Our framework enables investors to evaluate the strategic sustainability approach of portfolio companies and potential investments. Apply one consistent methodology across firms, compare ambition and management quality, and identify risks and opportunities.
We provide a single, comparable view on how sustainability sits inside each company’s strategy – not fragmented ESG scores. The PI Strategy Framework translates management evidence into three investor-relevant scores plus benchmarking, enabling faster, better-informed investment decisions, engagement with direction, and clearer exit narratives.
A consistent, comparable methodology to assess multiple portfolio companies at once.
A clear understanding of each firm’s ambition level, integration into core strategy, and management quality.
The ability to benchmark portfolio firms against each other and identify leaders, laggards, and areas of risk.
This makes it possible to integrate sustainability considerations directly into your investment process – from pre-investment due diligence, to portfolio management, to exit readiness.
Our framework outlines five ambition levels that represent different strategic imperatives for integrating sustainability beyond legal requirements. In addition, we identify two additional variations – No Ambition and Only PR – which describe organizations that lack a credible sustainability strategy. These are not strategic approaches, and they often create significant reputational and operational risks.
As you move through the ambition levels, you’ll see a clear progression:
Note: On this page, “integration” includes the corresponding investment
(budget, staff, opex/capex) required to achieve it.
Intention
Rapidly and consistently assess target companies to judge strategic fit, upside potential, and downside risk.
What you can answer
Does this company’s sustainability strategy go beyond minimum compliance?
Does management have the capabilities to scale sustainability into operations?
Is this target a greenwash risk?
Could sustainability weaknesses create hidden costs, liabilities, or reputational risks?
How does the target compare to peers in ambition and integration?
Outcome / solutions
Evidence-based sustainability strategy assessment to include in due diligence packs.
Identification of greenwashing or “Only PR” risks before purchase.
Benchmark positioning against peers for valuation scenarios.
Clear basis for setting covenants, warranties, or integration requirements post-close.
Intention
Track progress, prioritize engagement, and turn strategic ambition into measurable value.
What you can answer
Which companies are improving versus plateauing in sustainability ambition and management quality?
Where are the gaps between ambition and actual operational integration?
Which companies require intensive engagement versus light-touch monitoring?
How should engagement resources be allocated across the portfolio?
Outcome / solutions
Portfolio-wide heatmaps showing ambition and management quality.
Prioritization of engagement focus: which companies to work closely with.
Actionable engagement integration plan aligned to management’s actual maturity.
Integration of KPIs into board and management incentive schemes.
Regular monitoring dashboards to demonstrate progress to LPs or regulators.
Intention
Create a demonstrable, investment-grade sustainability story for buyers and shorten sales processes.
What you can answer
Has the company’s sustainability ambition and management quality improved over the holding period?
Can we substantiate claims with consistent, comparable evidence?
How does the company compare to competitors in sustainability strategy maturity?
Which achievements will resonate most with prospective buyers?
Outcome / solutions
Exit readiness report with trajectory over time and benchmarking against peers.
Documented evidence to include in the information memorandum or data room.
Clear sustainability story that differentiates the asset in the market.
Ability to demonstrate how improvements contribute to valuation uplift.
Intention: Optimize portfolio performance across both financial and sustainability metrics
Challenge: Continuously monitoring and improving the sustainability profile of diverse investments
Solutions:
> Align your portfolios with your sustainability investment objectives (risk, return, impacts)
> Inform engagement strategies with portfolio companies
> Use our engagement strategy tools to guide interactions with portfolio companies
> Leverage our Tools to track sustainability performance across your investments
> Use the approach to define exit strategies and prepare sell-side Due Diligence reports
Intention: Provide transparent, comprehensive reporting on portfolio sustainability strategy focus (risk, return, impacts)
Challenge: Aggregating and presenting complex sustainability data from multiple investments
Solutions:
> Utilize the stress test results to compile sustainability strategy information across your portfolio
> Use our benchmarking to ols to contextualize your portfolio’s strategy against competition and industry average performance
The framework maps a company to one of five Strategic Ambition Levels (from Legal/Stakeholder Compliance to Sustainability-Driven). This shows how deeply sustainability is embedded in strategy and whether it is likely to generate competitive advantage.
