CIRCULAR ECONOMY

At Dow, our ambition is to become the most innovative, Decarbonize and Grow strategy includes implementing
customer-centric, inclusive, and sustainable materials a phased, site-by-site approach to replace end-of-life
science company in the world. To achieve this vision assets with lower-emissions, lower-CapEx intensity,
requires a combination of near-term adaptability and larger-capacity operations, all while targeting return
long-term strategic decision making. Since its separation on invested capital at or above 13 percent over the
from DowDuPont in 2019, Dow has made significant economic cycle. We have a clear path to a 30 percent
progress in advancing its ambition, supported by a reduction in Scope 1 and 2 emissions by 2030 over the
long-term mindset that is reflected in everything we 2005 baseline and achieving net-zero by 2050.
do. This approach has ensured Dow’s business remains
resilient across the economic cycle, delivering top- DEVELOPING THE WORLD’S FIRST NET-ZERO SCOPE
quartile cash flow, cost performance, net debt reduction 1 AND 2 EMISSIONS ETHYLENE CRACKER AND
and shareholder remuneration, all while advancing our DERIVATIVES COMPLEX THAT WILL DECARBONIZE
Decarbonize and Grow as well as Transform the 20% OF DOW’S WORLDWIDE ETHYLENE CAPACITY
Waste strategies. Notably, we are developing the world’s first net-
zero Scope 1 and 2 emissions ethylene cracker and
A DIFFERENTIATED PORTFOLIO WELL-POSITIONED TO derivatives complex in Fort Saskatchewan, Alberta.
MEET CUSTOMER NEEDS The project will decarbonize ~20 percent of our global
In an industry positioned to solve many of the world’s ethylene capacity while more than tripling the ethylene
toughest challenges, there are several growth drivers and downstream derivative capacity at the site as it
that are increasing demand for our products, including delivers ~$1 billion in EBITDA growth by 2030. This
connectivity, efficiency, and sustainability. Dow’s global key investment allows us to meet the increasing needs
scale, leadership in materials science, and alignment to of our customers and brand owners seeking to lower
attractive market verticals enable us to capture growth the carbon footprint of their products. Our disciplined
across these trends while also remaining resilient. approach positions us well to lead the industry in
decarbonizing, growing, and accelerating our path
PLAN TO ACHIEVE A NET-ZERO EMISSIONS FUTURE toward carbon neutrality.
WHILE GROWING EARNINGS
Sustainability is a significant growth opportunity for Dow. ACCELERATING THE DEVELOPMENT OF A
In 2021, we announced a disciplined plan to continue CIRCULAR ECONOMY THROUGH A CAPITAL-
delivering value growth while achieving a net-zero EFFICIENT APPROACH
emissions future. We expect to increase underlying Innovating circular and sustainable solutions also
EBITDA by more than $2 billion through the execution remains a key aspect of our strategy. In October 2022,
of higher-return, lower-risk, faster-payback projects we accelerated our sustainability targets originally set
by mid-decade and another $1 billion from our Fort in 2020 with a new commitment to commercialize 3
Saskatchewan, Alberta Path2Zero project by 2030. Our million metric tons of circular and renewable solutions

2024 BLUE BOOK | 26

annually by 2030, which is expected to result in more and unlock new avenues of growth that will power our
than $500 million in incremental EBITDA by 2030. To success for the future.
reach our target, we have a robust pipeline of strategic
partnerships with leaders across the value chain
to enable and scale waste transformation through
mechanical recycling, advanced recycling, and bio-
based solutions. This allows us to enable a more circular
economy by serving as a major off-taker of circular
feedstocks, with a capital-light approach for Dow. For
example, we are partnering with Mura Technology to
construct multiple world-scale advanced recycling
feedstock facilities in the U.S. and Europe, as well as with
Valoregen to build the largest single hybrid recycling
site in France. When you combine this circularity target
with the additional capacity from our Alberta project, we
expect our circular, renewable, and scope 1 and 2 zero-
CO2 emissions capacity will comprise over 50 percent of
our global polyethylene capacity by 2030.

COMMITMENT TO DELIVERING LONG-TERM VALUE

FOR ALL STAKEHOLDERS
We are committed to protecting the planet as we
decarbonize our footprint and leverage our climate
adaptation approach to stewarding water, bio-diversity
and nature in our operations. We are advancing circular,
renewable, and low-carbon products and technologies in
collaboration with our partners. We continue cultivating
an inclusive team and thriving communities as a
responsible and invested employer and neighbor. All
this is supported by driving strong governance practices
and performance. Consistent with our longstanding
commitment to transparency and accountability, we’ve
set clear goals against which to measure our progress
as outlined in our annual INtersections Progress Report.
Notably, we’ve maintained our clear link to pay-for-
performance by adding a quantifiable greenhouse gas
emissions reduction metric to our long-term incentive
compensation program.
By working at the intersections of science and
sustainability, culture and accountability, Dow is
partnering with others to encourage new thinking,
advance issues that matter most to our stakeholders,

2024 BLUE BOOK | 27

EY
Carmine Di Sibio, Global Chairman & CEO

MEASURING WHAT MATTERS: SUSTAINING FOCUS ON LONG-TERM VALUE CREATION

In a world that’s changing faster than ever, the EY International Business Council (WEF-IBC) Stakeholder
purpose building a better working world has been a Metrics – a two-plus year collaboration between WEF,
guide, providing meaning for the work we do every day. the Bank of America, and the Big Four. Forming and
This purpose has been an integral part of NextWave, adhering to long-term strategies requires consistent,
the EY global ambition and strategy to create long-term comparable, and robust measurement. Both initiatives
value for EY people, clients, and society. It’s remarkable were focused on the difficult task of maturing the non-
to see how far the business community has come over financial reporting space and were designed to provide
the last decade in accepting that a focus on the long- steppingstones to standardization.
term and the creation of stakeholder value are the pillars The SMI also recognized the transformation of EY itself.
of a stable, financially stable organization. The next NextWave was established in 2019 to create long-term
phase will see mandatory requirements from regulation value for EY stakeholders and communities. The strategy
and governments – ratcheting up long-term value on the was based on the long-term value framework developed
Boardroom agenda. But where to start? in EPIC, and in 2021 it was expanded to include the
WEF-IBC Metrics. The EY Global Executive, the most
WALKING THE TALK
senior body in EY, also established a new Non-Financial
FCLTGlobal’s research has shown when organizations
Reporting Hub to collect, monitor and report global EY
“walk the talk” they generate higher returns, deliver higher
sustainability and long-term value performance, both
sales growth and are more likely to invest in research
internally and externally. And each year since 2021, we
and development, among other stakeholder benefits.
have matured EY reporting and honed our processes.
While we are a sample of one, we’ve had five years to
put our focus on long-term value into practice. And, over As we get better, we help EY clients get better. We
that time, we have achieved significant progress across recently helped a consumer packaged goods company
a range of metrics from carbon reduction and employee integrate their sustainability ambition across the
training to diversity and serving the communities in which company, supply chain, and disclosures. We helped a
we operate. These efforts have led to an incredible 43 global consumer company decarbonize their logistics
percent increase in global revenues since 2019. strategy through a data-driven roadmap; now projected
to reduce 92 percent of emissions in the logistics chain
At COP28, the Sustainable Markets Initiative (SMI)
by 2025 and maintain their market-leading position. We
awarded EY the “2023 Terra Carta Seal” for sustained
expect to see steady demand for these services as these
efforts to further non-financial reporting with clients,
objectives are increasingly prioritized.
international bodies, business leaders, and other like-
minded entities. The EY participation in two external MOVING FROM AMBITION TO ACTION
initiatives was specifically recognized: the Embankment Stakeholders are looking for action. The voluntary
Project for Inclusive Capitalism (EPIC) – a collaboration disclosures thus far have not only been welcome but
of 30+ organizations – and the World Economic Forum’s have whet the appetite for more. As disclosures move

2024 BLUE BOOK | 28

from voluntary to mandatory, reporting may be seen as
yet another challenge, but it’s also an opportunity to
build more trust with stakeholders. So, what have
we learned?
While many businesses have set long-term goals, many
more struggle to implement them. Rather than delay
and debate the complexity of a perfect plan, companies
need to show they are acting now. Collaboration will be
essential to achieving the changes we want to see. We
learned this in our work with EPIC and WEF IBC – which
involved well over 100 organizations. Collaboration
always brings diverse ideas, better solutions, greater
impact, and higher success rates. It’s important to
discuss shared challenges with each other, and
with regulators.
Systems change will no doubt generate push-back, but
sustainable, long-term growth requires a sustainable,
long-term focus. That won’t change.

SUSTAINING FOCUS
Many know the power of placing long-term value
creation at the center of a company’s purpose and
strategy. But remaining focused while also combatting
the basic day-to-day and the fundamental market,
technological and geopolitical challenges makes this all
the more challenging. Yet, that is exactly when it’s most
useful – as the lens through which leaders can
determine priorities.
For EY, the focus on long-term value – and how we
measure it – will evolve and continue as we seek to
support the further convergence and optimization of
non-financial reporting standards; deliver increased
transparency and maturity in our reporting; and help
organizations design, operationalize, and ease non-
financial reporting looking to new technology and
data collection methods.

2024 BLUE BOOK | 29

GIC
Lim Chow Kiat, Chief Executive Officer

A COMMITMENT TO LONG-TERM CAPITAL & PARTNERSHIPS

As Singapore’s sovereign wealth fund, GIC is infrastructure has become a significant part of GIC’s total
responsible for safeguarding and enhancing the portfolio, with investments in companies that deliver
international purchasing power of the reserves under critical services such as airports, seaports, electricity
our management over the long term. We can only utilities, renewable energy generation, fibre networks,
fulfill this mandate with the help of our many partners, telecommunication towers, and others.
including external fund managers, peer investors,
investee companies, service providers, and community LIFE-CYCLE COLLABORATION
organisations such as FCLTGlobal. GIC believes that Our long investment horizon offers greater certainty to
deploying long-term capital and embracing global our partners to commit to innovative ventures which may
partnerships are key strategies for both earning good, take time to see results. The willingness and ability of
risk-adjusted returns and contributing to a better future. long-term capital to support a company’s growth over
an extended period, along with the trusted partnership
PARTNERSHIPS BUILT ON A LONG-TERM between investors and investees, equip companies
COMMITMENT with the confidence to continue developing across
Our partnership approach is characterised by a long-term cycles. GIC’s investment in a sanitation company in
mindset that prioritises collaboration over transactions, South America exemplifies how local communities can
right from the start. Despite continued volatility in the benefit from long-term capital. For over a decade, GIC’s
economic landscape, we believe that investing is not a investment has helped the firm expand its coverage of
zero-sum game and that there are ample opportunities clean water and proper sewage services from 2 to 31
for investors and businesses to co-create value and million people and create employment opportunities
generate returns, even in highly fragmented markets. GIC for vulnerable communities. These efforts contributed
adopts a mindset of being fair, friendly, and firm with all to restoring the environment by reducing raw sewage
of our partners. It’s an approach we take seriously, apply discharges and reducing hospital admissions for water-
across all geographies and asset classes, and hope to borne diseases by 80 percent.
pass down from generation to generation. Long-term capital can likewise be crucial to catalyse
Infrastructure investments offer a prime example of how innovation in the early days of a company’s life cycle.
long-term capital and partnerships can contribute to For example, GIC’s investment in a US firm developing
supporting economies, while also bringing measurable a multi-day energy storage solution is helping to
benefits to an investor’s portfolio. Infrastructure accelerate the transition to a cleaner, more reliable,
businesses require consistent, long-term investments and cost-effective grid. Although long-duration energy
to serve their communities effectively. They also rely storage might be a relatively new area of innovation, it
on committed partnerships with financial backers and is critical in addressing the intermittency of renewable
governments to address challenges and keep essential power generation, potential grid outages, and extreme
services functioning well. Over more than a decade, weather events. By building its first manufacturing facility

2024 BLUE BOOK | 30

on the site of a former steel mill, the company is also rather than simply divesting, can be more effective to
taking a significant step towards transforming a former accelerate the decarbonisation of the real economy.
coalmining and steel-producing community into a clean Providing long-term capital can deliver super-charged
energy hub. growth, particularly when it addresses the challenges
posed by emerging mega-trends. However, deploying
RELIABLE AND RESPONSIVE CO-INVESTOR
long-term capital well requires global partnerships,
Having a long history of co-investing with select external
including governments, external fund managers, peer
managers and direct investing capability positions
investors, investee companies, service providers, and
us well to respond to co-investment opportunities,
community organisations. By expanding our investment
especially across real estate, private equity, credit, and
universe, widening our perspectives, and leveraging
infrastructure. Typically, our partners source attractive
each other’s unique capabilities, these partnerships
opportunities via their own networks, with us supporting
enable us to generate good, risk-adjusted returns, while
part of the required capital through responsive due
solving complex issues and investing in the foundations
diligence, clarity of decisions, fair terms, and additional
of a better tomorrow.
research. In recent years, we have extended more co-
investing invitations to our partners, thus expanding the
opportunity set further.

SYNERGIES THROUGH MULTI-FACETED INVESTMENT

PARTNERSHIPS
We prefer to do more with long-time partners both
in size and dimensions. For example, we may have
multiple asset-class exposures to the same external
manager, while for investee companies, we can be
their shareholder, bondholder, and even landlord or
joint-venture partner. Such partnerships are often
strengthened through varied collaborations tapping the
full scope of our organisations’ talents and resources.

