ESG Report 2015 - BaltCap
ESG report 2015ENVIRONMENTAL, SOCIAL &GOVERNANCE (“ESG”)REPORT FOR 2015February 20161
ESG report 20152
ESG report 201504MESSAGE FROMMANAGING PARTNERS06BALTCAP08BALTCAP’S APPROACH TOENVIRONMENTAL, SOCIALAND GOVERNANCEMATTERS11ABOUT THIS REPORT18OVERVIEW OF THE 2014SURVEY FINDINGS21CATEGORY SUMMARY:WORKPLACE POLICIES24CATEGORY SUMMARY:ENVIRONMENTALPOLICIES27CATEGORY SUMMARY:MARKETPLACE POLICIES29CATEGORY SUMMARY:COMPANY VALUES ANDANTI-CORRUPTION31CATEGORY SUMMARY:COMMUNITY POLICIES33ABOUT THE SURVEYMETHODOLOGY3
ESG report 2015MESSAGE FROM MANAGINGPARTNERSWe are pleased to present BaltCap Environmental, Social and GovernanceReport 2015. BaltCap has been a signatory of the United Nations Principles forResponsible Investment since 2008 and responsible investment is a natural partof our business. We are committed to conduct our operations in accordancewith the highest legal and ethical standards and promote the use of bestcorporate governance practices in our portfolio companies.We are always striving to find the best solutions not only for our investors andportfolio companies, but also for the Baltic economy, society and region at large.Sustainable development means for us contributing to the capacity building ofthe communities we are operating through providing the local businesses weinvest in the necessary tools and helping them in achieving their targets.For example, during 2015 BaltCap completed two significant renewable energyprojects by its portfolio companies: 18MW wind farm in Estonia (TuuleenergiaOÜ) and 24MW wind farm in Lithuania (UAB Eurakras). Both wind farms areusing currently best available technology and will jointly produce enoughelectricity per year to cover the power consumption of nearly 40,000households (136,000 MWh). In January 2016 both wind farms were acquired bythe Lithuanian state-owned energy group Lietuvos energija.Further, in 2015 our portfolio company Ecoservice, the leading wastemanagement company in Lithuania, started to install a line for sorting secondaryraw materials (SRM) in Siauliai. Total investment is around 0.5 million will enablesorting of 5 thousand tons of SRM per year. An even bigger facility is planned inVilnius with investment of up to 1 million. Both plants will start operations bymiddle of 2016. Secondary raw materials are increasing in importance ascollected amounts are growing and sorting of municipal waste is being shiftedto state funded MBT plants. Sorting lines will increases the value of the sortedwaste and increase the rate of final recycling benefiting environment.Participating in Estonian Sustainable Business Index has now become a traditionfor BaltCap, in 2015 we participated for the 6th consecutive year. We aredelighted to report that BaltCap has been awarded a silver-level Quality Labelin the 8th Estonian Sustainable Business Index.In order to ensure that ESG policies remain at the forefront of industry thinking,every year we ask our portfolio companies to complete a rigorous selfassessment. This report is intended to provide a picture of our latest ESG4
ESG report 2015screening results. We are encouraged to report that the majority of businesseshave shown a healthy development over the past 12 months.We recognize that while the average score across all respondents and all ESGcategories has increased this year much remains to be done and it is oursteadfast ambition that we will continue to ‘walk the talk’ of a sustainable future.If you have any questions or comments about this report or our ESG Principles(to be found on page 4), please do not hesitate to contact us.Tuuleenergia windmillPeeter SaksMartin KõdarDagnis Dreimanis5Simonas Gustainis
ESG report 2015BALTCAPBaltCap is the leading private equity and venture capital investor in the Balticcountries focusing on small and midmarket buyout, expansion and growthcapital investments. We partner with ambitious management teams, ctiveoperationalengagement. We aim to create strong partnerships with the companies we workwith, allowing us to take a hands-on role in strategic development and valuecreation.BaltCap has strong presence in all three Baltic countries with local offices andexperienced investment team. Since 1995, BaltCap has been managing severalprivate equity and venture capital funds with total capital of over 260 millionand has made more than 70 investments.We are supported by a broad blue-chip investor base that includes bothinternational and local institutions like the European Investment Fund, theEuropean Bank for Reconstruction and Development (EBRD) and the largestpension funds in the Baltics.Magnetic MRO hangar6
