Caledonia | ESG

ESG Policy

Policy as at:


We are committed to building our business for the long term. To this end, we consider the sustainability of the investments we make and aim to operate our business in a sustainable manner

ESG Approach

As an investment company, our purpose is to grow capital value and income over the long term, creating an increasing store of generational wealth for our shareholders. We invest in companies with a long-term view and are committed to building and maintaining effective relationships with those companies in which we invest. As a long-term investor our aim is to identify companies that can generate sustainable growth.

Caledonia is committed to investing in businesses, which will grow, provide employment and generate economic benefit in an environmentally and socially responsible way, both during and after our ownership.  We aim to invest in companies and funds that take a responsible approach towards the environment and society, built on high governance standards.

Standards & Codes

Historically our stewardship activities have focused primarily on governance matters most notably in our majority owned investee businesses which we seek to operate in line with industry best practice. The UK Stewardship Code (the ‘Code’), published by the Financial Reporting Council, aims to enhance the quality of engagement between asset managers and the companies in which they invest. We aim to operate in compliance with the Code, noting that due to our relatively small scale, in terms of overall assets and individual positions in public companies, we do not currently report publicly on our stewardship and voting activities. However, we do plan to keep this under review.

We seek to operate in line with the United Nations supported Principles for Responsible Investment (the ‘Principles’) as outlined below:

  1. Incorporate ESG issues into our investment analysis and decision-making processes;
  2. Be active owners and incorporate ESG issues into our ownership policies and practices;
  3. Seek appropriate disclosure on ESG issues by the entities in which we invest;
  4. Promote acceptance and implementation of the Principles within the investment industry;
  5. Work together to enhance our effectiveness in implementing the Principles;
  6. Report our activities and progress towards implementing the Principles.

In a similar approach to our compliance with the Stewardship Code, the relatively small scale of Caledonia, in terms of overall assets and individual positions in public companies, means that whilst we operate in line with the Principles, particularly the first three, it is not practical or appropriate for us to be a signatory. We continue to review this position and the level of reporting that would be required to allow us to become a signatory.

We recognise the importance of communicating both financial and non-financial ESG performance clearly to our stakeholders. We have considered our approach to the recommendations of the Taskforce on Climate-Related Financial Disclosures (‘TCFD’) and will provide a full set of disclosures in our 2022 Annual Report.



Our Quoted Equity team will meet with company management to consider the factors they consider important that will affect the company’s ability to deliver long term sustainable value to shareholders. These factors include, but are not limited to corporate strategy, operating performance, competitive positioning, corporate governance, remuneration, reputation and litigation risks, deployment of capital, regulations and any other risks or issues facing the business. Where appropriate we seek open and constructive dialogue with management and board members to broaden our knowledge of company strategy, operations and risk identification and management, and to ensure any concerns we have are assuaged. If we become aware of a significant governance issue, a member of the Quoted Equity team will make clear our concerns and expectations.

The level of interaction with each investee company will vary significantly depending on the company’s plans and performance; and will be greater with companies where we have a more significant presence on their shareholder register.

We make considered use of our voting rights and vote all our stock ahead of all shareholder meetings. As a consequence of our involved investment style, we expect to vote in line with management recommendations but are prepared to abstain or vote against resolutions where we consider they are not in the interests of our own shareholders.



Caledonia Private Capital invests in established businesses, across a range of sectors, that have robust operating margins, strong management teams and good growth opportunities. We introduce a high standard of corporate governance into these businesses, generally with an independent, experienced non-executive chair and a structure that includes formal audit and remuneration committees. Senior members of our Private Capital investment team will be appointed as non-executive directors of the boards of these businesses and will be expected to build and maintain close working relationships with the management teams. The boards of our portfolio businesses are responsible for their development, with only a limited number of matters reserved for consideration by Caledonia as shareholder.

Our Private Capital team review company performance through monthly performance reporting which includes operational, financial and other relevant performance information. There is a close dialogue with each business when formulating plans, budgets and forecasts, with ongoing analysis of performance against plan. This information is shared within the Private Capital team and also with Caledonia’s corporate functions and the board.

Our Private Capital team, particularly the senior executives, maintain a very high level of engagement with the senior management of portfolio companies. Our Chief Executive and CFO also build strong linkages with the management teams of the businesses. Ordinarily Caledonia’s executive and non- executive directors attend an annual event which enables them to meet with the senior management from portfolio businesses and to receive an update on progress in each business, together with a programme of regular presentations to our board. This is supplemented by periodic site visits.



Our Funds team invest into a mix of private equity funds in Asia and North America, balanced between direct investment into General Partner funds or into corporate fund of funds structures. In all cases we will assess the capability of the senior management of the fund and the governance structures in place to support decision making, remuneration and performance reporting. We make long term investments, so it is critical that these elements are in place and operating robustly. Our investment decisions are heavily influenced by management capability and track record.

Our Funds team maintain a high level of engagement with the principals and senior management of the funds into which we invest. This is achieved by regular in territory meetings and attendance at more formal annual meetings. In some cases, our Funds team represent us on the advisory board of the funds in which we are invested. This provides greater insight into the approach taken by the fund and their future plans. Such roles are advisory in nature, but they provide a platform for stronger engagement with, and potential influence of, the relevant manager. Other members of the Caledonia Executive Committee will often meet with the principals from our larger fund investments when they visit the UK.

Charitable activities

In 2020, we established the Caledonia Fund to provide grants to eligible applicants who were closely connected with our investee companies and faced financial hardship due to the Covid-19 pandemic. The fund supported many individuals, particularly those working for our consumer-facing businesses, Buzz Bingo and Liberation Group, which were more severely impacted by the pandemic and Government imposed trading restrictions. This fund supported over 300 individuals and granted awards of £0.26m in the year to 31 March 2021.

We have now established The Caledonia Investments Charitable Foundation to focus Caledonia’s future charitable activity. This charity will support a small number of causes relevant to Caledonia’s activities.