CONTENTS
History of sustainability at Alder
Executive Training in Resilience Thinking
Guiding tools for Alder’s operations
A message from our team
A year of resilience
If we had to pick one word for 2022 (and for Alder as a whole), it would be “resilience”. This word has come to define how we do business, how we survive and thrive, and how we approach every investment opportunity.
Like many other companies (as well as countries and individuals), our resilience has been tested under the unprecedented circumstances caused first by the pandemic and then the invasion of Ukraine. The impact on the production and movement of parts upon which many of our companies rely, coupled with soaring inflation rates, has created the perfect storm for a downturn. However, we are proud that despite these circumstances, we have remained steady and profitable.
Where many sectors and companies have struggled, we have continued to prosper. Our success is a testament to our continued focus on sustainability-led and solution-orientated businesses. Our portfolio companies that provide innovations like smart metering, low voltage electricity control and energy use monitoring have come into their own and been vital to customers struggling with energy costs.
Overall, 2022 made it more apparent than ever that investing in the transition to a low-carbon society is imperative for humankind and a significant business success factor going forward.
Below you can find some highlights from the last year, and if you’re intrigued to read more you can download the full report.
A snapshot of Alder in 2022
10
companies
2
platform investments
1
divestment
24
add-on acquisitions
2,310
employees across all companies
50%
of portfolio companies have halved scope 1 and 2 CO² emissions per SEK of sales since 2019
SaaS
common SaaS Sustainability
Management platform
4.5bn
SEK aggregated sales
Article 9
SFDR Article 9 for all Funds
Alder at a glance
Sustainability focus
Acquiring and growing companies that will benefit from the green transition and contribute to the long-term health and sustainability of the environment.
Alder is a member and a signatory of the PRI, the SVCA and the EVCA.
Investments and ownership are guided by the European Green deal including the EU Taxonomy, SFDR. TCFD, planetary boundaries, UN SDGs and the Greenhouse Gas Protocol and Alder’s internal guidelines.
Investment criteria
Focus on Investments with substantial growth potential.
Lower mid-market focus with primary focus on the Nordics.
Control positions in companies with proven business models and positive cash flows.
Track record
12+ years experience investing as a team.
17 platform investments made since 2010.
History of sustainability at Alder
2008
Alder founded on the principle of developing and investing in Nordic sustainable technology companies.
2010
Fund I is established as one of the first Nordic thematic focused ESG fund.
Systematic screening for ESG companies introduced.
2011
First ESG assessment of Fund I conducted by key investors.
Portfolio companies appoint an internal person responsible for ESG.
2012
Signatories of the PRI.
2014
External experts appointed to assess each investment.
2015
Alder company, Dinair selected as ”The most socially beneficial investment in Sweden” by PE Association, SVCA.
2016
ESG ambassador network implemented across portfolio companies.
2017
ESG quarterly
updates introduced.
2018
Fund II established, leveraging the same ESG themes as its predecessor.
Sustainable investment policy published.
Sustainability
Manager appointed.
Began measuring impact and operational KPIs.
2019
The Alder Way
launched – outlining clear expectations for portfolio companies.
Systematic decision tree and Due Diligence process
in place.
SDGs and Paris Agreement goals incorporated into portfolio decision making.
TCFD registered and reported.
Published first Sustainability Report.
Code of Conduct published.
2020
EU Taxonomy used for portfolio decision making.
2021
Alder’s funds classified within the EU Sustainable Finance Disclosure Regulation (SFDR) as Article 9.
Selected as one of the Future 40: Impact Investment Funds by RealDeals.
Human Rights Policy published.
EU Taxonomy eligibility assessments started in portfolio companies.
Began measuring full scope GHG Protocol for all
portfolio companies.
2022
Executive training in resilience thiking for Board Chairperson, CEO and Ambassador
of all portfolio companies.
Introducing SustainLab as a platform to manage ESG data.
TCFD update process initiated, to continue into 2024.
