Responsibility

Making a positive contribution.

Taking responsibility is in our DNA. We’re particularly aware of the great responsibility we carry for our portfolio companies, their employees and families, their home regions, suppliers and customers as well as the environment and our surroundings at large.

Afinum’s history spans more than two decades. Because of the special responsibility we carry, we’ve made good use of this time to define clear objectives both internally as well as at the level of our portfolio companies, and we’ve put relevant measures in place. These take into account the expectations of the above-mentioned stakeholders and ensure that we make a positive contribution on several levels.

For instance, Afinum has signed on to the UN Principles for Responsible Investment (UN PRI), is committed to the United Nations Sustainable Development Goals (SDGs) and has already achieved climate neutrality at the level of Afinum Management GmbH.

The UN Principles for Responsible Investment (UN PRI), defined in 2006, provide a framework for investment decision-making processes that are both sustainable and responsible. As a signatory, Afinum is fully committed to these principles.

Afinum supports the 17 United Nations Sustainable Development Goals. The goal of this UN initiative, which will run until 2030, is to achieve worldwide sustainable development economically, socially and environmentally.

Afinum is a climate-neutral company. To achieve and retain climate neutrality, we’re collaborating with ClimatePartner. This company charts our CO2 emissions and offsets them by investing in trusted environmental projects.

We’ve never considered ‘value creation’ and ‘values’ to be contradictory. At Afinum, we’re not only convinced that we can reconcile our social and environmental responsibility with an attractive value enhancement perspective for our investors – we consider it an imperative. To be economically successful for the long term, companies will need to remain attractive to both customers and employees in the future – and they’ll need to be committed to sustainable development goals and be technologically future-viable, too.

Dr. Gernot EisingerManaging Partner

Sustainability has always been an important concern for us at Ledlenser. Afinum supports us in our ESG strategy and contributes experience, valuable guidance and a professional network. We’ve already achieved great things together and will continue to expand our positive contribution in the future.

Michael ReuterCEO Ledlenser
In detail

Responsible in every way.

Afinum Management GmbH

Becoming aware of our responsibility as a company doesn’t just happen by itself. This is why we regularly provide training to our own employees with the goal of raising awareness and conveying Afinum’s values to our team. Our focus lies on environmental, social and governance issues. During our training sessions, we also work out together how Afinum as a company, and each employee as an individual, can actively support the UN Sustainable Development Goals.

Focus on climate responsibility: To reduce the impact of our activities on nature and the environment, Afinum calculates its own annual carbon emissions and, through Climate Partner, offsets the consumption in tons. Beyond mere offsetting, our goal is to achieve a steady reduction of carbon emissions. For this reason, we regularly review and revise our internal guidelines with regard to such topics as travel activities.

Afinum is committed to being an attractive employer for all people, regardless of their geographical origins, gender or age. To ensure this, we have, among other things, launched a team diversity initiative and offer flexible working models specifically aimed at young parents.

After completing the onboarding training, each Afinum employee commits to Afinum’s Code of Conduct and undertakes to adhere to our compliance system. The principles laid down there serve as guidelines for our conduct and collaboration in both internal and external interactions.

Investment process

Responsible action is also a top priority for Afinum in the investment process. This builds on Afinum’s Code of Conduct and ESG checklist, the UN Principles for Responsible Investment (UN PRI) as well as the mandatory, detailed ESG Due Diligence with experienced partners.

What’s more, investments in industries that are incompatible with Afinum’s values are generally excluded. In all other cases, during the investment process, the mandatory, detailed ESG Due Diligence paints a clear picture of the company’s current situation. This assessment enables concrete goals to be derived early on, which we then discuss together with the management, along with strategic and financial goals. Ideally, the management goes on to implement initial measures in the first months of the holding period.

 

 

Portfolio

All managing directors of Afinum’s portfolio companies sign the Afinum Code of Conduct at the beginning of the collaboration. The parties involved evaluate the results of the ESG Due Diligence and, with this as a basis, develop a catalog of measures.

In order to continuously reduce carbon emissions, our portfolio companies rely on a combination of reduction and compensation with the aim of positioning the respective shareholding as a leading company within its own peer group when it comes to climate friendliness.

As an integral part of their home region, many companies make an invaluable contribution by supporting regional education and training programs as well as local institutions and sports facilities. Afinum welcomes and supports this. In addition, these companies work with Afinum to develop measures to make them an even more attractive employer for employees from diverse backgrounds, genders and ages, while also promoting equality.

Afinum’s Code of Conduct sets clear framework conditions. Violations of the principles of good corporate governance are systematically prevented.

Mandatory disclosures under the Regulation of the European Parliament and of the Council on sustainability-related disclosure requirements in the financial services sector (EU) 2019/2088 (“Disclosure Regulation”):

I. Strategies for dealing with sustainability risks in investment decision-making processes (Article 3 of the Disclosure Regulation)
When considering investment opportunities at Afinum, an ESG due diligence is always conducted to assess potential risks. Before entering into an investment, potential risks are reviewed together with the Afinum ESG Officer and the transaction team and discussed in the Investment Committee.

Afinum always evaluates whether a potential investment is in line with the United Nations criteria for responsible investment. In particular, Afinum undertakes not to enter into investments in companies with predominant business activities in the following areas:

  • Arms manufacture and trade
  • Gambling and casinos
  • Companies in the tobacco industry
  • Producers or traders in pornography
  • Companies in the field of human cloning

If a new investment is made, Afinum intends to appoint an ESG Officer of the Portfolio Company together with the Portfolio Company’s management, who may contact the Afinum ESG Officer at any time. In addition, the managing directors of the acquiring companies are required to confirm compliance with the Afinum Code of Conduct initially upon acquisition of the investment and in the event of updates to the Afinum Code of Conduct. If there are indications of a breach of ESG guidelines, the Afinum Code of Conduct prescribes binding rules for remedying the breaches.
In order to subsequently give this commitment a formal framework in portfolio work as well, Afinum has installed a uniform code of conduct for the integration of ESG factors during ownership (“Afinum Code of Conduct”). The aim of the Afinum Code of Conduct is to provide its own team members and the employees of portfolio companies with clear rules and processes to ensure compliance with ESG principles. In addition, Afinum has further specified the ESG principles in an ESG guideline. This guideline contains requirements for the consideration of ESG aspects in the daily work of Afinum team members.

II. Mandatory disclosures on the consideration of adverse sustainability impacts at the level of Afinum Management GmbH (Article 4 of the Disclosure Regulation)

Art. 4 of the Disclosure Regulation provides a framework for creating transparency with regard to any adverse effects of investment decisions on sustainability factors. Therefore, financial market participants such as Afinum Management GmbH must disclose certain information (going forward also taking into account so-called Regulatory Technical Standards (RTS)). At present, Afinum Management GmbH does not take into account any possible adverse effects of investment decisions on sustainability factors, as it is of the opinion that the information provided to it by the portfolio companies with regard to the investments is not sufficient to enable it to do so. Afinum Management GmbH will monitor the development in the area of available information and examine whether it is reasonably possible in the future to disclose the information required by Art. 4 of the Disclosure Regulation (including the future RTS).

III. Mandatory Disclosures on Remuneration Policy in Connection with the Consideration of Sustainability Risks (Article 5 of the Disclosure Regulation)

As a registered alternative investment fund manager within the meaning of Article 2 (4) KAGB, Afinum Management GmbH does not have a remuneration guideline (remuneration policy) in accordance with the requirements of the KAGB. The inclusion of sustainability aspects is not taken specifically factored into the employee’s compensation.

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