CONSTRUCTIVE ENGAGEMENT
Long-term capital also supports companies in making
deep transformations, including the transition to more
sustainable business practices, which will affect the
longer-term prospects of assets and companies. We do
this in a way that recognises the respective dynamics of
the markets that they operate in, rather than imposing
a “one-size-fits-all” approach. For instance, GIC’s
investment in a US utility firm has enabled the company
to start transitioning its power generation fleet towards
cleaner fuel sources, with the goal of retiring all coal-fired
power assets by 2035. It’s an example of how investing
in the responsible retirement of carbon-intensive assets,

2024 BLUE BOOK | 31

Goldman Sachs

BLOOMBERG PHILANTHROPIES AND GOLDMAN SACHS CATALYZE ~$500 MILLION OF INVESTMENT

IN THE CLEAN ENERGY TRANSITION IN SOUTH AND SOUTHEAST ASIA

Despite growth in recent years, global climate finance power, grant capital, industry knowledge, and in-region
flows continue to fall short of demand. In 2021-2022, expertise, we could expand our efforts, scale rapidly,
average climate finance flows reached nearly $1.3 and help close the gap more efficiently. Our distinctive
trillion — nearly double 2019-2020 levels, but well below fund structure leveraged various finance mechanisms to
the roughly $4.5-$5 trillion estimated need.7 The gap mobilize capital through the targeted use of concessional
is notably acute in Asia, where local economies remain financing such as performance-based incentives, capital
heavily dependent on public-sector financing and where expenditure grants, contingent guarantees or reserves.10
clean energy investment is not yet at scale — particularly The following projects focused on clean energy,
in India and Vietnam, given their enabling environment sustainable transport, energy efficiency, and adaptation
and urgent need for carbon emissions reductions to meet activities to help improve the climate resilience of both
country-specific climate goals. In India, for example, the livelihoods and infrastructure. Each was catalytic in
power sector may need about $650 billion in additional nature within its regional context and is poised to have a
financing to reach its 450 GW renewable energy target.8 lasting demonstration effect.11
While private capital is beginning to mobilize and help
emerging markets make progress on decarbonization VinFast: Provided a milestone-based grant that
goals, the public and private sectors must continue to mobilized ~44x (44 times more than the grant amount) of
work collectively to drive scale and commerciality of low- investment capital to support Vietnam’s leading electric
carbon solutions. vehicle manufacturer in its supply of electric buses and
supporting charging infrastructure; ultimately being the
To help drive more capital, Goldman Sachs and country’s first fully electric
Bloomberg Philanthropies partnered to seed $25 million public bus fleet and first national electric vehicle
in grant capital and launch the Climate Innovation & charging network.
Development Fund (“the Fund” or “CIDF”), which was
structured as a blended finance facility9 and is managed Green Cell: Mobilized ~14x CIDF’s capital to partially fund
by the Asian Development Bank (ADB). The Fund’s goal an integrated battery energy storage system and off-site
was twofold: 1) increase the pace, scale, and ambition solar electricity arrangement for an electric bus fleet in
of climate solutions and 2) help transition to a low- India. This combination allows a portion of the bus fleet
carbon economy. The Fund was focused on catalyzing to be 100% powered by renewable energy, which may
investment in low-carbon technologies across South not have been economically
and Southeast Asia. The seed money has since helped viable otherwise.
unlock ~$500 million in private-sector and government AC Energy: Mobilized ~31x of investment capital to
investments. support an 88-megawatt windfarm in Vietnam with
Combining our respective strengths uniquely positioned environmental and social-related safeguards and
the CIDF for success. By leveraging our convening enhancements. The grant will de-risk the wind farm’s

2024 BLUE BOOK | 32

project finance through the provision of a revenue Proof-of-Concept: Blended finance aids in proving
reserve facility, which disburses funds when operations the concept for innovative technologies and
are curtailed due to environmental and social safeguards. commercial viability.
Australis Greener Grazing: Provided a matched, Project Selection and Visibility: Rigorous project
milestone and activity-based grant that mobilized selection helps address the challenges of prioritizing
~14x of investment capital to support the development which opportunities to pursue.
of seaweed as an agricultural feed supplement for Innovative Financing: Innovative finance mechanisms
innovative carbon abatement in Vietnam. improve commercial viability.
Tata Power: Provided a grant, mobilizing ~22x of Regional Focus: Tailoring funds to specific regions can
investment capital, to partially fund the purchase maximize impact.
and integration of South Asia’s first 10-megawatthour
grid-scaled energy storage project integrated into an For more information and key takeaways, explore the
electricity distribution network. The project will help full report, Progress and Lessons from the Climate
Delhi’s grid integrate clean energy sources like solar, Innovation and Development Fund.
and is expected to help reduce grid instability, black/
brownouts, and damage to customer equipment through
power surges.
GreenYellow: Used CIDF’s grant as first loss capital
for ADB’s first financing of a solar photovoltaic rooftop
portfolio for the commercial and industrial segment in
Vietnam. This mobilized ~8x of investment capital.12
Greenway: Enabled the rollout of up to 1,000,000
improved cookstoves as a carbon credit project through
a liquidity reserve which mobilized ~12x of investment
capital. This initiative addresses health hazards caused
by inefficient cooking practices, aiming to save lives
and empower mostly women by reducing their domestic
workload.
Each investment harnessed the power of innovative
financing to help improve commercial viability at scale
and maximize impact by tailoring solutions to meet
regional needs. Here, we distill six key takeaways:
Strategic Partnerships: Strategic partnerships bring
added value via pooled experience and expertise.
Additional Capital: Blending funds unlocked significant
additional capital – more than 20x the initial investment
on average.

2024 BLUE BOOK | 33

Hillhouse
Zhang Lei, Founder & CEO

RESILIENCE TO RALLY: WHAT TENNIS TEACHES US ABOUT BUSINESS POTENTIAL TODAY

VALUE INVESTING WAS TRADITIONALLY ABOUT CALM AND READY AT THE NET
IDENTIFYING THE POTENTIAL OF A BUSINESS; TODAY, Over the recent past, the importance of consistency
IT’S ABOUT IDENTIFYING THE POTENTIAL RESILIENCE and resilience particularly stands out. For the past 40
OF A BUSINESS. years, Asia has followed a near constant upward growth
I learned early in my career that some of the best lessons trajectory. While Asia still delivered about two thirds of
in investing could be drawn from the world of sports. At global growth last year, forecasts remain significantly
Yale Endowment, I was influenced by Charley Ellis, whose lower than pre-pandemic projections, with both domestic
book, Winning the Loser’s Game, has been a seminal output and external demand challenged by a series of
text for investors across the globe for nearly 40 years. global shocks.
Charley provided me with a set of foundational principles Within Asian economies, and indeed globally, the
that I have revisited again and again through nearly two journey through structural change –– in demographics,
decades since the founding of Hillhouse. digitization, climate transition, and the evolution of the
Perhaps surprisingly, Charley’s sporting lessons did not consumer –– is never straightforward; combined with
come from the greats. It was courtside at recreational a more challenging macroeconomic backdrop, these
tennis that he identified a powerful metaphor for structural dynamics are testing companies’ ability to get
investment success. In recreational tennis, the winner that ‘ball back over the net’.
tends not to be the player with the best volley from It is through these more difficult times that true
the net or most powerful serve, but the player who can leadership and management strength develop; under
consistently return the ball, leaving the onus on their pressure, the greatest companies pivot, embrace change,
opponent to make mistakes. When recreational tennis and deliver despite major headwinds. Today, we see
players win against themselves, they win against ‘traditional’ businesses evolving across markets, but
their opponents. particularly in Asia, where many management teams are
It is this concept that I reinforce with entrepreneurs, ready for the next rally on the proverbial tennis court.
portfolio companies, and colleagues. To succeed over Many are ready because they have managed balance
time, you don’t have to be the strongest, but the most sheets conservatively; have taken a proactive approach
consistent – ready, with a steady mind, to rise to the to problem solving; and/or are willing to embrace
occasion and capitalise on opponents’ unforced errors. technology to transform conventional business models
We’ve learned that the real investment opportunity for the next phase of growth. These tenets are what
out there is that of compounding capital over time. It is prepares and equips companies to keep going, even
through consistency that companies build market share; when it seems like they’re on the brink of ‘losing a set’,
it is through resilience that companies with the rain about to stop play on the court.
maintain it.

2024 BLUE BOOK | 34

CONSISTENCY DRILLS: BETTER UNDERSTANDING its operational resilience. Asia is the global leader in
CUSTOMERS domestic appliance innovation, and, with Hillhouse’s
During the pandemic, one of our portfolio partners, support, Philips Domestic Appliances could leverage the
Belle, one of the world’s largest shoe retailers, found speed and agility of execution developed in Asia on a
themselves selling the latest footwear into a consumer global basis.
population stuck at home in their slippers. Yet, right Going back to basics, to the ways in which customers
from the outset of our work with Founder Deng Yao respond to new products and innovations at a local level,
and CEO Sheng Bajjiao in 2017, we knew that no other has revolutionized how Philips Domestic Appliances
shoe retailer in the world could match the company’s goes to market with its products. Data-centric product
scale and supply chain; Belle’s seamless manufacturing, innovation has helped the business redefine competition
distribution, and logistics networks were primed for in categories; by reimagining appliances for a new
digital transformation. generation of users, Philips Domestic Appliances’ newly
Digitizing the firm’s offline stores future-proofed the launched Philips Airfryer quickly became the fastest
company’s existing loyal customer base. The strategy selling product in the company’s history.
also drew on in-store employees’ product insight and Today, the company is doubling down on what it does
customer knowledge, empowering existing talent on best in its core categories – coffee machines, air
a digital platform. Leveraging Belle and Hillhouse’s purifiers, and hand-held steamers – where a data-centric
existing capabilities, together we evolved the firm’s approach can only enhance the strength of its existing
CRM and technology efforts to discover, reach, and presence, high brand awareness and significant market
better understand customers. Three years later, in a share. Unsurprisingly, Philips Domestic Appliances is now
global pandemic, this proximity to customers and digital outperforming its closest peers by exceeding its own
agility was key to its resilience. At the height of global operational aspirations.
lockdowns, Belle was well ahead of its peers in its ability
This is the beauty of businesses developing in Asia today.
to adapt and pivot across a rapid response supply chain
Innovation-led leaders, well-managed balance sheets,
and digital network.
and conventional companies are optimising; in doing so,
GROUNDSTROKES: BUILDING LOCAL FOR GLOBAL they are developing resilience for whatever challenges
CAPABILITIES lie ahead. For management teams – and investors –
From our work with Belle, we understood the gains ready for the next rally, the match is just getting started.
to be made by tightening the feedback loop between
customer, product development, and production – and
the innovation potential of connecting supply chains,
category expansion, and customer demand through data
insights. Even strong performers had room to hone their
‘groundstrokes’.
At the beginning of 2021, we acquired Philips Domestic
Appliances, known today as Versuni. While the company
had a sophisticated manufacturing process and
management system, it lacked visibility on key metrics –
from sales forecast and inventory management to cost
controls and supply chain management – to optimize

2024 BLUE BOOK | 35

IFM Investors
David Neal, Chief Executive

MULTI-LEVEL ACTION TO DELIVER LONG-TERM RETURNS

IFM Investors’ purpose is to invest, protect, and grow the investors that recognize the need for public policy to
long-term retirement savings of working people. reflect the public interest.
IFM has been working closely with governments globally
WORKING WITH INVESTEE INFRASTRUCTURE
to help achieve the public policy and investment settings
COMPANIES THROUGH THE ENERGY TRANSITION
that can facilitate investment in the energy transition
As one of the largest infrastructure investors in the world,
and support climate risk mitigation. For example,
our approach at investee companies centers on long-
IFM convened eight of Australia’s largest investors
term ownership and the active management of essential
representing around A$1 tr of assets under management
community assets, such as water management services,
to agree on a single set of recommendations – a policy
tolls roads, and airports. While our asset-level activities
blueprint – that we believe would help the Australian
remain vital to delivering real world emissions reductions,
economy accelerate its energy transition. These include
our approach has evolved to include system-level
recommendations for how to increase competition in the
actions towards stronger economic, environmental, and
delivery of greenfield transmission projects; enhance
social systems.
community consultation and planning; incentivize
PUBLIC-PRIVATE COLLABORATION TO DRIVE investment in community and distribution-level batteries
SYSTEMIC CHANGE through regulatory change; and develop a Sustainable
Aviation Fuel (SAF) industry in Australia.
We believe that long-term investment returns are
dependent on healthy economic, environmental, and IFM also has entered collaborative strategic initiatives
social systems, all of which can be positively influenced with other private sector organizations that seek to
through policy advocacy. Systemic change cannot be deliver strong long-term returns for our investors, as
achieved by the private sector alone. We need increased well as delivering broader sectoral and system benefits.
collaboration among all stakeholders and strong For example, IFM entered into a memorandum of
leadership from governments to address the complex understanding with GrainCorp Limited (GrainCorp), the
and converging issues in the energy transition and largest processor of renewable feedstocks in Australia
unlock the capital it requires. Government needs to work and New Zealand, to jointly study the feasibility of
with investors and set “rules of the road” that incentivize producing SAF in Australia. Together, IFM and GrainCorp
sustainable market behaviors and allocation of capital. bring expertise spanning the entire SAF supply chain,
from farming of renewable feedstocks to airside refueling.
IFM believes investors have an important role to
The initiative is a significant step in IFM’s commitment
play in supporting appropriate government action.
to work with policy makers and the aviation sector to
Governments face a fiendishly complex set of risks
accelerate efforts to decarbonise aviation through the
in steering economies through the energy transition.
use of SAF.
Setting policy and regulations that support an orderly
transition can be aided by well-informed, long-term

2024 BLUE BOOK | 36

IFM has also partnered with QIC, another of Australia’s
largest infrastructure fund managers, and designed
and executed a large-scale power-purchase agreement
program – the largest multi-asset, multi-state program of
its kind in Australia – which will help reduce electricity
costs and greenhouse gas emissions at key Australian
airports, ports, energy utilities, roads, and hospitals. It
is estimated the project will facilitate the supply of more
than 400 GWh of renewable energy per annum by 2025.
IFM and QIC partnered in the program to help create the
scale necessary to deliver cost savings and significant
emissions reductions for the portfolio companies they
manage. By joining this program, several of IFM’s
assets have been able to accelerate their net zero
targets. (Neither IFM or GIC charged fees for organising
the program, and other infrastructure businesses are
encouraged to join the program to accelerate the
Australian infrastructure sector’s net zero efforts.)

IMPROVING INDUSTRY PRACTICE IN THE

INTEGRATION OF SOCIAL FACTORS
In addition to the economic and environmental change
occurring as part of the global energy transition, the
integration of social factors into our investment activities
is a core focus for IFM. For example, IFM’s Chief Strategy
Officer, Luba Nikulina, chairs the UK Taskforce on
Social Factors, established by the UK Department for
Work and Pensions, which has released guidance for
the UK pensions industry on how social factors can
be better incorporated into investment decisions and
stewardship policies. The guide is intended to provide
pension trustees with the tools to identify and monitor
social risks and opportunities and develop consensus
in approaching these across the pension investment
landscape.
IFM looks forward to working with FCLTGlobal and other
institutions seeking to focus capital on the long term to
contribute to healthier environmental and social systems
in the years to come.

