Responsible Investment


This Responsible Investment policy (Policy) outlines the principles of responsible investment (Principles) and the method of applying those Principles to Allegro Funds Pty Limited (Allegro or We or Us) as manager of the funds it is responsible for and the Portfolio Companies in which these funds (or its related bodies corporate) hold an interest (Portfolio Companies). In particular, the Policy sets out how environmental, social and governance (ESG) issues that can impact the performance of our funds and Portfolio Companies are addressed.

The Board of Directors of the Company (Board) is committed to:

  1. adopting and incorporating the Principles into the Company’s culture and investment process where it is consistent with the best interests of investors; and
  2. considering ESG issues when making investment decisions and determining their impact on new investments to ensure that the Company and the Portfolio Companies are responsible users of finite resources.


We are a high impact investor that manages Funds, separately managed accounts and mandates on behalf of our investors. We have a vision to build great businesses through Active Complex Transformation to deliver superior returns with sustainability and social responsibility embedded in our approach.

Allegro has been a signatory of the United Nations Principles for Responsible Investment (PRI) since 2011 where we adopted the six PRI prinicples. Our approach to responsible investing is underpinned by eight principles, including the six PRI principles and two additional principles linked to our ESG vision:

  1. ESG integration: We will explicitly consider ESG risks and opportunities in screening, due diligence, closing and monitoring of investments.
  2. Stewardship: We will be active owners and incorporate ESG issues into our ownership policies and practices.
  3. Performance measurement: We are proactive in tracking sustainability performance across our Portfolio Companies’ operations, aligned to widely accepted disclosure frameworks.
  4. Stakeholder engagement: We will engage with Limited Partners and Portfolio Companies to promote the acceptance of our ESG principles within the investment industry.
  5. Collaboration: We will work together to enhance our effectiveness in implementing our ESG vision, goals and Principles.
  6. Transparency: We will publish dedicated sustainability reports or statements disclosing our ESG performance, including ESG-related metrics, indicators, and impacts.
  7. Transformation: We are driven by our core purpose as a high impact investor and our ESG approach will, at all times, be driven with that mandate in mind.
  8. ESG as a value creation lever: We will work with our Portfolio Companies to identify opportunities to create value through environmental, social and governance initiatives.


The Principles serve to underpin our ESG considerations and encompass six focus areas which we consider to be most material to our stakeholders, and where we believe we can make the most meaningful contributions across our Portfolio Companies:

Each focus area is supported by a set of associated ESG metrics that are measured across our Portfolio Companies. We will review our focus areas and metrics on an annual basis to ensure they continue to be relevant to the evolving ESG landscape.

  1. Environment

    We have the following environmental goal(s):

    • Environmental Impact: Facilitate and support the transition towards a low carbon economy through our Portfolio Companies

    When making investment decisions, we review each Portfolio Company’s policy on environmental issues and its management to minimise its environmental impact.

  2. Social

    We have the following social goal(s):

    • Diversity and Inclusion: Develop a diverse and inclusive workforce across Portfolio Companies
    • Employee Engagement: Enable a highly engaged workforce and foster talents that are adaptable to market changes
    • Work Health and Safety: Uphold the highest standards of work health and safety practices

    Each Portfolio Company’s impact on its employees, the general community, and those stakeholders with which it has direct contact is considered carefully by us. By addressing social issues, the Portfolio Companies can influence society’s willingness to support or hinder it as a business.

  3. Governance

    We have the following governance goal(s):

    • Corporate Governance: Maintain best practice corporate governance practices
    • Risk Management: Have in place a robust risk management framework and strategy which embeds ESG

    Governance issues impact on the long-term success of Portfolio Companies. The nature of Funds sometimes necessitates a shorter term consideration of the Portfolio Companies interests than would ordinarily be the case.

    We take corporate governance and risk management responsibilities seriously and we support the long term interests of the Portfolio Companies. We engage in dialogue with Portfolio Companies about their corporate governance standards and risk management processes on a regular basis.

    We prefer to invest in Portfolio Companies where there is the opportunity to take a controlling position with the right to a board seat(s). Our representatives are on the board of each Portfolio Company and can therefore influence the appropriate governance and risk management policies for each Portfolio Company.

    The remuneration of directors and senior executives of Portfolio Companies is designed to ensure:

    a. long-term alignment with shareholder interests; and

    b. performance hurdles are in place that are reasonable and transparent.

    These policies and procedures are considered during monthly board meetings of the Company and our Portfolio Companies and policies and procedures are reviewed annually.


We encourage and facilitate the consideration of ESG issues and the implementation of the Principles at each stage of the investment lifecycle. Our approach to ESG integration is set out below

  1. Deal Sourcing and Screening

    In the deal sourcing and screening phase, we conduct negative screening of all potential investments (Target) against our exclusion list (see 4.1.1 below) to determine whether the investment can be pursued and we target to identify investment opportunities with positive ESG impact.

