To actively contribute to decarbonizing the economy and meeting the EU’s 2050 climate-neutrality agenda, BaltCap announced its Climate Commitment plan and launched a portfolio-wide CO2 measurement. We asked Martin Kõdar and Simonas Gustainis, the Managing Partners at BaltCap, why Climate Commitment is important and what the next related steps are at BaltCap.
What drives BaltCap when establishing its Climate Commitment plan?
Martin: Being the largest private equity in the Baltics and having a presence in the Nordics and Poland gives us a unique position to impact the growth and strategic development of numerous powerful companies in our region and beyond. This also gives us an opportunity to make a difference in a sustainability context.
Simonas: In our view, to make decarbonizing the economy really happen, it must be perceived as both a business opportunity and a responsibility of all the players in the ecosystem.
Martin: For BaltCap, establishing the Climate Commitment and related action plan is a guiding framework when encouraging and steering our portfolio towards net-zero.
What does BaltCap´s Climate Commitment mean?
Simonas: In general, we are of course guided by the EU’s 2050 climate-neutrality agenda and the Paris Agreement and will adapt our actions accordingly.
In more concrete terms, we have chosen a differentiated approach, where each portfolio company and also BaltCap as a fund manager will have individual targets and timeframes for CO2 reduction based on company analysis.
Martin: We plan to develop science-based targets (by SBTi) to reduce greenhouse gas (GHG) emissions and set specific net-zero GHG emission targets after a portfolio analysis in 2022 (against the 2021 baseline).
BaltCap as a fund management company will become carbon neutral in scopes 1 and 2 emissions by 2025.
How to convince a small or medium-sized company to contribute to decarbonization?
Simonas: First of all, committing a company to reducing GHG emissions and addressing climate issues opens up new value creation opportunities. It provides new market opportunities and revenue streams, helps to attract investment and talent, and differentiates us from competitors.
Martin: Customers, supply chain actors, and also current and future employees have increased their expectations of businesses in terms of businesses’ environmental impact. To attract and retain the best talent and serve its customers, businesses need to be part of the climate solution, not the problem.
Also, changing regulatory and capital markets will drive the change, meaning that very soon it will be impossible to get a loan at competitive rates if you have no proven commitment to climate neutrality and ESG.