Kleoss Capital is committed to integrating environmental, social and governance (“ESG”) considerations throughout the investment lifecycle in a manner that is proportionate to the Firm’s size, resources and focus on the South African mid-market. The Firm views ESG integration as a core element of prudent investment management, supporting informed decision-making, risk mitigation, value creation and responsible ownership.
Kleoss believes that consideration of material ESG factors enhances the long-term sustainability and resilience of portfolio companies and contributes to the preservation and growth of investor capital. The Firm’s investment strategy is also aligned with the objectives of institutional Limited Partners seeking exposure to opportunities that support economic development, employment creation, transformation and improved access to essential products, services and infrastructure within South Africa.
ESG considerations are incorporated into the screening, evaluation and execution of all prospective investments. As part of its investment assessment process, Kleoss evaluates:
The scope and depth of ESG due diligence are determined with reference to each investment’s sector, geographic footprint, operating environment and risk profile. Material ESG considerations identified during due diligence are incorporated into Investment Committee deliberations and form part of the overall investment decision-making framework.
Following investment, Kleoss seeks to promote appropriate ESG practices through active ownership and ongoing portfolio oversight. Where material ESG matters are identified, the Firm works constructively with portfolio company management teams to establish pragmatic action plans, implementation timelines and reporting arrangements.
Depending on the nature of the investment, the Fund’s ownership position and the level of influence available, ESG-related commitments may be embedded within shareholder agreements, board governance frameworks, reserved matters, financing covenants, side letters or other transaction documentation.
The Firm’s portfolio management approach is focused on ensuring that material ESG risks remain appropriately managed while supporting operational improvement, governance enhancement and sustainable value creation initiatives across the portfolio.
Kleoss adopts a practical and outcomes-focused approach to impact measurement. Consistent with its mid-market investment strategy, the Firm prioritises a focused set of meaningful indicators that are relevant to portfolio company operations and capable of being monitored on a cost-effective basis.
Subject to sector relevance and data availability, the Firm may monitor indicators including:
Where appropriate, Kleoss seeks to align portfolio-level outcomes with relevant United Nations Sustainable Development Goals (“SDGs”). Given the Firm’s investment focus, particular relevance is anticipated in relation to:
Such alignment is undertaken at a portfolio level where the investment thesis and underlying business activities demonstrably support the relevant development objectives.
Kleoss is committed to providing transparent ESG and impact reporting to Limited Partners. Subject to the availability, quality and reliability of portfolio company information, ESG and impact reporting is expected to be provided at least annually and may include:
Through this framework, Kleoss seeks to combine disciplined investment execution with responsible stewardship, supporting long-term value creation for investors while contributing to sustainable economic growth, transformation and development within South Africa.
Our ESG detailed reports are available on request.
