CapMan commits to science-based targets for net zero

The SBTI commits sponsors to setting a scientifically verified path towards net-zero greenhouse gas emissions, with short-term and long-term goals in line with the Paris Agreement.

ESG director Anna Olsson joined CapMan in September 2021. She told Unquote that taking the first step in committing to targets is part of the firm's ongoing ESG development. "CapMan has been working on ESG for many years; we have independent investment teams, but we wanted to focus on this on a joint CapMan level," she said. "There is a consensus at board and management level about the direction we want to go in."

The targets will commit CapMan, its portfolio companies and its real estate investments to net zero. CapMan has EUR 4.5bn in assets under management. Its portfolio companies employ 13,000 people and have a combined turnover of EUR 2.2bn, while its real estate investments have a combined area of 1.3 million square metres.

Olsson noted that the portfolio forms the most significant part of this work. "More than 90% of our emissions happen in our investments, so the main concern is to make sure that around half of our companies have set their own science-based targets in five years, then all of them in 10-15 years' time."

The increasing link between ESG and value creation, as well as the need to future-proof companies, is at the forefront of CapMan's mind. "Being financially strong also means understanding your ESG risks and opportunities, and this is getting increasingly important for the future," Olsson said. "There is a world of difference in what was expected of companies 10-20 years ago and what will be expected of them five years from now. More and more investors are seeing the importance of this and there is a common understanding that this is a good thing."

The initiative will also be integrated into fundraising and LP communication, Olsson told Unquote. "LPs are very keen to understand how GPs are reducing their emissions; we have had this dialogue with them over the years and are working with them now. We will share the set targets when we have them, which will give a clear picture of how it will affect travelling etc. We have 24 months to do this but will aim to do it in 12 months."

The GP took an ESG-linked facility for its 11th buyout fund in September 2021, as reported, linking the attainment of specified ESG KPIs to interest payments on the loan.

In addition to its science-based targets, also forming part of the initiative will be employee satisfaction, diversity and inclusion, and integrating sustainability objectives into executive remuneration at portfolio company and GP level, CapMan said in a statement.

CapMan expects to build up its ESG team further as it continues to develop its ESG approach and targets. "I was the first 'pure ESG' hire, although we previously had an ESG working group and are developing it, with representatives from the investment teams and all our important functions," Olsson told Unquote. "We are looking at what we need to live up to our commitments now, so we are looking at adding resources in this area."

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