At Skagerak Capital, we recognize the unique opportunity we have as investors to drive innovation and contribute to sustainable growth for the benefit of both people and the planet. Our commitment to responsible investment and continuous focus on sustainability are central to our mission.
As mandated by the European Union Sustainable Finance Disclosure Regulation (SFDR) (2019/2088), we provide the following disclosures in accordance with Articles 3(1), 4(1)(a), and 5(1) of the regulation. You can find additional information on our approach and impact assessments through the provided links.
ENTITY-LEVEL DISCLOSURES RELATED TO SKAGERAK CAPITAL AS (the Manager):
European Union Sustainable Financial Disclosure Regulation 2019/2088 (SFDR).
SFDR shall provide better insight concerning sustainability of financial products, make ESG information more comparable and reduce the scope of so-called greenwashing, i.e., prevent erroneous claims about the sustainability of a financial product.
Under the SFDR framework, funds are categorized into Article 9 funds (dark green), Article 8 funds (light green), and Article 6 funds (all other funds). Article 9, also known as "products targeting sustainable investments," encompasses funds that specifically aim for bespoke sustainable investments or have sustainable investment as their primary objective. Article 8 funds promote environmental or social characteristics, or a combination of both, on the condition that the companies in which investments are made adhere to good governance practices. Currently, we consider Article 8 relevant to all of our active funds under management.
Our approach towards sustainability, ESG and impact
Our approach to sustainability, ESG, and impact investing is aligned with the United Nations definition, which states that sustainability means meeting the needs of the present without compromising future generations' ability to meet their own needs. Impact investing, to us, involves pursuing measurable net positive environmental or social effects through our portfolio companies. Additionally, our ESG analysis helps identify non-financial risks or opportunities that may materially impact asset value.
At Skagerak Capital, we adopt a holistic approach to sustainability, ESG, and impact throughout our investment process, monitoring, and the development of our portfolio companies. To ensure our portfolio comprises companies with a net positive impact, we consider all three dimensions, conduct impact-related workshops, and engage in UN Sustainable Development Goals mapping. Furthermore, we have integrated mechanisms to disclose ESG-related threats and opportunities in our active investment strategies. We work with a third party to identify companies that pose ESG risks, and if we find the risks too significant, we refrain from investing in them.
Throughout the life of our funds, we closely monitor the performance of portfolio companies, employing dedicated employees to ensure alignment with our investment strategy. Previously, we utilized our self-developed ESG-scorecard system to track, benchmark, and enhance the performance of our portfolio companies. However, we are now in the process of transitioning to the utilization of the EU taxonomy and principal adverse impact indicators as our preferred frameworks. Additionally, we actively collaborate with management to enhance their ESG performance.
Remuneration policies
Evaluation of ESG-factors is an integrated part of ensuring long term sustainable value creation and is a natural part of both investment processes and in developing the portfolio companies in Skagerak Capital. Even though there are no KPIs directly linked to our remuneration policies, ESG-factors is one of many facets in the assessment of performance and renumeration reviews.
No consideration of adverse impacts of investment decisions on sustainability factors
Skagerak Capital AS does not consider principal adverse impacts on an entity level. However, we report and consider the PAIs for all our funds under active management. As we have already gathered the PAI data on a product level, we plan to also incorporate PAI reporting at an entity level in the future.
On a product level, as part of our commitment to transparency and accountability, Skagerak Capital began tracking indicators for adverse impacts on sustainability factors for 2022. This initial report provided valuable insights, marking the beginning of an ongoing process that will become an integral part of our investment approach.
To address principal adverse impacts (PAIs), Skagerak Capital has already taken indirect measures through our existing exclusion policy. This policy prohibits investments in companies involved in weapons, coal, and oil production, aligning with our commitment to sustainable investing and ensuring we avoid investments with adverse impacts in these areas. We are also participating in the boards of our portfolio companies to actively engage on issues such as emissions, human rights, anti-corruption, and diversity.
Looking ahead, we are dedicated to continuously improving our reporting and follow-up on these indicators. We understand the importance of robust data collection, analysis, and disclosure to accurately assess the sustainability performance of our portfolio companies. We will consider the principal adverse indicators throughout the entire lifecycle of an investment, from screening to exit. By enhancing our reporting framework, we aim to deepen our understanding of the potential adverse impacts associated with our investments and take necessary actions to effectively mitigate them.
Adherence to business conduct codes and internationally recognized standards
As part of our commitment to responsible investment, Skagerak Capital is a signatory of the Principles for Responsible Investment. These principles emphasize the integration of ESG considerations into ownership policies and practices, as well as the pursuit of relevant ESG disclosures from the companies in which we invest. Respect for established human rights is an integral part of our policies, and we ensure that our investees also incorporate this commitment into their policies.
Skagerak Capital is dedicated to adhering to internationally recognized standards. We closely align our practices with key ESG themes like Human Rights, Labor, Environment, and Anti-Corruption. For instance, we demonstrate our commitment to Anti-Corruption by incorporating anti-corruption provisions into our investment term sheets. Additionally, we have a stringent exclusion policy that prohibits investments in companies that fail to meet our standards for human rights compliance. Through these efforts, we strive to promote responsible and sustainable business conduct in all aspects of our investments.
Final remarks
We take immense pride in the companies within our portfolio and are excited about the possibilities that lie ahead. However, we also recognize that achieving greater impact and aligning our strategy and standards requires dedicated effort. We are committed to continuously improving our collaboration with the companies and enhancing how Skagerak Capital, as an investor, can contribute to making a positive impact on both people and the planet. We remain steadfast in our commitment to striving for excellence in our work and driving positive change alongside our portfolio companies.
PRODUCT-LEVEL DISCLOSURES RELATED TO SKAGERAK CAPITAL AS’ FUNDS UNDER MANAGEMENT:
Skagerak Capital’s fund specific SFDR disclosures can be found here:
Skagerak Capital IV: website disclosure | periodic disclosure
Skagerak Capital III: website disclosure | periodic disclosure
Agder Seed: website disclosure | periodic disclosure
First Seed: website disclosure | periodic disclosure
Skagerak Seed Capital II: website disclosure | periodic disclosure
Skagerak Venture Capital I: website disclosure | periodic disclosure