2024 BLUE BOOK | 37

Kempen
Maarten Edixhoven, Chair of the Management Board & CEO

SUSTAINABLE FARMING AT VAN LANSCHOT KEMPEN – A LONG-TERM SOLUTION TO A NEAR-

TERM PROBLEM

Today, the agricultural sector is a frequent topic of the fund has invested in a variety of over 25 different
interest and discussion. Whether this relates to healthy crops in nine different countries worldwide. The fund
food, the climate, biodiversity, or spatial planning it plays was relatively early in investing in an olive tree plantation
a key role in several of the major issues currently facing in Portugal, benefiting from the world-leading Alentejo
our society. The agriculture sector is responsible for irrigation project. Since, it has acquired a citrus farm in
roughly one fifth of global greenhouse gas emissions Spain, Macadamia orchards in Australia, a cherry growing
and a significantly higher percentage on water and and packing operation in New Zealand, and Pistachio
biodiversity impact. The WEF estimates that 50 percent plantations in the U.S. A majority of investments are
of the global economy is under threat from biodiversity allocated to broad acre cropping or annual crops such as
loss – equivalent to $44 trillion in global GDP. Similar wheat, barley, canola, or vegetables.
findings apply for water: 50 percent of biodiversity The fund has ”sustainable investments” as its objective
loss in freshwater is caused by food systems, and food and invests in agricultural land assets that contribute to
production is responsible for 70 percent of freshwater environmental and social goals, including decent living
withdrawals. The entire food system is responsible for a standards and wellbeing for end-users, climate change
third of emissions according to studies presented by the adaptation in line with the Paris Agreement, transitioning
Global Alliance for the Future of Food this year. Yet only a to a circular economy, and protecting biodiversity and
mere 3 percent of total public climate capital is allocated ecosystems from farm to fork. The Fund focuses on
towards improving the food system. sustainable and regenerative agricultural practices
At Van Lanschot Kempen, we believe that more capital and as such the Fund targets six impact themes and
should be directed towards natural capital solutions. six Sustainable Development Goals (SDGs) as set in
Inspired by our Dutch post-war agriculture history, the 2030 Agenda for Sustainable Development of the
sometimes a boon, sometimes a bane, agriculture has United Nations around food, health, water, biodiversity,
been our natural habitat. And one doesn’t need to look circularity, and climate.
far to find a solution. In fact, it can be found right under One of the main objectives was building a healthy soil
our feet: Our soil. that can effectively store carbon and restore a more
resilient living system. Healthy soil leads to healthy plants
DESIGNING A SUSTAINABLE FARMLANDS FUND
and animals, healthy food, and ultimately to healthy
Five years ago, our private markets team started a
people. The first results collected from our surveys and
journey together with Dutch pension fund investors in
samples look promising. A number of readings on soil
designing a long-term oriented sustainable farmlands
organic matter and water holding capacity have gone
fund. The fund makes physical investments in farmland
up, while the use of synthetic inputs and residues in our
and invests alongside local farmers in the cultivation of
crops from pesticides or fungicides have dropped. It
crops, mainly for human consumption. Over the years,
takes time and collective effort though to standardize the

2024 BLUE BOOK | 38

data and show a positive trend on certain metrics, such Institutional capital, however, can also greatly support
as soil microbial activity and biodiversity. Our investors and expedite the regenerative system and address the
are patient and understand that this is a long-term effort, hurdles in demonstrating that it is financially attractive, in
but they do require an upward trend and rely on carefully evidencing the ecological and agronomic impact, and in
agreed KPI’s. Our most inspiring learning so far has been establishing alignment with the various stakeholders in
the engagement with a new generation of knowledge- the long run.
driven, regenerative farmers who are countering a
perception of an ageing industry of laggards. Instead,
they are offering a much more promising and sustainable,
and sometimes tech-savvy perspective.

CHALLENGES AND LEARNINGS IN REGENERATIVE

FARMING
The transition to a more sustainable, nature-inclusive
future requires a long-term outlook and cooperation
across the entire food chain. Trust with the farmers is
key and relationships have to be built on long-termism
and fair share. Some urban myths need to be debunked,
such as the idea that the shortage of food globally
makes productivity the only key objective – or that the
food system’s evolution leaves no margin for the farmer.
Sustainable, regenerative farming is all about being
able to produce healthy crops long term, where our
conventional farming system may run out of productive
top soil in one or two generations. The principles defined
around regenerative farming are well known: disturb the
soil less; provide a greater diversity of plants; maintain
living roots in the soil as much as possible; and keep the
soil covered with plants and their residues at all times.
Our key learning is that the principle of re-generation is
just as important on the field as it is in our relationships.
Re-generating relationships between farmers,
consumers, and all other stakeholders within the chain is
key in the process of transitioning our food system from
an extractive to a symbiotic, collaborative system.
Investments in farmland are a vital part of this transition
and as such can be very effective in combining financial
return with sustainability goals. While the role of
institutional capital in farmland may be debated and
even be met with controversy, this only applies to most
of the passive capital that merely seeks a financial return
and reinforces the current system (go with the flow).

2024 BLUE BOOK | 39

KPMG
Bill Thomas, Global Chairman & CEO

HOW WE MAKE THE DIFFERENCE

KPMG is at its strongest when our 270,000+ people commitment and keeps people focused on driving
throughout 143 countries and territories are aligned meaningful change, even if it may take longer
behind a common set of values and working side by side than expected.
to solve problems. Every day, we bring the best people,
innovative technology, and our collective experience to SMALL THINGS ADD UP TO BIGGER SUCCESSES
the table to help clients, businesses, governments, and We continue to make strong progress against a range of
the communities we serve. goals that are important to our business, our people, and
clients. For example, last year, we reached a 25 percent
Now more than ever, collaboration across discipline and
carbon emissions reduction against our 2019 baseline,
geography is critical, especially as the world navigates
achieved a 50:50 gender balance on our Global
shared and ever more pressing challenges. Businesses
Management Team, and used our scale to invite more
are essential in developing many needed solutions, and
than 500 key global suppliers to disclose their carbon
how we measure progress towards those solutions is a
footprint data.
key driver of long-term value creation that will lead to a
more sustainable future. This year, for the first time, we are reporting with
reference to the Global Reporting Initiative (GRI)
MEASUREMENT INSTILLS ACCOUNTABILITY guidance and have used GRI 3 to help shape our
In 2021, KPMG launched Our Impact Plan, bringing approach to our materiality assessment refresh.
together our environmental, social and governance (ESG) We’re also making large investments throughout our
commitments under one umbrella. Measurement instills organization on our people and technology to embed
accountability, and by design, Our Impact Plan maps our ESG in everything we do.
trajectory to becoming a better business. From carbon The old adage, what gets measured gets done, has been
emissions to Inclusion, Diversity and Equity (IDE), we a guiding principle of our journey to build a better, more
analyze what we can and should be doing to meet our sustainable business. Each goal we set out to achieve is
responsibility to help shape a better future by doing a piece of a much larger mosaic, and through Our Impact
what we do best — solving problems to make lasting, Plan, we continue to gather and analyze data about
meaningful change. ourselves. Because of it, we are better positioned to
invest in our people and have a better understanding
TRANSPARENCY BUILDS MOMENTUM
of how we can better help our clients achieve their
Three years on, we continue to publish our progress
own goals.
annually. We want our people, our clients and everyone
who relies on us to understand where we are and where By tying together purpose and profit, we’re strengthening
we are going. Being open and transparent, even when our business, while developing solutions and strategies
it may be uncomfortable, has been incredibly important. for challenges that impact all of us.
One of the most important lessons we’ve learned It adds up to a more sustainable and more
since starting this journey is that transparency fortifies resilient future.

2024 BLUE BOOK | 40

Liberty Mutual Investments
Vlad Barbalat, President & Chief Investment Officer

CAPITAL AS A FORCE FOR GOOD: THE UNIQUE, LONG-TERM ADVANTAGES OF LIBERTY

MUTUAL INVESTMENTS

LONG-TERM FOCUS AND THE ADVANTAGES OF • Intellectual Vitality: We are not in the business of
MUTUAL STATUS predicting the future, but we are in the business of
Liberty Mutual Investments (LMI) manages ~$100 billion being prepared for all its eventualities. To do that,
in assets for Liberty Mutual Insurance, a Fortune 100 we must sustain intellectual curiosity and an innate
property and casualty insurance company. Insurance is hunger for continuous learning. We are willing to
the bedrock of commerce. Our products allow individuals question assumptions, to challenge each other
and businesses, large and small, to transfer and share constructively, and to consider perspectives that are
risks that would otherwise inhibit economic progress. As different than our own. Intellectual vitality requires
the investment arm of Liberty Mutual, our objective is a culture that is deeply committed to a meritocracy
to generate the capital needed to support this broader above all – it is nonnegotiable.
social purpose over the long run. • Capital as a Force for Good: Our investing
Being a mutual company provides us with distinct philosophy is guided by driving strong financial
advantages in pursuing this mission with a long-term returns, but we will never sacrifice our integrity
focus. Our structure fundamentally differentiates us or our duty to deploy our capital to projects and
from our competitors. Rather than distributing capital to partnerships that ultimately serve as a force for good.
shareholders, we grow, retain, and compound our capital We will use our influence, we will use our capital, and
in the interest of our policyholders, regulators, and we will use our energy to drive a better future.
broader stakeholders over time. Our mutual structure is
LONG-TERM FOCUS ≠ CAUTION: A PROVEN TRACK-
fundamental to our commitment to investing with a long-
RECORD IN DISRUPTIVE INNOVATION
term view, but equally critical is the differentiated culture
and commitment to innovation that shape our approach LMI has been investing in venture capital on a large
to investing. scale since the early 1980s, giving us a unique vantage
point, access, and expertise. Through our partnerships
A DIFFERENTIATED CULTURE and networks, we identify secular trends that have the
Our culture is a sustained source of differentiation that potential for creating tectonic shifts in our economy.
drives our commitment to take a long-term perspective. Beginning in 2010, we recognized and capitalized on the
LMI is guided by three cultural pillars: concept of “software eating the world” by strategically
gaining exposure to software and software-enabling
• Uncompromising Excellence: We put our capital
businesses across various sectors in our private
at risk every day, navigate complex problems, and
investment portfolio. When we identify key trends, we
represent our firm with partners across the globe.
invest across the entire value chain and capital structures
We take our responsibilities as stewards of Liberty’s
of businesses driving the emergence of artificial
capital seriously and never compromise in our
intelligence, climate technology, and life sciences. These
pursuit of excellence.

2024 BLUE BOOK | 41

investments generate financial return and leverage our SUSTAINING OUR LONG-TERM COMMITMENT TO
partnerships to deliver the full capabilities of Liberty CAPITAL AS A FORCE FOR GOOD
Mutual Insurance to drive innovation and commerce. LMI occupies a unique position in the financial
To replace flawed systems, society needs disruptive industry, leveraging its status as a mutual company and
technologies and innovative business models. LMI’s differentiated culture to prioritize long-term goals and
dedicated investment teams in Energy Transition & investments in innovation and societal impact. LMI’s
Infrastructure (ET&I) and Impact Investing are helping culture and dedication to disruptive innovation has not
meet this need for innovation in socially vital areas. only yielded financial success but has also positioned
These teams have the flexibility to invest across the company at the forefront of major shifts in technology
structures and sectors in projects and businesses that and industry trends. Across both Impact and ET&I
lack access to traditional sources of capital. investments, LMI maximizes long-term investment returns
by building partnerships with innovative firms who are
In the area of ET&I, LMI has been actively supporting the
investing in areas where capital is most constrained. This
global transition to a decarbonized economy for more
focus on innovation, sustainability, and impact enables
than a decade. The ET&I team has a strong track record
LMI to create capital as a force for good and contribute to
of generating attractive returns across many low-carbon
meaningful change.
technologies. As an example, our capital is supporting
the development and construction of some of the world’s
largest renewable energy and storage resources.
To expand its impact, LMI broadened the ET&I mandate
to include new sectors. In digital infrastructure, we are
bridging the digital divide by providing growth capital
to fiber optic new builds in rural and underserved
communities. Our capital also supports the “circular
economy” by capitalizing on projects that remove
agricultural waste and transform it into a valuable
energy resource. We are also actively investing in
onshoring for the energy transition, providing financing to
manufacturing facilities that support both job growth and
the domestic renewable energy value chain.
The recently launched Impact Investing strategy is
positioning us at the forefront on a number of evolving
social challenges and is pursuing investments that boost
social mobility, expand access to essential services,
and support resiliency, revitalization, and adaptation
in distressed communities. It pursues these objectives
by investing alongside partners with deep expertise
in niche sectors who are typically employing a novel
approach to solving pressing social challenges.

2024 BLUE BOOK | 42

Mastercard

WHEN WE CONNECT WOMEN ENTREPRENEURS TO CAPITAL, THE WHOLE WORLD WINS.