ESG report 2015Investment strategyBaltCap’s investment philosophy is based on value creation delivered throughactive ownership. We focus on working in partnership with management teamsto deliver long-term revenue and profit growth, as well as building businessesthrough acquisition. We invest equity or equity-related instruments, and like tosupport strong, ambitious management teams with whom we have a goodcultural fit.Facts about usMain countries of operationEstonia, Latvia and LithuaniaNumber of Investments72 (of which current 32)BaltCap Private Equity II SCSpBaltCap Private Equity Fund II L.P.BaltCap Private Equity Fund L.P.BaltCap FundsBaltCap Latvia Venture Capital Fund K.S.Lithuania SME Fund KUBBaltic Investment Fund III L.P.Baltic Investment Fund III C.V.Contact point for questionsTriinu Oll, triinu.oll@baltcap.comHomepagewww.baltcap.com7
ESG report 2015BALTCAP’S APPROACH TOENVIRONMENTAL, SOCIAL ANDGOVERNANCE MATTERSOur environmental, social and governance principlesAs a signatory of the United Nations Principles for Responsible Investment(UNPRI), an investor initiative in partnership with UNEP Finance and the UNGlobal Compact, BaltCap follows the policies and practices of responsibleinvestment and has incorporated ESG considerations into daily operations.BaltCap is committed to the followingParticipating actively in the strategic management of portfoliocompanies through Council and Board memberships;Identification, credit analysis and supervision of portfolio investmentswill be carried out with due regard to ecological and environmentalfactors;Not to invest in companies, which are engaged in arms manufacturing,manufacture of tobacco, hard spirits, gambling, human cloning,genetically modified organisms and illegal economic activity;Not to proceed on any investment transaction without knowing whothe beneficial owner of the counterparty is;Carry out relevant due diligence (including environmental and socialdue diligence) in all the investment cases;Ensure that appropriate standards of corporate governance are inplace or will be implemented within a reasonable time period in allportfolio companies in compliance with the OECD CorporateGovernance Principles;8
ESG report 2015Ensure that all Portfolio Companies comply with the health, safety,worker protection and environmental regulations and standardsapplicable in the country where the investment is situated;Manage our business affairs sustainable and reduce our overallexposure to risk;Comply with EBRD’s Environmental and Social Risk ManagementManual;Comply with all applicable laws, regulations and best practiceprinciples of the private equity industry, abiding by the Invest EuropeProfessional StandardsBaltCap is actively contributing to the local market development by being afounding member of the Estonian, Latvian and Lithuanian Private Equity andVenture Capital Associations. BaltCap is also an active member of ResponsibleBusiness Forum in Estonia.Implementation and monitoringIn order to provide necessary training and ensure environmental and socialawareness among BaltCap team, the members are regularly attendingconferences and trainings where ESG, sustainable development and corporatesocial responsibility topics are part of the agenda.BaltCap also carries out and compiles an annual self-assessment regarding itsenvironmental, social and governance procedures as well as performance basedon the UNPRI reporting tool and Responsible Business Forum Estoniaquestionnaire. The results of this self-assessment are in turn evaluated, rankedand published by the Responsible Business Forum in the annual CorporateSustainability and Responsibility Index and by UNPRI in its Report on Progress.In order to ensure that our environmental, social and governance principles arefulfilled, we monitor portfolio companies’ environmental and social performancethrough our own ESG survey, which is presented in this report.9
