Table of Contents
ESG report 2023
2023 was an active ESG year for Argentum. In preparation for the CSRD (EU’s new directive for sustainability reporting), Argentum is incorporating non-financial information into the company’s annual report this year. This report is a shorter version of the ESG-chapter in our annual report, which is translated to English.
As a fund investor, Argentum engage with all managers in its portfolio through an annual ESG survey. For the reporting year 2023, Argentum is using a new platform for data collection for the first time. All managers are asked to evaluate their portfolio companies, with a particular focus on how they follow up on value chains in the portfolio companies and continue last year's questions on nature risk.
For the third time, Argentum is also collecting data as part of the ESG Data Convergence Initiative (EDCI). The findings clearly show that the work with ESG in the portfolio companies remains high on the agenda for the managers and that the data is continuously improving.
Early in the year, it was decided to create a new position in the organization dedicated to ESG work, and in May, the Head of ESG was hired. The role reports directly to the CEO and is responsible for developing Argentum's sustainability strategy, following up on the portfolio, and conducting ESG due diligence before investments. Through this position, the company has strengthened its competence, which is necessary to ensure responsible and sustainable management in an increasingly complex field.
For the first time the company, in addition to measuring Scope 3, has also included Scope 1 and 2 in the company's carbon accounting. This means that Argentum now has a complete climate account for its own operations.
The Transparency Act was adopted by the Norwegian government, which came into force on 1 July 2022. The first statement for our own work related to due diligence assessments was done in 2023. This statement can be read here.
The SFDR regulation was introduced in Norway in 2023, and all funds established by Argentum Alternative Investments after this have been classified as Article 8 funds under SFDR.
Argentum’s strategy related to ESG and sustainability
Through profitable investments, Argentum contributes to sustainable value creation. The company’s main objective is to achieve the greatest possible returns over time within a sustainable framework. Argentum believes that responsible and sustainable value creation provides the best return in the long run. The company places high demands on the funds in which it invests and has integrated concern for good ESG into its investment process, where managers have to describe the assessments made with this in mind. Argentum engage with the fund managers’ ESG work each year, and the findings are summarised in this CSR report. The company has also established relevant KPIs linked to sustainability in order to follow up on the work.
Argentum has identified seven main points that form the foundation for our work related to 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 as well as monitoring and reporting.
- Engagement in the industry and contributing to increased focus on ESG, for example via our website.
- Environmental awareness internally in our own activities and operations.
- Raising ESG awareness in our own organisation.
- Annual reporting on our internal and external ESG activities.
Argentum’s ethical guidelines are regularly revised. These 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 corporate social responsibility in respect of its own activities and specifically of the status at portfolio level.
From the reporting year 2023, this reporting is included in a separate chapter in the company's annual report. Read the full ethical guidelines on our website here here.
Achievements of Goals
Argentum measures the progress of our work related to ESG, and in 2023 we have three KPIs on ESG linked to remuneration:
- The proportion of fund managers who have taken concrete steps to further develop their ESG policy/ESG routines (minimum 55 percent).
- The proportion of fund managers who include the UN Sustainable Development Goals in their ESG work (minimum 60 percent).
- Percentage change in the portfolio companies' greenhouse gas emissions (ownership-adjusted), (decrease by 5 percent).
All goals were achieved in 2023.
Industry standards followed by Argentum
In addition to Argentum's own ethical guidelines, we base the company's investment activities on the principles of the UN Global Compact and UN PRI. For many years, Argentum has asked fund managers in the portfolio if they are familiar with and base their business on the principles of the UN Global Compact, both when investing in new funds and following up on old ones. Argentum also investigates whether the managers have signed the UN PRI prior to new investments.
UN Global Compact
The UN Global Compact is based on ten principles related to human rights, labor standards, the environment, and anti-corruption. Read more here.
UN PRI SIGNATORY
The UN PRI is related to environmental, social, and governance issues, including that ESG should be included in the investment process. Read more here.
EDCI
The European Data Convergence Initiative is an industry initiative aimed at establishing a standard set of ESG indicators for fund managers and fund investors, which will ease the reporting burden and provide investors with more insight into the companies in the portfolio.
Invest Europe
Argentum has incorporated Invest Europe, the European industry association for private equity, its standard for responsible investments in the follow-up of managers.
GRI
The internal reporting on corporate social responsibility at Argentum is based on relevant indicators from the UN Global Reporting Initiative (GRI), which, among other things, shows our impact on the environment.
Tax and Jurisdiction
Argentum's tax policy is based on the principles of compliance with national and international tax rules, openness and transparency, and not contributing to harmful tax practices. Argentum follows the OECD guidelines on tax and invests only in jurisdictions that follow the global forum's standard for transparency and information exchange for tax purposes and have entered into tax information exchange agreements with Norway. Argentum makes information about the fund's jurisdiction visible on our website and in the annual report. Argentum's guidelines are further described in the company's tax policy.