ESG+I
Playing a key role in our daily lives, providing livelihoods for one-third of the global population, the Ag & Food sector accounts for more than 10% of Gross Domestic Product (GDP) across developing countries and almost 30% of GDP for the world’s least-developed countries.
The global population is estimated to reach 10 billion people by 2050 and will require an increase of 70% in food production, adding further pressure on the use of natural resources and contributing to climate change. These challenges call for urgent transformation of Ag & Food systems, but also pose opportunities for new practices and business models. Addressing these challenges and opportunities through our managed funds’ investments has become one of our major priorities.
There is a revolution happening in the Ag & Food sector, driven by science, technology, and nature-based solutions that address the challenges of soil regeneration, climate emergency resilience and adaptation, biodiversity promotion, while promoting higher productivity, new consumption habits, creation of new supply chains, new jobs, and higher long-term returns.
To support an inclusive, innovative and sustainable growth in this sector, Aqua Capital commits to the adoption of rigorous ESG and Positive Impact (ESG+I) principles and practices.
Aqua Capital’s ESG and Positive Impact (ESG+I) vision is to lead the transition of the Ag & Food sector by amplifying the sustainability efforts in relation to climate change, food security and health & wellness across our Funds’ portfolio companies, while generating value for all its stakeholders.
We seek to contribute to the sustainable development of our sector, including the promotion of diversity within our workforce, responsible production, and an efficient use of natural resources, while also addressing food security challenges.
Our ESG+I Theory of Change and Approach
At Aqua Capital we believe that the adoption of rigorous ESG+I principles allows us to build enduring relationships with our partners and customers, while driving additional value creation for our investors.
As private equity asset managers, we identify, develop, improve and exit investments to generate superior financial returns while positively contributing to the environment and to society.
Our “ESG Approach as Risk Mitigation” goes hand-in-hand with our more holistic approach that includes “Sustainability and Positive Impact as Value Creation”.
We differentiate ourselves by integrating these two critical sustainability factors into the investment cycle. We promote ESG risk management within the Aqua-managed funds portfolio companies and accompany them to create sustainable value.
Aqua Capital Commitment to ESG+I
Aqua Capital is committed to continuously improving how ESG and Impact factors embedded into the firm’s operations and the Aqua-managed funds’ investment activities
Our ESG+I policy, management system and action plans are applied throughout the investment process, from pipeline construction to exit, and are aligned with international benchmarks (IFC Performance Standards, ILO, Impact Principles, Impact Management Platform and UN Guiding Principles on Business and Human Rights) as well as measurement metrics (IRIS+, Harmonized Indicators for the Private Sector (HIPSO) and Global Reporting Initiative (GRI)).
Aqua Capital’s ESG+I Performance
Policy Governance and Strategy
★ ★ ★ ★ ☆
Direct – Private equity
★ ★ ★ ★ ★
Confidence building measures
★ ★ ★ ★ ☆
Best impact performance in Latam and top 5 globally (Fund II, 2023 DERa score)
Aqua Capital Performance
The rating is on our alignment to each principle of the framework and rated as follows:
- Advanced (Limited need for enhancement)
- High (A few opportunities for enhancement)
- Moderate (Several opportunities for enhancement)
- Low (Substantial enhancement required)
The rating is on our alignment to each principle of the framework and rated as follows:
- Advanced (Limited need for enhancement)
- High (A few opportunities for enhancement)
- Moderate (Several opportunities for enhancement)
- Low (Substantial enhancement required)
| Operating Principles for Impact Management | Rating |
|---|---|
| P1 – Define strategic impact objective(s), consistent with the investment strategy | Advanced |
| P2 – Manage strategic impact on a portfolio basis | High |
| P3 – Establish the Manager’s contribution to the achievement of impact | Advanced |
| P4 – Assess the expected impact of each investment, based on a systematic approach | Advanced |
| P5 – Assess, address, monitor, and manage potential negative impacts of each investment | Advanced |
| P6 – Monitor the progress of each investment in achieving impact expectations and respond appropriately | Moderate |
| P7 – Conduct exits considering the effect on sustained impact | Advanced |
| P8 – Review, document, and improve decisions and processes based on the achievement of impact | High |
Aqua Capital’s ESG+I Awards
Aqua Capital is the most awarded private equity firm in ESG/Sustainability in Latin America.
