08 - Macro-to-micro - BOAL
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Greenhouse effect

Our adventure with BOAL Group has been all about impact. And that was just the start of its ESG journey.

BOAL Group logo and image

THE NUMBER OF humans living today just surpassed eight billion. In the next 30 years, food demand will increase by 50%, and we will need more food in the next four decades than mankind has produced in the last 8,000 years. Any business that could have a positive impact on such a challenge will surely have a bright future.

When Equistone came across BOAL Group, it was applying its extrusion capabilities to the production of greenhouses. But it had an ambition to do much more. So began the story of how this Dutch industrial business has turned itself into a high growth sustainable organisation, driven by a compelling ESG story.

BOAL Group is based in the Westerland region of the Netherlands, an area well known for greenhouse production and agricultural exports. But the scale and sophistication of BOAL’s ambition stood out: it wanted to enable its customers to create sustainable microclimates that would make a real difference to food production, in otherwise inhospitable environments.

When Equistone first looked at the business, the second-generation family managers had the vision of consolidating complementary innovations that would allow customers to build greenhouses using BOAL’s core expertise of roof and sidewall systems, while also very precisely regulating aspects such as temperature, humidity, irrigation and airflow, as well as employ additional features, such as insect netting, to negate the need for pesticides.

The deal team quickly bought into the CEO’s vision to create an integrated offering that would allow developers and growers to build the right product to meet their crop and environmental context.

“The product addresses a fundamental challenge of our world – feeding a growing population, and in combination with the environmental challenges we are facing, doing so more locally, with less transport, giving off less emissions, using less water and less space resources, and fewer chemicals, is fundamental to human flourishing,” says Equistone’s Moritz Treude.

“What this means,” adds Moritz’s deal team colleague, Roman E. Hegglin, “is that with BOAL’s high tech greenhouses, you can grow food for populations with less natural resource. We were excited about BOAL as an impact investment opportunity, as well as a strong financial investment proposition.”

BOAL's CEO Adri Pols and ESG Director Stefan Eggers.
BOAL's CEO Adri Pols and ESG Director Stefan Eggers.

Take the humble tomato. Outside, you might grow 3-8 kilos per square metre a year. In a BOAL high-tech greenhouse, you can expect 80-100 kilos per year. And with much less resource intensity. In other words, there is a very rational and tangible commercial basis behind each sale, centred on improved yield. Today, the company has turned over 8,000 hectares of land into contained, fertile worlds, across 50 countries, from the deserts of North Africa to the windswept Canadian prairies. It also recently signed a co-operation agreement that will allow it to expand its presence in the Chinese market.

In choosing to invest, Equistone carefully assessed the core business – and liked what it saw. “But on top of that,” says Moritz, “we were convinced this is something that needs to grow at a good pace, because it addresses such a fundamental need.”

A mandate to ‘feed the world’ would probably satisfy most investors, but under Equistone’s ownership, BOAL’s ambition has not stopped there. The next step has been the implementation of a ‘solid ESG strategy’. For Moritz, it’s not enough that they have a great product that is positive for the world. “It’s also important to look at everything from an E, S and G perspective, from the running of operations to the training of employees, health and safety, corporate governance, so everything is as good as it can be. And that’s what they have done.”

Measures have been as varied as increasing its use of recycled aluminium and adopting measures to avoid acting politically in the regions it operates.

As a result of these efforts, in April 2022 Sustainalytics ranked BOAL’s ESG risk as the best in its category, and the top 1% of all companies. Most recently, the company receive the Global Top 50 Rated Badge for 2023, placing them at #47 out of the 15,613 companies rated worldwide.

And this is the important part. None of Equistone’s other investments are going to have precisely the same ‘impact’ as BOAL – their missions will obviously be different. But any investment can look to its own house and put it in order.

As Roman puts it: “BOAL is just an extraordinarily good example because, on top of its ESG initiatives, it is – in its DNA – a very impactful investment too.” 

A full version of this article appeared in PLATFORM 08, Winter 2022/23