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Our Approach

At ARCH, we believe there is an intrinsic connection between financial and ESG aspects that builds more resilient and valuable companies.

Our Approach to ESG and Responsible Investment

Environmental, social and governance (ESG) principles are at the core of our Fund strategies, enabling us to better manage risks and opportunities and ultimately create value through ESG.

As an investment advisor, ARCH raises private capital and invests in private and publicly-listed companies primarily in emerging markets, which also helps to aid their rapid transition to low carbon, climate resilient and sustainable economies. To ensure the delivery of long-term value, our approach to responsible investment approach is comprised of three key aspects:
Risk Management

We consider and manage material ESG impacts and risks associated with asset development and/or portfolio company activities in line with local and international ESG standards.

UN SDG Contribution

We invest in companies that directly or indirectly contribute to the United Nations’ Sustainable Development Goals (UN SDG).

Climate Action

We commit to providing tools and resources that enable Funds to integrate climate factors across the investment process.

Integrating ESG Across the Investment Cycle

ARCH’s ESG Policy, endorsed by the CEO, outlines our commitment to ESG and governs how we embed these aspects into the investment decision-making process.

To ensure ESG is effectively integrated across the Funds’ investment lifecycles, Environmental and Social Management Systems (ESMS) offer a set of policies, procedures and tools bespoke to each investment strategy to identify, assess, manage and report on ESG risks and the positive impacts associated with the portfolio companies’ activities. Each ESMS is designed specifically to address each Fund’s investment strategies’ unique challenges and opportunities.

Deal Sourcing and Screening

  • ARCH constantly evaluates investment opportunities and potential positive development outcomes that align with our Funds’ strategies.
  • ARCH screens those opportunities against an ESG Exclusion List and reviews them to identify ESG risks.
  • ARCH is developing a climate risk pre-screening tool to broaden investment risk analysis of targets, improve the portfolio’s climate resiliency and identify opportunities posed by climate change prior to acquisition.

Due Diligence

  • ARCH’s investment teams and dedicated ESG function conduct due diligence on every opportunity scaled to the ESG risk level.
  • ARCH works with external ESG specialists if a deeper dive into specific issues such as climate risk, biodiversity, resettlement, and/or if a comprehensive Environmental and Social Impact Assessment (ESIA) is needed.
  • ARCH includes an analysis of relevant ESG aspects in the Investment Advisory Committee (IAC) process.
  • ARCH incorporates ESG aspects into investment agreements, and construction contractor agreements as applicable, to align with the highest ESG standards, manage risk and maximise positive impact opportunities.

Investment Management

  • ARCH partners with portfolio companies to ensure alignment with our ESG standards.
  • ARCH supports portfolio companies by sharing knowledge, building internal capacity to manage issues and opportunities, and leveraging board and shareholder influence.
  • ARCH uses ESG data as a core tool during the investment period to drive value.
  • ARCH routinely monitors the portfolio companies and reports on material ESG metrics across all our investments to our stakeholders.


  • ARCH leverages work done during the investment period to integrate and measure the effectiveness of our ESG risk management and the resulting positive impacts.
  • ARCH communicates the portfolio companies’ tangible ESG value creation to maximise valuation premiums for business models and competencies that reflect ESG best practices.
  • ARCH factors ESG credentials into potential buyers’ evaluation to ensure our portfolio companies and assets continue to be sustainably managed.

Standards, Initiatives and Disclosures

ARCH became a signatory of the United Nations Principles for Responsible Investment (UN PRI) in February 2022. As a UN PRI signatory, ARCH will be providing annual disclosures regarding ESG integrations into our investment process.

ARCH is also a signatory of the UK Initiative Climate International (iCI), so we can contribute to the private equity industry's commitment to tackling climate change.

ARCH aligns with other global industry frameworks to ensure proper management of ESG risks and opportunities across the entire investment lifecycle.

ESG Expertise and Experience

In addition to robust processes and systems, ESG is embedded across all levels of ARCH, from our Board that oversees our firm's progress to the investment teams that work directly with portfolio companies.

ARCH is committed to hiring people who are passionate about building resilient, sustainable economies, primarily in emerging markets. Our investment team members, with their diverse perspectives and insights, are all trained and engaged on ESG and responsible investment.

ARCH's dedicated ESG function provides oversight of the Funds' ESG aspects, including implementation of the Funds' ESMS, and ensures ARCH and its Funds stay abreast of the latest ESG developments. ARCH's ESG function works closely with our investment teams and portfolio companies to support the integration of ESG into the decision making and value creation process.

ARCH's Head of ESG reports directly to our Chief Executive Officer (CEO) with a dotted line reporting to the Chairman of the Board. We have an ESG Committee, which is chaired by our CEO and includes the Head of ESG, Head of Risk, Head of Investor Relations, Company Chairman, and Managing Directors of each investment strategy.

ESG is on the agenda of every quarterly Board meeting, the Product Committee (a committee formed to guide the launch and governance of new strategies), and the Audit and Risk Committee. ESG aspects of investments and potential investments are presented at every Fund IAC and Limited Partner Advisory Committee (LPAC) meeting.

EU Sustainable Finance Disclosure Regulation

Disclosures in accordance with Regulation (EU) 2019/2088 Sustainable Finance Disclosures Regulation (the “SFDR”)

ARCH is an investment adviser to certain regulated managers. The managers of ARCH advised Funds are domiciled outside of the European Union and therefore firm level disclosures (for such Managers) under SFDR are not applicable.

Where required, Fund/vehicle specific disclosures in accordance with the SFDR will be made available in the data room and the investor portal.

The managers advised by ARCH do not consider the adverse impacts of investment decisions on sustainability factors within the meaning of the SFDR. Whilst ESG considerations are integrated into all investment processes as outlined in the ESG Policy, the detailed rules underlying the SFDR will require ARCH to ascertain the availability of the data expected to be reported under the new requirements of the SFDR. As such, the position will continue to be monitored and reviewed by ARCH as the underlying rules are finalised.