Impact that creates
sustainable value

Our Approach

Our principal investment themes are sustainability and health. We seek to invest in companies and assets in our two priority sectors that have an intentional, measurable, and additional social and/or environmental contribution. Our ESG and impact framework is designed to both support risk mitigation and drive value creation.

Accredited by the Green Climate Fund

As the first North American private equity buyout fund accredited by the Green Climate Fund (GCF), Pegasus can partner with GCF to fund assets and companies that enhance low-emission and climate-resilient development, taking into account the needs of communities that are particularly vulnerable to climate change impact.

GCF is an anchor investor and partner of the Subnational Climate Finance initiative that aims to invest in and scale mid-sized climate resilient, low-carbon infrastructure and nature-based solutions in developing countries.

Please also see our dedicated website on the Subnational Climate Fund.

Impact Sectors and Themes

Impact Management

Creating long-term value by considering our impact on the people and planet is the starting point of our investment philosophy. We select our investments individually and seek measurable positive social, environmental, and economic impact. ESG and impact considerations are integrated throughout the entire investment cycle:

Screening Stage

Every investment opportunity undergoes significant due diligence to identify how or whether it fits within Pegasus’ investment themes, impact potential, ensure that the investment opportunity is not on Pegasus’ exclusion list, and to assess the potential ESG risks and opportunities.

Due Diligence Stage

We conduct comprehensive due diligence on ESG risks and opportunities and potential impacts on sustainable development. Depending on the circumstances, technical consultants may be engaged for additional expertise. For medium risk projects, we conduct and publish the Environmental and Social Impact Assessment (ESIA) and Environmental and Social Management Plan (ESMP).

Investment Decision Stage

Material findings from the screening and diligence stages help to identify ESG performance gaps, enhance practices, and address positive and negative impacts which result in an ultimate investment decision.

Investment Agreement Stage

Our legal investment agreement(s) incorporate ESG and impact criteria, as appropriate. This can include ESG action plans with targeted timelines to close ESG performance gaps and ESG and impact targets and requirements to report on performance.

Holding, Monitoring & Reporting Stage

We measure and monitor the investee’s ESG and impact performance timely to gather learnings and insights. By engaging with investees to improve their ESG and impact performance, we ultimately drive the depth of our impact even further. We report back to our investors on a regular basis including progress made towards our impact goals.

Exit Stage

We are convinced that assets which are optimized operationally, financially, as well as for ESG and impact aspects are more attractive to potential future owners and yield better exit results while also attracting a broader set of potential exit partners.

Policies, Sustainability-related Disclosures and Impact Reporting

• Sustainability Disclosures (ESG policy and SFDR Disclosures)
• Subnational Climate Fund – Sustainability-related website disclosure for Regulation (EU) 2019/2088
• Global Fund for Coral Reefs – Sustainability-related website disclosure for Regulation (EU) 2019/2088
• Our Impact Report
• Our Operating Principles for Impact Management Disclosure Statement
• Verification Statement of the alignment with the Operating Principles for Impact Management
• Gold Standard Impact Fund Certification: SCF Fund Design Document and Impact Strategy
• Gold Standard Impact Fund Certification: Audit Report

Impact Measurement

We are committed to rigorous qualitative and quantitative measurement of the sustainability outcomes and impact that we have with our investments. We seek to measure, analyze, and report on the impacts of our investments transparently and consistently. We apply internationally recognized standards to our metrics such as the Impact Reporting and Investment Standards (IRIS), the IFC Operating Principles for Impact Management, and the Sustainable Development Goals.

Our comprehensive impact measurement system is implemented throughout the entire investment lifecycle – from the pre-investment process to holding and exiting the investments. By evaluating the effectiveness of the capital invested and assessing the additionality of the impact created, we aim to maximize the impact of our portfolio investments. For each investment, we identify and track the relevant key performance indicators (KPIs), analyze the data, monitor the performance, engage with the investees, and where we deem it important, take corrective actions. We also initiate independent audits of measured impacts and external verification and publish the results on a regular basis.

Stakeholder Engagement

Our goal is to improve the lives of stakeholders in meaningful and lasting ways. Engagement is critical to understanding the views and interests of different stakeholders such as affected people in surrounding communities.

We help our partners and project developers to consult and engage with stakeholders throughout the investment and project life cycle to identify and manage environmental and social impacts. This presents a vital element for promoting transparency, accountability, effective participation and inclusion. An ongoing feedback and grievance mechanism provides stakeholders the opportunity to submit any feedback or raise grievances at any time.