How GHO Capital connected sustainability to revenue with the help of Upright’s monetised data

The starting point: How to evidence the societal contribution of private investments at scale?

London-based specialist healthcare investor GHO Capital, focused on mid-market healthcare companies with c. €9 billion AUM, invests in technical B2B businesses that can sit several steps upstream in the healthcare value chain. That can make the connection between a company’s products and services and eventual patient and societal outcomes difficult to see.

GHO wanted credible, consistent evidence of how its portfolio delivers on its purpose of “Better, Faster and More Accessible Healthcare”.

Julia Rebholz, Head of Responsible Investing at GHO Capital, shares:

“Our LPs, employees, and portfolio companies were individually asking the same question: how can we evidence, in a consistent way, that this portfolio delivers societal benefits alongside financial returns?”

GHO first partnered with a university to evidence one portfolio company's contribution to society. The results were strong, but the approach would have cost too much to scale across the portfolio, and it offered no way to screen new targets.

GHO therefore explored universities, data providers, and consultants for a scalable way to quantify societal impact, sustainability risks and opportunities.

Why GHO complemented its proprietary sustainability framework with Upright

As LPs increasingly asked for evidence of the positive contribution to society to report back to their own clients, GHO also looked at which tools its investors were using themselves. Upright kept coming up.

"That's crucial in healthcare, where an innovation can take years to move from the lab to producing patient outcomes, and where our companies often sit well upstream of the patient."

Building further on GHO's proprietary framework alone would not have been the most efficient path, given Upright had been developed since 2017.

Upright was also already used by some of GHO's LPs – giving GHO and its investors a shared reference point rather than asking LPs to trust an entirely new one.

How GHO uses outside-in, monetised sustainability data across the investment lifecycle

Today, GHO uses five of Upright’s datasets across three funds, both for portfolio management and target screening. Used alongside GHO’s proprietary framework and other tools, Upright provides an outside-in view that helps GHO identify sustainability risks and opportunities and compare companies across jurisdictions and sub-sectors.

On target screening, Julia Rebholz said:

“We use Upright to screen target companies and quickly identify, from an outside-in perspective, which products and services are contributing to society. That is then further scrutinised in our commercial and responsible investing due diligence.”

That is particularly useful when management teams already have a great deal to focus on in their first year of ownership. Rather than making data collection the starting point, GHO can begin with an outside-in assessment and use it to identify the areas that warrant deeper investigation.

GHO also uses Upright to run double materiality assessments to the CSRD standard, both across the entire portfolio and for each individual company. Having recently refreshed a previous assessment run with a Big Four firm, GHO found:

“Upright's CSRD double materiality assessment gave us results consistent with our previous Big Four assessment, at a fraction of the cost – and one portfolio company felt it was at least as strong as a previous third-party consultant assessment.”

How Upright’s monetised sustainability helps connect sustainability to revenue

As GHO’s approach and toolset evolved, they were able to demonstrate more clearly how sustainability links to customer revenue requirements — both now and in the future — with real numbers.

With that clarity, deal teams could work with management to focus on the highest-priority items for their customers.

For Rebholz, connecting sustainability to revenue is where even the most capable sustainability leaders can struggle – and it is a crucial part of the role.

It is the same thing LPs want to see: not just evidence of responsible investing activity, but a clear link between those initiatives and value creation and protection.

"LPs want mature GPs that are not in 'tick-the-box' sustainability mode. Upright adds to our toolset to help demonstrate that maturity – that we have built an evidence base and the capabilities to give thorough answers to hard questions," Julia Rebholz said.

That capability also supports GHO's engagement with more sophisticated LPs who need to meet their own mandates, where putting a number on healthcare's contribution helps make its value more tangible, rather than something abstract and removed from the end patient.

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