Developing Investindustrial’s Responsible Sourcing framework for portfolio companies

Overview

twentyfifty partnered with European investment group Investindustrial to develop a Responsible Sourcing framework to assess investees’ human rights and environmental due diligence practices in their supply chains. 

The challenge

Investindustrial wanted to improve the management of human rights and environmental risks in the supply chains of their portfolio companies.

They also wanted to update their environmental, social and governance (ESG) pre-acquisition Due Diligence Questionnaire to better assess the current practices and risks related to responsible sourcing for potential targets.

Our approach

We partnered with the client to develop a Responsible Sourcing framework to assess investees’ human rights and environmental due diligence practices in their supply chain, based on a number of KPIs. 

The framework assessed companies against three levels of maturity. We also provided a summary of the key legal requirements of the CSDDD and EU Deforestation regulations, to facilitate the future compliance of portfolio companies. We mapped the framework topics against others used by portfolio companies such as B Corp and Ecovadis. We also provided guidance on responsible sourcing best practice through case study examples.

We worked closely with three portfolio companies to pilot and improve the Framework, before socialising it with the entire portfolio. 

In parallel we revamped the human rights section of Investindustrial’s Due Diligence Questionnaire to help the Sustainability team better understand the profile of potential targets and equip them to have richer discussions in the pre-investment phase. 

Results

The Responsible Sourcing framework was positively received, helping the pilot companies to take immediate and practical steps to address their supply chain risks and update their policies and processes.