This case report on Daewoo Express Bus Services, the largest and one of few organized transportation companies in Pakistan, describes an investment where the business case is very closely linked to the conclusions of the ESG analysis. In September 2016 Tundra, through three of its funds, acquired 9.4% of the company through an pre-IPO (expected listing in 1H2017). The transportation sector in itself entails several components of interest from an ESG-perspective; including environmental impact, working conditions and governance issues. This brief case report will however focus on one of the core concepts of social responsibility; basic human rights of children and adolescents. In the analysis of the sector we observed systematic violations of human rights as represented by the high prevalence of “truck cleaners” working on board the traditional colourful buses in Pakistan. Most of them young men and boys with appalling working conditions, but even more alarming children facing multiple threats on a daily basis, including sexual abuse. When Daewoo started its operations in Pakistan 1997, it promised to deliver safe, comfortable and quality travel for Pakistani citizens. It is our belief that the company can make a difference, as a result grow faster than the transportation sector as a whole and thereby become a profitable investment for Tundra’s unitholders. Tundra views ESG-analysis as an integral part of the financial analysis. We hope that this case study can show why this integration is so important going forward.

Read the full report here.