Redefining Investment for Social Good: Aureos’s Role in Shaping Impact Investing
Aureos Capital was among the early trailblazers in the world of Impact Investing. In a time when financial returns were seen as the primary measure of investment success, Aureos took a bold approach by integrating Environmental, Social, and Governance (ESG) considerations into its investment decision making process and strategy. The firm’s incentive structures for its senior investment teams were also tied to both financial and impact returns.
The introduction of impact metrics on a standalone basis were not sufficient unless the investment teams are trained on the principles of ESG and the relevant frameworks/tools being implemented to create consistency and transparency. For example, if there were two investments in the same industry/sector across two different locations, then it was required of the teams to compare and contrast the two investment theses, with a focus to learn, create value and mitigate risks. This was then considered at the relevant Investment Committee discussions. The firm recognised that private equity could be a powerful driver for positive social and environmental change, especially in emerging markets. Aureos’s pioneering approach laid the foundation for what has become a global movement to align capital with purpose.
At the heart of Aureos’s impact investing philosophy were two innovative frameworks/tools: The Aureos Way (Aureos PE +) and The Aureos Sustainability Index (ASI). Together, these approaches helped shape not just Aureos’s investments, but also the broader impact investing landscape..
Catalysing Change in the Impact Investing Industry
Aureos’s pioneering work set the stage for the growth of impact investing worldwide. By the time Aureos merged in 2012, its influence had spread across industries, geographies, and investors. The firm showed that it was possible to deliver competitive financial returns while also generating lasting, positive social and environmental outcomes.
The integration of The Aureos Way and the Aureos Sustainability Index not only enhanced the performance of its portfolio companies but also contributed to the development of industry standards for ESG and impact measurement. These tools provided a blueprint for future investors, proving that sustainability and profitability could – and should – be aligned.
As Impact Investing continues to grow as a global force for good, Aureos’s legacy lives on through the methodologies it pioneered, the businesses it supported, and the communities it uplifted. Today, many of the principles and practices that Aureos championed are foundational to how investors approach impact-focused investment strategies.