Sustainability at Mekong Capital

Mekong Capital’s Sustainability Vision 2015
Mekong Capital’s Sustainability Vision is to consistently maximize shareholder value creation relative to negative environmental and social impacts, and corporate governance risks, thereby raising the standards for sustainability in private equity.

Measurement of Sustainability Vision 2015
The Vision will be measured based on the Sustainability Ratio, which is calculated on a semi-annual basis as follows:

Sustainability Ratio = Gross Return Multiple x ESG Rating Score (%)

Gross Return Multiple is the value of an investment at the most recent revaluation / the total original cost of that investment.

ESG Rating Score (%) is a rating score of the positive impact of an investee company has on social, environmental and corporate governance issues. This score ranges from 0%-100% with 0% is at the final end of negative impact, and 100% is at the final end of positive impact. The higher the score, the more positive impact, and vice versa. This rating system is expected to be in place by end of 2011. The Sustainability Officer is responsible for causing the deal teams and the investee companies to increase this score from time to time.

Our Approach to achieve Sustainability Vision 2015
Mekong Capital’s approach for achieving its Sustainability Vision involves aligning Mekong Capital’s team around its Sustainability Vision, creating measurable goals associated with the vision, creating annual milestones and periodical targets for Key Performance Indicators (KPIs) for tracking progress towards achieving the vision. Sustainability reports are used to identify when Mekong Capital’s portfolio companies are off track from their targets, including any non-compliance issues, at which point Mekong Capital intervenes to get the company back on track.

Mekong Capital applies a value creation approach called Vision Driven Investing to maximize shareholder value for its investee companies. Meanwhile, Mekong Capital is taking actions to inspire its investee companies to identify and comply with best practices in environmental and social impact, and corporate governance. Normally this involves creating a clear link between sustainability best practices, and the successful achievement of a company’s vision.