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DISCLOSURES PURSUANT TO REGULATION
AVG is required to publish on its website information on its policies on the integration of sustainability risks in its investment decision-making process (Art. 3 (1) SFDR). According to Art. 2 (22) SFDR, sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment (“Sustainability Risks”). AVG pursues an investment strategy targeting financial returns and positive climate impact. Considering Sustainability Risks forms an integral part of our pre-investment assessment of each investment. The pre-investment phase is structured into two stages, screening (consisting of positive and negative screening criteria) and due diligence. The ESG due diligence is conducted by our Director of Impact & ESG in close cooperation with experienced external ESG consultants as well as AVG’s investment team and involves an assessment of ESG risks (including Sustainability Risks) as well as the target company’s capacity to manage such risks. The ESG due diligence results in an ESG score which informs AVG’s investment team when preparing, and the investment committee when taking, an investment decision.
STATEMENT ON PRINCIPAL ADVERSE IMPACTS OF INVESTMENT DECISIONS ON SUSTAINABILITY FACTORS
CLIMATE & OTHER ENVIRONMENT -RELATED INDICATOR
SOCIAL & EMPLOYEE, RESPECT FOR HUMANRIGHT, ANTI-CORRUPTION & ANTI-BRIBERY MATTERS
ADDITIONAL PRINCIPAL ADVERSE IMPACT INDICATORS
Description of policies to identify and prioritize principal adverse sustainability impacts
REFERENCES TO INTERNATIONAL STANDARDS
SUSTAINABILITY-RELATED DISCLOSURES (ART. 9 SFDR)
The Nordic ESG and Impact Fund SCSp (the “Fund”) is an impact growth equity fund managed by AVG. Thus, the actions and decisions described in the following section are each made by AVG for and on behalf of the Fund. The Fund pursues an impact private equity strategy and qualifies under Art. 9 SFDR as it has sustainable investments within the meaning of Art. 2 (17) SFDR as its objective. Sustainable investments are investments in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, or on its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social objective, in particular an investment that contributes to tackling inequality or that fosters social cohesion, social integration and labor relations, or an investment in human capital or economically or socially disadvantaged communities, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, in particular with respect to sound management structures, employee relations, remuneration of staff and tax compliance (“Sustainable Investments”).
The Fund’s sustainable investment objective is to accelerate the “decarbonization” of the economy through private equity investments. Accordingly, the Fund invests in private companies with a focus on climate solutions. Portfolio companies within the following industry verticals: energy, industry, transportation, buildings and food & agriculture must have a measurable positive climate impact. During the pre-investment phase, the Fund conducts an ESG due diligence and a climate impact assessment for each investment it makes. Such assessments are conducted by AVG’s Director of Impact & ESG in close cooperation with external ESG consultants as well as AVG’s investment team. During the holding phase, AVG monitors and tracks ESG risks as well as climate impact based on its bespoke AVG Impact Methodology. AVG is committed to actively support the Fund’s portfolio companies to achieve the agreed impact targets which are the key indicators for the Fund in attaining its sustainable investment objective.
NO SIGNIFICANT HARM TO THE SUSTAINABLE
SUSTAINABLE INVESTMENT OBJECTIVE OF THE
Our sustainable investment objective is to accelerate the “decarbonisation” of the economy to support the goals of the Paris Agreement through private equity investments. Therefore, we only invest in companies whose business model we expect (and support) to generate a direct or indirect positive climate impact by providing solutions for reducing, avoiding or removing greenhouse gas emissions.
PROPORTION OF INVESTMENTS
MONITORING OF SUSTAINABLE INVESTMENT OBJECTIVE
AVG’s bespoke AVG Impact Methodology is based on the five dimensions of impact defined by the Impact Management Project (IMP) and uses IRIS+ metrics provided by the Global Impact Investing Network (GIIN). The KPIs used for quantifying and tracking progress include the PAI Indicators (as described in detail above (please refer to Description of policies to identify and prioritise principal adverse sustainability impacts) and selected IRIS+ metrics provided by the Global Impact Investing Network (GIIN). AVG is committed to set itself decarbonization goals for financial institutions consistent with the Science Based Targets Initiative (SBTI). Whenever feasible, AVG will work with its portfolio companies to commit to science-based net-zero targets based on the sectoral decarbonization approach (SDA). The impact of climate solutions can be expressed as their contribution to “avoided” greenhouse gas emissions across the value chain. Accordingly, climate impact estimates shall be based on product- or technology-specific life cycle analyses (LCAs) and in line with guidance provided by the Greenhouse Gas Protocol.
DATA SOURCES AND PROCESSING
LIMITATIONS TO METHODOLOGIES AND DATA
LIMITATIONS TO METHODOLOGIES AND DATA
ATTAINMENT OF THE SUSTAINABLE
The Fund’s sustainable investment objective is to accelerate the “decarbonization” of the economy to support the goals of the Paris Agreement through private equity investments. Therefore, the Fund invest in companies whose business model, or parts thereof, generates a direct or indirect positive climate impact by providing solutions for reducing, avoiding or removing greenhouse gas emissions. For each investment we set impact targets to mark the decarbonization contribution we seek with the respective portfolio company, and we track our progress in achieving those impact targets throughout the holding phase. For the kind of investments the Fund seeks to make, i.e. private equity climate impact investments, no appropriate benchmark (e.g. EU Climate Transition Benchmark or EU Paris-aligned Benchmark) is available and the methodological requirements set out in Delegated Regulation (EU) 2020/1818 are not being complied with.