1. Argentum’s ESG work
ESG 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 and the UN Principles for Responsible Investment (UN PRI).
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. 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.
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. We have also joined the ESG Data Convergence Initiative, which aims to request the same data within the PE industry.
We collaborate on ESG and sustainability efforts with other investors and are a member of the Norwegian Forum for Responsible and Sustainable Investment (Norsif).
1.1. 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.
- 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”. 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.
1.2. Industry standards we follow
In addition to Argentum’s ethical guidelines, the principles set down in the UN Global Compact and the UN PRI 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.
Argentum has incorporated the Invest Europe standard for responsible investments when monitoring managers. This standard is central before new investments are made and in the follow-up of existing managers each year.
Argentum follows the OECD guidelines for taxation. 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 UN Global Reporting Initiative (GRI), which show, among other things, our impact on the environment and the trends in these indicators.
1.3. Developments since the latest report
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 UN Sustainable Development Goals:
- 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.
- 13: 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 ESG Data Convergence Initiative. 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.
We have also become a leading partner in Sustainability Hub (S-HUB), one of Norway’s most ambitious sustainable business networks. In April 2022, we were the main sponsor of the Sustainable Finance & Reporting Summit in Oslo, where we put the spotlight on sustainable finance and sustainability reporting in the unlisted market.