In rural Brazil, a group of women banded together to the world’s adults — still do not have a bank or mobile
gather baru, a wild chestnut. When they had little luck money account.
selling baru as a snack in local markets, they came Nevertheless, there’s a significant upside to supporting
up with a plan to turn their harvest into a base for a women-led businesses.
dark, frothy Guinness-like beer. Despite their ingenuity
and hard work ethic, the women were missing a key On a larger scale, attaining economic parity for women
ingredient for success: access to capital needed for could add $12 trillion to the world economy, according
equipment and distribution of their first batch. The plight to the World Economic Forum. If women were able
of this baru cooperative is all too common for women to participate in entrepreneurship at the same rate
entrepreneurs around the world, whether it’s a simple as men, global gross domestic product would rise
one-woman operation or a hot tech startup with by an additional 3 percent to 6 percent, equivalent
growth potential, women-owned firms are plagued to $2.5 trillion to $5 trillion in value, according to one
by funding challenges. estimate. Lenders would also do well by investing in
women. One study found that even though female-
Companies with only female founders raised just 2.2 led startups receive less than half the funding that
percent of all venture funding in the first eight months male-founded ones do, they generate 10 percent more
of 2021, according to an analysis by Crunchbase; this cumulative revenue. This benefits the wider community
is lower than any of the five previous calendar years. as well, creating financial security and an asset base for
Historically, women entrepreneurs are less likely to get entire family groups and local economies.
approved for bank loans and are often subject to higher
interest rates and smaller loan amounts. In developing Mastercard is working to connect women entrepreneurs
economies, women-owned businesses make up 23 to the tools they need. We recently announced the
percent of micro, small, and medium-size businesses fulfillment of our pledge to connect 25 million women
but account for 32 percent of the overall financing gap. entrepreneurs worldwide to the solutions they
need to grow their businesses, two years ahead of
Women entrepreneurs also do not always have banking schedule. To meet that ambitious goal, we focused on
services or digital tools, which can help grow an informal digital acceptance of payments, access to credit and
cash-based business into one with a larger financial mentorship, as well as networking and other forms
footprint. While the proliferation of mobile money in sub- of expertise.
Saharan Africa has boosted financial inclusion for women,
the gender gap in account ownership in developing In Latin America, Mastercard co-created a new value
economies overall has fallen but stands at 6 percent, proposition to digitize small retailers so they are able to
according to the World Bank, and 740 million women — accept electronic payments and pay suppliers digitally.
equivalent to 13 percent of For instance, we are partnering with some of the largest
consumer packaged goods brands by arming their
network of small mom-and-pop distributors with the

2024 BLUE BOOK | 43

ability to accept digital payments. That allows these
entrepreneurs to get paid almost in real time, giving
them funds with which to purchase more stock, while at
the same time equipping these brands with insight into
which distributors might need additional capital in order
to grow.
Meanwhile, for the women harvesting baru nuts in Brazil,
help for their traditional business came in a very 21st-
century form. Moeda, a social investing platform and
veteran of our Start Path startup engagement program,
uses blockchain to link worthy entrepreneurs with
investors looking for both profit and social good, and
it extended a microloan that allowed the cooperative
to purchase equipment and turn their harvest into Baru
Beer. That beer sold out in a matter of months, netting
perhaps five times what the women could have earned
by selling the nuts alone. And as those newly converted
Baru Beer fans will agree, unlocking the potential of
these fierce entrepreneurs will benefit everyone.    
Women entrepreneurs face unique barriers to success,
from challenges in obtaining funding to inadequate
access to basic financial services and tools, but a world
that works better for women creates limitless possibilities
for us all. That’s why Mastercard is committed to building
an inclusive digital economy where everyone prospers
and providing these women-owned small businesses
with solutions that can help them grow and thrive. By
harnessing technology, philanthropy and our network
of partners, we’re closing the capital, insights, and
resources gap so women-owned businesses around
the world can thrive, their communities thrive, and our
economies thrive.

2024 BLUE BOOK | 44

McKinsey & Company
Bob Sternfels, Global Managing Partner

ACCELERATING LONG-TERM, INCLUSIVE ECONOMIC GROWTH AND A SUSTAINABLE FUTURE

FOR OUR PLANET

Sustainable and inclusive growth is what we aspire to support toward that commitment.
achieve through our work – and how we measure our We are also working to build a more inclusive firm to
long-term impact on society. We’re making progress. ensure that everyone with the skills and talent has a shot
Our clients contribute 20 percent to global GDP growth, at our firm. We have tripled our number of Black hires
create 1 million jobs per year, and make up 80 percent of and elected twice the number of women partners in five
reported CO2 emissions reduction. We’re inspired by this. years. Now our global workforce is 48 percent women.
We also know there is much more to be done. We continue to hire distinctive talent from anywhere and
have increased our sources of recruiting to 1,700. Our
ACTING NOW FOR A SUSTAINABLE FUTURE
progress in these areas inspires us to do even more.
We’re helping leaders build sustainable businesses
for the long term. Last year, more than 3,500 of our INVESTING IN GOVERNANCE FOR LONG-TERM
colleagues worked on more than 1,600 sustainability RESILIENCE
engagements with 600 clients across nearly 60 True resilience—the ability to absorb shocks and thrive
countries and in every industry. We have introduced as disruptions continue – is critical to long-term success.
an internal carbon fee on air travel, and we continue to We have heavily invested in our governance capabilities,
convene leaders, including at COP28, to launch fresh strengthening the foundation of our business for the long
solutions. Our new Climate Transition Framework, for term. Since 2018, we have spent nearly $700 million on
example, will help ensure people remain at the center of our risk management teams, capabilities, and processes.
the net-zero transition, and Frontier – an advance market We have also introduced an industry-leading framework,
commitment we co-founded with Alphabet, Meta, Shopify, CITIO, to assess proposed work along multiple
and Stripe – is helping to expand the global supply of dimensions, which includes vetting client organizations
carbon removal. and relevant individuals. This extends to our suppliers
and internal systems, where we have improved
ACCELERATING LONG-TERM, INCLUSIVE ECONOMIC
cybersecurity controls, data and document retention,
GROWTH
and process management. Annually, 100 percent of
We believe that giving more people a chance to
our colleagues participate in a rigorous professional
participate in the economy can accelerate long-term
standards and risk training program.
growth and that economic growth can in turn drive more
inclusion. New businesses are critical in this. Our Leap These actions are just a few of the ways we are working
by McKinsey colleagues helped clients build nearly 200 every day, in every one of our 65+ global offices,
new businesses last year, creating more than 20,000 to accelerate sustainable, inclusive, and long-term
jobs and $140 billion in value. We have committed $2 growth. We hope they inspire others as they continue
billion to social responsibility efforts by 2030 and have to inspire us.
so far contributed nearly $620 million in cash and in-kind

2024 BLUE BOOK | 45

MFS
Carol Geremia, President & Head of Global Distribution

SHAPING LONG-TERM FOCUS: PRACTICAL STRATEGIES FOR ALIGNING TIME HORIZONS

We know from 100 years of investment management and solve challenges that stem from any potential
that patience is not just a virtue – it’s an asset and misalignment with our stakeholders. This can range
a vital source of durable value creation for all of our from how we better govern the journey our employees
stakeholders. We also know that in an extremely experience, to our corporate sustainability and DEI
competitive market – and one that is exacerbating activities, and how we manage data and leverage
short-term incentives, actions, and expectations – technology in the midst of the digital transformation
having a genuinely long-term orientation is a source of underway. During the last three years, over 350 senior
differentiation and analysis advantage. colleagues (~16% of all employees) have worked together
in small, dedicated teams to help us to not only solve but
The best decisions that we make for our stakeholders
anticipate some of the biggest challenges the industry
– including our employees, clients, shareholders,
faces and have helped us remain strongly aligned with
communities, and suppliers – are those that prioritize
our stakeholders.
their long-term success. Nurturing our culture, creating
an environment that attracts and develops the best talent, ADDRESSING TIME HORIZON MISALIGNMENT
and making decisions that place the value we create for PRACTICALLY
others above all else has helped us to work cohesively
As an investment organization, one of the most important
and consistently towards aligning with our stakeholders.
stakeholders we have is our client, and one of the
It has created a competitive moat around our client and
greatest sources of potential misalignment in our industry
employee value proposition decades in the making that
is of course the issue of time horizons and pervasive
allows us the surety of continuing to invest in the future
short-termism. Therefore, many of the project teams have
health of our company.
directly and indirectly sought to address this issue on
BRINGING TOGETHER LEADERS TO SOLVE multiple fronts. Some practical examples include:
STAKEHOLDER CHALLENGES • Changing the way we present performance
Over the last few years, we have sought to structurally information to our Boards and our clients to
embed this ethos into our business by creating underscore our commitment to long-term value
what we call our Client Alignment Platform, with the creation. E.g., we included 1,3,5,10 year rolling
explicit purpose of being “an inclusive leadership returns pages in our product and client review
forum, designed to enable, empower, and embed books and changed the order of our performance
transformational projects and spark innovation in metrics. Making seemingly simple improvements in
the organization that are aligned to the long-term transparency has actually enabled and facilitated
mission, vision, and strategic goals” of the company; all discussions that are more oriented to long-term
to create value for our clients. thinking.
The platform brings senior leaders from all departments • Bringing the organization together on the employee
together and empowers them to understand, explore value proposition and having a holistic framework

2024 BLUE BOOK | 46

 to understand the employee journey over time.
Identifying those key areas in the employees’
journey where they need support, challenges, and
opportunities to develop their skills has resulted in
low employee turnover (e.g., 3-year turnover for all of
MFS is 5.8% and for investment team is 3.3%) which
is so important in the asset management industry
where people are your capital.
• Transforming our mindset around data, leading
to a significant multi-year investment in our
technological tools that will allow us to deepen
our value proposition to clients and employees in
the long term. In an evolving data and technology
environment, we have been expanding our platform
and building new capabilities to better deliver on our
purpose (e.g. evaluate risk and opportunities related
to climate transition) with the client experience in
mind (e.g. customization needs)
Each one of these actions is an important part of the
mosaic of how we ensure we remain long-term oriented
in our decision-making. All together, they are helping us
to collectively – and intentionally – shape our shared
future. Creating an environment for diverse groups
of leaders to come together and take accountability
over that alignment has helped us to create an exciting
flywheel, that is both building the future leadership
of the firm and delivering positive outcomes for all of
our stakeholders.

2024 BLUE BOOK | 47

MSCI

TRACKING KEY TRENDS FOR LONG-TERM INVESTORS IN THE YEAR AHEAD

Companies that aim to harness the potential of artificial example, appear to face the highest levels of climate-
intelligence may need to reinforce their capabilities transition risk compared with other private equity or debt.
in areas ranging from data privacy and regulatory Private companies in distressed-debt portfolios could
compliance to talent management, according to the see an average fall in their operating margins of 133 basis
latest annual edition of MSCI ESG Research’s Climate points in a market with a hypothetical global carbon price
and Sustainability Trends to Watch, which outlines a of USD 75 per ton.
series of currents for investors to keep an eye on in the Homeowners and workers confront climate hazards
year ahead. -- Extreme weather and other effects of climate change
Investors might well be examining whether companies are increasingly affecting where and how people live
developing AI foundation models or AI-driven and work. In three U.S. states that face higher-than-
applications for consumers are integrating guardrails and average exposure to acute climate hazards -- Oklahoma,
guidelines covering privacy. While AI has the potential Arkansas and Mississippi -- the cost of homeowners
to unlock improvements in labor productivity, investors insurance relative to income is already among the least
might also ask which companies will invest in their affordable in the country. Rising levels of heat and
employees alongside AI and which will limit their focus humidity add to the costs for workers and management
to cutting costs. alike. Measuring risk holistically – and managing it – is an
immediate challenge.
The ability of companies to manage the basics in
connection with AI is one of eight trends that could Challenges for corporate oversight -- 2024 could
command the attention of companies and investors present new challenges for corporate oversight amid
in 2024. an acceleration of efforts to assess the quality of listed-
company audits. The number of audit deficiencies
The importance of investments in nature will only
flagged by overseers in the U.S., U.K., and India rose
increase -- Investors are increasingly able to assess the
302 percent as of September 2023 from a year earlier,
possible impacts of nature-related loss on their portfolios.
according to the report. At the same time, more and more
Rising levels of debt distress in developing countries
companies are aiming to recruit directors whose skills
could fuel the market for debt-for-nature swaps that, with
match evolving demands that range from technology and
risk guarantees from multilateral development banks,
cybersecurity to engineering and sustainability. That may
could generate interest from private investors. The
compound the difficulty of finding candidates who are
voluntary carbon market could see an increase in nature-
not already filling director roles elsewhere; the number of
related investments.
board seats occupied by directors who possess each of
Climate transition risk in private markets comes into three core competencies (finance, risk management and
focus -- Investors are sharpening their view of risks industry experience) fell overall at large-cap companies
to private assets that may accompany the transition globally in 2023.
to a low-carbon economy. Distressed-debt funds, for

2024 BLUE BOOK | 48

On the lookout for orphaned emissions -- Financial balance between sustainable-investment objectives and
regulators in a growing number of countries are imperatives for a global climate transition.
poised to roll out requirements that companies publish Ultimately, amid the challenges, there are silver linings.
their greenhouse gas emissions and other climate-
related financial information. Still, it will be important to
distinguish genuine corporate climate transition plans
from differences in accounting. Companies have used
methods ranging from excluding emissions from business
units slated for sale to structuring finance as corporate
debt issued by special purpose vehicles to keep fossil-
fuel assets without counting their emissions in top-
line tallies.
Scrutiny of supply chains ups the need for corporate
action -- The European Union’s requirement for products
to be free of commodities produced on recently
deforested land is slated to come into effect, potentially
ushering in the first of a series of similar initiatives
globally that will force companies to not only ramp up
their risk assessments and reporting but to monitor such
risks proactively. For example, the need for action could
drive demand for satellite monitoring, blockchain ledgers
for grain, and electronic tagging of cattle. Besides food
producers needing to revamp their traceability efforts,
sustainable finance frameworks in the EU and elsewhere
will also obligate companies to report on risks to human-
rights, including modern slavery.
The SFDR’s unintended consequence for climate
capital -- EU funds that have sustainability as a main
objective need to consider so-called principal adverse
indicators (PAIs) as prescribed by the bloc’s Sustainable
Finance Disclosure Regulation. Yet as of June 2023,
companies in emerging markets fell short far more
often than their developed-market peers on PAIs tied to
compliance with international norms and board diversity.
Emerging-market issuers also lagged on carbon and
energy-related indicators. While such roadblocks may
get in the way of companies’ inclusion in sustainable
investment products and portfolios, the learnings may
be applied in the future; the EU Commission is expected
to revise the SFDR’s technical standards this year. Still,
investors may be watching for any changes that affect
how their capital is steered and for any shift in the

2024 BLUE BOOK | 49

Nasdaq Inc.