2016 Environmental Responsibility
→ Operational efficiencies
→ Sustainable water management
→ Investments in energy efficiency
2017 Environmental Social & Gov
→ Best aquaculture Practices (”BAP”) certification
→ Implementation of a state-of-the art sanitation control
→ Retrechtment plan with the closure of the old plant
2019 Environmental Responsibility
→ ISO 14.001 and ISO 45,001 certifications
→ GHG inventories, reporting and improvement
→ Best practices in Chemical management
2020 ESG Award
Shortlisted
2021 Environmental Responsibility
Winner
2022 Deal Book
Featured
Key 2023 ESG+I Figures
30m tCO2e of avoided GHG emissions
10% YoY absolute emission reduction
25m hectares covered by regenerative ag practices
8,765 full-time employees
.
4.6k jobs created since Aqua’s investment
30% of women in the workforce
Aqua Capital’s Theory of Change
Target the most impactful, transformational and scalable opportunities
Implement value creation through professionalization, growth, transformation and impact
Enhance corporate governance, diversity and ESG practices
Outputs
Sustainable Companies
Outputs
Sustainable Ag & Food Practices
Impact
Sustainable Planet
Co-benefit
Aqua Capital’s Theory of Change
ESG+I Approach for Value Creation
ESG+I approach is designed to drive impact and generate equity value, based of four core pillars.
Aim to invest in “do good” business models
The Ag & Food sectors have a critical role to play in the significant reduction of global GHG emissions through more sustainable products and practices, as well as in improving food production efficiency.
Aqua Capital’s investment strategy aims to invest in companies that can drive positive-impact outcomes while maximizing financial performance.
Capture direct positive impact
Diversity, inclusion, and good governance are key to building lasting, sustainable, and high-performing organizations. We promote gender equality and the inclusion of women at all levels of our portfolio companies and have an unwavering commitment to outstanding corporate governance in every investment.
As company builders, a natural by-product of our stewardship is the distribution of direct economic value, through developing companies, as well as networks of suppliers and producers, that encourage the use of best practices and technology, creating high quality jobs and contributing to the economic development of the regions in which we operate. These regions are mostly rural areas, of significant importance to developing countries.
Execute bottom-line environmental projects
Aqua Capital also seeks opportunities to help the planet through identifying emissions reduction and resource efficiency projects, with high returns (>30% IRR). Once identified, we bring experts on board to systematically execute these projects across our portfolio.
Apply world-class ESG
Aqua Capital works closely with portfolio companies, not only to ensure full compliance with ESG best practices and to monitor their sustainability-related risks, but also to encourage and drive them to position themselves at the forefront of this critical agenda.
1
Aim to invest in “do good” business models- Need for more & better food
- Tech disruption in ag & food
- Sustainability & climate change
- More health & wellness in nutrition
- Antibiotic replacement in animal use
- Reduced use of crop chemicals and fertilizers
- Increased agronomic yield
- Increased supply of higher quality, more natural, food and ingredients
2
Capture direct positive impactDiversity & Inclusion
- Women on the board
- Women in finance
- Diversity internship program
Economic Value Creation
- We have created 600+ quality jobs per year from 2017-22, mostly in rural areas
3
Execute positive environmental bottom-line projectsHigh-return environmental projects
- 2 ESG professionals to identify resource efficiency and waste reduction projects
Lower cost of financing
- Structuring lower-cost longer-term financing lines linked to green finance
4
Apply world-class ESGCompanies fully compliant with ESG practices
- Robust structure for managing and monitoring company risks reduces potential downsides
Companies at the top of their game in ESG
- Strategic acquirers find companies more attractive, which enables them to qualify as potential acquisition targets, potentially paying higher multiples
Aqua Capital is a member of the 2X Challenge initiatives initiated by major development financial institutions to promote gender-lens investing.