ESG report 2015Communication and transparencyActive co-operation through business associations mentioned above is animportant part of our communication activities to address the issues ofresponsible entrepreneurship and encourage the development of corporateresponsibility in the Baltic region.The ESG progress regarding the portfolio companies is reported to our investorsregularly. Material ESG issues are covered in the quarterly reports to investors.In addition, an annual report is published based on the annual ESG screeningresults. Furthermore, there is of course daily communication and co-operationwith our business partners.TREV-2 road construction10
ESG report 2015ABOUT THIS REPORTThis is our 5th annual report presenting BaltCap’s principles and performance inEnvironmental, Social and Governance (ESG) matters. Our previous ESG reportwas published in February 2015. This report is the main point of reference forour stakeholders regarding our annual Environmental, Social and Governanceperformance.BackgroundBaltCap is a signatory of the United Nations Principles for ResponsibleInvestment (UNPRI) initiative and thus committed to implement the principlesand communicate on the progress. Since 2011 we are annually carrying out anESG survey among our portfolio companies in order to follow up and measurethe progress in ESG matters.The purpose of the survey is also to highlight the importance and raiseawareness regardingresponsibleentrepreneurship.Wehope that thequestionnaire helps companies to identify the material aspects and relevantactions they can take to strengthen their businesses, reputation and reduce theiroverall risk exposure.ESG survey 2015The survey carried out during the period December 2015 - January 2016 had thesame scope and was identical with the questionnaire used in ESG survey 2014.The main focus of the survey is to provide an ESG performance overview thatmeets the expectations of our investors and the latest developments in theprivate equity industry. The questionnaire is designed to fully comply with thelatest requirements of European Bank for Reconstruction and Development forannual environmental and social reporting.28 out of 32 currently active portfolio companies responded to thequestionnaire. Compared to 2014, the share of respondents decreased from 89%to 88%. All portfolio companies of BaltCap Private Equity Fund I&II respondedto the survey. The participation was voluntary for JEREMIE initiative funds’(BaltCap Latvia Venture Capital Fund and Lithuania SME Fund) companies,however in total 89.5% of those companies responded to the survey,demonstrating the increasing interest in ESG issues.11
ESG report 2015Methodology in icatorsAssessesthe policy &management system ofthe portfoliocompanyAssessesthe portfoliocompany’sapproach tomanagerisksExamines orkplace policiesEnvironmental policiesMarketplace policiesCompany values &anti-corruptionCommunityOverview of respondentsThe scope and boundaries of this report include the following companiespresented below.Type ofbusinessEmployeesTurnover( 000)Environmental& social riskclassification*Private equity (PE) portfolio – including the companies of BaltCap Private Equity II SCSp,BaltCap Private Equity Fund II L.P., BaltCap Private Equity Fund L.P., Baltic Investment FundIII L.P. and Baltic Investment Fund III C.V.Propertymanagement854 270MediumDental careprovider2546 773MediumWastemanagement60724 572114 135Low96761 371LowNatural gasdistributionnetworksoperatorDirectionalmedia company12Medium/High
ESG report 2015Machinerytrade25856 577LowTransportinfrastructureengineering29712 050HighAircraftmaintenance,repair andoverhaul29712 77718 526LowRoadconstructionandmaintenance37951 369HighWind farmdevelopment21 618High3 934253 311SubtotalPortfolio of JEREMIE initiative funds – including the companies of-BaltCap Latvia VentureCapital Fund K.S., Lithuania SME Fund 352 073Datainterchangesolutions14466LowPostal m33404LowChain ofbranded 916 984MediumWind farm125251 717Liquid crystaldisplayproducer13LowMedium/HighHighMedium
ESG report 2015Gym and healthclubs operator32311 137LowMedical careservicesprovider4084 879MediumLaboratorysupply provider5315 599HighChocolatemanufacturer703 706Medium2007 569High291Low9652Medium421 228MediumSubtotal1 72865 441Grand total5 662318 752CosmeticsproducerUrban journeyplanningapplicationMonitoringsystems ceIntrac forestry equipment14