    4.1.1: Company exclusion list

    The Company will not invest in:

    1. companies that derive more than 15% of consolidated sales revenue or pre-tax profits from the production and manufacturing of cigarettes and other tobacco-related products;
    2. companies that generate 30% or more of their revenues from thermal coal extraction; or
    3. companies involved in the manufacturing or production of weapons or components of weapons covering the following weapon systems – biological and chemical weapons, anti-personnel mines, cluster munitions, land mines, depleted uranium, incendiary weapons and nuclear weapons.
  2. Due Diligence

    We will conduct ESG due diligence on all Targets to assess ESG risks and opportunities that may arise from the Target’s products, services or business practices. We also verify whether the Target currently meets or is able and willing to meet our minimum ESG standards on governance and risk management. For Targets where a higher level of ESG risk is identified, we use external experts to perform detailed investigation and provide relevant information on industry standards and benchmarks.

    In some circumstances, site visits are also conducted to validate ESG risks and opportunities identified. We may also conduct interviews with the Target’s management to determine the Target’s willingness and capability to address the identified key ESG issues.

    ESG due diligence findings and recommendations are documented and reviewed by the Investment Committee to inform the investment decision.

  3. First Strategy Day

    Once a decision is made to pursue the investment, an ESG 100-day plan checklist is developed based on the due diligence findings and recommendations. As part of a Portfolio Company’s first strategy day, the management team of the Portfolio Company will develop an ESG strategy and value creation plan with associated targets and key performance indicators (KPIs) and incorporate input from the Portfolio Company’s board of directors. These KPIs will include ESG specific commitments, targets and action plans.

  4. Portfolio Company Management and Monitoring

    As an active investor, we are committed to working together with our Portfolio Companies to uplift their ESG performance and reporting. In the management and monitoring phase, we support our Portfolio Companies to execute approved ESG initiatives, embed ESG risks into the risk management framework and ensure ESG governance gaps identified in due diligence are addressed.

    To maintain oversight over the Portfolio Companies, regular ESG Board reporting and KPI monitoring mechanisms are established. Depending on the importance of ESG to the Portfolio Company’s overall strategy and risk profile, we may also identify escalation triggers for ESG breaches and incorporate ESG outcomes into management KPIs.

    We recognise that ESG risks and opportunities will continue to evolve and hence we will support our Portfolio Companies to review their ESG strategy and update their approach as required.

  5. Exit Planning

    In the exit planning phase, we will support our Portfolio Companies to plan and facilitate a sale process. We will include considerations of ESG risks and opportunities in the positioning of the Portfolio Company and highlight the progress made against its ESG strategy. We may also disclose the Portfolio Company’s ESG performance against globally recognised ESG disclosure guidelines relevant to that Portfolio Company (e.g. UNSDG, GRI, ESG data convergence initiative and/or TCFD) to provide relevant ESG information to potential buyers.


We believe everyone at Allegro has an important role to play in the effective execution of our ESG strategy and policy, under oversight by the Board.

The Board has ultimate responsibility for Allegro’s long term strategic ESG ambition and vision.

The Investment Committee (IC) is responsible for the funds’ investments and for ensuring ESG considerations are factored into investment decisions and ongoing portfolio investment plans.

The portfolio company board and subcommittees are responsible for implementing the investment plan and the portfolio company’s ESG strategy. The Allegro Deal Team is typically represented on the portfolio company boards and subcommittees.

Allegro’s ESG Steerco (the Steerco), which consists of representatives from Allegro Operations, Deal Team and Operating Partners, is responsible for formulating ESG strategy, policies, tools and other materials that ultimately lead to the proper implementation, maintenance and review of Allegro’s ESG activities.

Allegro has a dedicated ESG Operating Partner (the ESG OP), who is part of the Steerco. The ESG OP is responsible for driving Allegro’s ESG strategy and overseeing the implementation and reporting at Allegro.

The ESG OP also works with portfolio company boards and management teams to coordinate and drive the implementation of ESG strategy and initiatives at portfolio company level.


We will provide regular updates on our ESG activities to our Limited Partners and other relevant stakeholders to keep them informed on our progress against our six ESG Focus Areas.

As a signatory to the PRI, we are also committed to publicly reporting on our progress against our eight principles on an annual basis.


Our entire organisation including our ESG Operating Partner, together with the Investment Committee, Deal Team, Operating Partners and Finance & Administration teams, are responsible for the implementation of this policy across our Portfolio Companies. This policy will be reviewed by the Board on an annual basis and amended when necessary.