2023
Fund III to be established as an Article 9 Fund.
Alignment with SFDR templates
and reporting.
Roll out of new toolbox to help portfolio companies increase positive impact and create business value.
Vision:
No. 1 Green Investor
Executive Training in Resilience Thinking
Pushing our understanding of what’s needed to thrive because of and despite change
Aligning with EU regulations
In 2022, we carried out updates for both the EU Taxonomy and the TCFD.
Climate Change
Mitigation
Climate Change
Adaption
Circular Economy
Marine Resources
& Fresh Water
Ecosystem &
Biodiversity
Pollution
Future-ready investments
In 2022, we took significant steps to define our investment themes and where we will focus our efforts in the coming years. By defining four key areas, we have developed a proactive tool for identifying the most promising companies for our portfolio.
Our investment themes
The starting point for defining our investment themes is the knowledge that people have inhabited a minute proportion of the planet, called the biosphere, for less than half of 1% of Earth’s existence. Yet, we have become a dominant force that impacts the stability of the ecosystems upon which we rely. While we need an urgent transition, we know that humans will continue to have complex needs that must be met in ways that allow the planet to thrive. This is where we see our opportunity to help build and drive sustainable companies that enable a resilient future within the planetary boundaries.
Our investment focus falls under the following four themes:
Care of natural resources
Building efficiency
Intelligent infrastructure
Sustainable industry
A robust approach to sustainability data
We aim to continuously improve how we gather and analyse our portfolio’s sustainability data to be as accurate and transparent as possible. This is a prerequisite that comes from Alder’s core values but also from increasing regulative demand. In 2022, we decided to make our data management even more robust with the help of external experts, SustainLab.
SustainLab’s AI-powered SaaS sustainability management platform collects and processes sustainability data and outputs actionable impact insights that can be updated, tracked and followed up.
The system will cover sustainability data in line with SFDR’s PAI indicators, scope 1, 2 and 3 from the GHG Protocol, eligibility and alignment according to the EU Taxonomy, Alder’s ESG indicators and each portfolio company’s specific sustainability targets.
We have begun implementing the platform for each portfolio company and we are using the data in this report for the first time. During 2023, we aim to fully integrate the tool for regular input to management teams and boards, and use it to keep track of targets and progress and enable annual reporting.
Toolbox for accelerating transformation
The next phase in increased positive impact and reduced environmental footprint
The Alder Way is our internal tool to guide our portfolio companies in accelerating sustainability excellence. In 2022, we took the next step in supporting our portfolio companies’ sustainability journey. In collaboration with Material Economics/McKinsey, we developed a what we call a “Toolbox” to accelerate transformation. The Toolbox is a hands-on, strategic process for increasing positive impact and creating business value while reducing the environmental footprint of operations.
The Toolbox has four modules: understanding where the market is heading; identifying opportunities to create a positive impact; translating sustainability into customer value; setting ambitions, and tracking progress and impact. The modules are designed to help our portfolio companies understand their current positioning and identify steps to improve on this. They also include setting targets for scope 1, 2 and 3 emissions, a target to align with the EU Taxonomy and at least one target to measure their positive impact(s).
The benefit of the Toolbox process is that sales teams can demonstrate the positive impact of products and services to their customers and employees. It can be used in the value growth phase of ownership once the companies have fully onboarded and integrated the Alder Way.
In Autumn 2022, we began a pilot project with one of our companies, Scanacon, to test the effectiveness of the Toolbox. Scanacon’s CEO Karl Holmqvist says of the results, “Many of us at Scanacon have the interest and dedication to improve our sustainability impact and the Toolbox has helped us create a context and a concrete pathway that we can understand and work towards.” We will launch the Toolbox and Alder Way 2.0 to all our portfolio companies during 2023.
For most of 2022, our ten-company-strong portfolio remained. In December, we announced the exit of Autocirc and an investment in 3nine and r2pTracking.
