The Aureos Sustainability Index (ASI) was a pioneering tool developed to measure and report the development impact of Aureos’s partner companies throughout the investment lifecycle. The ASI represented a holistic approach to sustainability, capturing a wide range of indicators that reflected both financial and non-financial performance. Each investment was assigned an ASI rating based on six equally weighted cluster indices, each containing an average of thirteen carefully selected sustainability indicators.
These six cluster indices represented the core dimensions of sustainability for businesses operating in growth markets:
1) Financial Performance – Evaluating the profitability, revenue growth, and operational efficiency of partner companies.
2) Economic Linkages – Measuring the impact of the company on local economies, including job creation, supply chain integration, and regional trade contributions.
3) Socio-Economic Impact – Assessing the broader societal benefits, such as improvements in living standards, community engagement, and social inclusion.
4) Private Sector Development – Evaluating the company’s role in strengthening the private sector through innovation, competitiveness, and market expansion.
5) Management and Governance – Measuring the quality of governance, leadership practices, and adherence to ethical standards within the business.
6) Health, Safety, Environmental, and Social Impact – Monitoring the company’s efforts to ensure employee well-being, environmental stewardship, and social responsibility.
A Comprehensive Framework for Measuring Sustainability
The ASI was designed to go beyond traditional financial metrics, providing a comprehensive framework that captured both qualitative and quantitative data. This data was sourced from the Aureos Management Information System and was rigorously aggregated to produce a yearly sustainability score for each partner company. The result was a detailed and multidimensional assessment that enabled comparisons across companies, sectors, deal sizes, and regions.
By including factors such as governance quality, employee engagement, health and safety standards, and community impact, the ASI provided a nuanced view of how well companies were balancing financial returns with positive societal outcomes. It also served as an essential tool for addressing non-financial issues, offering investment managers and companies a clear path to improving sustainability practices.
Empowering Stakeholders Through Accountability
One of the key innovations of the ASI was its ability to link sustainability with profitability. Aureos firmly believed that long-term financial success was intrinsically tied to strong sustainability practices. By tracking performance through the ASI, both Aureos and its partner companies were able to monitor progress, identify areas for improvement, and make informed decisions that drove value creation.
The ASI provided a percentage-based sustainability score, which helped investment managers and partner companies track their development impact throughout the investment period. This transparent, data-driven approach fostered accountability and empowered companies to take ownership of their sustainability journey.
Enhancing Business Performance Through Sustainability
At the heart of Aureos’s philosophy was the belief that sustainability is a key driver of profitability. The ASI’s rigorous approach to measuring sustainability didn’t just align with ethical business practices – it also strengthened valuations and enhanced business performance. By integrating environmental, social, and governance (ESG) factors into their operations, partner companies demonstrated a commitment to long-term success, which benefited not only investors but also employees, management, communities, and other stakeholders.
The ASI’s innovative approach showed that businesses could deliver strong financial returns while simultaneously contributing to economic development and societal well-being. By creating this robust framework, Aureos solidified its role as a leader in impact investing, showing that sustainability and profitability are not mutually exclusive but rather complementary goals.