Our commitment to sustainable investments

PCP has a long history of being a socially conscious investor and was an early mover in integrating ESG related risks and opportunities in the analysis and structuring of our funding solutions. In the last decade, we have also been increasingly active in funding and incentivizing the sustainability transition.

P Capital Partners AB (“PCP”) is an active financing partner supporting European companies’ and industries’ transition to greener, more equitable and, thus, competitive future. We believe transitioning core business to sustainability shall positively impact companies’ long-term returns. As active credit investors, a PCP financing partnership can support companies with active engagement and, when suitable, financial incentives, to accelerate the management of sustainability risks and opportunities over time.

PCP manages the alternative investment funds within P Capital Partners AB (“the Funds”). PCP intends to achieve the expected net return to the investors of the Funds by pursuing an active credit investing strategy, which includes integrating material sustainability risks and opportunities, and their monitoring, in the investment process. PCP also endeavours to consider the principal adverse impacts of investment decisions on sustainability factors as of December 2022.

Furthermore, PCP believes that companies can achieve significant competitive advantages by actively improving applicable sustainability aspects. Inadequate handling of material sustainability risks can directly or indirectly affect the returns of business, which, in consequence, can negatively impact the PCP Funds. For instance, sustainability risks materialising can impair the value of an investment, which may result in loss of business or in high costs, which in turn risks impacting a borrower’s operating performance, or assets. Such impairment can impact PCP funds’ return. As the companies in PCP portfolios vary in, for instance, size, geographical presence and industry, applicable sustainability risks will differ in accordance with the characteristics of the portfolio companies. Additionally, PCP endeavours to reduce the carbon footprint of the Funds currently being invested).

An integral part of PCP’s investment process is the identification and evaluation of sustainability risks and opportunities, alongside impacts on sustainability factors in society as part of each investment due diligence. PCP due diligence includes an evaluation of materiality and any change PCP would like to see on the management of sustainability risks and factors. The PCP investment team follows up on any identified issues where on, at least, an annual basis.

PCP has adopted internal regulatory documents relating to the sustainability aspects of the management of the Funds. These include:

– a code of conduct,
– a policy on sustainability risks in investments, and
– PCP ethics and sustainability guidelines.

The code of conduct is a tool to communicate the core values of PCP and its perspective on the ssustainability aspects. The sustainability risks policy specifies how sustainability risks are considered in PCP investments and how they impact the Funds’ returns. The ethics and sustainability guidelines ensure that the Funds do not provide financing to companies with unethical business models and detail the internal working routines. The ethics and sustainability guidelines also detail how PCP performs ESG evaluation taking into account international conventions and frameworks such as the United Nations Declaration of Human Rights and UN Convention on the Rights of the Child and the International Labour Organization’s Convention.

The PCP investment team is responsible for integrating and monitoring sustainability risks, and any adverse impacts of investments on sustainability factors. In addition, PCP has an ESG committee that is involved in the evaluation of a potential investment where the ESG aspects require an extended investigation in the overall risk assessment. The ESG committee is composed of PCP’s chief executive officer, members of the investment team, as well as external parties with specific relevant sustainability expertise. PCP is also an active contributor in national and international networks on sustainable finance, as well as a UNPRI member.

The consideration and monitoring of certain sustainability metrics are not explicitly tied to any part of employees’ remuneration package. Any targets relating to sustainability factors are integrated into the firm’s investment strategy and will ultimately affect the overall success of the firm, but do not explicitly form part of the remuneration package.

Applicable LEI-codes:
P Capital Partners: 5493006X98JQHEM2G618
Proventus Capital Partners IV AB (publ): 549300G3RA6UFU6SRC13
Proventus Capital Partners IV B AB (publ): 549300DR0P5P81E8ZW38
Proventus Capital Partners IV C AB: 549300MLFATC711WRQ54

Applicable company registration numbers for funds without a LEI code:
Proventus Capital Partners X AB: 559261-2849

Date of publication: 2021-03-08

Non-compliance with principal adverse impacts

P Capital Partners AB (“PCP”) currently investing funds are not at this time compliant with principal adverse impacts. PCP sustainability analysis, data collection and disclosure has instead focused on sustainability risks material to the funds. However, we are advancing our approach to managing principle adverse impacts to be as exact and substantial as possible, and it is the ambition of PCP to ensure the funds are compliant with principal adverse impacts within one year.

As described in our ethics and sustainability policy, and in our sustainability risk policy, as part of our investment process, we identify material ESG factors per each investment, engage borrower management teams on these factors, and collect annual information on the management of these factors from investees. Where available, we collect disclosure data on how ESG factors have been managed from the companies, but quantitative information is not available in each case (which is when we collect qualitative information), and this information has not been available for the past four periods to date in each case.

PCP funds will endeavour to be compliant on adverse principal impacts in 2022. The period 2022 disclosure will focus on principal (interpreted as per the legislation as one additional primary, and as outlined in the law’s Annex 1, table 1) adverse impacts, and will seek to deliver a forward-looking climate disclosure scenario on the PCP funds.

Applicable company registration numbers for funds without a LEI code:
Proventus Capital Partners X AB: 559261-2849

Date of publication: 2021-03-08