DTCP is an independent investment management firm with more than EUR 2.5 billion in assets under management and more than 50 professionals. With a focus on digital transformation, the firm invests across two strategies. DTCP’s Digital Infrastructure team invests in European digital infrastructure — namely mobile towers, fiber networks, and data centers. DTCP’s Growth Equity team is the expert investor for enterprise software as a service (SaaS) companies in Europe, Israel, and the U.S.
Introduction
- Name: Jan-Michael Dierkes, Managing Director & Head of ESG at DTCP Capital
- GRESB Assessments or tool: GRESB Infrastructure Fund and Asset Assessment
- AuM: EUR 2.5 billion
- Region: Europe
- Starting year with GRESB: 2023
- Partner: Yes
What motivated you to start participating in the GRESB Assessments? What were you doing for ESG/sustainability prior to joining GRESB?
We founded DTCP in 2015 intending to generate attractive returns with acceptable risk for our investors while creating a more sustainable digital society. Not having any unsustainable legacy investments enables us to embed sustainability in our processes from the outset and create long-term value for our partners, portfolio companies, and colleagues.
When we signed up with GRESB for our Digital Infrastructure Fund II (DIV II), our aim was to quantify our ESG commitment. We chose GRESB because it is one of the most internationally recognized infrastructure benchmark standards. The process is clear and well-understood, providing a robust framework for measuring and reporting on our progress.
DTCP scored a remarkable 98 and achieved a GRESB 5-star rating at the fund level in its first year of GRESB participation, in addition to having one of its infrastructure assets score 100. What are some of the key factors or strategies that contributed to DTCP’s performance?
We have put a lot of emphasis on embedding ESG processes at DTCP over the last two and a half years. ESG is part of our due diligence processes, both before and after we purchase a stake in a portfolio company. We have ESG objectives and key results (OKRs) in place for both our investment teams and the management teams of our portfolio companies. Creating transparency through our reporting and the GRESB Assessments is very important to us. We believe that having the relevant metrics, OKRs, plans, and processes in place was most likely the key success factor contributing to our 2023 GRESB performance.
In general, our portfolio companies are very ESG-aware, but tend to have fewer institutionalized processes, especially when it comes to earlier-stage companies. We actively engage with our portfolio companies and assets to increase understanding and accelerate any changes required.
What does this result mean for DTCP? What more would you like to achieve in ESG?
We are very proud to have achieved this result as a first-time participant. Given the time and effort spent on ESG at DTCP and at our portfolio companies, the GRESB result acknowledges our socially responsible investing (SRI) endeavors and outlines the path for the future. Through our participation in GRESB, we have been able to benchmark our ESG performance and demonstrate our commitment to sustainability to our stakeholders.
DTCP also invests in greenfield assets. Can you speak to the importance of ESG in the development phase?
Greenfield assets provide you with the unique opportunity to put sustainability at the center of an investment by adapting its design pre-construction. Brownfield assets often cannot offer this flexibility. Data centers, for example, are typically energy-intensive facilities that consume a substantial amount of electricity for server operation, cooling, and other technical requirements.
Greenfield data center plots, however, enable you to consider components that optimize efficiencies and significantly reduce their environmental impact — e.g., for energy supply, air conditioning, and IT performance. For instance, waste heat can be reused and fed directly into neighboring local heating networks. This early engagement not only demonstrates proactive environmental protection, but also enables a best-in-class approach that sets the course for sustainable and future-oriented operations.
What did you find most helpful when preparing and completing your assessment submission? What did you find most challenging?
Participating in the 2023 GRESB Assessments has provided us with valuable additional insights and learnings about our ESG performance, as well as opportunities on how our sustainability practice can evolve even further. The support of a consultant who helped us better understand the exact meaning of complex questions was also useful, especially for the first year participating in GRESB.
One of the biggest challenges for us was to identify the right documents from our databases and obtain data from various stakeholders in such a way that the most important information was available and easy to understand for GRESB as part of our submission.
Did you take advantage of the Grace Period, the Pre-submission Check (formerly Response Check) or the Assessment Correction (formerly Review Period)? If so, how were these services helpful in your first year of participation?
Yes, we took advantage of the Grace Period. This service allowed our company and portfolio companies to become familiar with the Assessments.
What did you find most valuable in the resulting GRESB benchmarks and data? How have you been using them?
We discussed the results within our management team and with each portfolio company individually. In particular, the peer comparison graphs were very beneficial as we aimed to understand our relative position, learn from the competition, and adopt best practices where applicable.
In general, the results of the GRESB report are the best evidence of our ESG initiatives.
In light of your investment strategy, what are the most important insights and learnings you’ve uncovered with GRESB data?
Embedding ESG in the investment process is a complex process requiring time and money. This is also true of ESG assessments. We are convinced that our commitment to the needed resources and processes will ultimately lead to better ESG results and fulfill the needs of our investors.
Now that you have become a GRESB participant, what advice would you have given yourself before doing the Assessments?
Get yourself and your portfolio companies prepared early. Participating in both Assessments (i.e., the performance and management components) is time-consuming, particularly for the portfolio companies. An action or project management plan with regular check-in calls with all stakeholders is essential for a successful final submission.