Our commitment to sustainable investments
We are strongly committed to responsible investing and promoting sound ESG-principles. ESG-factors are an integral part of our investments process and due diligence, consisting of a structured assessment of both opportunities and risks related to ESG. Together with other stakeholders, we ensure that our portfolio companies have the approach and the guidance necessary to achieve their ESG-related goals. We believe that by actively enhancing sustainability aspects across our portfolio companies, companies will strengthen their business models and long-term competitive advantages by being future-proof. Furthermore, we believe that responsible investing can enable higher risk-adjusted returns our investors and it is also the right thing to do.
Responsibility and ESG principles
Armada is committed to responsible investing. As a financing provider, Armada believes that responsible investing and ESG (Environmental, Social and Governance) are important aspects when evaluating the debt service capacity of the portfolio companies’ and when managing investment risks and returns in the short- and long-term.
Armada is fully committed to promoting sound ESG principles. Sustainability factors are an integral part of our investment process and due diligence, consisting of a structured assessment of both opportunities and risks. Armada ensures that the portfolio companies have the approach and the guidance they need to achieve their sustainability goals and Armada is actively working together with them in achieving these goals.
Read more on our approach in our Responsible Investment Policy.
Notice on EU Sustainable Finance Disclosure Regulation (SFDR)
The EU Sustainable Finance Disclosure Regulation (“SFDR”) 2019/2088 involves new transparency obligations and periodic reporting requirements for fund management companies at both a product and company level. The SFDR requires financial market participants to publish on their websites:
- Information about their policies on the integration of sustainability risks in their investment decisions
- Information on how they consider principal adverse impacts of investment decisions on sustainability factors or if they do not consider adverse impacts of investment decisions on sustainability factors, clear reasons for why they do not, including information as to whether and when they intend to consider such adverse impacts
- Information on how integration of sustainability risks is included in their remuneration policies
Policies on the integration of sustainability risks
Sustainability risks, being environmental, social or governance events, if they occur, could cause a negative material impact on the value of the investments, are considered by Armada in its investment processes and due diligence procedures.
Read more on our approach in our Sustainability Risks and Principle Adverse Impacts document.
Consideration of principal adverse impacts
Armada is committed to a comprehensive ESG due diligence procedure in its investment operations and has developed criteria which defines when an investment may present a sustainability risk.
Armada does not currently consider the adverse impacts of its investment decisions on sustainability factors set out in the SFDR, in particular because the relevant regulatory technical standards have not yet been finalized by the European authorities.
When the finalised Regulatory Technical Standards (RTS), supplementing the SFDR, are published and the rules are made sufficiently clear, Armada intends to comply with the relevant requirements by developing processes to gather information on the sustainability impact of its portfolio companies and by undertaking a relevant principal adverse impact assessment.
Armada’s remuneration principles are specified in the Remuneration Policy. The remuneration is not in conflict with principles specified in the Responsible Investment Policy.
Principal Adverse Impacts (PAI)
Armada Credit Partners Oy (Business ID 2306633-6 ) (hereinafter « Armada ») considers principal adverse impacts of its investment decisions on sustainability factors. The present statement is the consolidated statement on principal adverse impacts on sustainability factors (“PAI”) of Armada.
This statement on principal adverse impacts on sustainability factors covers the reference period from 1 January 2023 onwards. Armada will publish a PAI statement with the relevant metrics and impacts for the time period of 01.01.2023 – 31.12.2023 latest in June 2024.
At Armada, PAI are taken into account in accordance with Armada’s Principles on Sustainability Risks and Adverse Impacts on Sustainability Factors which Armada implemented in July 2022 and revised on 21 October 2022. These Principles apply to all investment decisions made after that date and describe Armada’s due diligence process as regards PAI. Relevant policies regarding PAI considerations also include Armada’s Responsible Investment Policy implemented in August 2018 and revised on 21 October 2022 and Armada’s Climate Policy implemented on 25 August 2022. Armada’s Responsible Investment Policy describes Armada’s exclusion list and Armada’s approach to ESG integration and portfolio company engagement. Armada’s Climate Policy outlines Armada’s climate ambition and aim to reduce climate related adverse impacts.
Armada has currently the following funds IV, V and VI of which funds IV and V are classified as Article 6 funds. Armada’s fund IV does not make new platform investments anymore. Armada’s Article 6 funds have not taken PAI into account as the funds were closed prior to the Sustainable Finance Disclosure Regulation 2019/2088 (“SFDR”) came to force and also before Armada’s policies regarding PAI consideration were implemented. Armada’s funds that have been established after the implementation of the Principles on Sustainability Risks and Adverse Impacts consider PAIs on fund level. At the present, Armada has one fund at a marketing stage, VI, that is classified as Article 8 fund and will consider PAI.
Armada considers the PAIs described in the following table. Armada’s approach to identifying and prioritizing PAI as well as Armada’s engagement policies, reference to international standards and the availability of the historical comparison is addressed at the end of the table.
Armada’s full statement on principal adverse impacts of investment decisions on sustainability factors can be found here in English (link). Summaries of the PAI statements can be found here in Finnish (link), Swedish (link), German (link), French (link) and Spanish (link).