Oakley’s commitment to responsible investing involves incorporating environmental, social and governance (ESG) principles into both our strategic framework and that of the companies we invest in. This integration is key to mitigating risks and fostering long-term, sustainable growth, thereby increasing opportunities to deliver lasting value to the investors who entrust us with their capital. Supported by the OCI Board, in 2023 we achieved considerable progress in advancing our ESG agenda and incorporating ESG considerations into our investment practices, our interactions with portfolio companies and our overall conduct.

We recognize that our responsibilities extend beyond financial performance and believe that by assisting our portfolio companies to develop and integrate ESG and sustainability into their business operations they can help to contribute towards better outcomes for people and the planet.

We have been building upon the processes and practices established in the foundational years of our engagement practices since 2021, with a focus on achieving three key objectives: developing a strong and value-adding portfolio engagement programme, providing support to investment teams in assessing ESG during due diligence, and enhancing Oakley’s own ESG practices.

We are proud of the progress we have made and are committed to continuous improvement by engaging transparently with our stakeholders.

ESG at Oakley

Oakley has continued to make the same sustainability journey as many of the companies within our portfolio.

We measured our full scope 1, 2 and 3 carbon footprint last year, for the 2022 calendar year. This included activity-based emissions for Scope 1 and 2, and a mixture of activity and spend-based emissions for Scope 3, which excluded our investments. As we undertake this assessment for 2023, we will look to move more towards activity-based emissions, where possible.

Alongside the climate impact of our operations, we have also been considering how a changing environment may affect our operations. Later this year, Oakley will issue it first TCFD report, which will highlight our efforts to understand how climate related risks and opportunities may impact our business.

On the social side, Oakley’s approach to equity, diversity and inclusion (EDI) has been developing over the last year, underpinned by the expansion of our internal capabilities, with the implementation of an EDI committee comprising members from across the organisation. To help drive our EDI progress, we have focused our attention on recruitment and career development. There has been a concerted effort in diversifying our workforce – between 2021 and 2023, the makeup of the Oakley team globally has shifted from 30% women to 47%. Our success in recruitment stems in part from developing our approach to our partnership with recruiters, ensuring they present us with the best candidates from a wide variety of backgrounds. Our focus now is on developing that talent towards leadership positions via transparent, fair performance management processes and career development tools.

We’ve also started our own internal network, the Oakley Women’s Leadership group, which brings together many of our emerging and existing female leaders in a forum to share and support one another’s development journey.

Cybersecurity is another area where we have seen rapid developments. Oakley’s seven-strong IT team is led by the Chief Information Security Officer, who joined in 2023. Over the course of the last year, Oakley has worked with external advisers to continually develop our cybersecurity and data privacy postures, including a full cyber risk assessment.

We are extremely proud that the ESG initiatives undertaken at firm and portfolio level have resulted in Oakley scoring 4/5 stars in the latest UNPRI reports for both the Private Equity and Policy, Governance and Strategy Module, outperforming the PRI median in both categories.

Our efforts to promote ESG integration would not be possible without the support and leadership of industry organisations and initiatives. From Level20 to the International Climate Initiative (ICI), OutInvestors and the ESG Data Convergence Initiative (EDCI), these organisations provide communities and pathways for us and our portfolio companies to continue to make progress on ESG. We are grateful to be involved with each of them.

Active stewardship

We believe that Oakley’s focus on portfolio stewardship reflects an opportunity to develop robust ESG practices. Our objective is to help companies understand how ESG can fit into their business strategy, formalise an approach and support implementation. The first step in this process is building trust, which begins during due diligence and continues during onboarding and regular engagement. Over the last year, we met in person with all but one of our majority-owned portfolio companies. During these meetings, we emphasise partnership, assess the unique position of each company and are sensitive to other business needs while discussing ESG.

To support our portfolio, we continue to focus on three ESG themes: energy and climate change, equity, diversity and inclusion (EDI), and cybersecurity. We organised our third annual ESG Forum in November, which brought together our management teams with external advisers to discuss these themes, along with ESG governance, to share and build knowledge and understand resources available. As a result, we now provide our companies with resources and tools on each of these themes, including a carbon accounting and decarbonisation strategy platform, EDI and employee engagement survey and consultant, and annual cyber-maturity assessments.