LEVERAGING TECHNOLOGY TO SIMPLIFY THE LIVES OF OUR CLIENTS

Nasdaq’s role as an exchange operator, public company, Nasdaq’s Capital Access Platforms Division is taking
and provider of ESG-focused marketplace solutions advantage of technology to help corporates unlock
gives us a unique perspective on the challenges ROI on their sustainability reporting processes and
corporates face in navigating the capital markets and help investors gain more transparency through unique
investor engagement. Nasdaq as an Enterprise is on data and analytics, so they can make better investment
our own ESG journey – a strategy underpinned by our decisions. Within Nasdaq’s Market Services Division, our
corporate purpose: to advance economic progress for Nordic and Baltics markets are leading the global effort
all. Our approach to ESG is focused both internally in addressing the scale of investment required for green
and externally. transformation and developing a broad spectrum of
investment channels across public and private. Nasdaq’s
Internally, we manage our businesses’ ESG-related
Financial Technology Division is playing an important
risks and opportunities and thecorresponding impact
role in the development of global carbon credit markets.
we have as an organization across our own operations.
By providing institutional grade infrastructure to the
For example, we are taking steps to minimize our
market, we can help address many of the pain points that
environmental footprint and address the negative effects
have so far prevented the market from achieving scale
of climate change. In 2022, our net-zero emissions
and emerging a genuine tool in the fight against climate
targets were approved by the Science Based Targets
change. Recent examples of how these divisions simplify
initiative, and we achieved carbon neutrality for the
the lives of our clients in their sustainability and impact
fifth consecutive year. We’ve continued to solidify our
investing journey include:
position as a destination for the world’s leading talent by
deepening our culture of diversity, equity, and inclusion. CAPITAL ACCESS PLATFORMS
By leading with best-practice governance policies, we
We’ve been on this journey for many years now to be
continue to solidify our business resilience. These efforts
a true partner to corporates and investors as well as a
have earned us industry-leading rankings from leading
bridge that helps both groups unlock ROI. Our goals are
ESG raters and recognition by respected third-party
to help corporates elevate their sustainability reporting
validators for our inclusive workplace policies.
process and assist investors in achieving transparency
Externally, we strive to have positive economic and through unique data and analytics to make better
societal impact through the Nasdaq Foundation. We decisions. We recently launched three new offerings
support the establishment of thoughtful partnerships designed to help corporates and investors streamline
aimed at diversifying entrepreneurship and creating their sustainability and impact investing journeys.
accessible pathways to the wealth capital markets can
Designed for corporates, Nasdaq Metrio™ is a Software
create, expanding our community impact around the
as a Service (SaaS)-based, end-to-end platform that
globe. Importantly, we also focus on the impact we have
helps them to better collect, measure, and report
on the world through our ESG-related products and
sustainability data. Since the Metrio acquisition
services that support our clients’ objectives.
announcement last year, Nasdaq quickly integrated

2024 BLUE BOOK | 50

Nasdaq OneReport® and Metrio legacy technologies clients with access to scienced-based carbon removal
(combining the power of two market-proven solutions projects, we also envision the partnership to support the
with over 30 years of integrated product history). The development of global carbon marketplaces that will be
platform also features a new Carbon Accounting and critical in scaling the investment and innovation required
Management product for companies looking to focus on to achieve the net-zero ambition.
their scope 1, 2, and 3 emissions.
FINANCIAL TECHNOLOGY
The new Nasdaq eVestment® ESG Analytics solution
Nasdaq’s technology – provided to financial market
generates greater transparency for the global
infrastructures, carbon registry platforms, and other
institutional market, so investors can make better
service providers around the world – underpins full trade
data-driven impact investment decisions. The offering
lifecycle of carbon credits, from trading platforms to the
provides qualitative and quantitative information for the
post-trade infrastructure that sits behind the market.
institutional investment community to understand risks
and exposures. Asset owners, managers, investors, and Carbon credit marketplaces, such as CIX Exchange in
consultants will now have more transparency – including Singapore which leverages Nasdaq’s trading technology,
sustainability and diversity data – so they can make more are vital in establishing market-driven prices, allowing
informed decisions. participants to compare individual carbon projects and
trade standard contracts. Nasdaq also recently launched
Nasdaq Sustainable Lens™ is a SaaS-based ESG
a pioneering new technology that securely digitizes the
intelligence platform that harnesses the power of
issuance, settlement, and custody of carbon credits,
generative artificial intelligence (AI) to help companies
allowing market operators and registries to create
navigate complexity and stakeholders’ asks for greater
standardized digital credits and distribute them with full
transparency. Nasdaq has been leveraging AI for several
auditability throughout the transaction lifecycle.
years, and Sustainable Lens is the latest example of how
we’re using technology to help simplify and reduce In the first major use case of this technology, it will
cost burdens for companies around sustainability be used by Puro.earth – to register CO2 Removal
and ESG reporting. Certificates, or CORCs. The ability to track issuance,
retirement, and the transfer of the assets is vital to
MARKET SERVICES provide full traceability and transparency, avoid double
Our European Market Services has developed a counting, and improve overall integrity of the market.
standardized and transparent framework to facilitate
both equity and debt financing for companies. These
initiatives include Nasdaq Green Designations and
sustainable bonds, educating institutional and public
investors to allocate capital to environmentally conscious
companies and projects.
Nasdaq also acquired a majority stake in Puro.earth,
the world’s leading crediting platform for engineered
carbon removal. This strategic partnership connects
industrial carbon removal, based on the Puro Standard,
with buyers seeking to implement sustainability goals by
removing carbon dioxide from the atmosphere. Beyond
the benefits of providing our global network of corporate

2024 BLUE BOOK | 51

NBIM
Nicolai Tangen, Chief Executive Officer

CLIMATE ACTION AT NBIM

The purpose of the Government Pension Fund Global our ESG Analytics team supports our data tools and
is to safeguard and build financial wealth for future analysis throughout.
generations. We believe that long-term value creation
for the fund depends on sustainable development in HOW WE APPROACHED THE PROJECT
economic, environmental, and social terms. Analysis A key tenet of our Climate Action Plan is the “engage
of our equity portfolio’s transition risk shows that a to change” approach. We decided to start with the
scenario with a delayed policy response would lead to companies with the highest emissions, aiming to conduct
greater financial losses than staying on a 2C pathway. We in-depth dialogue with the ca 200 companies who are
therefore stand to benefit from an orderly transition. responsible for 70 percent of the financed emissions
in our portfolio. In the past year, we have built out this
NBIM has worked with climate change in mind for more
focused engagement through dedicated ‘dialogues’ with
than 15 years, and in September 2022 we launched a
companies in high-emitting sectors and will continue
dedicated Climate Action Plan. Our headline ambition
this work in 2024. We refer to these as our net-zero
is for our portfolio companies to achieve net zero
dialogues. In practice, we integrate them with our
emissions by 2050. The plan describes how we are
existing company facing investment and
working on the market, portfolio, and company levels to
ownership activities.
achieve this. At the market level, we support standard
setters in their efforts to improve the management As a basis for this strengthened dialogue, in August 2023,
of climate-related risks and advocate for mandatory we published updated climate change expectations of
climate-related reporting. At the portfolio level, we companies, emphasising the need to shift from setting
systematically monitor climate risk in the portfolio, and emissions reduction targets to transition planning. We
integrate it into our investment and divestment decisions. have introduced a small number of ‘core’ expectations
At the company level, we want to support our portfolio to signal our highest priorities, which directly inform our
companies through the climate transition and engage voting and ownership activities. These core expectations
with them to set targets and develop transition plans of include board oversight, climate risk disclosures,
their own. greenhouse gas reporting, net zero 2050 and interim
targets, and transition plans. Our updated expectations
Many of our functions are involved in the implementation
were shared with the boards of selected companies, and
of the plan. The market level work is conducted
we follow up with letters to “laggards” in cases where
collaboratively across teams, drawing on our experts,
companies’ practices fall significantly short of
but led and coordinated by our Corporate Governance
our expectations.
department. It includes engagement with regulators
and participation in initiatives that can support capacity The presence of targets is a starting point, but they need
building. Our portfolio-level work is mainly led by our to be evaluated. In 2023, we conducted a pilot analysis
investment and risk areas, and company engagements of the cement industry, assessing how companies’
are led by the Corporate Governance department, while relative emissions performance aligns with the industry

2024 BLUE BOOK | 52

pathway. Pathways help us evaluate whether companies about transition planning and changing business
plan to reduce their emissions in line with the reduction models is still a work in progress for many companies.
that the entire industry needs to achieve year-by-year. We need companies to expedite their decarbonisation
efforts. We are no longer talking about “hard to abate”
IMPACT OF THE CHANGE but “expensive to abate” – the technology is there, and
One of the key performance indicators we use to we want our portfolio companies to invest in a way that
evaluate the effectiveness of our climate work is an creates sustainable value.
internal net zero tracker. We have observed a positive
The biggest challenge relates to systemic issues, the
development, as close to 65 percent of the fund’s
underlying coordination failures, which are hard for
financed scope 1 and scope 2 emissions are now
companies and investors alike to address on their own.
covered by net zero targets. We also observe that target
The high cost and low impact of individual efforts is one
setting is linked to emissions reductions: there is a 2
example of this; for instance, auto manufacturers rely on
percent reduction for companies with strong targets,
critical minerals supply for transitioning and on consumer
compared to an 8 percent increase for those without.
demand for EVs. Another example is policy uncertainty
At the company level, we have set specific objectives and occasional backtracking, which makes companies’
for each net-zero dialogue. Objectives can include investment and capital allocation decisions difficult in
building a relationship with the company, understanding some sectors. More broadly, we increasingly recognise
their strategy, conveying our expectations, and the importance of a multi-stakeholder perspective,
seeking impact over deliverable changes in strategy and of analysing the entire value chain to assess the
or disclosure. While it is too early to assess progress, interdependencies of companies’ action with suppliers
we have built a strong understanding of companies’ and clients, among others. Finally, we acknowledge the
decarbonisation efforts and going forward will engage in need to devote increased attention to climate physical
a deeper and even more targeted way to effect change. risk, in light of its ever more apparent manifestation.
We also observed positive results of our first shareholder
resolutions: of the four that we filed, we decided to
withdraw two following commitments made by the
targeted companies.
This is very encouraging, although we are careful in
attributing these outcomes to our engagement. We
are a minority investor in all the companies we own,
which are subject to pressures from other shareholders,
stakeholders, regulators, and market forces.

WHAT WE LEARNED
To analyse the progress of our work, we depend on good
data. While climate and sustainability disclosures from
companies have increased, we still face challenges in
the coverage, quality, and availability of this information.
This is why we strongly support initiatives such as the
International Sustainability Standard Board’s climate
standard. Value chain risk and Scope 3 information is
particularly key, and good forward-looking information

2024 BLUE BOOK | 53

Nuveen, A TIAA Company

ADDRESSING AFFORDABLE HOUSING SHORTAGES THROUGH PUBLIC-PRIVATE PARTNERSHIP AND

SUSTAINABLE AND RESPONSIBLE INVESTMENT

The preservation of affordable housing is paramount to Strategy focuses on building resilience among low-
protecting underserved populations and maintaining the income communities in the U.S., primarily by investing
supply of below-market rental units in high-growth areas. in rent-subsidized, income-restricted, and Naturally
For more than a decade, Nuveen has helped tackle this Occurring Affordable Housing (NOAH) assets. The
challenge, investing in preserving the supply of safe, strategy concentrates on preserving existing affordable
quality, low-cost housing. As of 3Q23, Nuveen has a housing stock and developing new units in designated
platform that manages over 161 affordable housing assets, communities. More than 95 percent of our portfolio
with approximately 32,000 units across 24 states. Given serves renters who earn 60 percent or less of the Area
the greatest household expenditures are housing related, Median Income (AMI).
Nuveen’s underlying mission in this space is to provide In addition to quality housing, Nuveen is committed to
residents with affordable rent and targeted supportive providing social services that can positively affect our
services. By lessening the impact of those severely rent residents’ lives and build strong, healthy communities.
burden, residents then have an opportunity to spend Many communities facing the adverse effects of the
their income towards other essential items, including nationwide affordable housing shortage today are also
improving health outcomes, and increasing educational victims of generational disinvestment in key quality of life
advancement, and financial security. resources. Our strategy helps address that disinvestment
The cost-burden on lower-income renters has become by building a larger and more sustainable ecosystems for
increasingly untenable and lower-income earners in the communities to thrive.
bottom quintiles of the U.S. population is only growing.
Nearly half of extremely low-income renter households BRIDGING PUBLIC AND PRIVATE SECTORS
are senior citizens and citizens living with diverse Addressing the affordable housing crisis will require
abilities. One-third of extremely low-income renter both scale and partnerships. Our strategy includes
households are in the labor force – 85 percent of whom building relationships that create an important bridge
work more than 40 hours each week.13 between private capital and public resources. The
traditional model for housing must be reimagined so
A STRATEGY TO PROTECT AND BUILD AFFORDABLE that municipalities, governments, and private capital
HOUSING FOR LOW-INCOME COMMUNITIES can collaborate on this issue – achieving more together
We estimate there are approximately 650,000 units than any group could independently. For Nuveen, that
at risk of losing their affordability protections by 2030 partnership approach has driven success and growth. It
unless there is active intervention.14 In 2022, Nuveen has yielded many off-market opportunities and allowed
Real Estate launched the Global Impact Investing us to deliver significant volume of units for communities
Sector. Drawing upon more than a decade of investment in need. Investment and partnership at this level benefits
experience in the space, the U.S. Impact Housing residents, investors, and communities as a whole.