Diversity and Inclusion
At Aqua Capital we aim to go beyond just measuring indicators related to the number of women in the total work force, ratios of wage parity, promotion by gender and number of women on boards.
We are setting ambitious objectives, including improving sourcing and recruiting of women within Aqua Capital and its fund-managed portfolio companies, increasing representation of women on boards, and offering job opportunities to underrepresented minorities.
Our Diversity and Inclusion agenda started with the implementation of an anti-bias training at Aqua Capital and its fund-managed portfolio companies and continued with our internship program focused on inclusion and racial equality. We aim to improve periodically.
Diversity and Inclusion
At Aqua Capital we aim to go beyond just measuring indicators related to the number of women in the total work force, ratios of wage parity, promotion by gender and number of women on boards.
We are setting ambitious objectives, including improving sourcing and recruiting of women within Aqua Capital and its fund-managed portfolio companies, increasing representation of women on boards, and offering job opportunities to underrepresented minorities.
Our Diversity and Inclusion agenda started with the implementation of an anti-bias training at Aqua Capital and its fund-managed portfolio companies and continued with our internship program focused on inclusion and racial equality. We aim to improve periodically.
Aqua Capital is a member of the 2X Challenge initiatives initiated by major development financial institutions to promote gender-lens investing.
Our contribution to SDGs
At Aqua Capital we seek to contribute to the Sustainable Development Goals defined by the United Nation (UN SDGs) for achieving a better and more sustainable future for all by 2030 and beyond. The UN SDGs for which our contribution is the strongest are.
Zero Hunger
(SDG 2)
Though our direct actions, Aqua-managed funds portfolio companies are producing more with less, and increasing their volumes of production above the industry average, contributing directly and/or indirectly to the increase in food production.
Gender Equality
(SDG 5)
Via our proactive Positive Agenda, we are promoting best practices in terms of gender balance, recruitment and retention policies and female representation on the boards of Aqua-managed funds portfolio companies.
Decent work and economic growth
(SDG 8)
Through the proactive management of Aqua-managed funds portfolio companies, we generate growth and create quality jobs, of which the vast majority in rural areas, contributing to the development of the rural economy and avoiding exodus towards large cities. 100% of our full time employees get health plans, and over 50% life insurance, meal and transport vouchers.
Innovation and
responsible Production
(SDGs 9 and 12)
Innovation is part of the daily business life for the majority of Aqua-managed funds portfolio companies. From the development of bacteria and fungi to promote plant growth to the production of innovative yeast-derived additives to replace antibiotic in animal feed, involving major partnerships with local university, and technical assistance to our clients to produce more with less inputs and food tech R&D, Aqua-managed funds portfolio companies contribute to a more sustainable and healthier food production.
Responsible consumption and Production
(SDG 12)
Ensure sustainable consumption and production patterns.
Climate action
(SDG 13)
Our fight against climate change embraces the promotion of resource efficiency projects within our Aqua-managed funds portfolio companies, assistance to measure and reduce their GHG emissions and carbon footprint, as well as to produce and support the use of biological fertilizers throughout our distribution networks.
Our Broader Involvement
in the Community
Since 2017, Aqua Capital is a corporate sponsor of the Black Jaguar Foundation, one of the largest reforestation projects in Brazil aimed at the reforestation of a corridor of 2,600km between the Cerrado Savannah and the Amazon in cooperation with farmers.
While reforesting or maintaining the original vegetation in the corridor, the Black Jaguar foundation supports farmers to ensure they comply with national regulations with regards to preservation of permanent protection areas and legal reserves.
Additional benefits of implementing the restoration project in their properties include improvements in soil quality, microclimate, biodiversity, natural pollination and water availability.
For more information:
www.black-jaguar.org/the-project/
