The purpose of this Environmental, Social and Governance (ESG) Policy is to describe the ESG principles and guidelines for Monterro Fund Management AB. It also ensures that investments managed by Monterro have the necessary foundation for long term sustainable growth and is protected against sustainability risks.
Monterro has adopted this ESG policy as a commitment to its investors, staff, and the communities in which Monterro and its portfolio companies operate. It aims to support more sustainable investments and at the same time manage financial risk stemming from ESG issues (thus following EU’s Sustainable Finance Disclosure Regulation).
As per January 1, 2023, Monterro holds a license by the Swedish Financial Supervisory Authority. The license is valid for management of alternative investment funds with strategy private equity. Furthermore, Monterro’s approach to sustainability is that we integrate sustainability risks in our investment process, however without promoting environmental or social factors or having sustainable investments as an objective (i.e. the level related to the Sustainable Finance Disclosure Regulation is considered to be article 6).
Monterro builds and develops sustainable long-lasting software businesses that create value for shareholders, minimize risk, create safe and fair working opportunities for employees, and bring value to the end-customer. The very essence of our portfolio companies is to create and enable innovative use of technology, which can enable a more efficient use of the world’s resources. Thus, naturally, the largest impact on sustainability will therefore derive from Monterro’s portfolio companies, although Monterro is committed to actively and continuously take sustainability into account in our business practices.
Monterro’s sustainability efforts will benefit both our portfolio companies and our funds’ investors in the short and long term.
Monterro’s investments are assessed based on an integrated analysis of both financial and ESG factors. We also integrate sustainability risks into our investment decision process in a structured way, such as conducting internal ESG due diligence in all cases.
The companies in which we invest must live up to fundamental principles regarding, for example, human rights, labor law, the environment and anti-corruption, based on the principles of the UN's Global Compact and the OECD's guidelines for multinational companies.
Monterro aims to ensure that below ESG principles are observed.
In addition to integrating ESG considerations into our investment process, Monterro also places a strong emphasis on risk management. We recognize that effective risk management is critical to the long-term success of our portfolio companies and our firm.
We take several measures to integrate sustainability risks into our investment processes, starting from the sourcing of potential portfolio companies to the exit process.
Monterro evaluates ESG risk exposure at both company and portfolio levels.
During the ownership phase the portfolio companies report data on PAI factors. The objective is to monitor and reduce our portfolio companies’ green house gas emissions as well as monitoring social and governance factors that might impact negatively. The data include:
We have a structured process to evaluate environmental, social and corporate governance risks in the due diligence process. When identifying a target we: