ESG Report 2021

Argentum

“Matsmart is one of the few commercial sustainable investments within food I have ever come across.”

Fund commitments in 2021 by investment focus (NOK) 

How many of our managers have their own ESG policies for investments?

How many of our managers have their own ESG policy?

 The point relating to satisfactory guidelines is based on whether the managers have made their own efforts to develop an ESG policy and do not simply refer to national/international guidelines.

How many funds report on their ESG activities to the investors?

18 new commitments have committed to this. 88 new commitments have previously done so.

12 new commitments have committed to this. 76 new commitments have previously done so.

Transparency: Do the fund managers report on transactions and portfolio companies on their website?

Transparency: Do the managers have an ESG policy on their website?

Share of GPs that have developed their own detailed ESG policy.

Share of GPs that have made concrete measures to develop their ESG policy or ESG initiatives in 2021, or plan to do so in 2022.

Number of managers engaging with specific sustainable development goals (2021)

 ESG stands for Environmental, Social, and Governance, and we take this to mean our ability to safeguard environmental and social conditions and manage the company in a proper manner.

 is an integral part of Argentum’s business activities and applies to our investment decisions, investment partners and own operations.

Argentum has established ethical guidelines to ensure that the company focuses on integrity and high ethical standards when making decisions.

 The company’s ethical guidelines are based on the principles of the UN Global Compact

The UN organisation for sustainable business and the world’s largest business initiative for sustainability. Argentum became a full member of the UN Global Compact in 2012 and submitted its first report to the UN in 2013.

 and the UN Principles for Responsible Investment (UN PRI).

In 2021, we became a full member of the UN PRI, after following the principles for several years. The first UN PRI report will be produced in 2023.

The company uses its own indicators to measure ESG, which are applied internally and in investment activities. Internal ESG reporting is based on relevant GRI indicators.

Description: Digital psychological support services to help employees tackle stress, overperformance, and finding motivation.

 Particular ESG requirements have been drawn up for the investment process, making this an integral part of the due diligence, investment decision and monitoring of the fund managers in the portfolio.

“Employees do the sessions remotely from their own safe space”

Verdane closed its first impact growth technology fund at €300m in January 2022. The fund’s name comes from the Norse goddess of spring and youth.

The fund backs companies within three themes: Energy transition, sustainable consumption, and resilient communities.

The fund’s carried interest is linked to achieving sustainability KPIs. It will deploy initial equity tickets in a €10-15m sweet spot, with further follow-on investment for each company for projects such as M&A.

In addition to Auntie, the fund has invested in the sports and physical health start-up Spond (read our story in the State of Nordic Private Equity 2021) and the electric vehicle charging service EVA Global.

The fund is classified as “Article 9” under the EU’s Finance Disclosure Regulation (SFDR).

“Auntie’s social impact is powerful. It makes people live better, healthier lives”

Argentum works purposefully on ESG and sustainability, and we continuously develop the company’s processes within this area. As of 2022, the company will link its sustainability efforts to four specific UN Sustainable Development Goal.

Verdane’s in-house ‘Elevate’ team consists of operational experts in tech, marketing, analytics, and data science.

The team works to find the right people for different positions in investee companies that Verdane.

Connects experts in the same fields in portfolio companies so they can learn from each other.

In the case of Auntie and other companies in the Idun portfolio, Elevate has worked with finding measurable impact KPIs.

The proportion of women in the company overall, as well as in specialist roles and in management.

Ensure that women have complete and real participation and equal opportunities for leadership positions at all levels at which decisions are made, in politics, financial and public life.

The percentage of women in the company is 37%. 16.7% women in specialist roles. 33% women in the management team.

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The number of new investments in funds and the amounts invested in the funds

Promote a development-focused policy supporting productive activities, creating decent workplaces, entrepreneurship, creation and innovation and stimulating the formalisation of and growth in the number of very small, small and medium-sized businesses, including by providing access to financial services.

18 primary investments. NOK 2.2 billion invested.

Argentum and the UN Sustainable Development Goals

12. Responsible consumption and production

The number of managers that have taken specific steps to develop their ESG policies/ESG procedures further

 We have also joined the ESG Data Convergence Initiative,

Stimulate companies, especially large and multinational companies, to adopt sustainable methods and integrate information about their sustainability in reporting procedures.

59 out of 97 managers (60.8%) had taken specific steps.

Developments in CO2 emissions for portfolio companies that report on this

Take steps to combat climate change and its impact.

which aims to request the same data within the PE industry.

91 companies reported on emissions. Scope 1: Average decrease of 9.7% (median increase 5%). Scope 2: Average increase of 25.5%

We collaborate on ESG and sustainability efforts with other investors and are a member of the Norwegian Forum for Responsible and Sustainable Investment (Norsif). 

Argentum’s ESG and sustainability strategy

Through profitable investments, Argentum contributes to sustainable value creation. The company’s main objective is to obtain the highest possible return over time. Argentum believes that responsible and sustainable value creation provides the best return in the long run. The company places high demands on the funds it invests in and has integrated concern for good ESG into its investment process, where managers have to describe the assessments made with this in mind. Argentum follows up on the fund managers’ ESG work each year, summarising the findings in this report.

Argentum has identified seven main points that form the foundation for our work in the area of ESG and sustainability:

Thorough ethical guidelines that are actively communicated internally and externally.

Integration of the ethical principles into the company’s investment processes, including primary, secondary and co-investments.

 Investing in a new fund is called a primary investment. A secondary investment is the purchase of fund units in the secondary market. Co-investments are where Argentum, either directly or through intermediate companies or funds, invests in companies together with a private equity fund.

Dialogue with the funds Argentum invests in regarding the implementation of ESG in operations, monitoring, and reporting.

Engagement in the industry and contributing to an increased focus on ESG, for example, via our website and events.

Environmental awareness internally in our activities and operations.

Raising ESG awareness in our organisation.

Annual reporting on our internal and external ESG activities.

Argentum’s ethical guidelines are regularly revised. The guidelines state, among other things, that “In its investment activity, Argentum shall integrate considerations targeted at good corporate governance, the environment and society at large”.

Ethical guidelines for Argentum’s own business

 Each year, Argentum also prepares a report on ESG and sustainability in respect of its own activities and specifically of the status at the portfolio level.

In addition to Argentum’s ethical guidelines, the principles set down in the 

 The latest reports are available on the UN Global Compact 

form the basis for the company’s investment activities. The UN Global Compact is based on ten principles related to human rights, labour standards, the environment and anti-corruption.

 The UN PRI are related to environmental, social and governance issues, including the incorporation of ESG into the investment process and members needing to focus on increased transparency and implementation of PRI principles in the industry. For several years, Argentum has asked the fund managers in its portfolio whether they are familiar with and base their activities on the principles of the UN Global Compact, both when investing in new funds and when following up on existing funds. Argentum also checks whether managers have signed the UN PRI before making new investments.

 standard for responsible investments when monitoring managers.

http://www.investeurope.eu/media/21433/ESG_disclosure_framework.pdf

 This standard is central before new investments are made and in the follow-up of existing managers each year.

Furthermore, Argentum invests only in jurisdictions that follow the 

Global Forum standard for transparency and exchange of information by request within the tax area

 and that have entered into tax information agreements with Norway. Argentum provides information about the jurisdictions of the funds on our website and in the annual report.

The internal ESG reporting is based on relevant indicators from the 

 (GRI), which show, among other things, our impact on the environment and the trends in these indicators.

In addition to becoming a signatory of the UN PRI in 2021, we have updated our sustainability strategy. In the strategy, we have linked Argentum’s sustainability efforts to four 

Two economic goals: Goal 8 on Decent work and economic growth and Goal 12 on Responsible consumption and production.

One of the social goals: Goal 5 on Gender equality.

One of the climate goals: Goal 13 on Climate action.

Argentum has identified various objectives within these goals and has developed specific, measurable indicators based on these. These indicators are:

5.5 The proportion of women in the company overall, as well as in specialist roles and management.

8.3: The number of new primary investments and capital committed to these.

12:6: The number of managers who have taken specific steps to further develop their ESG policies/procedures.

 Here, we report on the goal as a whole: “Take steps to combat climate changes and the impact of these”.

 Developments in CO2 emissions for portfolio companies that report on this.

See our report on the various objectives in the chapter relating to internal activities.

We have also joined an industry project that aims to standardise ESG reporting in PE, the 

. We have agreed to report on 15 indicators within six main areas: Renewable energy consumption, GHG emissions, diversity of board members, work-related injuries and employee engagement.

Findings from the ESG Data Convergence Initiative

We have also become a leading partner in 

, one of Norway’s most ambitious sustainable business networks. In April 2022, we were the main sponsor of the 

 in Oslo, where we put the spotlight on sustainable finance and sustainability reporting in the unlisted market.

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Description: Matsmart is an online discount retailer for non-fresh food founded in Sweden. It also operates in Finland. In Denmark, Germany, and the UK, the company is called Motatos.

GP: Northzone since 2015, in addition to other venture and growth funds, e.g. Norrsken and SEB Venture Capital.

of people struggle to separate “use by” and “best before” dates on food products (Respect Food)

“Matsmart has always been about helping the climate and making a deal at the same time.”

Roughly one-third of the food produced for human consumption every year is wasted or lost, which is enough to feed 3 billion people.

Food waste uses up to 21 % of freshwater, 19 % of fertilisers, 18% of cropland, and 21% of landfill volume on earth.

Annual per capita consumer waste is between 95-115 kgs a year for Europeans and North Americans, while in South and South-Eastern Asia, it is 6-11 kgs.

If food loss were a country, it would be the third-largest greenhouse gas emitter, behind China and the US.

Developed and developing countries waste or lose roughly the same amount of food yearly, at 670 and 630 million tons, respectively. Around 88 million tons of this is in the EU alone.

Sources: Earth.org, Forbes, Stop Wasting Food, UNEP

ESG Report 2021

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