Impact reports

Sustainability and Impact Report 2021: Sustainable Solutions Fund III

Sustainability and Impact Report 2021: Sustainable Solutions Fund III

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Introduction and Overview

2021 was a pivotal year for sustainability and its prominence on the global stage, as financial markets began to reckon with the severity of the climate crisis, global inequality, and the continued effects of COVID on communities, supply chains, inflation and global trade. While many pockets of the economy faced headwinds, we saw tailwinds from an increased and urgent demand for businesses offering solutions to address sustainability challenges.

This Sustainability and Impact report covers our third Growth Equity Sustainable Solutions Fund (SSF III), which closed with just over $1 billion of committed capital in 2019 and is now almost fully invested as of writing. We added five new companies in 2021 and the final two companies added in early 2022 will feature in next year’s report.

At Generation, we refer to sustainability as having two dimensions – what a company does and how a company operates. As such, we believe the best companies will be able to consistently capture and report on both the contribution of their products and their operations towards a net-zero, prosperous, healthy, fair and safe future. But measurement is not the end-game – the very best companies will also be using meaningful quantification of impact to regularly reflect on and improve their performance. In 2022, you can expect us to continue to support our companies on their journeys to best practice on both levels.

Growth Equity


15 Years of operating, since inception 1
16 Employees as at 31 March 2022 2
$3.3 billion Total assets under management, 31 December 2021

Investment Strategy & Approach


We invest in companies whose products, services and operations contribute to the global outcomes of planetary health, people health and financial inclusion.

sustainable solutions diagram

We seek to back companies that drive clear impact across our three outcomes domains, as detailed in the table below. Using our systems thinking lens, we also understand that these outcomes are often interrelated, and we take this into account in our investment research and evaluation – planetary health influences people health and financial inclusion, and the other way around.

We believe this will be the defining decade for driving the transformational changes needed in climate and social action. Click on the video below to hear more from Lucia Rigo, Partner in Growth Equity.

Approach to Portfolio Impact and ESG Performance Measurement

We select at least one ‘North Star’ impact metric to measure each business’ contribution to the above goals, and report on outcomes mapped to the UN Sustainable Development Goals (SDGs), alongside core ESG performance metrics. For companies contributing to Financial Inclusion and People Health, we conduct social outcomes benchmarking using beneficiary surveys. For companies contributing to Planetary Health, we analyse their total environmental impact through Lifecycle Analysis (LCA). We also analyse our business’ overall contribution and risks to impact using the Impact Management Project (IMP) framework. Finally, using GHG emissions measured as part of our core ESG performance metrics, we have also begun to engage our portfolio in reporting aligned to the Task Force on Climate-related Financial Disclosures (TCFD) and in setting Science-Based Targets (SBT), in line with Generation’s commitment to align our portfolio to net zero by 2040 or sooner.

Planetary Health
People Health
Financial Inclusion
Reporting Frameworks:
Impact Outcomes

GHG Mitigation

Pollution Avoidance

Resource Efficiency


Health Outcomes

System Cost Efficiency


Earnings Growth

System Cost Efficiency

  • Sustainable Development Goals (SDGs)

Impact Metrics
  • CO2e avoided

  • Tonnes of pollution/waste avoided to air/water/land

  • Litres of fuel saved

  • Cubic meters of water saved

  • # trees saved

  • # patients treated

  • # new people insured/treated

  • # early interventions

  • Increase in recovery rate/life expectancy

  • $ cost reduction to customers

  • % beneficiaries in low income/unbanked/underinsured group

  • $ increase in earnings

  • $ cost reduction to customers

  • Lifecycle Assessment (LCA) or beneficiary surveys

  • Impact Management Project (IMP)

ESG Performance MetricsEnvironmental, Social, and Governance (ESG) information captured across the portfolio
  • Best in class sustainability accounting standards

  • Carbon emissions target-setting and reporting standards

Portfolio Results

Within our portfolio in 2021, we saw a significant step forward in disclosure and transparency on all fronts. We have deepened our focus on carbon accounting (including 100% disclosure of Scope 1, 2 and 3 emissions across our private portfolio for the second year)3 and are taking early steps to support companies with setting Science-Based Targets. Equity, diversity and inclusion (EDI) outcomes improved, with 42% of portfolio management teams identifying as female or non-binary and 40% as people of colour (POC). Importantly, we also tapped our extensive network for multiple Board searches, leading to a three percentage point increase in average Board gender diversity. Next year, we aim to scale the strong performance on diversity achieved by many of our portfolio companies (including three companies with >50% POC on the Board) to the entire portfolio.