ESG report 2015Overview of private equity portfolio companiesEBITDA of PE portfolio ( m)Revenues of PE portfolio ( m)2792689%64%14816EntryEntry2015E2015EEmployees in PE portfolio393449%2 638Entry2015EEach year the portfolio companies also pay significant amounts in salaries, taxesand invest in the development of the business. 49 millionof net salariespaid by 11 privateequity portfoliocompanies in 2015 28 millionof total taxespaid(includingsocial taxes,PIT and CIT)in 2015 17 millionof totalcapitalexpenditurein 2015Major CAPEX investments in 2015 included acquisitions of new equipment mobile asphalt concrete plant (Trev-2), rental machines (Intrac), wastecollection related machinery (Ecoservice) and refurbishments of existingfacilities - painting hangar (Magnetic MRO), Tallinn dental clinic (Dental InvestEstonia).15
ESG report 2015Magnetic MRO hangar in Tallinn16
ESG report 201517
ESG report 2015OVERVIEW OF THE 2015 SURVEYFINDINGSESG Survey results 2014-201561% 65%201455% 57%38%WorkplacePolicies43%201543% 43%28% values and ncesatisfaction.Companies’relativelyimproved on the overall level andstrong performance in this categoryalmost in every category, exceptcompared to the other topics is alsocompany-valuesanti-corruption,the result of the effective legislationwhere the score remained on theregarding the occupational health andsame level as the year before.safety.Theaverage&scoreacrossallAnother category where the generalrespondents and all ESG categoriesperformance scored above averageincreased from 45% in 2014 to 48% ).customersatisfaction, which are some of theAs the year before the portfolioquestionnaire topics in this category,companies continue to perform besthave naturally been key issues inin the category Workplace policiesprivate sector, why companies in(average score 65%), reflecting erformance in this section.strong emphasis on the health andsafety issues as well as employee18strong
ESG report 2015Thecategorywhereportfolio48%companies’ management systems ge score 2015theCommunity category was the secondbest improver, climbing from 28% to32% in average score. Communityengagement has so far been relatively45%new topic in the private sector and ingeneral considered secondary to dayto-day business issues. Nevertheless,asthegovernments’andAverage score 2014publicinterest in businesses contributing tolocal community capacity buildingAmong the specific issues covered inand social responsibility is increasing,the survey the common practicethis category has a potential toamongbecome important in the near future.allrespondentsandallbusiness sectors are promoting equalCertified management systems foropportunitiesmanaging ESG issues such as ISOprocess for countering all forms of90001, ISO 14001 and OHSAS1800 arediscrimination, ensuring safety,includingandresolvingportfolio companies. However, thecomplaints from customers, supplierssmall-sizeand business partners.enterprisesstillapplyinstead a practical approach based onRisk management remains a majorteam members’ common values andchallenge although respondents ingoals for the business rather thanaverage perform better in this sectiondocumented procedures and policies.compared to 2014. Comparing the riskassessment in all categories,theoccupational health and safety yand/orenvironment in the supply chain israre and still applied by only a smallConsider ESG policies important inshare of respondents.the business environment where theyTo sum up, no major ing 2015 in BaltCap or in theportfolio companies.Based on the survey in ESG in 2015,FCR, Magnetic MRO and TREV-2 wereamong the best performers.19
ESG report 2015ESG Management in portfolio companies (2015)Jeremie Initiative FundsBaltCap Private Equity FundShare of enterprises that have a certifiedmanagement system for quality,environment and/or health & safety (e.g.ISO 9001, ISO 14001, OHSAS 18000)29%43%Share of enterprises that carry outbackground check of significantsuppliers and business partners35%43%Share of enterprises that have processfor assessment of ESG risks47%Share of enterprises that putenvironmental and/or socialrequirements on their suppliers47%50%50%TREV-2 site20