Measures the consistency and operational embedding of commitments. High ambition with low management quality = engagement focus or value-at-risk. Low ambition with high management quality = deliberate strategy choice.
Assess disclosure quality and detect “Only PR” risks (greenwashing). Use these to triage diligence effort and to set remediation priorities.
Compare dozens of companies on the same metrics so you can: prioritize engagement, reweight exposures, stress test aggregated portfolio risk, or identify (potential) high sustainability value creators.
The five ambition levels of the Strategy Framework are built on insights from 36 leading sustainability standards, and reflect the degree to which sustainability is embedded into the organization.
Our research on major German stock-listed firms reveals a spectrum of sustainability strategies, each with distinct financial implications:
> Applying an “Only PR” approach or remaining at Legal/Stakeholder Compliance often correlates with financial disadvantages (reactive posture)
> By contrast, Pragmatic and Strategic levels—implemented consistently—are more likely to yield advantages
Some B2C leaders at the Sustainability-Driven level have reported 15–40% annual revenue growth. See, e.g., Patagonia and Tony’s Chocolonely.
As ambition levels increase, so do investment requirements. The key question is: Which strategy best suits your investments, and is your management aligned with this goal?
Determine which strategic ambition levels are realistic and relevant for your investments.
Evaluate the financial return and business impact of each sustainability ambition level.
Benchmark your portfolio against industry peers and best practices.
Select the ambition level that best supports your investment’s mid- and long-term value creation.
Identify misalignments or missed opportunities (gaps & overshoots) across your current investments.
Align sustainability efforts with the overall goals of your investment firm to drive consistency and effectiveness.
Enhance communication and reporting by moving beyond surface-level PR to meaningful sustainability action.
Once you’ve assessed your sustainability strategy, the next step is to act on it.
We’ve developed a flexible, evidence-based process to help you move from insight to integration – tailored to your ambition level, your sector, and your current position. Not every step is needed for every investment stage, and the order can vary depending on where you are in your journey.
Our frameworks and tools have undergone extensive pilot-testing on a diverse sample of companies, including SMEs. This rigorous process aimed to:
> Evaluate sustainability management based solely on public information
> Validate the effectiveness of our assessment questions and answers
> Uncover new insights through our innovative approach
Our unique methodology separately assesses Strategy, Quality, and Sustainability Performance. This approach, pioneering in its field, has yielded groundbreaking results, which were published in our “Demystifying the links between sustainability/ESG and performance” paper series. Notably, these findings hold true across sectors, years, company sizes, and prior financial performance, as confirmed by back-testing from 2019 to 2022.
We uniquely balance societal impacts with business impacts (financial materiality) as those are interconnected. Impacts on society, where we take a clear societal perspective and avoid impact washing, and impacts on business (i.e., financial materiality), where we take a clear business perspective, are interconnected. Any guide for integrating sustainability into strategy, governance, and processes must have a business perspective in mind. This dual perspective is crucial for effectively integrating sustainability into strategy, governance, and processes.
The PI Strategy Framework:
> Provides a non-binary, nuanced view of strategy implementation (as strategy is not a tick-the-box-exercise)
> Bases recommendations on logic and facts, not PR or political preferences
> Aims for financial gains when applied correctly (to avoid financial losses when not applied correctly; scientifically proven on a sample of companies)
Materiality assessments form the backbone of any sustainability strategy and governance. We combine quantitative impact analysis with stakeholder and expert insights to determine both your organization’s impacts on society and the environment and the financial relevance of these impacts. This ensures a clear view of how sustainability topics shape your financial performance.
Our methodology includes:
This ensures that your materiality assessment is not just compliant (if relevant), but meaningful. It helps you prioritize actions, allocate resources, and communicate with confidence.
