Excess Returns Go Beyond Monetary Gains: Sustainable Value Creation for our Investors and our Society
SwanCap’s approach to responsible investing emphasizes the importance of Environmental, Social and Governance (E-S-G) factors and the long-term health and stability of economic markets and society as a whole. SwanCap is convinced that integrating E-S-G significantly increases the ability to generate strong, long-term, sustainable returns for investors.
Seek opportunities that rank well regarding energy and water consumption, waste production and waste management, the use of hazardous material during production processes and any pollution caused by production processes. Take measures to minimize negative impacts from our portfolio and aim to deliver positive environmental impacts where possible.
Seek opportunities that have established appropriate health & safety measures, enhanced product safety, sound employment practices, processes in accordance with a code of conduct & ethics and the promotion of a socially sound corporate behaviour. In addition, the attention to human rights is a key element of sustainable investing.
Seek GPs and companies with well-established corporate governance structures, accounting and valuation methodologies in accordance with internationally recognized standards, and the implementation of independent compliance and internal audit functions as well as proper anticorruption measures and good employer practices. These are important factors for building and maintaining sustainable businesses.
SwanCap believes that a proactive approach towards responsible investing also creates a positive impact on our long-term value proposition towards our investors. As such, SwanCap has been a signatory of the United Nations Principles for Responsible Investment (UN PRI) since 2016; and SwanCap is working with our GPs to implement sustainable development goals in all due diligence and monitoring processes and to create a positive influence on our portfolio companies.
Learn more about our approach:
The Principles for Responsible Investment Initiative was launched by the United Nations in 2006 in order to promote a set of sustainable investment principles. At the heart of the six Principles for Responsible Investment (the “Principles”) is the premise that investors have a duty to act in the best long-term interests of their beneficiaries and this means taking into account environmental, social and governance factors. The Principles are:
- We will incorporate E-S-G issues into investment analysis and decision-making processes.
- We will be active owners and incorporate E-S-G issues into our ownership policies and practices.
- We will seek appropriate disclosure on E-S-G issues by the entities in which we invest.
- We will promote acceptance and implementation of the Principles within the investment industry.
- We will work together to enhance our effectiveness in implementing the Principles.
- We will each report on our activities and progress towards implementing the Principles.
SwanCap believes in investing responsibly, and while SwanCap’s priority is to deliver favourable returns for its investors, SwanCap also believes that investing responsibly and delivering favourable returns are not mutually exclusive but, in fact, complimentary. As such, the assessment of E-S-G risks and opportunities is a key pillar of our investment due diligence and portfolio efforts. SwanCap therefore has setup an institutionalised framework of compliance policies, including a Code of Conduct promoting responsible behaviour of individual employees, as well as SwanCap as a company.
In our daily activities, E-S-G risk management is an important component of the operational risk assessment conducted on GPs that we are investing with. For each new investment, SwanCap will consider the E-S-G framework of the GP or sponsor as part of the operational due diligence process. This analysis (“Top-Down Evaluation”) includes:
- The GP’s commitment to the UN PRI Pillars or comparable E-S-G principles;
- The Integration of such standards in the GP’s setup and operations;
- The integration of sustainability risks in the investment process and of an active ownership approach by a GP;
- Whether adequate transparency and information is provided on E-S-G matters by a GP.
As part of its due diligence process and prior to participation in investments, including fund investment programs, SwanCap will further consider (“Bottom-Up Evaluation”):
- Risks of exposure to E-S-G critical sectors and industries;
- How a GP assesses and tracks sustainability risks for its investments, and how it is capable and committed to mitigate identified sustainability risks.
For fund investments these considerations may be made on the basis of historic sample data.
SwanCap has developed a proprietary scorecard for the GPs it invests with (the “E-S-G Scorecard”), which scores GPs on their performance in both the Top-Down and the Bottom-Up Evaluation. As part of our efforts to foster Responsible Investing, Swancap evaluates the scores in each area, as well as the weighted average total score. As an investor, and through positions held in advisory boards and committees, SwanCap aims to promote an active ownership approach towards E-S-G being taken by its GPs. SwanCap encourages GPs to maintain a constructive dialogue with investors and other stakeholders on developing and further improving E-S-G standards. SwanCap will use its position on LP boards to promote E-S-G adoption and will request that managers discuss their existing situation and plans relating to E-S-G as part of their annual and advisory board discussions.
The present statement contains, in particular, the disclosures which are required to be made on this website by SwanCap under the Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector (the “Sustainability Disclosures Regulation”).
SwanCap does not only apply leading principles to our own investing and operational activities, but also supports initiatives that work towards the promotion of sustainability-related aspects in the overall investment industry.
- We actively consider the 17 Sustainable Development Goals (SDGs) adopted by all United Nations Member States in 2015 during our investment due diligences;
- We plan to carry out impact analysis using the Impact Management Project’s five dimensions of impact
- We are about to become a signatory of the Climate Neutral Now initiative launched by the UN Framework Convention on Climate Change (UNFCC) and promote the principles of climate neutrality in all our portfolio investments.
Success comes with responsibility – responsibility towards society and responsibility for your own actions and values. This strong conviction forms an integral part of SwanCap’s corporate culture, for our platform and for our professionals.
In 2014, SwanCap obtained regulatory approval by the Luxembourg regulator (Commission de Surveillance du Secteur Financier) for its AIFM-licensed Luxembourg management company SwanCap Investment Management S.A. to provide discretionary portfolio management services to non-fund clients.
With that SwanCap was one of the first managers receiving AIFM approval and is committed to developing a standard for European alternative asset managers aiming to support Luxembourg to retain a leading financial centre in Europe. As such, SwanCap is honoured that our Chairman, Claus Mansfeldt, was re-elected as President for the Luxembourg Private Equity and Venture Capital Association (LPEA).
We are also regulated by ...
- Commission de Surveillance du Secteur Financier (“CSSF”);
- United States Securities and Exchange Commission (“SEC”);
- Commodity Futures Trading Commission (National Futures Association);
- Bank of Italy; and
- Commissione Nazionale per le Società e la Borsa (“Consob”).
SwanCap Partners GmbH is registered with the Industrie- und Handelskammer, Munich, as per §34f trade ordinance (“Gewerbeordnung”).