a long-term perspective
Being a world-class company and a world class investor includes ensuring high environmental, social and governance (ESG) standards. Sustainability goes hand-in-hand with Altor’s longer-term ownership horizon. Altor’s commitment goes beyond compliance with rules and regulations – it’s intended to ensure that Altor contributes to the creation of companies that promote a sustainable future for business, society and the environment.
Altor Funds formalized its ESG efforts through an Investment and Ownership Policy, launched in 2012. The policy outlines how we capture and manage Environmental, Social and Governance (ESG) related matters – risk and opportunities – in the investment process and as active owners.
Altor Funds are signatories of PRI, The Principles for Responsible Investment, and are committed to PRI’s Six Principles. Altor is providing an annual report to PRI. The outcome of historical reports is available on this site, along with the Altor Investment and Ownership Policy.
In Altor’s view, environmental, social, and governance topics are not to be looked at from a pure compliance and risk angle. High ESG performance can be an important driver of financial value creation, which is proven in several of our portfolio companies.
Integration of sustainability risk in our investment decision-making process
As stated in Altor’s Responsible Investment & Ownership (“RIO”) policy being a world-class company and a world class investor includes ensuring high environmental, social and governance (ESG) standards which goes hand-in-hand with Altor’s longer-term ownership horizon. The commitment is intended to ensure that Altor contributes to the creation of companies that foster a sustainable future. Altor is of course committed to adhering to the EU’s Sustainable Finance Disclosure Regulation (SFDR) ((EU) 2019/2088) and making available sustainability-related information with respect to the funds and the investment process.
ESG matters are typically considered already in Altor’s early sourcing discussions in the context of industry, geographic scope, and maturity of potential targets. In the due diligence process, it is mandatory to present and consider the ESG risk profile of a target. Altor has a formalized risk management framework, encompassing the investment process from preacquisition due diligence to investment monitoring. Prior to each investment a standardized questionnaire, referred to as the Risk Summary and containing an ESG section, is distributed to the investment team for completion. Questionnaires are collected, reviewed, and approved by Altor’s Risk Committee as well as in scope for internal audit. Several investment opportunities have historically been disregarded due to ESG concerns.
Beyond the investment decision-making process Altor also considers ESG risk profiles post-acquisition through mandatory annual discussions at the board level.
More information on how Altor integrates sustainability in its investment decision-making and ownership process can be found in Altor’s RIO policy.
Integration of sustainability risks into remuneration policies
Altor has adopted a remuneration policy which is consistent with Altor’s integration of sustainability risks in its investment processes. Remuneration to employees is determined on the basis of an annual performance review, and both financial and non-financial criteria are taken into account in the review. The non-financial criteria include compliance with Altor’s values (of which one being sustainability) and compliance with the firm’s Responsible Investment and Ownership Policy (as relevant depending on each employee’s role and function), which outlines how Altor manages ESG-related risks and opportunities throughout its screening, sourcing, and active ownership.
No consideration of sustainability adverse impacts
Altor does not currently consider principal adverse impacts of investment decisions according to Article 4 of the SFDR. The main reason is that the requirements on the content, methodology and presentation of such impacts remain to be finalised. We will re-evaluate this position when the applicability, content and definition of the principal adverse impact indicators have been finalised and clarified.
THE GOAL: SUSTAINABLE
Altor’s new Head of ESG, Stephanie Hubold, joins with a clear mission. “Environmental, social, and governance topics are too often looked at from a pure compliance and risk angle.” she explains. “Actually, high ESG performance can be an important driver of financial value creation.”
(182.04kB) 2020 Public Transparency Report for Altor Funds
(595.16kB) 2019 Public Transparency Report for Altor Funds
(507.47kB) 2018 Public Transparency Report for Altor Funds
(369.53kB) 2017 Public Transparency Report for Altor Funds
(622.63kB) 2016 Public Transparency Report for Altor Funds