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Employee satisfaction platforms open up ESG at smaller firms for investors

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Investment holding company MBH Corporation’s latest research shows that employee satisfaction platforms, such as Glassdoor, will play an increasingly important role for investors assessing ESG credentials at smaller firms.

The MBH study, among UK based professional investors, managing a collective GBP83.2 billion who specialise in small and micro-cap investments, found 89 per cent believe the role platforms will play in providing data on governance and future company performance will increase over the next three years with 17 per cent expecting a dramatic increase.

The research from MBH Corporation plc, a diversified investment holding company listed in the US and Germany, found investors believe the lack of publicly available ESG data from smaller companies means analysts are increasingly looking to employee review sites such as Glassdoor and Vault for information.

Not investing in small and micro-caps could be costly for ESG-focused investors, the research found. Around 89 per cent questioned said small and micro-caps are relatively unploughed territory despite many having strong ESG credentials.

ESG is central to the strategy of MBH Corporation, which acquires successful, well established micro-cap and small sized enterprises across multiple geographies and sectors, with its role in helping small businesses to grow and create jobs in their communities a key focus.

The research found 81 per cent of investors believe they can have more influence on the ESG strategy of small and micro-cap companies as they will have larger shareholdings which will not be the case at mid-cap and larger companies.

A major issue which they can influence identified by the research is boardroom diversity at smaller companies – around 86 per cent of investors believe the focus on boardroom diversity at smaller companies from investors will increase over the next three years with 39 per cent expecting a dramatic increase.

As a reflection of MBH’s support for UN Sustainable Development Goal 10 – reduced inequalities – the company has 50 per cent female representation on its board and supports one board apprentice each year from an under-represented group.

The Group’s public support for the UN’s Sustainable Development Goals has been recognised by ‘Support the Goals’, an initiative to rate and recognise those businesses that support the UN Global Goals, with a five-star rating.

Stars are awarded when businesses publicly demonstrate plans, commitments, actions, and progress towards the Sustainable Development Goals (SDGs) agreed by world leaders in 2015 as a plan to end poverty, extreme inequality, and climate change by 2030.

Vikki Sylvester, CEO Acacia Training and Executive Director MBH corporation plc, says: ‘There is a clear need for companies to be in full control of their ESG reporting and to invest in ensuring that their credentials are properly reflected. Investors are so hungry for information and will reference relevant websites for clear insights into companies.

‘ESG is at the heart of our business strategy and we recognise how central it is to business performance and the value and responsibility we have for our people and the planet.’

MBH currently has 25 small businesses in its portfolio and will continue its highly focused growth of well-established profitable small businesses across multiple geographies and industries.

MBH companies carry minimal debt, deliver around USD1 million – USD10 million EBITDA and are generally still run by their founders who become co-owners of MBH.

By leveraging its unique Agglomeration strategy, MBH can create substantial shareholder value through the consistent and accretive acquisition of excellent companies. With Agglomeration, profitable companies convert their private shares into public shares or bonds in MBH Corporation plc in a perpetual earn-in model. Company owners are then incentivised to accelerate their growth trajectory using the re-sources of the plc including expertise, skill transfer of best-in-class practices, cross-selling to other group companies and where appropriate, zero cost funding for new growth projects.

Each Group company retains its autonomy and follows appropriate corporate and financial governance. Business owners are also incentivised financially to enhance shareholder value through a share bonus scheme aligning their interests with public shareholders.

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