Our Impact & ESG investment process
In line with our vision statement of "creating significant social and economic transformation of our African society through innovative solutions that deliver sustainable value for all stakeholders", our investment philosophy embodies the following overarching principles:
We make investments on behalf of and alongside our investors, predominantly retirement funds.
As responsible stewards, we strive to provide investment solutions that create sustainable value for our investors, the companies we invest in and the communities they serve whilst protecting the planet.
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We define "sustainable value creation" as investing in companies that create long-term value by acting on both opportunities and risks associated with economic, environmental, and social developments.
IMPACT & ESG
Impact is measured by tangible outcomes
How we approach impact & ESG
Our approach to Impact and ESG management acknowledges the inherent interrelation between the two practices, while also recognising their distinct differences in terms of goals, investment management procedures, and intended outcomes.
As impact investors, we direct all of our investors' capital towards opportunities in companies and infrastructure projects that contribute to achieving the United Nations Sustainable Development Goals.
Our commitment to the 2X Challenge ensures that all applicable investments align with at least one of the five diversity and inclusion criteria.
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Furthermore, as a member of the Global Impact Investing Network ("GIIN"), we use the Impact Reporting and Investment Standards ("IRIS+") to set impact targets and strategic objectives for each fund. We evaluate each opportunity using the Impact Management Project ("IMP") framework, analysing Who, What, How Much, Contribution, and Risk. Our ongoing impact reporting adheres to the IRIS+, Harmonised Indicators for Private Sector Operations (HIPSO), and Joint Impact Indicator (JII) standards whenever possible.
As a signatory to the Operating Principle for Impact Management ("OPIM"), Summit incorporates the Impact Principles and related frameworks into the design and implementation of our impact management system. This approach ensures that we fully integrate ESG and Impact considerations throughout our investment lifecycle.
Our OPIM Disclosure Statement provides a comprehensive overview of our Responsible Investment policy and framework to ensure we and our portfolio companies deliver on ESG and Impact objectives aligned to the United Nations Development Goals.
Our Impact Framework Partners
We set impact objectives and targets for each fund by combining the following complementary frameworks with in-country development plans such as the South African National Development Plan 2030.
IMPACT FRAMEWORKS
ESG FRAMEWORKS
Our Investment themes
Our investment framework, built on the Theory of Change principles, sets out a fund's long-term impact themes and targets. Fund investment focus and sector selection are structured around one or more of our three core impact themes. Specific impact strategic goals and targets are based on the target countries' national goals and where these are aligned with the Impact Reporting and Investment Standards (IRIS+) strategic objectives.
Through our investments, we will look to create new permanent jobs and temporary jobs for mostly previously disadvantaged persons. Job creation within partnership companies is measured using HIPSOs Joint Impact Indicators and in-country frameworks like South Africa's Jobs Fund. Job creation is monitored across demographics and management levels and is typically independently audited annually.
Each fund's impact targets vary depending on the investment sector selection. The potential for community upliftment within partnership companies is determined during a pre-acquisition impact and ESG desktop evaluation. The evaluation is based on IMP's five dimensions of impact (Who, What, How Much, Contribution, Risk) and is measured using IRIS+.
Each fund will set transformation targets typically aligned with each country's in-country objectives, such as South Africa's BBEEE Codes. Being aligned with the 2X CHALLENGE, each fund will look to enable the inclusion & development of women in the workplace. Transformation, diversity and inclusion targets are jointly and upfront agreed upon with the portfolio company, including aspects of black and black women; equity ownership, board, senior management and staff representation and skills development expenditure on previously disadvantaged employees. These targets are monitored and reported quarterly.
Each fund's overarching objective is to deliver risk-adjusted financial returns and tangible social returns.
Organisation & Screening
IMPACT
ESG
Pre-screening includes evaluating if the potential investment is aligned with the Fund's Impact Targets and objectives. In addition, Summit assesses if its investment will contribute to delivering additional Impact.
Upfront and before commencing full due diligence, each investment is pre-screened against excluded activities, which can result in adverse social and environmental outcomes, and therefore deemed off-limits.
How we integrate Impact & ESG through the investment cycle
Be the Change You Want to See
2022 Proved to be a momentous year for the Fund, as it successfully achieved its financial objectives while also making notable advancements in realising its Impact targets. During this period, we achieved several significant milestones in our investment portfolio. We successfully concluded our initial investment in tertiary education by partnering with NewBridge. Additionally, we made a strategic investment in Life Path Health, a prominent mental health and rehabilitation healthcare group. Moreover, we solidified our commitment to supporting small, medium, and micro enterprises (SMMEs) by completing an investment in Custom Capital Finance, a distinguished alternative finance provider. This investment aims to offer financial assistance to more than 19,000 SMMEs throughout the duration of the Fund's investment.
30 March 2023
Published
Investing for Growth with Impact
2021 Marked a significant milestone for Summit. In August, we proudly announced the successful completion of our inaugural fund, reaching its final close with a remarkable committed capital of R1.615 billion. The Fund achieved a notable accomplishment by finalising its investment in Apex Surgi-Centre. As a result, Apex Soweto Day Hospital, a state-of-the-art facility with 24 beds and three theatres, located in Soweto, Gauteng, was added to the Fund's growing portfolio of healthcare facilities. This expansion aligns with our commitment to providing quality healthcare services. Additionally, Zoutpansberg Private Hospital ("ZPH") in Louis Trichardt, Limpopo, stands as another significant healthcare facility within our portfolio.
31 March 2022
Published
Monitoring & reporting
Our Investment, Value Add, ESG and Impact teams consistently engage with each portfolio company to assist with achieving the targeted financial returns and social impact objectives. Quarterly data is collected across our three impact themes and ESG aspects and reported to our investors. This data is aligned to the IRIS+, HISPO (and JII), SASB, and data categories where possible.
Current fund impact & investment themes
SECTOR FOCUS
FUND
Private Equity Fund I
Private Equity Fund II
Launching in Q4 2023
Social Infrastructure Fund I
Financial inclusion, access to affordable healthcare, and access to affordable education
Enabling access to affordable healthcare and access to affordable education
How we integrate Impact & ESG through the investment cycle
IMPACT
ESG
Pre-screening includes evaluating if the potential investment is aligned with the Fund's Impact Targets and objectives. In addition, Summit assesses if its investment will contribute to delivering additional Impact.
Upfront and before commencing full due diligence, each investment is pre-screened against excluded activities, which can result in adverse social and environmental outcomes, and therefore deemed off-limits.
Organisation & Screening
Organisation & Screening
Appraisal & Due Diligence
Investment Committee Approval
Contracting
Value Addition
Monitoring & Reporting
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