The secular rise in global incomes, population and consumption are creating intense pressures on ecosystems around the world. The effect is felt not only in environmental degradation, but also in rising economic hardship and social suffering for some of the poorest and vulnerable communities, especially women and children.
WAVE embraces investment principles that align the positive power of private capital with the social and environmental needs of society at-large. We believe that we can attain positive environmental, social and governance (ESG) impact without sacrificing financial returns. On the contrary, our experience suggests that if we invest in cost-effective solutions to our most intractable challenges, we can generate exceptional investor returns on a consistent basis.
WAVE invests in essential industries—clean energy, food, water and waste recycling—that are critical for a healthy planet and harmonious society. Hence, the ESG impact is not an afterthought but a natural by-product of our private equity investments.
Our portfolio companies generate strong environmental and social impact at no cost to the customer. Their innovative solutions enhance industrial efficiency and resource productivity. They save money and conserve resources for their customers by improving existing processes and reducing energy and other inputs. Our investment practices adhere to the dictum: That which is not profitable, is not sustainable.
WAVE’s investment activities promote financial responsibility as well as ESG impact. In fact, we believe that these goals are intimately linked and complementary. Our portfolio companies create long-lasting impact because their innovations improve industry-wide impact in multiple global industries by:
- Conserving the use of energy, water and other natural resources,
- Creating high quality manufacturing jobs in rural communities with low to moderate incomes,
- Investing in employee and stakeholder development, training and education,
- Fostering inclusion of women and minorities in employment and contracts,
- Promoting ESG dialog and ethics through industry and civic engagements,
- Reducing pollution and waste, and promoting close-loop recycling of natural resources,
- Incorporating responsible governance measures in the board and management practices, and
- Avoiding investments that promote violence, spread addiction and substance abuse, utilize child or forced labor, indulge in bribery practices, or violate local laws.
Since WAVE makes profitable impact investments that capture rising market demand for sustainable products at affordable prices, it offers several compelling value propositions to the investors. Benefits to the investors include:
- A pragmatic option to those investors who want profit with purpose,
- Low volatility investments in sectors with consistent demand – clean energy, food, waste and water,
- Ability to seize opportunities to capture alpha through market inefficiencies, and
- Capitalize on long-term social and environmental trends.
WAVE is a signatory to the United Nations Principles of Responsible Investing and applies these principles to all investment activities. We adhere to the following six UNPRI principles:
- We incorporate ESG issues into investment analysis and decision-making processes,
- We actively incorporate ESG issues into portfolio management,
- We seek appropriate disclosure on ESG issues by our portfolio companies,
- We promote adoption of ESG practices among our peers,
- We collaborate with investors and experts to enhance our effectiveness in implementing the Principles, and
- We review and report on our activities and progress towards implementing the Principles.
Each year, WAVE publishes a Sustainability Report that measures the ESG impact of our portfolio companies and shares these reports with the Limited Partners in WAVE funds.