1.Argentum’s strategy related to ESG

The strategy and mandate of Argentum is to achieve the highest possible return over time within sustainable frameworks. To ensure that Argentum adheres to the mandate and to monitor the work, the company has established relevant KPIs related to sustainability as part of the company's remuneration scheme. The results for 2024 are described further in the section "Achievement of Goals."

Argentum has identified seven main points that form the foundation for the company’s ESG work:

The company has well-developed ethical guidelines that are actively communicated internally and externally.
The ethical guidelines are integrated in the company’s investment processes, including primary, secondary and co-investments.¹
Engage in 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 awareness of social responsibility, for example via our website.
Be environmentally conscious in the company’s own activities and operations.
Raise awareness of ESG within the company’s own organization.
Report annually on the company’s internal and external work related to ESG.

Argentum’s ethical guidelines undergo an annual review, with the most recent revision in May 2024 and the next scheduled for June 2025. These guidelines encompass the integration of sound governance, environmental, and social considerations into investment activities. Furthermore, there are annual ESG reports for the company's own operations and specifically focus regarding the portfolio. Beginning with the 2023 reporting year, this reporting has been included in a dedicated chapter in the company’s annual report. The full ethical guidelines of Argentum can be accessed on the company’s website here.

Argentum invests in a range of different funds that operate in various sectors, including a number of companies with sustainable activities. As a fund-of-funds actor, Argentum believes that the greatest opportunity to influence is by choosing and investing with managers who have good routines and processes related to ESG - Environmental, Social, and Governance.

When Argentum makes primary investments, the company invests in funds that then build a portfolio. This means that Argentum does not have insight into which companies will become part of the portfolio until after the investment is made. Indications of sector and geographical exposure, based on history and strategy of the manager, provide important information ahead of Argentum's investment decision. With this background, it is therefore particularly important that Argentum has good routines for assessing the funds that are suitable to invest in, and that the selection also includes assessments related to ESG. Argentum prefers funds that have ESG as an integrated part of their business management. Various themes around ESG and investment restrictions are regulated through agreements such as Argentum's standard side letter (signed by the manager in connection with all new investments).

Prior to making any investments, Argentum evaluates funds thoroughly. Additionally, every year Argentum conducts a follow-up with all managers using its own ESG questionnaire. This year's response rate is somewhat lower than previous years. Several funds provide feedback where they refer to self-produced ESG reports. Nevertheless, the total response rate is 86 percent, compared to 91 percent last year. Read more about this year's survey in "Review of the portfolio in 2024" (section 4).

Roles and responsibilities

The sustainability work at Argentum is led by the Head of ESG, who reports to the company's CEO. The Board is kept continuously informed about the ESG-related work, and annual meetings are held with the owner. Argentum is committed to having robust ESG routines, and in connection with the implementation of both SFDR and CSRD, the company has strengthened its processes related to integrating sustainability risks into investment decisions.

Business model and strategy

The main goal for the company is the highest possible return over time within sustainable frameworks. Argentum believes that responsible and sustainable value creation yields the best returns over time. The company sets high standards for the funds it invests in and has integrated good ESG governance considerations into its investment process.

Achievements of goals

The company has established relevant KPIs related to sustainability to measure the progress of work related to ESG. These elements are included as part of the company’s remuneration scheme. For 2024, the company defined the following objectives:

Percentage of fund managers who have made concrete steps to further develop their ESG Policy/ESG routines (at least 60 percent).
Percentage of fund managers who incorporate the UN Sustainable Development Goals in their ESG work (at least 65 percent).
Percentage change in the portfolio companies’ greenhouse gas emissions (ownership adjusted) (decrease by 5 percent).

All goals were met in 2024.

Tax and jurisdiction

Argentum's tax policy is grounded in principles of compliance with applicable national and international tax regulations, transparency, and a commitment to avoid harmful tax practices. Argentum adheres to OECD guidelines on taxation and invests only in jurisdictions that follow the Global Forum's standards 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 available on its website and in its annual report. The company's guidelines are further detailed in Argentum's tax policy.

Industry standards followed by Argentum

In addition to Argentum's own ethical guidelines, the principles of the UN Global Compact and UN PRI form the basis of the company's investment activities. For many years, Argentum has requested fund managers in the portfolio to be aware of and base their operations on the principles of the UN Global Compact. This applies both to investments in new funds and ongoing follow-up of existing funds in the portfolio. Prior to new investments, Argentum also assesses whether the managers have signed the UN Principles for Responsible Investment (UN PRI).

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.