ESG report 2015CATEGORY SUMMARY: WORKPLACEPOLICIESWorkplace policies overview 2014-20152014201579%60%62%66%60%Profile indicatorsRisk management70%Performance indicatorsAchievements and challenges 2015In the same way as the year before orkplace policies continues to be:Promotingemployeestodevelop real skills and long-65%term careers for instance viaaperformanceappraisalprocess and/or a trainingAverage score 2015plan (96% or ywelfareandhealth,toprovide sufficient protection61%for employees (96%),Seekingandtakingintoaccount employees’ viewsAverage score 2014regarding important issuesfor the business (96%),Promotingequalopportunities within the21(93%of
ESG report 2015Other examples of common practiseotherare: zero tolerance against all forms ofchallenges.examplesofthereporteddiscrimination in recruitment process100%as a formal policy or non-formal codeof conduct, occupational health andsafety training for employees, workCompanies confirm that there wereenvironment audits, and non-formalno cases of discrimination at work inpolicies for flexible working hours.the reporting periodExamples of important mprovedenvironment(BPTReal Estate, Bluebridge Technologies,Companies actively offer a goodClusterpoint, Dental Invest Estonia,work-life balance for its employeesEcoservice, EKJU, Kelprojektas, Intrac,Runway, Stenders, Trafi), astatuoccupationalhealth and safety measures in case ofCompaniesemergencyarrangements for health and safety to(MagneticMRO,EuroLCD), and carrying out osteringhavesufficientsuitableprotectionteamwork (Clusterpoint).The main topics where companies in26(2014)general score low are quantitativetargets for job satisfaction and/or14No ofaccidents(2015)occupational health and safety, andalsoris
private equity and venture capital funds with total capital of over 260 million . investment and has incorporated ESG considerations into daily operations. BaltCap is committed to the following Participating actively in the strategic management of portfolio
ESG PORTFOLIO EXTENDED SUMMARY REPORT December 03, 2020 Portfolio Benchmark Weighted Avg ESG Score 6.20 6.03 Adjustment ESG Trend Positive 4.74% 15.81% LAGGARD AVERAGE LEADER Distribution of MSCI ESG Fund Ratings Universe Adjustment Total 0.81% 0.88% Score Adjustment 0.05 - ESG Trend Negative 2.02% 7.49% - ESG Laggards 1.91% 7.44% ESG Quality .
stated to apply to ESG ratings providers may apply to ESG data products providers, and vice versa. 1. The term ESG ratings and data products providers, as used in this report, covers providers who offer ESG ratings and/or ESG data products. Where there is a need to single out ESG data products providers who
Report. As the leading private equity and venture capital investor in the Baltic countries we also strive for leading the way in incorporating ESG issues into the investment process. Every year we ask our portfolio companies to complete a rigorous self-assessment. Find out more and take a look into this ESG report for 2016.
Portion of cases where ESG affected portfolio construction LE 6.1 150/150 Pre-investment phase ESG risk management Compliance processes for negative screening LE 8 200/200 Post-investment phase ESG risk management Incorporation of ESG in regular reviews LE 9 150/150 Post-investment phase ESG risk management Identification of ESG incidents LE .
ESG quality, from the asset allocation mix, a question similarly posed by Schroders [2019]7. DWS Approach to ESG in SAA On the aforementioned point of inclusive versus exclusive ESG SAA approaches, we take the more inclusive approach. First, ‘ESG integration’ as for PRI is primarily a risk
ESG and financial variables is interpreted as ESG being the cause and financial value the effect, however the transmission can be interchanged. COMPONENTS/CRITERIONS OF ESG: 3 key components of ESG are - Environmental, Social and (corporate) Governance aspects. Since ESG factors are often interrelated, there may be scenarios
Example ESG Switchable Glass Sound Control Data ESG Switchable - Examples of Optical Performance* Thickness Standard Construction ESG Switchable Std dB Rating (Rw) ESG Switchable Acoustic dB Rating (Rw) 10 mm 4 mm Low Iron tempered glass x 1.52 PVB 0.4 mm LCD x 4 mm Low Iron tempered glass 35 37 12 mm 5 mm Low Iron tempered glass .
An API (US) nationally adopted standard, either modified from or identical to the ISO standard, may include the API Monogram Program requirements. This shall be noted on the front cover as to be evident to the reader. Both modified and identical adoptions which include the API Monogram should be designated as follows: API Title . ANSI/API XX . Edition, Month/Year . Effective Date: (minimum of .