Click on the logos below to read more about results from companies in the portfolio.

In Focus: Equity, Diversity, and Inclusion (EDI)


Generation continues to consider diversity to be a critical sustainability factor that drives business and investment success, with our vision focused on ensuring not only a net-zero but also an equitable and safe world. To this end, we are pleased to see increasing interest in diversity disclosure by the regulators governing corporate disclosure in the markets in which we operate. As we move toward greater and more systematic disclosure, we are broadening and enhancing our definition of what diversity really means and how to best represent this in our reporting. As a result, this year marks an important evolution in our conceptualisation of gender and our reporting approach, in which we report on our companies’ workforce gender diversity including a non-binary category.


Across our portfolio, the momentum building behind EDI in 2020 continued into 2021. Our engagement strategy continued to focus on disclosure and in setting the tone from the top, engaging with portfolio companies on Board composition to improve diversity of the Board, providing a spotlight on diversity at our System Positive Summit, and connecting our companies with the resources to support development of their workforce EDI strategies. To name a few examples over the course of 2021, we supported Andela in hiring a new female independent director, helped Guideline add their first female executive to the Board, and worked with Pivot Bio to identify two experienced female executives to join their Board, including one who joined as Chair of the Audit Committee.

Sources: Percentage Female & Non-Binary14, Percentage POC15

Definitions: Management16, Technical Staff17, Other Staff18


We note continued improvements in diversity at the management level with 40% identifying as a person of colour (POC) and 42% as female or non-binary (up from 38% and 30% in 2019, respectively). Disclosure of gender diversity significantly improved in 2021, with 100% of companies reporting on the Board and 92% also reporting on workforce composition. EDI is getting strategic attention with two companies making their first dedicated EDI leadership hires, two initiating strategic EDI consultant partnerships and three setting up dedicated EDI taskforces or committees.

Example initiatives within the portfolio

One of our companies has recently updated their approach to hiring diverse candidates, with a partnership programme to ensure a pipeline of talent from underrepresented groups, representative interview panels and the use of a de-biasing software platform to ensure written hiring communications are inclusive.

Another company recently created their first three-year EDI strategy, merging international EDI goals (improvements in gender, disability and LGBTQ+ representation) with a localised implementation approach, including e.g., a focus on improving veteran and ethnic representation in US offices. The same company also implemented training for all employees, inclusive hiring processes, an accessible workplace, an employee resource group, policies around harassment, gender salary reviews to ensure pay equity and a renewed parental leave policy to support inclusion.

In Focus: Environmental Impact


We believe it is critical for our portfolio companies to measure and reduce their climate impact, regardless of whether their business is tackling outcomes in Financial Inclusion, People Health or Planetary Health. Understanding our portfolio’s total Scope 1, 2 and 3 GHG emissions is also an essential first step to achieving our firm-wide commitment to align our portfolio to net zero by 2040, and to support our companies in setting Science-Based Targets, in line with our additional firm-wide commitment to achieve 60% SBT coverage across assets under management by 2025.


For the second year, we have focused our engagement on driving ‘carbon-consciousness’ by conducting a comprehensive evaluation of Scope 1-3 GHG emissions for every private company in SSF III. We also supported Lifecycle Assessments (LCAs), which measure the net (negative) impact of a company’s product and services versus business-as-usual, for five of the six companies contributing to outcomes in the domain of Planetary Health.19

Scope Breakdown (Aggregate Portfolio)


The portfolio as a whole emitted 163,131 tCO2e in 2021, now over 13 companies relative to 8 companies in 2020. This includes two circular economy companies with substantial revenues and significant operations, Back Market and Vestiaire Collective; on a like-for-like basis, portfolio emissions intensity actually decreased by 30% from 2021 over 2020. As expected, the largest contribution was from Scope 3 (91% of portfolio emissions), with share of emissions from Scope 3 up slightly on last year. Of the Scope 3 emissions, the largest share is still derived from Purchased Goods and Services and broadly in line with last year.