2024 BLUE BOOK | 54

SOLUTIONS AND OPPORTUNITIES FOR COMMUNITIES opportunities that produce positive societal benefits and
IN NEED steady returns.
Nuveen’s analysis of the U.S. Census American Housing We view investments in housing through an impact lens,
Survey found that lower income renters have a higher with an intentional focus on upward mobility and financial
share of households living in physically inadequate inclusion. When working in specific communities, we
housing conditions. Moreover, according to a National think about solutions holistically – not just as assets, but
Low Income Housing Coalition analysis, 11 million as bridges to better healthcare, education, transportation,
extremely low-income renter households occupy or have and business development. We are proud of the results
access to only 3.7 million affordable and available units, we have helped to deliver, but the job is far from done
leaving a shortage of 7.3 million rental homes.15 and we look forward to making more progress on this
Responsible institutional investors of affordable housing issue in the years ahead.
are providing residents with a safe and sustainable living
experience. The numerous benefits from institutional
investment entering the affordable housing sector
include, but are not limited to:
✓ Enhanced resident satisfaction because of improved
living conditions, ultimately resulting in lower
resident turnover.
✓ Increasing seniors’ ability to age in place, given the
enhanced focus on health and wellness.
✓ Integrated sustainability plans that lower utility bills
for residents, ultimately creating more room in the
budget for other essentials.
✓ Providing residents access to WiFi and telehealth.
✓ Closing economic gaps through on-time credit
reporting and access to rent relief.
In 2023, Nuveen’s parent company, TIAA, committed to
seed the Nuveen Real Estate U.S. Impact Housing fund
with $250 million through the TIAA General Account.
The fund is focused on generating strong risk adjusted
returns, primarily by investing in a geographically diverse
portfolio of properties, including assets that are rent-
subsidized, income-restricted, and/or Naturally Occurring
Affordable Housing (NOAH). The fund also intends to
invest in regenerative development and financing that
supports diverse developers of affordable housing. This
creates a compelling portfolio allocation for institutional
investors, as demand for affordable housing has
intensified nationwide and more investors are seeking

2024 BLUE BOOK | 55

Onex
Bobby Le Blanc, CEO

CULTIVATING SUSTAINABLE GROWTH FOR THE LONG TERM: EMPOWERING SMALL & MID-SIZED
COMPANIES IN THE ONEX PORTFOLIO

At Onex, our commitment to sustainable investing is a specific needs. We typically held these meetings with
collaborative effort to drive long-term value across our the CEO, CFO, and/or COO to ensure strategic alignment
diverse portfolio companies. While larger corporations at the outset, with subsequent responsibilities for
often boast dedicated sustainability teams, small to implementation delegated across the organization
mid-size companies typically lack such resources. as needed.
Indeed, there has been a prevailing presumption that
sustainability is less critical for smaller enterprises. IMPACT
However, a paradigm shift is underway as smaller The impact of our sustainability approach has been
companies, embedded in the supply chain of larger substantial. We found that many of our smaller
counterparts, face increasing pressure from customers companies had been grappling with the issue of how
and other stakeholders to align with sustainability-related to address the increasing sustainability expectations
best practices and guidelines, and in some cases, to of their customers, particularly with respect to carbon
set targets for improvement. This is particularly true measurement and reduction, in a cost-effective and
in the area of carbon emissions and climate, as more efficient way. Our companies welcomed the engagement
companies look to measure and reduce their scope by our ESG team, as it provided them with additional
3 emissions found in their up and downstream expertise and guidance without having to hire a
supply chains. dedicated resource or engage an external consultant.
The value delivered to our portfolio companies is
APPROACH exemplified by the transformative journeys of two of
To address this evolving landscape, our sustainability our portfolio companies, as detailed below. However, it
team held an information session for all our small to is important to note that these two examples are just a
mid-sized companies. This session aimed to introduce snapshot of the progress made, as many of our other
key sustainability concepts, outline the cost and smaller companies have made substantial progress on
revenue benefits of sustainability initiatives, discuss the the sustainability front, driving positive environmental,
importance of identifying material ESG factors to their social, and financial outcomes along the way.
business, and highlight market-leading best practices. One of our portfolio companies, Precision Global,
Following this foundational step, our team engaged is a consumer packaging company with facilities in
individually with each portfolio company to assess their Europe and North America. The company sought to
current level of sustainability knowledge and initiatives, enhance its approach to sustainability to compete more
and to determine the best next steps. Our objective effectively with peers. Our ESG team worked closely
was to guide each company to develop or enhance its with management to formulate a sustainability approach,
own bespoke sustainability strategy that is focused on which began by conducting a materiality assessment
the most financially material considerations and tailored to identify the sustainability topics most likely to drive
to the company’s unique circumstances and sector-

2024 BLUE BOOK | 56

 value and mitigate risk. This resulted in the establishment challenges and opportunities, but often do not have
of key pillars for the company’s sustainability strategy, the resources to address them. Providing guidance and
which reflects industry best practices. Our team provided assistance through our ESG team has been a significant
ongoing support to operationalize the strategy, by value-add for our companies, as it is helping them to
integrating these key pillars into its company-wide future-proof their businesses by meeting or exceeding
strategy and risk management process. This included evolving customer and stakeholder expectations,
establishing a working group with accountability for enhancing business reputation, and spurring product
each pillar, identifying KPIs, establishing baseline innovation. Given the obvious business benefit, we are
measurements, setting targets, and creating reporting confident that these initiatives and innovations will be
goals. The company also launched an enhanced long term in nature, reflected in our exit valuations, and
‘greener’ product line, which helped foster an enhanced will continue past our hold period. Our approach has also
dialogue with its major customers and boosted the emphasized the importance of tailored, collaborative
brand’s reputation. approaches that consider the unique circumstances of
each company, which we believe will ultimately drive
Walter Surface Technologies is a portfolio company
additional value on exit and long-term change.
that provides consumable surface technology solutions
for metalworking end-users, including abrasives, safety
/ PPE, complementary chemicals, twist drilling products
and tooling. Recognizing the growing importance of
sustainability, the company sought guidance from
our ESG team to advance its sustainability approach,
with a particular focus on identifying revenue growth
opportunities. Our ESG team collaborated with the
company to identify the most material sustainability
initiatives that would meet or exceed evolving customer
expectations and better compete with peers. Through
this engagement, the company identified new revenue
growth opportunities, with sustainability considerations
integrated into product launches and targeted sales
strategies. Additionally, the company’s customers are
increasingly asking for data and information relating
to its carbon emissions. It has been able to provide
that information by utilizing tools provided by Onex to
measure its carbon emissions, while also identifying
opportunities for increased energy efficiency and
emissions reduction.

LEARNINGS
The above examples highlight the value of proactively
working with our portfolio companies to understand
their current sustainability initiatives and evolving best
practices for their industry. We have found that small and
mid-size companies have many of the same sustainability

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Ontario Teachers’ Pension Plan

TAPPING INTO INNOVATION TO UNLOCK GROWTH

Today’s business environment is characterized by greater enabled products and capabilities to drive financial
uncertainty and volatility, stressed supply chains, and growth and keep pace with the innovation curve. To
higher interest rates – and we’re experiencing one uncover new opportunities, Koru hosts hack-a-future
of the most challenging economic and geopolitical sessions together with participating portfolio companies
environments for investing in a generation. At the same to workshop ideas and then turns them into tangible
time, many industries are being challenged by upstart business concepts. With a focus on speed to market, the
technology companies looking to disrupt traditional concept is incubated, and the team works to build the
industries and processes. Disruption is happening all minimum viable product. Once finalized, the Koru team
around us – just look at the healthcare, energy, and holds immersion sessions to ensure the product, tool,
food industries. This trend is only going to accelerate. or service is integrated within the portfolio company.
With so many businesses being impacted by disruption, Koru provides continued support as the capability is
we consider innovation critical to helping our portfolio embedded in the business.
companies stay resilient in a rapidly changing world.
Those that don’t adapt will be left behind. CREATING VALUE
Koru has helped our companies solve business pain
At Ontario Teachers’, we view innovation as a core part
points and leverage opportunities in our global portfolio
of our long-term business philosophy and a key catalyst
to build long-term value. One of Koru’s success stories
for growth and value creation. We stood up a new asset
is FYLD, which was born out of a partnership with our
class – Teachers’ Venture Growth – roughly five years
portfolio company SGN, a gas distribution company
ago to partner with cutting-edge technology companies
in the UK. The idea behind FYLD is that technology
that are aiming to become the leaders in their markets.
can help field workers be safer and more productive.
We also launched a venture studio – Koru – that works
Utility and construction crews do essential work, but
exclusively with our portfolio companies. When we
field workers were filling out repetitive, paper-based
think about investing for the long term, we need to help
forms by hand, causing decision makers to react late.
our businesses maintain their resilience in the face of
Managers were unable to address safety and operational
unprecedented and rapid disruption. Backed by a team
challenges efficiently.
of successful innovators and creators within the start-
up world, Koru marries the knowledge, expertise, and FYLD reimagined remote field operations by replacing
advantages of our portfolio companies with a start-up paper-based risk assessments with a digital solution.
methodology and approach to build new opportunities Taking a data-driven approach, the solution delivers
and businesses. risk assessments via video and voice analytics, flags
potentially dangerous working conditions, and prompts
THE TOOLS TO UNLOCK GROWTH control measures.
The Koru team provides our portfolio companies with While FYLD was launched as a standalone business,
the tools to uncover, test, and build new technology- it was built for, and created in partnership with, SGN.

2024 BLUE BOOK | 58

FYLD has helped the natural gas distribution company
reduce worker injuries and incidents by 20 percent and
has cut time spent on risk assessments by 75 percent.
In the time since, FYLD has onboarded more than 100
companies globally in hazardous sectors ranging from
gas, electricity, and water to highways and construction.
It has also won a host of awards, including the U.K.
Energy Innovation Centre’s Innovator of the Year award.
Koru also partnered with Fairstone – a Canadian
lender – to help expand its product offering. Together,
the lender and Koru created Fig, which is a fully digital
lending experience. Fig simplifies the borrowing process
for consumers, allowing them to apply for personal
installment loans in a few clicks. This seamless process
frees up Fig’s team to support customers.
Koru, with the long-term focus of Ontario Teachers’, is
continuing to partner with portfolio companies to unlock
value within their businesses – whether that is new
growth opportunities or finding efficiencies. Innovation
and self-disruption can be untapped resources for
businesses searching for growth. For a long-term
investor, we see that continued innovation will help
create more resilient and more valuable businesses.

2024 BLUE BOOK | 59

PwC

THREE LESSONS IN PREPARING FOR THE NEW CLIMATE ERA

We are entering a new era of a permanently altered When we took the time to clearly understand how
climate. Adapting to extreme weather conditions globally climate change might affect us at PwC, the risks became
– while striving to mitigate the damage – is a long-term tangible, immediate, and personal. Our climate risk
challenge par excellence. And for this task we are vastly teams can predict how extreme shifts in weather and a
unprepared. Our all too human tendency to prioritize changing climate will affect the earth’s land surface. Even
today’s concerns over tomorrow’s needs has led us here, in our own work environments, our teams showed us
and it will take a collective shift in priorities to preserve a how much our offices are likely to be exposed to climate
livable future for all. hazards such as drought, extreme heat, and extreme
precipitation or flooding.
Business, for our part, needs to do more. In PwC’s 2023
Global CEO Survey, over half of CEOs acknowledged When we can see that certain PwC offices from Tokyo
that their companies will be exposed to climate change to Tampa may face up to 200 days a year of potentially
risks within the next five years. However, only 17 percent deadly temperatures, climate change feels very real,
reported taking proactive measures to safeguard their very quickly. This stark picture of our risks helped to
workforce and physical assets from the effects of climate galvanize action and, more importantly, give our people
change. That’s a dangerously low number, considering the granular information they need to take steps to adapt.
companies are already seeing their operations being Having clear data on our own risks helped to dispel
affected by extreme weather throughout the world (the misunderstandings that climate change’s effects will
US alone is now hit by a billion dollar weather disaster happen only in the distant future, elsewhere, and to other
every other week on average¹) and we are expected to types of businesses. We made public highlights of our
breach the red line of 1.5 °C of global warming within this climate risks, in part to encourage other companies to
decade.² examine theirs.
So what will enable business leaders to proactively Use data to define clear next steps and create the teams
adapt to a rapidly changing climate that will affect their and processes to deploy them.
companies for decades to come? PwC has prioritized A detailed analysis of our climate risks enabled us
long-term thinking about climate change risk deep into to identify key issues for our business and potential
our strategy as a network, and the lessons we’ve learned responses. It wasn’t easy – it took great effort to translate
along the way might help others think about how to technical climate data into pragmatic business risk
bolster their own resilience. assessments, and then educate and mobilize a network
Use data to make long-term risks relevant now. of leaders in every territory to act on them.
The effects of climate change can seem distant, even We built climate resilience into the core of our enterprise
abstract. We know climate change is real, but sometimes strategy, establishing a leadership structure to oversee
we’re not entirely sure how it will affect us and when. the process within our own operations. We appointed
This can make it tempting to delay action on a threat that Climate Risk Leaders from across our network to
feels remote. implement their own local climate risk analyses and work

2024 BLUE BOOK | 60

across multiple functions to put adaptation measures
in place. We looked afresh at our security and business
continuity functions, globally and locally, to anticipate
climate hazards. Climate resilience is very much a part of
our network risk management framework, and climate-
related risk is considered within the enterprise risk
management processes of all our PwC firms.
Demonstrate that climate adaptation is not a distraction
from building business value.
Rather, it is central to value creation and preservation.
Our climate risk analysis helped us quantify the benefits
of action and the costs of inaction. The analysis
helped us build a business case for steps like securing
our supply chains and adopting climate resilient
infrastructure. This brought to light opportunities too: to
innovate, to operate more efficiently and sustainably, and
to help the communities in which we operate to adapt.
After all, climate change doesn’t affect just PwC offices;
it affects our clients, our people, and our communities in
the region. Uncovering our climate risks helped us think
holistically about how to help the wider communities of
which we are a part.
Revealing PwC’s own climate risks made a global issue
personal, helping us see the urgency and value of
building resilience – and helping us make decisions
today to help secure the long-term future of our network
and our communities. Business leaders must understand
their own climate risks and the steps they can take right
now to adapt.

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Schroders
Peter Harrison, CEO

HUMAN CAPITAL MANAGEMENT AND LONG-TERM RESILIENCE

Companies work with a diverse set of capitals to individual and collective attributes. These include skills,
create value – financial, physical, and human. The experiences, and relationships available to the firm to
latter is increasingly talked about but rarely analysed create economic value. It is a special type of intangible
in detail. Labour markets have sought to re-establish asset that produces economic wealth by unlocking value
their bargaining power in recent years, first via the from otherwise inert forms of capital on firms’ balance
“great resignation” and again through heightened strike sheets. Human capital management catalyzes this
activity. The knowledge economy continues to grow. The crucial transformation, turning assets into earnings by
emergence of generative AI has led us into the era of driving productivity.
cognitive abundance, where competitive differentiation Human capital is a critical source of competitive
lies in the interaction with, and application of, knowledge; advantage and resilience. Maintaining it requires the
no longer just access to information. synergistic combination of many systems – culture
Cyclical inflections and short-term cost pressures and inclusion, incentives and compensation, access
often emphasize identifying key talent. Long-term to opportunities for professional development, and
demographic trends imply growing skills gaps and labour environments conducive to innovating.
shortages, as early as 2030. We believe these issues Qualitative and quantitative analysis of human capital
increase the significance of human capital management. management prompts us to ask new questions about
The harder it becomes to find skilled workers, the more how value can be created sustainably. Indeed, human
companies need to be good developers and stewards capital return on investment (HCROI) in combination
of talent; to be good employers and offer better with employee economic value added (EEVA) – among
work-life balance, better compensation, and effective other metrics – helps us assess the effectiveness of
development and training. such management. HCROI is positively correlated with
To further our understanding of the value of sustainable forward excess returns over multiple time horizons
human capital management, we have conducted and and across multiple sectors, even after controlling for
published detailed research in collaboration with a variety of factors. Companies with stronger HCROI
the California Public Employees’ Retirement System create more value. Analysis can also help us determine
(CalPERS) and the University of Oxford’s Saïd Business why companies with similar levels of labour investment
School. This work helps to inform our engagement and see different outcomes. For now, corporate disclosure
portfolio management activities and is integrated into our of human capital-related data remains poor. Better
broader work on secular trends such as deglobalization disclosure would significantly benefit market participants
and demographic shifts. and asset owners.

