Certior Capital is highly committed to responsible business practices and good corporate governance. We take environmental, social and governance (ESG) aspects fully into account within our own operations and use our influence to encourage our business partners across Europe to maintain the highest standards in their own activities.
“We are a European-focused firm with strong Finnish roots and this is reflected in our corporate culture and team ethos which is fundamentally transparent, honest and humble.”
Certior Capital is dedicated to offering our investors transparency regarding where and how their money is being invested and we undertake to actively play our part concerning major global issues such as climate change, pollution, fair working conditions, employee diversity, corruption and the use of aggressive tax mitigation strategies.
We are a signatory to the PRI (Principles for Responsible Investment) and fully recognise that ESG factors play a material role in determining risk and return and understand that incorporating ESG factors is an important part of our fiduciary duty to our clients and their beneficiaries. Through our membership of PRI we are committed not only to adopting and adhering to responsible investment practices across our operations but also to reporting on these principles and our progress regarding ESG matters and promoting the adoption of PRI practices within our industry.
In 2021 Certior Capital became the first Finnish member of Initiative Climat International (iCI). In joining iCI, Certior benefits from being part of a formally endorsed, global and collaborative initiative to assess and limit private equity’s exposure to climate change risk. We fully recognize that climate change will have adverse effects on the global economy, which presents both risks and opportunities for investors. We will join forces to contribute to the objective of The Paris Agreement to limit global warming to well-below two degrees celsius and will actively engage with our portfolio companies and investment managers to reduce their greenhouse gas emissions, contributing to an overall improvement in sustainability performance.
EU Sustainable Finance Disclosure Regulation (SFDR)
The EU Sustainable Finance Disclosure Regulation (2019/2088, as amended, the “SFDR”) sets out certain transparency requirements for Certior Capital (as a registered Alternative Investment Fund Manager).
Transparency of Sustainability Risk Policies
Certior Capital integrates sustainability (or ESG) risks in its investment-decision making process through carrying out due diligence on ESG matters on new investment opportunities as well as through continuous portfolio monitoring.
In order to minimize ESG-related risks due to certain sector exposure or activities that run high reputational risk, we exclude certain industry sectors seen as incompatible with ESG values. The full exclusion list is contained in Certior Capital’s ESG policy.
Furthermore, as a part of its representation on the advisory boards of target funds, Certior Capital encourages fund managers to pay more attention to ESG matters and follows up on how managers have integrated ESG issues in their investment decision making process, thereby decreasing potential sustainability risks in the portfolio.
Transparency of Adverse Sustainability Impacts
At the present time Certior Capital does not formally consider the adverse impacts of its investment decisions on sustainability factors and so is unable to make disclosures of principal adverse impacts pursuant to the SFDR (and the related regulatory technical standards). This is principally due to the fact that the regulation is relatively new, and the target funds and investee companies in the existing portfolio of Certior Capital’s funds are not under any obligations to provide the relevant information. Accordingly, Certior Capital cannot guarantee that the relevant information can be obtained (given that Certior Capital is not in control of the underlying investee companies nor its investee funds).
Furthermore, as Certior Capital focuses on new and emerging managers, in particular, such fund managers may not be able to provide the relevant information in a timely manner. Consequently, for the time being, Certior Capital continues to observe developments in its portfolio in this respect and may start considering principal adverse impacts of its investment decisions, as and when the relevant information can be obtained.
Certior Capital’s ESG Policy Updated
Certior Capital began enhancing responsible investment practices during 2023 following the recruitment of a fulltime ESG manager. As part of this development, we fully updated our ESG policy in the Spring of 2024. In revising and expanding our ESG policy, we defined more precise guidelines for considering environmental, social, and governance factors in our investment activities. Additionally, we detailed the integration of responsible investment policies at each stage of the investment lifecycle and refined our exclusion list to better describe the economic activities we do not wish to invest in due to their greater harmful impacts or higher risk. Overall, with this update we aim to communicate more clearly to our stakeholders how our investment decisions address the greatest challenges of our time and manage the risks of harmful impacts as part of our fiduciary duty.
Please click the following link to access the new policy: Certior Capital ESG Policy Dec 2024
Measurement and Compensation of Certior Capital’s 2023 Carbon Emissions
As part of our increasing focus on sustainability and good corporate governance, Certior Capital has recently conducted its first carbon emissions calculation for its business operations during 2023. Operational carbon emissions for the period were estimated to be just under 47 tCO2e. As is typical for small asset management companies with <10 employees, Certior’s carbon emissions from its own operations are relatively low. While our investment activities do not focus on high-emission industries, our underlying investment portfolios are expected to account for the majority of Certior’s total carbon emissions. As a next step, carbon accounting for our investment portfolios will now be implemented for future publication.
The operational carbon accounting was carried out mainly using cost-based estimation. For electricity and office cooling/heating, direct consumption data from the landlord allocated to our own office space was used. The precise emission factors for electricity, office cooling/heating were collected from the utility companies. Employee flight emissions were calculated using the UNGCCC GHG emissions calculator based on flights taken during the year. Employee commuting was estimated based on the number of office days, the modes of transportation used and emission data provided by domestic operators (HSL, VR, Motiva). For other consumption, we used monetary expenses along with factors from Climatiq.
Overall, our operational emissions were modest at 47 tCO2e. These relatively low levels of emissions were achieved through the use of zero-emission electricity and cooling at our offices. The largest emissions, as expected, came from business-related travel and the use of IT-based accounting and reporting services which together accounted for about two-thirds of our operational carbon emissions.
Certior Capital’s 2023 Carbon Emissions Are Now Fully Compensated
After reviewing a number of alternative solutions, the CO2 emissions from our own operations have now been offset by planting new forests as carbon sinks. The offsetting was carried out with a slight overcompensation through an external service provider, Ilmastoapu Oy. The company started operations in 2015 and focuses on helping Finnish SMEs mitigate their carbon footprint. It will plant new forests in Finland on decommissioned peatlands, creating genuinely new carbon sinks.