Capria is unequivocally committed to delivering both profits and social impact for our investors. We’re confident that this is the only way to drive sustainable positive change disadvantaged populations. Our model for delivering profits is described more fully in our private placement memorandum and other investor materials. There are three ways in which we maximize the positive social impact of the investments we make through our local-market fund managers:
- Company Selection. We favor managers who target investing in for-profit companies that are able to serve large low- and middle-income populations (potentially including those at the base of the economic pyramid or “BoP”), providing products and services that improve their lives, and/or improving the environment in ways that affect everyone. We do not invest in fund managers who target entertainment, vice purveyors, environmentally-damaging companies, or any entity we do not see making a sustained commitment to positive social impact to low- and middle-income and/or disadvantaged populations through their operations.
- Impact Metrics. Through our partner fund managers, we engage the CEO of each portfolio company to develop a small number of measurable impact goals which are monitored at least semi-annually. These goals are closely aligned with their business operations and success. For example, an education services company tracks how many students are enrolled and whether they are reading at grade level and how many jobs they create. Impact metrics are then reported at the sector, fund, and uber-fund level, by both Capria and local fund manager partners.
- Policies to Align Values. For every investment, we strongly encourage fund managers to discuss and agree on a set of core company policies and guiding principles which are then memorialized in various corporate documents, employee handbooks, and policies.We drive for this alignment around values at the fund level as well as at the portfolio level.
Company Selection and Impact Metrics are self-evident. To ensure values-alignment with each portfolio company and execution of appropriate policy and adherence to principles, we request that our partner fund managers utilize investment documents that include affirmative agreements by each portfolio company approximately as follows, which we call the “Profits and Values Approach“:
- include the Profits and Values Approach in all business strategies and operations;
- acknowledge that compliance with the Profit and Values approach might not lead to profit maximization and/or could impact near term economic value for shareholders [although we believe neither should be true and to the contrary believe the Profits and Values Approach will increase returns, not everyone does];
- ensure a continued focus on providing goods and/or services that substantially benefit low- and middle-income and/or local disadvantaged populations;
- provide investing fund mangers, and through them Capria, with reasonable access to all information necessary to monitor and evaluate the Company’s compliance with the Profit and Values Approach and attainment of social and/or environmental impact goals;
- conduct the Company’s business operations in accordance with assessments of all environmental, health and social risks, including efficiency in resource usage, prevention of pollution, and ensuring community health, safety and security;
- follow responsible hiring and employment practices such as payment of fair wages; providing appropriate insurance coverage; ensuring prohibition of child labour; providing equal treatment of men and women regardless of race, gender, ethnicity, religion, age, caste, or sexual orientation; offering clean and safe working conditions; and
- comply with principles of applicable laws; pledge not to accept or offer bribes including requiring employees to pledge to do the same; be transparent, ethical and accountable, including adhering to the principles of good corporate governance, in all business operations.
We’re confident that by focusing on both profits and values with companies that have been carefully-selected for their potential to deliver positive social impact to large disadvantaged populations, we and our fund manger and ecosystem partners will drive a wave of sustainable change that improves the lives of millions of people around the globe.