Beyond measurement, this year marks a turning point in action. Three companies have set carbon emissions reduction targets, two of which are Science-Based Targets,20 and a further three are actively developing targets and reduction strategies, comprising efforts to reduce employee travel, reduce use of single-use plastics and manufacturing process optimisation to reduce lifecycle footprint. As just one example, Andela’s move to fully remote working reduced its emissions intensity substantially. It is also worth noting that care must be given to interpreting these results as certain companies, such as Back Market, Convoy, Nature’s Fynd, Pivot Bio and Vestiaire Collective, are producing products that are designed to reduce emissions from the economy. This impact is included in our LCA analysis and impact metrics, and effectively serves to counteract on a net basis the carbon footprint displayed in the chart above.

Data Partners for this Report

Click on the logos below to read more about the data partners for this report.

Glossary of terms

APIApplication Programming InterfaceKPIKey Performance Indicator
BQBusiness QualityLCALifecycle Analysis
CDPCarbon Disclosure ProjectMQManagement Quality
CO2Carbon DioxideNASANational Aeronautics and Space Administration
CSRCorporate Social ResponsibilityNEDNon-Executive Director
EAExecutive AssistantPOCPeople of Colour
EDIEquity, Diversity and InclusionSASBSustainability Accounting Standards Board
ESGEnvironmental, Social, GovernanceSDGSustainable Development Goal
GHGGreenhouse GasSMBSmall and Medium-sized businesses
GIMGeneration Investment ManagementTCFDTask Force on Climate-related Financial Disclosures
IFRSInternational Financial Reporting StandardstCO2eTonnes of carbon dioxide equivalent
IPCCIntergovernmental Panel on Climate ChangeUN PRIUnited Nations Principles for Responsible Investment
IMPImpact Management ProjectUNEP FIUnited Nations Environment Programme Finance Initiative
IPIntellectual PropertyVRFValue Reporting Foundation
ISSBInternational Sustainability Standards Board

Disclosure Frameworks

Generation believes in the principle of integrated reporting on financial and sustainability activities, performance outcomes and risks. In certain cases, we also publish supplementary reporting to ensure our reporting meets specific regulatory or voluntary commitment requirements. A summary and links to these disclosures is below.

Task Force for Climate-related
Financial Disclosures (TCFD)
Generation has made a commitment to use the TCFD’s recommended framework for disclosing its climate-related exposure each year. Our first TCFD report, covering 2020, was published in 2021.TCFD Report 2021
Sustainable Finance Disclosure
Regulation (SFDR)
Generation adheres to the European regulatory framework SFDR and discloses its sustainability risks, remuneration, consideration of Principal Adverse Impacts (PAIs) and the classification of its funds, in its fund offering documents and/or on its website, according to SFDR’s required practices.Sustainability in the Investment Process
UK Stewardship CodeGeneration is pleased to have been accepted by the Financial Reporting Council as one of the initial signatories to the UK Stewardship Code last year. Generation’s Stewardship Report has just been submitted and is available publicly on our website under Our Strategies.Stewardship Report

Key Frameworks

  • The Impact Management Project, a collaborative effort of more than 1,000 global stakeholders, has agreed on a set of shared fundamentals for communicating, measuring and managing impact. By helping every investor and entrepreneur understand their material effects, they aim to encourage more impactful capital allocation.


  • G20 Finance Ministers and Central Bank Governors asked the Financial Stability Board (FSB) to review how the financial sector can take account of climate-related issues. The FSB established the Task Force on Climate-related Financial Disclosures (TCFD), which released recommendations for more effective climate-related disclosures in 2017.


  • SASB standards enable businesses to identify, manage and communicate financially-material sustainability information to their investors. SASB has developed a complete set of 77 industry standards, published in November 2018. These globally applicable industry-specific standards identify the minimal set of financially material sustainability topics and their associated metrics for the typical company in an industry and are organised through a Materiality Map.


