Sustainability - Spearhead

At SAAM sustainability is not a buzzword, it is a paradigm!

Our decades of investment experience has conclusively proven that pursuit of financial returns is not in conflict with sustainability. In fact, when applied appropriately, sustainability can be a driver of long-term “alpha” and not merely a risk avoidance tool. Many compelling sustainable investment opportunities in Africa are also the most attractive financially and our team’s unique perspective enables us to combine and optimise the financial and non-financial outcomes from our investments.

Creating value from Sustainability

Our team members have considerable expertise in driving value creation through proactive identification of sustainability-related risks and opportunities in the businesses we invest. To accomplish this, we use a broad range of tools including

Environmental  & Social (E&S)  standards

We partner with our investee companies to adopt a comprehensive set of E&S standards to reflect their business complexity and risk exposure. These standards are based on global best practices such as those prescribed by the International Finance Corporation (IFC) and the African Development Bank (AfDB).

E&S due diligence

Prior to committing any investment, we undertake detailed due diligence to identify the E&S risks and opportunities for the business. With the support of industry experts, we benchmark the (projected) sustainability performance of the business to best-in-class operators – establishing the “distance to frontier”.

Sustainability  action plans

Our investee companies agree with us a time-bound action plan to implement the recommendations from the E&S due diligence work. They also commit financial and organisational resources required to achieve and exceed the targets under these action plans.

Reporting

We require our investee
companies to report regularly to us on their sustainability performance, as well as the progress against agreed improvement targets. Our funds, in turn, report the consolidated performance to our investors.

This transparency creates confidence in our and our investee companies’ ability to deliver long-term value to our investors.

Impact

Earning a competitive financial return should not be the sole (or ultimate) criterion by which the performance of an investment should be judged. We treat it as de minimus and fully recognise the potential of an investment to deliver a positive outcome for all stakeholders.

We are committed to measure and report the development impact of our investments, using the framework established by the United Nations’ Sustainable Development Goals (SDGs).

Product-level impact

As an asset manager, most of the impact that we deliver is through our investment activities. That is why we measure and report our impact disaggregated at the product level, providing further transparency for both our investors and the broader stakeholders.

For instance, for Spearhead Africa Infrastructure Fund (SAIF) we propose to measure and report our impact on, inter-alia, the following SDGs: