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BaltCap

PRI reporting framework 2019

You are in Strategy and Governance » Investment policy

Investment policy

SG 01. RI policy and coverage

New selection options have been added to this indicator. Please review your prefilled responses carefully.

01.1. Indicate if you have an investment policy that covers your responsible investment approach.

01.2. Indicate the components/types and coverage of your policy.

Select all that apply

Policy components/types

Coverage by AUM

01.3. Indicate if the investment policy covers any of the following

01.4. Describe your organisation’s investment principles and overall investment strategy, interpretation of fiduciary (or equivalent) duties,and how they consider ESG factors and real economy impact.

BaltCap follows the policies and practices of responsible investment and has incorporated environmental, social and governance (ESG) considerations into daily operations. Performing well in terms of ESG issues is as important for us as financial performance. When investing in any company we always aim to contribute to the growth of these businesses. Very often this implies a significant job creation, improvement of productivity per employee and also improved working conditions. BaltCap’s main contribution to the society and economy in general is bringing significant capital to the Baltic countries that is invested in the development of small and medium sized companies (SMEs). By using this capital and adding our skills and experience we seek to build business champions out of these companies where we invest. As the leading shareholder of our portfolio companies we must ensure that all our companies always comply with environmental regulations. Whenever possible we seek to improve their environmental performance through investing in more environmentally efficient technological solutions and launching better products and services. In some instances, the whole investment case has been about financing a project that has a significant positive environmental impact, for instance wind farms, hazardous waste recycling facilities that didn't exist here before. 

01.5. Provide a brief description of the key elements, any variations or exceptions to your investment policy that covers your responsible investment approach. [Optional]

Our guiding principles are integrity, transparency and professionalism. As an investment firm, BaltCap’s main contribution, including contribution to environmental sustainability, is our investment activity. We invest in Estonian, Latvian and Lithuanian companies where we take a leading shareholder role with the aim to create long term sustainable value. The investments are carried out by our investment funds backed by institutional investors (incl. pension funds and government institutions). These investments become our portfolio companies that often play a significant role in their respective industries and local economies.

BaltCap always takes an active shareholder role in each portfolio company and participates in strategic decision-making through board or council membership. The alignment of interest of key stakeholders (our investors, other shareholders of portfolio companies, employees, customers and community) is of utmost importance to BaltCap. When selecting co-operation partners, we prefer organisations that follow CSR principles and share similar values with us.

Every investment in companies that BaltCap makes is indirectly an investment in people. People are the most important asset for BaltCap and the portfolio companies. In addition to employees, people also comprise the cooperation partners, customers, communities and other stakeholders. Therefore, social sustainability is a very important factor in our investment activities.

We take our responsibility to the environment seriously and seek to adopt and implement environmentally sound policies in our portfolio companies, and in our own internal operations. All our portfolio companies need to comply with applicable environmental regulations and standards and strive beyond the compliance.

Environmental sustainability is and has always been among the key investment criteria of all our investment funds. Our recent most significant contribution to the environmental sustainability is the launch of BaltCap Infrastructure Fund. It is a new investment fund established in June 2017 with the target size of €100 million that is backed by European Investment Bank, Nordic Environment Finance Corporation (NEFCO) and Baltic pension funds. Infrastructure development is one of the key priority areas for the Baltic region to improve competitiveness, independency and meet environmental targets.

01.6. Additional information [Optional].

          
        
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SG 01 CC. Climate risk

01.6 CC. Indicate the climate-related risks and opportunities that have been identified and factored into the investment strategies and products, within the organisation's investment time horizon.

Infrastructure fund was established with a purpose to adress climate change mitigation agenda in the Baltic states:

a) BaltCap has completed 3 renewable energy investments in electricity and heat generation from biofuel which has zero greenhouse gas (GHG) emissions and replaced energy produced from natural gas.  

b) BaltCap invested in a A+ energy efficiecy class school development in Vilnius.

c) Over the next 3.5 years BaltCap will aim to develop 70MW wind farm in Lithuania which should further reduce GHG emission in the region.

01.7 CC. Indicate whether the organisation has assessed the likelihood and impact of these climate risks?

01.8 CC. Indicate the associated timescales linked to these risks and opportunities.

Investment period of 5 years should be sufficient to implement BaltCap's climate change mitigation goals by financing renewable energy and energy efficiency projects that contribute to the Baltic States national GHG reduction targets.

01.9 CC. Indicate whether the organisation publicly supports the TCFD?

01.10 CC. Indicate whether there is an organisation-wide strategy in place to identify and manage material climate-related risks and opportunities.

Describe

BaltCap aims to track the following indicators (before and after investment is completed) that can measure effectiveness of the climate change mitigation goals implementation:
1) Fossil Fuel type consumption tonnes/a
2) Fossil Energy consumption tonnes/a
3) Electricity consumption MWh/a
4) Waste production t/a
5) Waste re-circulated t/a
6) Renewable energy prod/cons. MWh/a
7) SLCP (Short Lived Climate Pollutants) t/a

 

1.12 CC. Indicate the documents and/or communications the organisation uses to publish TCFD disclosures.


SG 02. Publicly available RI policy or guidance documents

New selection options have been added to this indicator. Please review your prefilled responses carefully.

02.1. Indicate which of your investment policy documents (if any) are publicly available. Provide a URL and an attachment of the document.

02.2. Indicate if any of your investment policy components are publicly available. Provide URL and an attachment of the document.

02.3. Additional information [Optional].


SG 03. Conflicts of interest

03.1. Indicate if your organisation has a policy on managing potential conflicts of interest in the investment process.

03.2. Describe your policy on managing potential conflicts of interest in the investment process.

We have set and signed specific rules for avoiding/managing possible conflicts of interest in our fund agreements but since they are confidential documents, it is impossible to describe our policy in a more detailed way. We touch upon the same topic in our responsible investment policy which is available on our website https://www.baltcap.com/company/responsibility/

03.3. Additional information. [Optional]


SG 04. Identifying incidents occurring within portfolios (Private)


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