ESG report 2024

On February 26, 2025, the EU announced comprehensive changes to the requirements related to CSRD reporting. On April 14, the EU adopted a decision to postpone the sustainability reporting requirements for companies that would have otherwise been subject to reporting. This means that Argentum will not be required to report under the CSRD until the 2027 reporting year. Argentum is closely monitoring developments and adjusting ESG reporting in line with current regulations.

The background for the introduction of the CSRD is to provide companies with a structured framework to present a more comprehensive and nuanced representation of their value creation. This includes how the company's products and services contribute to society, as well as how effectively the business allocates its resources to maximize value and seize strategic opportunities. Furthermore, the reporting should identify risk factors that may prevent the company from achieving its goals. A central aim of the CSRD is also to highlight the measures the company takes to prevent or reduce negative impacts on the environment, people, and society. Through a double materiality assessment, the company should identify which sustainability topics are considered material to its operations. The process and requirements related to conducting a double materiality assessment are further detailed in the sustainability directive⁴.

The work on implementing the CSRD was led by an internal group at Argentum, under the leadership of the Head of ESG. The sustainability team at the auditor also participated in the project group and ensured that the essential areas were covered by the project. Throughout the entire process, the project has been anchored in both the administration and the board of Argentum.

The double materiality assessment includes identifying IROs (impacts, risks, and opportunities), encompassing how Argentum affects the external environment through its operational and investment activities, as well as how the company's future development can be influenced by various external sustainability themes.

The assessment was conducted in the fall of 2024. At that time, Argentum was invested in 242 funds, with an underlying portfolio consisting of 1,345 companies. Based on the analysis, it was assessed that Argentum's most significant impact, and what the company is most affected by, are activities within Argentum's portfolio. Therefore, this was given the greatest importance in the further work. Additionally, the company's own activities, as well as upstream activities such as capital raising, office operations, and other supplier-related matters, were also emphasized. These activities together make up Argentum's value chain, see illustration 1.

The first phase of the double materiality assessment focused on achieving a thorough understanding of the company's context, defining the value chain and associated activities, and identifying Argentum's stakeholders. The second phase involved identifying both actual and potential impacts, risks, and opportunities. In the third phase, an evaluation of all identified impacts and opportunities from phase two was conducted, including assigning an assessment score to each identified impact. Finally, the company concluded which impacts, risks, and opportunities are considered material. These prioritized themes formed the basis for the assessment.

Illustration 1

The double materiality assessment was carried out at three levels: upstream, own activities, and downstream.

Upstream activities include products and services such as data equipment and IT services, as well as the inflow of capital. Own activities encompass travel and accommodation, business operations, and capital raising. Downstream activities involve all the activities taking place within Argentum's portfolio.

Argentum's downstream activities include all investments in Argentum's underlying portfolio. When categorizing the underlying portfolio into sectors, Argentum follows the GICS (Global Industry Classification Standard) for sector classification. It was also a methodological choice to divide the portfolio into sectors based on value, rather than committed capital. This way, the largest values represent the greatest sector exposure.

Based on the GICS standard, Argentum's portfolio had the following sector classifications in the double materiality assessment:

Argentum has primarily focused on the seven largest sectors and identified which funds in the portfolio hold the most value within these sectors. These seven sectors comprise 97 percent of the total value in our portfolio. The remaining 3 percent of the portfolio consists of 50 portfolio companies. Each of these companies has been individually reviewed, showing that they are distributed across the sectors already included in the overall assessment.

Significant risks for Argentum have been identified, both related to the company's own operations and within the seven sectors covered by the portfolio analysis.

An important part of the analysis was identifying Argentum's stakeholders. These can be divided into internal stakeholders, suppliers of products and services, and external stakeholders (capital owners, investors, managers, and owners). Argentum maintains ongoing dialogue with selected stakeholders, including gathering information related to due diligence assessments, during the investment phase, in briefing matters to the board, internal briefings, and annual follow-up of the entire portfolio.

The most important stakeholders are Argentum's board and owner (Ownership Department of the Ministry of Trade, Industry, and Fisheries), in addition to Argentum's own employees and management. Stakeholder engagement was conducted with management, Argentum's board, and the owner, where significant impacts and opportunities (IROs) for Argentum were discussed and anchored, as well as how significant themes affect the company.

The CSRD methodology involves defining significant IROs in three categories: E, S, and G, with several subcategories (also known as ESRS-European Sustainability Reporting Standards). Through this methodology, significant risks, impacts, and opportunities for Argentum have been identified, both in its own operations and across the seven sectors in the portfolio. It is important to note that the significant risks for Argentum have not changed, and the risks are not increasing or more extensive than before. The CSRD methodology has categorized the risks and systematized them according to the EU's new standard. The assessment should consider significant financial risk. Because Argentum's portfolio is extensive and diversified, events in individual companies are unlikely to significantly impact Argentum financially. However, if something affects an entire sector, such as an energy crisis, this could have a greater financial cost for Argentum, although it is difficult to estimate specific financial amounts. All assessments in this phase are structured according to the CSRD methodology, identifying potential ESRS impacts on Argentum in each activity in the value chain. Argentum's significant themes are presented in the table below and form the basis for further sustainability work.