ActiveCap – Capital Partners, SCR, S.A. (“ActiveCap”) is a private equity fund manager (“SCR”) registered with the Portuguese Securities Market Commission (“CMVM”) under Portuguese law, whose activity is the management of private equity funds (“FCR”).
With the objective to disclose the established commitments and approach to responsible investment carried out by funds managed by ActiveCap according to ESG criteria (Environment, Social and Governance), ActiveCap adopts this Sustainability Policy (“Policy”), which describes how those criteria are integrated into the investment strategy of the funds under management.
The Policy reflects the commitment to adopt the best environmental, social and governance practices. ActiveCap believes that this is the best way to offer innovative and sustainable solutions to its investors and to position itself as a responsible and sustainable entity.
2. Regulatory framework and definitions
In drawing this Policy, which comprises ActiveCap as Management Entity as well as its private equity funds under management, the following regulatory framework was considered:
– Regulation (EU) 2019/2088 of 27 November 2019 on disclosure of sustainability-related information in the financial services sector, also known as the Sustainable Finance Disclosure Regulation (“SFDR Regulation”);
– Regulation (EU) 2022/1288 of April 6, establishing the regulatory framework for regulatory technical standards developing the SFDR regime (“the RTS Regulation”); and
– Regulation 2020/852 of 18 June 2020, which defines the taxonomy in the EU on sustainability (“Taxonomy Regulation”).
In the definition of the SFDR Regulation, “sustainability factors” are considered those that include environmental, social and labor issues, human rights, anti-corruption and bribery, and “sustainability risks” are defined as any events or conditions of an environmental, social or governance nature whose occurrence is likely to have a significant negative impact on the value of the investment.
Additionally, a “sustainable investment” is defined as an investment in an economic activity that contributes to an environmental and/or social objective, provided that the beneficiary companies adopt good governance practices, in particular with regards to management structures, labor relations and staff remuneration practices and compliance with tax obligations.
3. Principles for Responsible Investment
As a Management Entity, ActiveCap has a duty to act in the best interests of the investors of the funds it manages. ActiveCap believes that environmental, social and governance issues can affect the performance of its portfolios.
Since 2020, ActiveCap is a signatory of the Principles for Responsible Investment (“PRI”) initiative, founded in 2006 with the support of the United Nations (“UN”). These principles seek to promote the sustainability of investment by incorporating environmental, social and governance considerations into the investment and decision-making practices. The six PRI principles are the following:
By endorsing the Principles, ActiveCap intends to extend its responsibility and influence as a management entity, thus aligning its investment activities with the broader interests of Society.
4. Principles adopted in investment decisions
Under the SFDR, management entities must disclose how sustainability risks are integrated into their investment decision-making process and the results of the assessment of the potential impacts of sustainability risks on the performance of the funds under management.
ActiveCap intends to gradually incorporate sustainability criteria, in a systematic manner, into its investment process, with the objective to mitigate risks and promote sustainable returns. The incorporation of environmental, social and corporate governance factors is supported by the conviction that these factors can negatively impact the value of the fund portfolios managed by ActiveCap, an approach that is in line with how the SFDR defines sustainability risks.
In the environmental context, are taken into consideration the legal requirements applicable in these matters, the scarcity of resources, climate change and the introduction of more sustainable practices in portfolio companies.
Regarding social issues, special attention is given to the respect for human rights and the health and safety of workers, promoting the improvement of the quality of life of employees.
In what concerns governance issues, a management based on ethical principles and high standard of conduct is promoted as well as the compliance with all applicable legislation and regulations
As part of its activity, ActiveCap makes investment decisions on behalf of the funds under management, permanently monitors the investments in its portfolio companies, and makes divestment decisions. In all these phases, ESG risks shall be considered, promoting the implementation of initiatives to mitigate sustainability risks, namely in the following vectors:
a) Environmental: climate change mitigation and adaptation, pollution prevention and control, sustainable use and protection of natural resources;
b) Social: no discrimination based on gender, race or other features, human rights compliance, health and safety at work, and protection of consumer rights;
c) Governance: structure and composition of the management body, protection of shareholder rights, remuneration policies, internal control system, compliance with tax obligations.
An ESG Officer has been appointed and is responsible for the ESG management, monitoring and compliance with the Sustainability Policy by the investment team and its portfolio companies.
Based on the methodology followed in the selection and implementation of investments, the UN Sustainable Development Goals where ActiveCap expects its investments to have the greatest impact are the following:
ActiveCap’s approach to sustainability is centered around permanent development, continues improvement and training in order to quantity and monitor sustainability criteria and incorporate the regulatory framework associated with the European Union’s taxonomy.
5. Approval, monitoring and review
This Policy was prepared by the ESG Officer and approved by the Board of Directors.
The ESG Office is responsible for monitoring and ensuring compliance of the Policy as well as keeping it updated.
This Policy will be reviewed annually and whenever needed to be modified or updated, being the ESG Officer responsible for presenting review proposal to the Board of Directors.
This Policy is available for consultation on www.activecap.pt, in its Portuguese and English versions.