29 April 2021 -
ESG Investing at SHS: Part 2
In the first part of the series ESG Investing (Environment, Social, Governance), Dr. André Zimmermann, Partner and Head of ESG at SHS, wrote about the basic principles of socially responsible investing. Today, we will take a closer look at how SHS implements ESG and SRI (Socially Responsible Investing) in concrete terms.
Since its foundation almost 30 years ago, SHS has been guided by ethical standards in its investments. The healthcare sector focus excludes ESG-critical industries such as fossil and nuclear energy, tobacco, alcohol and weapons as a matter of principle. However, certain topics within the healthcare industry, such as pre-implantation diagnostics or work with embryonic stem cells, among other fields, are also not considered for SHS investments.
By financing and promoting healthcare/medtech companies whose products and services improve the health of millions of people worldwide, SHS has lived up to the idea of ESG investing and SRI since its first healthcare engagement. An approach that has been and continues to be supported by the institutional and private investors in SHS funds. More and more investors want to combine the aspect of investing with that of socially responsible action in a meaningful way. The healthcare sector offers very good opportunities for this, because investments in medical technology or diagnostic innovations help countless people who, for example, suffer a heart attack or stroke or develop cancer. The same applies to innovations that support efficient health prevention or give old people the opportunity to live at home for as long as possible.
The issue of socially responsible investments is also institutionally anchored at SHS. On the one hand, there is a written ESG policy to which SHS consistently aligns its actions. On the other hand, the Head of ESG is located at partner level and is responsible for ensuring that the criteria are adhered to. All employees are regularly informed about changes or innovations in the area of ESG. ESG reporting is part of the quarterly and annual reports for SHS investors.
SHS has implemented an end-to-end system at the investment level: This ranges from ESG screening as part of the due diligence process prior to a new investment, to continuous improvements at the level of each individual portfolio company, all the way to the exit of the respective company. SHS uses a powerful analysis tool from the European VC/PE association Invest Europe, which SHS has adapted to the healthcare sector. The ESG progress of the portfolio companies is subject to constant monitoring with the help of this analysis tool, so that SHS can document the improvements of each individual company over the years.
The concrete impact of an ESG/SRI investment in the healthcare sector can be seen in the SHS portfolio companies GNA Biosolutions and c-LEcta in the current pandemic situation. Especially now, innovations in the healthcare sector are literally vital. Effective vaccines and fast, precise diagnostic tools stand out here. GNA Biosolutions has developed and brought to market a technology for corona testing that comes close to PCR tests in terms of accuracy and is virtually on par with rapid tests in terms of speed. In order to detect clusters of infections and to interrupt chains of infection, particularly rapid tests are essential. The enzyme products of the DENARASE® family from c-LEcta are used as important processing aids in the development of various corona vaccines.
GNA and c-LEcta are two examples from the SHS portfolio spectrum that show how important socially responsible, sustainable investing is. SHS will also consistently pursue this approach in the next SHS VI fund generation. An approach that our investors enable and actively support with their capital!