HUMAN CAPITAL RESEARCH HUMAN CAPITAL IN ACTIVE OWNERSHIP

An organisation’s human capital refers to its people’s Faced with continuing economic volatility, we expect
capabilities; a cumulative, unique, path-dependent set of that companies with strong human capital management

2024 BLUE BOOK | 62

are likely to be more capable of navigating the future of companies to find out where their approach to human
effectively. We identify four key sub-themes for capital management might give them an advantage,
engagement on human capital: culture and oversight, or not. Much of what we ideally want to know is not
investment in the workforce, engagement and typically disclosed by companies, or not in a format that
representation, and health, safety, and wellbeing. We set enables comparison.
out our approach and expectations of companies in our We have analysed the strength of human capital
Engagement Blueprint. management of individual companies in collaboration
Disclosures that enhance our ability to interpret these with a variety of desks, from European to Japanese
attributes are an increasingly important part of the Equities. We have also integrated human capital
investor toolkit. However, our experience to date is that measures into some of our quantitative funds. In Europe,
human capital data disclosed by issuers is frequently our investors engaged companies in the technology
incomplete and inconsistent. sector to understand the sustainability of their innovation,
the strengths of their human capital management
We therefore launched an engagement initiative in Q3
strategies, and to share findings of common
2023 with our US holdings to explain the importance
best practices.
of HCM disclosures and to encourage all our holdings
to move towards more universal and comparable Such an approach allows active managers like us to gain
human capital reporting metrics. This includes both greater insights into companies within our investment
core quantitative metrics, applicable across sectors and universe. In time, we can seek to identify the leaders and
geographies, as well as the most appropriate qualitative laggards in human capital management and make better
information based on individual companies and their informed allocation and engagement decisions.
business models. We believe that this combined For more information on Schroders’ human capital work,
approach will give investors a more complete explore our Insights and Podcast.
picture of human capital management quality at
investee companies.
Our approach is aligned with that of the Human Capital
Management Coalition, a cooperative effort among a
diverse group of institutional investors representing over
$8 trillion in assets. We also believe that the metrics we
have asked for are cost-effective to collect and can be
substantiated by supporting narrative that explains these
firms’ human capital management strategies
and challenges.

HUMAN CAPITAL IN PORTFOLIO MANAGEMENT

As active investors, we are trying to find companies
where the market is mispricing their potential. Human
capital management analysis forms part of the whole
mosaic our investors look at when assessing a company.
It adds to the more traditional financial analysis we do
around things like valuations or forecasts. Practically, this
may take the form of helping to ask the right questions

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State Street
Ronald P. O’Hanley, Chairman & Chief Executive Officer

MAINTAINING BOARD SKILLS TO ENSURE LONG-TERM SUCCESS

Corporate boards are the shareholders’ fiduciaries. unimpeachable business ethics, and perhaps above
They are charged with overseeing the development all else, are adaptable. For example, an individual
and execution of strategy within a clear risk framework board member might not be an expert on a host of
and holding management accountable for the same. important new business drivers — including Artificial
Accordingly, the three critical requirements of a Intelligence (A.I.), social media use, blockchain, or climate
successful board are: a deep understanding of long- change — but they are a fast learner and big picture
term strategy; CEO selection and succession planning; thinker who upskills quickly, embraces collaboration,
and effective risk oversight. As I have written about and understands how these new challenges and
previously, the exigencies of near-term results may opportunities might impact thinking around long-term
push a board to allocate less time on these core pillars strategy and risk management.
of the long-term lens. A board must of course keep its Clients, regulators, and markets expect new business
eye on the peaks and valleys of its firm’s short-term drivers like those to be integrated quickly and effectively
performance — though this is sometimes influenced into business strategy. We see this with the reality
by anomalous company, industry, and/or market of topics such as cybersecurity, climate risk, and A.I.
developments — as this performance is often a leading Multiple constituencies now expect companies to
indicator of momentum and investor returns. But the identify, measure, disclose, and adapt to the related
board’s responsibility is to maintain a long-term vision strategic opportunities and risks. What are some steps a
and preserve management’s focus on a foundation for board might take to equip itself to best oversee the long-
continuous innovation, growth, and return. term evolution and growth of its company amidst this
Given the importance of their role, how can corporate continuing stream of new and complex opportunities and
boards ensure they are an effective cornerstone of considerations? Some ideas:
long-term strategic growth? Success hinges on building Identify knowledge gaps and provide depth of material:
a board with broad, complementary experiences, skills, Survey the board to self-identify areas where it might
and qualifications. In this respect, the importance of benefit from greater expertise; and then act on any
board diversity — in all its myriad forms — cannot be identified needs via an active new director and board
overstated. Diversity of thought, perspective, and refreshment program. In addition, ensure a dedicated
expertise is at least as important as other forms of board resources program and library are in place that
diversity, as these attributes help to ensure that the is continually curated by management (and board
board has the fundamentals in place regardless of members) with new material.
specific topic.
Draw deep on internal company expertise: It all starts
Apart from diversity, other intangible attributes and with promoting strong and qualified talent and fostering
characteristics for effective board membership trusted engagement between the board and internal
include directors that are independent-minded, management and teams. These internal personnel
hyper-competent, responsive, capable, curious, have thoroughly know the organization and can demonstrate

2024 BLUE BOOK | 64

how novel subject matter relates to strategy, operations, Board mentoring and talent-management process:
and risk through formal board-level presentations and Talent management and the professional development
trainings, and informal interactions, as appropriate. of the next generation of leaders is a critical part of
any company fulfilling its long-term strategic vision.
Embrace external experts and education opportunities:
Board members’ direct engagement with high-potential
Engage with experts (e.g., subject matter experts,
individuals beyond the C-suite and upper-level managers
academics, and consultants) to augment material
can be useful in deepening the board’s strategic
presented by management. This includes considering
understanding and also elevating company talent. Board
bringing in external experts and/or encouraging and
members might consider serving as mentors to high-
sponsoring board members to attend conferences and
potential mid-level managers to provide support and
events that specifically foster board-level understanding
guidance to more junior executives while also providing
and socialization. For example, the National Association
board members with valuable new perspectives on the
of Corporate Directors (NACD) offers regular conferences
organization.
on a variety of topics.
Change is perhaps the only constant in business.
Go where the knowledge is: Assign select board
As new opportunities, challenges, and risks present
directors to visit company offices and operations centers
themselves, skill sets must never remain stagnant. This
and attend small group sessions, production tours, and
holds true especially at the board level. New ways of
interactive town halls to see up-close the application and
supporting corporate boards — and enabling individual
effects of new developments. It may also be useful to
board members to evolve through deeper corporate
incorporate meetings with clients and regulators during
understanding and subject matter expertise — are
these opportunities.
essential components of delivering upon any company’s
Consider new board committees or working groups: long-term strategic goals.
It may be useful to add a new board-level committee
beyond the typical audit, nominating, and compensation
committees. Committees aligned to a specific discipline
or subject matter can accelerate a board’s understanding
and ability to effectively oversee new critical topics.
Adding a new committee should be done thoughtfully, as
it will consume additional director and management time
and may be difficult to alter or sunset if not successful.
Board and committee rotation and succession
planning: Leverage existing committee structures
and memberships to position current directors to gain
valuable experience to assume board leadership
roles (e.g., committee chairs). This includes rotating
directors through several committees to gain a more
comprehensive understanding of the company
and thereby contribute more fully to board-
level discussions.

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Temasek Holdings
Dilhan Pillay, Executive Director & Chief Executive Officer

TEMASEK’S PATHWAYS TO DECARBONISATION

As the climate crisis intensifies, governments, businesses, have also accelerated efforts along these three pathways
and societies face multifaceted challenges. At Temasek, to decarbonisation.
we recognise the long-term effects of climate change on
the resilience and commercial viability of our portfolio. INVESTING IN CLIMATE-ALIGNED OPPORTUNITIES
Sustainability is, therefore, a resolute commitment and To support the acceleration towards net zero, Temasek’s
an ongoing journey for us. We embed it in all that we investments and efforts span several key areas reflecting
do – from our mandate to deliver sustainable value the real economy: food, water, waste, energy, materials,
over the long term to our strategy for how we operate clean transportation, and the built environment.
as an institution, shape our portfolio, and engage our Temasek invests in companies seeking to scale pivotal
investees to build sustainable businesses. We have been and commercially viable decarbonisation technologies,
steadily intensifying efforts to deploy capital and catalyse such as renewable energy and solutions, and bring them
solutions to tackle the climate crisis, to create a more to market quickly. Through our investments in early-stage
resilient and inclusive world so that every generation companies, we also back nascent but innovative and
can prosper. promising next generation technologies and solutions
that may not be commercially viable yet, but have
OUR COMMITMENT TO SUSTAINABILITY AND CLIMATE
immense potential to decarbonise adjacent sectors
ACTION
and transform economies. Solutions include those in
Environmental sustainability, climate change mitigation, geothermal energy; nuclear energy including fusion; and
adaptation, and transition are critical levers towards hydrogen, which could all have a transformative impact
a greener economy. We have committed to halve our as technology advances.
portfolio emissions (from 2010 levels) by 2030 and
achieve a net zero portfolio by 2050. To guide our ENABLING CARBON-NEGATIVE SOLUTIONS
investment decisions and account for potential exposure Temasek has also deployed capital into ventures at the
to transition risk, we have set an internal carbon price of forefront of decarbonisation. We launched GenZero,
US$50 per tonne of carbon dioxide equivalent (tCO2e), an investment company that aims to accelerate
informing us of the true cost of capital for the long-term decarbonisation globally and drive positive climate
value of our investments. This helps us better prepare for impact by investing in nature-based solutions, tech-
a world where current or future regulation could increase based solutions, and carbon ecosystem enablers. We
the environmental cost associated with business have also invested in carbon removal and carbon capture
activities, in line with the Paris Agreement, resulting in solutions to support the mitigation of climate change.
financial impact on businesses. We expect to raise this
As we lean into the transition of the real economy,
internal carbon price progressively to US$100 per tCO2e
we are also prepared to selectively invest in carbon-
by 2030. To drive progress towards our targets, we
intensive businesses to help accelerate their transition
developed a climate strategy that is informed by science
to net zero. Reflecting Temasek’s focus on real-world
and the relevant policy and technology roadmaps, and

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decarbonisation, we acknowledge that emissions This is where opportunity lies for all players and sectors
trajectories of such transition investments may therefore to lean in. With appropriate structuring and adaptation
differ from our core portfolio. of frameworks by governments, alongside partnerships
with multilateral development banks, concessionary and
ENCOURAGING DECARBONISATION EFFORTS philanthropic capital can provide first-loss capital to fund
IN BUSINESSES critical developments. This, in turn, encourages private
The success of our portfolio companies underpins our sector buy-in, which will help expand progress and
own success. Close engagement strengthens everyones’ hopefully foster a cascade of innovation.
long-term resilience. To encourage ongoing alignment,
Our joint venture with HSBC, named Pentagreen Capital,
we developed a Climate Transition Readiness framework
is an example of how we are catalysing financing
that is shared with our portfolio companies and we work
for marginally bankable clean infrastructure projects.
with them to transition their operations. For example,
Temasek also signed a Memorandum of Understanding
the merger of Sembcorp Marine and Keppel Offshore &
with the Monetary Authority of Singapore, Allied Climate
Marine to form Seatrium is expected to accelerate the
Partners, and the International Finance Corporation, at
group’s transition towards providing renewable energy
COP28 to establish a blended capital partnership, with
and cleaner offshore and marine solutions.
the goal of addressing climate finance gaps and increase
Another key engagement opportunity is our annual the bankability of green sustainable projects in Asia.
Ecosperity conference, a platform for global leaders,
The climate crisis does not discriminate based on
policymakers, investors, and civil society to share
borders, entities, and sectors. We recognise that
developments, insights, and best practices on
partnerships are crucial for us to catalyse sustainable
sustainable development.
solutions, and pool resources with complementary
RADICAL COLLABORATION TOWARDS A capabilities. It is more critical now than ever for the
COMMON GOAL international community to come together. When
we work together, our efforts can be stronger and
The world is not yet on track to net zero. The urgency
our impact, amplified. We look forward to continued
to find effective, sustainable solutions has never
collaboration and partnerships that will enable us to
been greater, and our collective journey requires a
deploy meaningful solutions today to shape a sustainable
systems approach. In addition to direct investments, we
future for generations to come.
established Decarbonization Partners, a joint venture
with BlackRock, to focus on late-stage venture capital
and early-growth private equity investments with the
sole purpose of advancing decarbonisation solutions.
Asia is also where the action needs to happen – and at
speed, even as it balances competing interests of social
and economic development with the decarbonisation
of its energy systems. Asia accounts for half of global
carbon emissions, with about 85 percent of energy
produced from fossil fuels. Given fiscal constraints and
limited access to private capital, especially for marginally
bankable projects, the substantial costs associated
with a just transition make the adoption of greener
solutions challenging.

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Vista Equity Partners
Robert F. Smith, Founder, Chairman & CEO

ADVANCING THE DIGITAL ECONOMY IN A DOWN MARKET

Over the last decade, we’ve witnessed a massive A FOCUS ON VALUE CREATION
expansion in the software-as-a-service (SaaS) sector. Since inception, Vista has focused exclusively on
According to IDC, forecasted worldwide revenue for enterprise software and has done more than 610
enterprise applications will grow from $279.6 billion private equity transactions.20 This experience allows
in 2022 to $385.2 billion in 2026, at a 5-year CAGR of us to identify companies with market-leading potential
8.0%.18 The primary driver behind this growth has been – quickly and with conviction. Our team develops
the overwhelming productivity that SaaS can provide, investment theses with an understanding of the
reaching into every aspect of the economy as a force operational factors we can control and influence that aim
for positive disruption. Yet, after a period of prolonged to de-risk and generate returns. We then partner with
monetary expansion – in which capital and ambition executives to accelerate the corporate maturity of their
were flowing through the economy and software businesses, executing value creation strategies that can
multiples reached record highs – the broader tech sector expand revenue and deliver EBITDA growth.
has experienced a re-rating over the last two years.
A recent example of this value creation approach was our
During this time, rising inflation and interest rates, as well
investment in Cvent, a provider of event management
as geopolitical uncertainly, have caused volatility in the
software. Early in our investment period, Cvent adopted
financial markets. Many investors have struggled to make
one of Vista’s core best practices around pursuing
new investments and create realization opportunities for
longer-term, multi-year contracts with its customers.
their portfolio
During the COVID-19 outbreak when live events
and investors.
shuttered, we pivoted the business and were able
Thanks to Vista’s disciplined investment approach, the to retain much of its revenue, while at the same time
firm has maintained its momentum. Since November investing in a virtual event platform. Within five months,
30, 2021 – when the market correction began – our Cvent scaled its virtual events business to over $60
firm has completed or signed 21 monetization events. million in bookings. Vista sold Cvent to Blackstone for
Across these events, we have generated $18.7 billion $4.6 billion in June of 2023.21
in total value, including monetizations of $14.5 billion
(including co-investment) with $4.2 billion in unrealized A FOCUS ON PROFITABILITY
value still to be captured.19 With over two decades of In today’s higher interest rate environment, more limited
experience investing in enterprise software companies, partners are focused on investments that have a path
Vista’s disciplined approach and focus on value creation, to profitability and the capacity to generate free cash
profitability, and innovation within our investments have flow rather than pursuing growth alone. At Vista, we’ve
been central to the firm’s long-term resilience. These assessed over 9,000 companies since our founding,
principles are underpinned by a prioritization of talent including over 2,000 deals since March of 2020. Yet, we
and diversity among our investment team. only invest in about 5 percent of the companies they
view or consider.22 We aim to transform our investments

2024 BLUE BOOK | 68

into highly profitable, mission-critical assets with table. This is why people choose to grow their careers
defensible top-line growth and market positions. at Vista with a 95 percent retention rate at the Vice
President level.24 Diversity and inclusion help fiduciaries
In June, we announced the sale of Apptio to IBM for $4.6
to maximize value creation and set up their business for
billion after a four-year transformation. During Vista’s
long-term success. Diverse organizations even see a 12
ownership, Apptio evolved into a comprehensive IT
percent increase in employee performance and retention
financial planning platform, growing its total addressable
on average compared to nondiverse organizations.25
market and opening new go-to-market channels to
Vista reached gender parity at the start of 2022, and
double revenue and increase EBITDA margins by more
currently over 40 percent of the firm are people of
than four times. During the partnership, Apptio expanded
color.26 Our talent strategy encourages a highly cohesive,
its customer base by more than 3.3x and currently serves
integrated team that has evolved as our firm has grown.
more than 60 percent of the Fortune 100.23
Today’s economic and technological environments
INNOVATION present challenging dynamics for many investors and
In addition to macro headwinds, today’s software software companies. But thanks to our focus on value
companies face technological disruption with the creation, profitability, and innovation, we feel confident
arrival of generative AI – a technology which could in our ability to continue to successfully execute our
alter our society in a similar fashion as the internet. By investment strategies with purpose.
encouraging thoughtful AI adoption within our portfolio,
we believe we can build more resilient businesses
and create new opportunities in product development,
demand generation, customer retention, and more. Vista
is actively supporting its companies across several
key vectors with a lens toward AI: product innovation,
product uplift, portfolio enablement, and risk and
readiness. We leverage our value creation and product
innovation systems to programmatically understand
the evolving generative AI ecosystem, establish best
practices for success, and ensure the entire portfolio will
benefit from shared learnings.
We encourage our companies to explore AI use cases
through Vista’s annual Global Hackathon. This year,
250 participants across 35 companies competed with
generative AI use cases spanning from personalized
student instruction to automated software testing. We
also welcomed STEM students from historically Black
colleges and universities to participate in the competition
and gain hands-on experience.

A FOCUS ON DIVERSE PERSPECTIVES AND TALENT

Our culture is founded on an engineering mindset and
a commitment to excellence. We prioritize diversity
and a team dynamic where everyone has a seat at the

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Votorantim
João H. Schmidt, Chief Executive Officer

TRANSFORMING BUSINESSES FROM THE GROUND UP

Investing with a long-term approach has always been adopted cutting-edge practices in their business sectors
part of our DNA. Since our foundation in 1918, we have to achieve this goal.
pioneered practices and adopted an entrepreneurial
mindset that has guided our way of doing business MOVING TOWARDS CARBON NEUTRAL-CONCRETE
for the last century. Historically, Votorantim has a solid At Votorantim Cimentos, our building materials business,
industrial background, with high-carbon-emitting the goal is to produce carbon-neutral concrete by 2050.
operations (hard-to-abate) and energy-intensive Like other large-scale industrial assets, the cement
sectors, such as building materials, metals and mining, industry is considered hard-to-abate primarily due
and agriculture. Over the years, these companies to the nature of its production process, but there is
have evolved. While joining the global effort to adapt much room to improve. Votorantim Cimentos is leading
to climate change, we have transformed our business this change by committing to limit its net emissions to
model to encourage our portfolio companies to do 475kg of carbon per ton of cementitious product by
the same. 2030, representing a reduction of almost 25 percent
in emissions compared to the base year (2018). The
STRONG GOVERNANCE, ROBUST STRATEGY moving parts to fulfill this goal are centered around
Today, each portfolio company must manage its business co-processing. We start with substituting fossil fuels for
strategies in-line with a long-term strategy articulated alternative fuels, such as biomass and different kinds
with Votorantim. Votorantim helps maintain this alignment of waste. We opt for by-products from other industries,
in three ways: by influencing, monitoring, and reporting. strengthening our circular economy. We prioritize energy
We influence the portfolio companies to adopt best efficiency by optimizing the use of renewable sources.
practices, contributing to the long-term viability of the And we fund the creation of new technologies, by
business. We follow the incorporation of ESG criteria into investing in innovative processes and partnerships to
investment decisions and company evaluations while improve operational efficiency. Through this robust plan
monitoring risks. And we do this while communicating of action and as an example, the company has recently
transparently about initiatives undertaken by Votorantim raised $150 million with the International Financial
and the portfolio companies. Corporation (IFC) to invest in emissions-
reducing initiatives.
Following this method, our companies are encouraged
to adopt goals aligned with the Science Based Targets LOW-CARBON ALUMINUM
Initiative (SBTi) and report data based on GRI standards.
CBA is one of the largest producers of low-carbon
The portfolio companies are members of the United
aluminum in the world. While the global average
Nations Global Compact, serving as ambassadors for
emissions are around 12.6 tons of carbon per ton of
multiple Sustainable Development Goals and related
aluminum produced, CBA’s levels are about 3 tons CO2/
initiatives. Votorantim Cimentos, CBA, and Citrosuco
ton – more than 4x lower than global peers (according
are also part of the Net Zero Ambition Movement, which
to data provided by CRU). As the only fully vertically
aims to reach net zero operations by 2050, and have

2024 BLUE BOOK | 70

integrated aluminum company in Brazil, CBA’s goal NEW BUSINESS OPPORTUNITIES FOR THE GREEN
is to reduce emissions by 40 percent until 2030 (on ECONOMY
average for cast products, cradle-to-gate) compared Nature-based solutions have significantly impacted our
to the base year (2019). As the aluminum operation is portfolio. Through Reservas Votorantim, we introduced
energy-intensive, the company invests in renewable a new PES (Payment for Environmental Services)
self-production, counting on 23 hydroelectric plants to methodology, which will be implemented at Legado das
supply energy for their production process. CBA also Águas, the largest private Atlantic Forest reserve in Brazil.
supports circularity through a business unit focused Project PES Carbonflor accounts not only for avoided
on recycling aluminum scrap, which requires only five deforestation but also for the impact of climate change
percent of the electricity needed to produce primary and carbon credit generation from forest conservation
aluminum, improving energy efficiency. Today, CBA has efforts. In a partnership between Reservas Votorantim
an A leadership level score from CDP (Disclosure Insight and CBA, we have issued the first carbon credits from
Action) and follows the recommendations of TCFD (Task the Cerrado biome in Latin America. This issuance was
Force on Climate-Related Financial Disclosures). This part of a REDD+ project that represented a milestone
is the first Brazilian company to join the First Movers in the Brazilian carbon market and was first applied
Coalition – a World Economic Forum initiative to promote at Legado Verdes do Cerrado, a 79,000-acre private
innovative clean technologies across eight hard to abate reserve owned by CBA and managed by Reservas
sectors, including aluminum. Votorantim.

PRODUCTION CHAIN ADVANCEMENT FOR A LOW- BUSINESS TRANSFORMATION IN HARD-TO-ABATE

CARBON ECONOMY ASSETS
As one of the largest orange juice producers in the Votorantim is in many ways proof that hard-to-abate
world, Citrosuco has prioritized making its production operations can transform themselves. Simply divesting
chain sustainable. To do so by 2030, the company from these assets altogether squanders the opportunity
aims to reduce carbon emissions (scopes 1 and 2) by to utilize companies’ pre-existing networks, capabilities,
28 percent compared to the base year (2019). The and industry expertise to create long-term value at scale
plan is to pursue biodiversity conservation projects going forward. As an engaged investor, we own our role
for 100 percent of the land owned while reducing in fostering this transformation in our portfolio companies
greater social vulnerability by 100 percent in selected and see the climate transition as an opportunity for
territories where it operates. 68 percent of Citrosuco’s diversification and growth in a changing world.
production comprises certified sustainable fruit, with
100 percent of owned farms certified by the Sustainable
Agriculture Initiative Platform. The company has an
A- grade from CDP and is recognized with a gold-level
rating from EcoVadis, a rating agency that establishes
best practices in corporate sustainability. To diversify its
portfolio, Citrosuco launched a new business unit, Evera,
specialized in developing natural ingredients. Evera’s
ability to fully utilize the fruits and offer unique solutions
to the market broadens the horizons for innovation in the
citrus industry.

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Appendix
1 International Energy Agency, 2023. https://www.iea.org/reports/net-zero-roadmap-a-global-pathway-to-keep-the-
15-0c-goal-in-reach
2 World Fund, 2023. https://www.worldfund.vc/knowledge/whitepaper
3 Unless otherwise noted, source for data is BlackRock and monetary figures are in USD
4 BlackRock Investment Institute, “Tracking the low-carbon transition,” July 2023
5 BlackRock, "Global perspectives on investing in the low-carbon transition," September 2023
6 As of December 31, 2023
7 Sourced from: Climate Policy Initiative, Global Landscape of Climate Finance - 2023 & 2021.
8 Sourced from: Bloomberg, Press Release.
9 Blended finance is defined as the strategic use of development finance (from public or philanthropic sources) to
mobilize additional private sector finance in sustainable development.
10 ADB administered Fund financings in accordance with Development Finance Institutions agreed principles on the
use of Blended Concessional finance for private sector projects. (link)
11 All grant mobilization figures for each CIDF project have been provided by ADB. Grant mobilization figures are
rounded estimates as of the investments’ financial close date.
12 Sourced from: ADB, “GreenYellow Sign Deal for Commercial and Industrial Rooftop Solar in Viet Nam”. (link)
13 The GAP Report 2023; ACS PUMS 2021
14 The State of the Nation’s Housing 2019; Joint Center for Studies, Harvard University
15 The GAP Report 2023; ACS PUMS 2021
16 NASA finding: US has already experienced 23 $1 billion dollar weather disasters in 2023.
17 ‘Global warming in the pipeline,’ Nov 2, 2023 publication led by James Hansen of Colombia University Earth
Institute.
18 IDC, “IDC Forecasts Steady Growth for Enterprise Applications through 2026 in Support of Digital Business
Objectives” 01/12/2023
19 Vista Equity Partners, as of 11/30/2023. Unrealized value is based on 9/30/2023 valuations or latest transaction.
20 Vista Equity Partners, as of 12/31/2023. Note: inclusive of signed deals. Transactions include platform investments,
add-on acquisitions, and monetizations, and excludes public toe-hold positions. Add-on transaction count
reflective of platform investments with above 40% Vista ownership and excludes add-ons for public portfolio
companies where Vista has less than 50% board representation.

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21 Case study provided for informational purposes to illustrate Vista’s value creation experience. It should not be
assumed that investments made in the future will be comparable in quality or performance to the investments
described herein. Please visit www.vistaequitypartners.com for a list of current and former portfolio companies
22 Vista database, as of 12/31/2022, inclusive of signed and/or closed Platform and add-on investments since 2000.
Past performance is not necessarily indicative of future results. There can be no assurance that historical trends
will continue during the life of any Vista Equity Fund. There can be no assurance that any pending acquisition will
be consummated at all or on the current terms of the agreement.
23 Case study provided for informational purposes to illustrate Vista’s value creation experience. It should not be
assumed that investments made in the future will be comparable in quality or performance to the investments
described herein. Please visit www.vistaequitypartners.com for a list of current and former portfolio companies.
24 Vista Equity Partners, represents average retention rate from 01/01/2016 – 10/24/2023 for PE investment
professionals (VP and above). Excludes operating professionals.
25 Gartner, “Diversity and Inclusion Build High-Performance Teams,” 09/20/19.
26 Vista Equity Partners, as of 12/31/2023. Data reflects all lines of business in VEP and VCG and includes employees
across operations and all investment strategies – private equity, credit, public and permanent capital. VEP senior
staff reflects employees at the Exec Office, MD/SMD, SVP and VP level; VCG senior staff reflects employees at
the Executive Director level and above. People of color reflects U.S. data, while female reflects global headcount.
People of color reflects Asian, Black or African American, Hispanic or Latino or employees who are two or
more races.

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Members

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31 Saint James Avenue, Suite 890, Boston, MA 02116, USA | +1 617 203 6599 | www.FCLTGlobal.org
2024 BLUE BOOK | 75