  1. We have been investing for 15 years as a Growth Equity team – beginning with our research ahead of the final close and launch of our first Sustainable Solutions Fund in 2008.
  2. Growth Equity team as at 31 March 2022, excluding individuals who are not 100% allocated to the Growth Equity team and long-term consultants.
  3. 100% carbon emissions disclosure excludes Sophia Genetics, which is now a public company.
  4. Data comes from a survey of a sample of AlayaCare’s care workers conducted by 60 Decibels. For more information on the survey and 60 Decibels, please see Data Providers for this Report.
  6. US EPA “Fast Facts: U.S. Transportation Sector GHG Emissions” 2019, Convoy data and estimates, ECG analysis. Data refers to truck freight within the US only — it does not include international transport or rail and shipping freight.
  7. Guideline. “Exposing the small business 401(k) access gap.” March 29, 2019.
  8. U.S. Bureau of Labour Statistics.
  9. Poore, J., & Nemecek, T. (2018). Reducing food’s environmental impacts through producers and consumers.
  10. Institute for Agriculture and Trade Policy.
  11. Pivot Bio. “Synthetic Fertilizers in Ag.” July 19, 2021.
  12. MDPI. “Review Nitrogen Fertilization. A Review of the Risks Associated with the Inefficiency of Its Use and Policy Responses.” May 18, 2021.
  13. World Economic Forum (2021), Net-Zero Challenge: The supply chain opportunity
  14. Percentage of workforce self-identifying as female & non-binary across the portfolio represents the weighted average, with total employees as the denominator. A total of 12 out of 13 companies reported gender representation of the workforce in 2021.
  15. Percentage of workforce self-identifying as POC across the portfolio represents the weighted average, with total employees as the denominator. A total of eight out of 13 companies reported ethnic representation of the workforce in 2021.
  16. Management is defined as C-Suite employees.
  17. Technical Staff is defined as non-administrative employees (excluding functions such as building maintenance, security and other ancillary staff).
  18. All other staff fall into the Other Staff category.
  19. For companies with planetary impacts, the LCA analysis of the impact of the company’s products and services vs. ‘business as usual’ also includes analysis of those categories of the company’s carbon footprint that are directly related to the product/service production lifecycle. This is intended to provide a fair comparison of lifecycle impacts that aligns with the GHG Protocol Product Standard and ISO 14044 standards for LCA.
  20. Vestiaire Collective is currently awaiting validation of its Science-Based Target.

Important Information

The material contained in this document (the “Document”) has been prepared by Generation Investment Management LLP (“Generation”) for informational purposes only and reflects the views of Generation as at May 2022. It is not to be reproduced or copied or made available to others without the consent of Generation.

The Document is compiled in part from third party sources believed to be accurate, including the Fund’s investee companies themselves. Generation believes that such third party information is reliable, but does not guarantee its accuracy, timeliness, or completeness. It is subject to change without notice. The information should not be considered independent; it may be subject to error or omission and should not be relied upon.

Generation accepts no liability for loss arising from the use of this material. Any opinions expressed are our current opinions only. This Document is not meant as a general guide to investing. It is expressly not a source of any specific investment recommendations. It makes no implied or express recommendation concerning the manner in which any client's account should or would be handled. Under no circumstances is it to be considered as an offer to sell or a solicitation to buy any investment referred to in this Document. It is not investment research. Should you disregard this caution, you should further be aware that, in consequence, it does not take into account your individual circumstances nor your financial situation or needs. Securities can be volatile and entail risk and individual securities presented may not be suitable for you. You should not buy or sell a security without first consulting your financial advisor or considering whether it is appropriate for you and your respective portfolios.

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Any statements of opinion or belief contained in this Document, all views expressed and all projections, forecasts or statements relating to expectations regarding future events or the possible future performance of any product in respect of which Generation or any affiliates provide management or advisory services (or any other product) are those of Generation and represent Generation's own assessment and interpretation of information available to it as at the date of this Document and are subject to change without notice. No representation or warranty is made, nor assurance given, that such statements, opinions, projections or forecasts are correct or that the objectives of Generation or any products in respect of which Generation or any of its affiliates provide management or advisory services (or any other products) will be achieved. No responsibility is accepted by Generation or any affiliates in respect thereof.

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Nothing in this Document should be interpreted to state or imply that past results are an indication of future performance. There is no assurance that any securities included within this report will remain in the Fund portfolio.

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