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BaltCap

PRI reporting framework 2020

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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. 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 that BaltCap makes into companies 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 rather 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. BaltCap Infrastructure Fund completed its first investment in Poland in November 2019.

01.6. Additional information [Optional].

SG 01 CC. Climate risk

01.6 CC. Indicate whether your organisation has identified transition and physical climate-related risks and opportunities and factored this into the investment strategies and products, within the organisation’s investment time horizon.

Describe the identified transition and physical climate-related risks and opportunities and how they have been factored into the investment strategies/products.

Infrastructure strategy is based on market opportunity in relation to climate change mitigation agenda. The core focus of the fund is to make greenfield investment into renewable energy projects that enable reduction of greenhouse gas emmissions.

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

Describe the associated timescales linked to these risks and opportunities.

Climate change mitigating investments are linked to European Commission and country level targets within investment geography to achieve carbon neutrality by 2050.

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

01.9 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

 

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

SG 02. Publicly available RI policy or guidance documents

 

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.

URL/Attachment

URL https://www.baltcap.com/company/responsibility/esg-policy/

URL/Attachment

URL https://www.baltcap.com/company/responsibility/esg-policy/

URL/Attachment

URL https://www.baltcap.com/our-strategy/infrastructure/#top

URL/Attachment

URL https://www.baltcap.com/company/responsibility/esg-policy/

URL/Attachment

URL https://www.baltcap.com/company/responsibility/esg-policy/

URL/Attachment

URL https://www.baltcap.com/our-strategy/infrastructure/

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 abide by Invest Europe’s Professional Standards. We have laid down our principles in a Responsible Investment Policy and Code of Responsible Behavior that summarize our fundamental values and those of our portfolio companies.

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/esg-policy/

Our Code of Responsible Behaviour can be seen here: https://www.baltcap.com/company/responsibility/esg-code-of-responsible-behaviour/

 

03.3. Additional information. [Optional]

SG 04. Identifying incidents occurring within portfolios (Private)

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