Abris Capital Partners’ climate manifesto

Organisation: Abris Capital Partners

Signatory type: Investment manager 

HQ country: Poland

The approach, initiative or process

The Abris climate manifesto sets out our plan to deliver better returns by achieving portfolio carbon neutrality and preparing for the net zero transition.

Under the Paris Agreement, countries have agreed to try to keep the increase in global average temperatures to less than 2˚C above pre-industrial levels, and to pursue efforts to limit the temperature increase to 1.5˚C. Limiting warming is necessary to mitigate the most severe, long-term economic and environmental consequences of climate change.

Abris recognises that business has a vital role to play in addressing climate change and that business’s actions can deliver economic, social and environmental benefits over the long term. As the transition accelerates, companies with a well-articulated strategy and a clear plan to address the shift to net zero will distinguish themselves among their stakeholders – customers, suppliers, employees, policymakers and others – by inspiring confidence that they can navigate this global transformation.

Key actions that we have taken to meet the demands of the climate transition include:

• developing an effective balancing model – we aim to develop a carbon-neutral balancing model for our entire investment portfolio to ensure each new company can reach its carbon-neutral goal;
• committed to achieving a carbon-neutral portfolio by 2025 – as a responsible investor, we have introduced carbon-reduction action plans and a catalog of offset initiatives for our portfolio companies so that we can achieve a carbon-neutral portfolio by 2025;
• developing an agile climate change strategy for our portfolio companies – together with our portfolio companies, we will adopt strategies for climate change and build a resilience plan based on the recommendations of the Taskforce for Climate-related Financial Disclosures (TCFD);
• building a net-zero strategy pathway for our portfolio companies by 2030 – we will provide each company that we exit with a detailed action plan on how to address the transition to net zero.

We believe we can generate higher returns through placing the environment at the center of our investment strategy. Companies that have a clear climate change strategy:

• can help lead the transition to net zero;
• will deliver better long-term returns;
• will be more able to adapt in a changing world;
• will be favored by increasingly climate-aware consumers, employees and other stakeholders;
• will find it easier to comply with changing regulatory and societal demands.

Our approach to managing climate change risk and opportunities includes several strands.

• Investment process: we have integrated climate change considerations and carbon footprint management into our entire investment process and throughout our organisation; they are central to our decision-making at every stage, from pre-due diligence through to exit.
• Climate change strategy: at the value-creation and monitoring stage, each portfolio company modifies its climate change strategy, calculates its carbon footprint and sets emission-reduction targets to build climate change resilience.
• Portfolio decarbonisation: two of our key strategic goals are to achieve a carbon-neutral portfolio by 2025 and to direct portfolio companies on to a path to net zero by the time of our exit.
• Active ownership: as an active, hands-on owner dedicated to supporting our portfolio companies throughout the investment period, we provide all our companies with appropriate tools and support to help them achieve their carbon-reduction goals. In addition, we conduct an annual review to assess companies’ progress towards climate objectives.
• Education: we help to develop climate change knowledge and awareness through dedicated training programmes for Abris professionals and portfolio executives and staff.

Risk management

Climate change risk management is integrated into our entire investment process and comprises several components.

• Goals: we have introduced measurable emission-reduction goals into our environmental, social and governance (ESG) strategy, the implementation of which requires an analysis of climate risks.
• Risk analysis: at the due diligence stage, we assess investment goals in terms of climate change risk. At the value creation and monitoring stage, we regularly evaluate the evolution of climate change risks for our portfolio companies.
• Tools: we have developed tools for our portfolio companies to analyse their carbon footprint and manage the risks and opportunities related to climate change.
• Categorisation: in line with TCFD, we divide climate-related risks into two categories: risks related to the physical impacts of climate change and risks associated with the transition to a lower-carbon economy, such as policy and legal, technology, market and reputation risks. Those risks are reviewed annually.

Results

In 2023, the Abris portfolio achieved a 52% reduction in CO2e emissions per million euros of revenue compared to baseline levels. This represents avoided emissions, as increased production volumes would have otherwise resulted in a proportional increase in emissions without the mitigation measures implemented by Abris and its portfolio companies.

Example from Scanmed:

The company aims to achieve carbon neutrality by 2025. To reduce scope 2 emissions (which account for 87% of all emissions), it signed a contract in 2023 to purchase green energy for all its own facilities. For scope 1 emissions, it developed a capital expenditure programme that resulted in a 25% reduction in emissions in 2023 compared to 2021 and PLN 620,000 annual energy cost savings.

Example from Velvet CARE:

Velvet CARE reduced its carbon footprint by 45% (Mg CO₂e/million €) in 2023 compared to 2019. The company’s ecoROLL packaging, launched in 2023, contains 28% less plastic than the standard product, cutting CO₂ emissions by 36% and waste by 43%. A capital expenditure under construction was set to lower Scope 1 and 2 emissions by 69,000 tonnes, a 46% reduction from 2023 levels. Over the decade from 2013 to 2023, Velvet CARE reduced plastic content in materials by 45%, water usage per ton of tissue produced by 52%, and overall CO₂ emissions by 49%.

Example from Dot2Dot:

In 2023, Dot2Dot reduced CO₂ emissions per €1 million in sales by over 50% compared to 2019 levels. The company also guided clients through sustainability transitions, replacing 84 million plastic packaging units with eco-friendly alternatives, including the commercialisation of biodegradable solutions like ECOLURE® technology as a substitute for PET lamination.

More details can be found in Abris’ latest ESG Reports.

The measures to ensure transparency and involve collaboration

Our climate change and carbon footprint reduction activities follow internationally recognised standards. The goals we set are ambitious and measurable and support global emission-reduction targets.

Metrics and tools prepared by Abris include:

• carbon footprint measurement tool for scope 1, 2 and 3 emissions;
• reduction targets;
• balancing model;
• offset catalog;
• exit scenario;
• climate change tool based on TCFD;
• climate change and risk management workshops.

In addition, Abris has developed proprietary software – the ESG Scoring Application – that tracks over 600 metrics at each portfolio company and allows us to measure and analyse ESG actions across our portfolio. This tool supports investment decision-making and supervision of ESG integration at portfolio companies, looking at specific risks. Each input is assessed yearly, generating quantitative reports to track progress. The ESG Scoring Application is reviewed regularly throughout the year. This methodology applies to all our investments.

 

PRI disclaimer: This case study aims to contribute to the debate around topical responsible investment issues. It should not be construed as advice, nor relied upon. It is written by a guest contributor. Authors write in their individual capacity – posts do not necessarily represent a PRI view. The inclusion of examples or case studies does not constitute an endorsement by PRI Association or PRI signatories.