Sustainability fit is one of our investment criteria. In some cases we have had extra meetings to solely discuss the environmental fit. We also have the opportunity to engage external consultants in our assessments.
ESG policy on investment selection:
We evaluate risks and opportunities related to sustainability when considering possible investments. Our framework includes tools for the different stages of the investment process:
‒ Identifying possible target companies - screening of the company against Alder’s exclusion list. Alder does not invest in any company whose business comprises sale of alcoholic beverages, commercial gaming, production of tobacco or tobacco products, pornography or production of military weapons.
‒ Initial assessment – Evaluation of whether environmental benefit in business model meets our investment criteria.
‒ Due Diligence: We perform a sustainability due diligence as a component of the overall due diligence process. Alder’s bespoke model for this purpose covers environmental, social and governance topics to identify risks and opportunities, potential red flags and required actions, which will be incorporated into the value creation plan of the portfolio company should we make the investment.
‒ Investment decision – Conclusions from the sustainability assessment are included in the investment memorandum - sustainability risks and opportunities are highlighted, the company’s current handling of these is evaluated and necessary and recommended action steps are identified. Sustainability aspects are taken into account in the investment decision in parallel with commercial, financial, and other relevant aspects,