Retina Group’s Commitment to Responsible Investing
Retina Group believes that the transformative power of technology is the key to an even better future — a smarter economy, a healthier planet, diverse and inclusive communities, and a broader path to prosperity. Environmental, Social and Governance (ESG) practices and policies guide us in our effort to be responsible stewards of our fund clients (“Funds”) and Fund investors who have entrusted us with their investment capital.
We recognize our responsibility to encourage positive societal and environmental benefits through our investment and operating decisions. Our ESG policy guides our stewardship role and reflects our commitment to creating value for our stakeholders. Retina Group's intention is to become a signatory to a number of international ESG commitments, which help define, operationalize and prioritize our engagement efforts.
The Principles for Responsible Investment (PRI) is a U.N.-supported network of investors promoting responsible investment practices through the incorporation of ESG factors into investment decisions and active ownership. The PRI defines stewardship as: “the use of influence by institutional investors to maximize overall long-term value including the value of common economic, social and environmental assets, on which returns and clients’ and beneficiaries’ interests depend.
The Net Zero Asset Managers Initiative is an international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.
Scope and Limitations
This policy intends to reflect a general framework for our approach to ESG across Retina Group’s internal operations and investment strategies, including our private equity and permanent capital, credit, and public equity strategies; however, in certain cases, this document draws distinctions between our ESG approach within various investment strategies.
Given our focus on enterprise software, we have identified certain material for ESG risks and opportunities that we believe to be important investment considerations. Our approach to incorporating these considerations is dependent on our influence over the management of each investment which may vary depending on the investment structure and terms, and our engagement will be tailored accordingly..
In cases where Retina Group determines it has limited ability to conduct due diligence or to influence and control the consideration of ESG issues in connection with an investment, whether at the investment or at the Fund level, Retina Group will only apply those elements of this ESG policy that it determines to be practicable. Examples of such cases at the investment level include where Retina Group is a minority shareholder, has limited governance rights or where other circumstances affect Retina Group’s ability to assess, set or monitor ESG-related performance goals. Examples of such cases at the Fund level include a jointly managed fund, a separate account where the underlying investor maintains significant influence over investment decisions, where Retina Group is a lender with no indicia of influence or control, or where Retina Group holds a small, passive public equity interest.
Roles and Responsibilities
Retina Group understands the importance of ESG in driving long-term success, and we strive for broad understanding and accountability of our ESG principles and actions across our organization.
Our Responsible Business Practices
Retina Group is committed to implementing leading ESG practices that are specific to our focus on software investing. In addition to investing, our firm-level ESG strategy includes:
Retina Group has a Code of Ethics that requires employees to conduct their business dealings with honesty, integrity, fairness and respect for others. We understand our fiduciary duty to our clients and seek to mitigate conflicts of interest and encourage transparency in our business practices.
Retina Group is committed to measuring, reducing and offsetting the GHG footprint of its internal operations annually.
Retina Group has a robust Diversity, Equity and Inclusion program and policy to strengthen our workplace practices, as well as attract and retain talent.
Retina Group fosters community engagement by encouraging employees to support the community through both charitable and volunteer support focused on various causes, including job training and opportunity, improving access to quality education, supporting the arts and protecting our health and the environment.
Retina Group believes in the transformative power of technology and software to advance ESG outcomes and intends to leverage software solutions for internal ESG measurement, management and reporting.
Retina Group is committed to protecting the privacy and confidentiality of our stakeholders’ personal and corporate information in our operations and in those of Retina Group portfolio companies.
Our Approach to Incorporating ESG in Our Investment Process
Retina Group seeks to integrate ESG considerations during the investment life cycle with engagement approaches designed to match Retina Group’s influence over the investment.
During pre-investment due diligence, Retina Group leverages an ESG framework to analyze material ESG risks and opportunities in potential investments. For Retina Group Partners, subject matter experts conduct an in-depth review of the company’s technology, cybersecurity and data privacy practices before every platform investment and add-on acquisition. Additionally, we engage law firms and consultants to assess the material ESG factors in a company’s industry, approach to ESG, and potential risks and opportunities. Material findings are communicated to the investment committee and management teams and are included as part of the company’s value creation plan.
We seek to monitor ESG issues and engage with the board of directors and management teams when appropriate throughout our ownership period. We are committed to transparent and regular communications on ESG with our Fund investors.
Private Equity and Permanent Capital Control Investments
We seek to systematically engage with our majority-owned portfolio companies to encourage ESG integration within the business. Our engagement tactics, in collaboration with investment teams, value creation team, company management and board members, may include the following:
Private Credit and Minority-Owned Investments
For substantial private credit and minority-owned investments, we have assigned primary points of contact for ESG within the investment teams who notify outside counsel and/or ESG consultants to evaluate and/or report material ESG risks and opportunities during investment due diligence through the form of a bespoke management questionnaire.
These findings are shared with the ESG team and with investment professionals and may be considered within the investment decision-making process. In select situations, the findings may also be shared with company management and Retina Holdings may undertake a concerted dialogue to encourage action.
An ESG committee, consisting of team members within the compliance, investment and ESG functions, will seek to meet quarterly with oversight from Retina Group leadership, with the intent to oversee the management and application of ESG within our private credit investments.
An ESG committee, consisting of team members within the compliance, investment and ESG functions, will seek to meet quarterly with oversight from Retina Group leadership, with the intent to oversee the management and application of ESG within our private credit investments.
ESG Focus Areas
To integrate ESG considerations into Retina Group’s investment processes, Retina Group has created a bespoke framework that encompasses specific focus areas important to enterprise software companies.
This framework draws upon global ESG standards and serves to highlight significant risks and opportunities throughout the investment lifecycle. These focus areas are routinely reviewed to ensure that they reflect current events and macrotrends. Areas include (but are not limited to):
Public Equity Investments
In evaluating investments in public companies, our investment team includes ESG disclosure scores reflecting the level of ESG-related disclosure by an individual issuer as part of the overall investment review process. This information is shared with the ESG team and is reported to investment professionals. In select situations, where practicable, we may partner with management to either improve the level of disclosure and/or performance of the ESG metrics.
An ESG committee, consisting of team members within the compliance, investment and ESG functions, with oversight from Retina Holdings leadership, will seek to meet quarterly, with the intent to oversee the management and application of ESG within our public equity investments.
