Responsible Investing

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Responsible Investing

In today’s ever-changing investment landscape, AURELIUS has consistently viewed responsible investing not just as an ethical obligation, but as a cornerstone of sustainable business. The aim is to go beyond mere compliance, embedding environmental, social, and governance (ESG) factors firmly into AURELIUS´ investment decision-making process. This ongoing commitment aligns with global sustainability objectives and serves the broader goals of long-term value creation and enhanced risk management.

AURELIUS is continuously evolving its approach to responsible investing, maintaining pace with new insights and regulations, to maximise positive impact.

The Principles For Responsible Investment (PRI)

The Principles for Responsible Investment (PRI) is a UN financial initiative launched with the aim of fostering sustainable investing. AURELIUS has been a member since 2021.

By implementing the PRI, AURELIUS aims to constantly enhance the sustainable investment approach, promoting corresponding business practices and encouraging other market participants to do the same actively and transparently.

The PRI comprise a total of six principles:

Principle 1

Incorporating ESG issues into investment analysis and decision-making processes.

Principle 2

Being active owners and incorporating ESG issues into our ownership policies and practices.

Principle 3

Seeking appropriate disclosure on ESG issues by the entities invested.

Principle 4

Promoting acceptance and implementation of the principles within the investment industry.

Principle 5

Working together to enhance the effectiveness in implementing the principles.

Principle 6

Reporting on activities and progress towards implementing the principles.

Principle 1

Incorporating ESG issues into investment analysis and decision-making processes.

Principle 2

Being active owners and incorporating ESG issues into our ownership policies and practices.

Principle 3

Seeking appropriate disclosure on ESG issues by the entities invested.

Principle 4

Promoting acceptance and implementation of the principles within the investment industry.

Principle 5

Working together to enhance the effectiveness in implementing the principles.

Principle 6

Reporting on activities and progress towards implementing the principles.

Integrating ESG along the investment cycle

AURELIUS firmly believes that long-term value creation goes hand in hand with sustainable business practices. As part of the strategic approach, ESG is seamlessly integrated into all phases of the investment process, encompassing selection, due diligence, asset management, and exit.

Selection

At the heart of AURELIUS´ investment strategy lies a responsible ownership philosophy. This begins with a careful selection process where AURELIUS avoids any opportunities tied to unacceptable risks emanating from non-compliance or non-remediable practices.

Due Diligence

AURELIUS´ due diligence process goes far beyond financial vetting. ESG considerations are integrated into our comprehensive analysis of potential investments. The goal is to identify relevant ESG opportunities and risks during this phase using both internal and external sources, including principles outlined by the Sustainability Accounting Standards Board (SASB). Any red flags related to ESG concerns are promptly identified, enabling AURELIUS to avoid pitfalls and build a more robust and responsible portfolio.

Ownership

AURELIUS achieves the greatest ESG impact by assisting the portfolio assets in the implementation of ESG topics. The principle of active ownership becomes even more potent when integrated with the operational excellence methodologies. This synergy empowers AURELIUS to create not just financially sound businesses, but responsible corporate citizens.

AURELIUS establishes appropriate collaboration models and best practice sharing between and across the own teams and the portfolio companies. AURELIUS has a flexible approach to supporting its portfolio companies on ESG matters. In close cooperation with the portfolio companies´ management, AURELIUS supports with various ESG tasks.

Monitoring

Monitoring isn’t a one-off process; it’s a continuous commitment. AURELIUS´ focus lies in diligent data collection and thorough analysis, which allows to proactively address any material ESG matters. Furthermore, AURELIUS ensures compliance with relevant laws and industry standards and integrates ESG factors into risk management models. This dynamic approach to monitoring enables AURELIUS to identify and resolve issues swiftly, pushing the needle toward continuous improvement and positive impact.

Exit

ESG is a value driver, especially when it comes to the exit phase. Our exit process considers the strides made in ESG initiatives, measured against predefined indicators. This comprehensive assessment ensures that the company’s ESG performance plays a pivotal role in the success of an exit, reinforcing our belief that well-implemented ESG strategies not only mitigate risks but also amplify value.

Further details can be found in the Responsible Investment Policy.