Addressing sustainability and social responsibility as part of the investment process is
not only the right moral approach, it also makes good business sense.
Since its foundation, Alven has been particularly active in backing women entrepreneurs
who not only have helped build exceptional businesses
but also enabled the investment firm to generate superior financial performance.
Alven, a responsible management company
Alven, as a responsible investor, is particularly committed to honour its responsibility as a shareholder, and seeks the performance of its investments with a view to create long-term value.
Alven is committed to being an active partner in its holdings – building on our approach of straightforward honesty. In this regard, financial performance is closely related to the adoption of best ESG practices. Alven intends to play a role in raising awareness, but also, to have a real impact on the extra-financial actions of the companies in its portfolio with particular attention paid to two subjects: gender equality and decarbonization.
Gender equality: Alven is specifically mindful to respect a balance between male / female profiles within the companies it finances. To date, Alven has financed a number of companies headed, founded or co-founded by women. Alven commits to substantially increase both its new investments co-founded by at least one woman, and the number of women at management committee level in its portfolio companies.
Decarbonization: Alven has targeted to have as many portfolio companies of >30 employees as possible measuring and monitoring their carbon footprint.
Sustainability risk refers to environmental, social or corporate governance (“ESG”) events or conditions which, if they occur, could cause an actual or a potential material negative impact on the value of an investment of the Funds.
Alven’s investment team takes ESG criteria into account in investment decisions.
Alven, responsible investor
ESG criteria are taken into account throughout the investment cycle. In particular, we ensure that all of our investments comply with the standards and regulations applicable to them. Alven refrains from investing in sectors of activity deemed to be non-compliant with its ESG policy, in particular sectors of production or marketing of weapons, pornography, or advocating racist, terrorist or sexist theses, the marketing or production of tobacco and alcoholic beverages. Alven does not invest in companies whose products or services are associated with violations of human rights or child labor or which may have a negative impact on its reputation or that of its investors.
Our commitment alongside the managers of our portfolio companies is long-term (5 years or more) in order to allow the implementation of the growth levers identified together.
The main capital of our holdings is people. Beyond these two main points of attention (gender equality and decarbonization), we also encourage our investments to progress towards better social practices and to promote the implementation of incentive mechanism for employees in the form of BSPCE options.
Alven’s proximity to its portfolio companies allows investment managers to be particularly involved with each company they monitor, including meeting frequently with their managers and pushing the ESG agenda.
Initial consideration of sustainability risks
Alven recognises the importance of identifying, assessing and managing material sustainability risks as an integral part of conducting business.
In order to identify and manage the sustainability risks, Alven uses an integrated approach to sustainability risks based on a global set of policies and processes. This framework is implemented to integrate the most material sustainability risks.
- Initial consideration of sustainability risks
Sustainability risks are considered at all stages of the investment process, in respect of each individual investment opportunity. Alven has implemented internal policies ensuring that key ESG factors are incorporated into investment proposals.
Alven’s Investment Team requires future portfolio companies prior to a new investment to complete a sustainability due diligence questionnaire submitted to the investment committee for consideration. This aims at ensuring that key areas of ESG concerns are flagged prior to investment.
Alven has also implemented a series of exclusion-based policies to manage the most severe sustainability risks. Such exclusion policies result in Alven specifically limiting investment into particular sectors, companies and underlying assets on the basis that they are most exposed to specific Environmental, Societal and Governance risks.
Monitoring of sustainability risks
- Monitoring of sustainability risks during ownership
Alven closely monitors the sustainability risk attributes of each investment opportunity, through performance management of the underlying assets based on regular monitoring as well as business planning. Alven seeks to actively add value and mitigate sustainability risks through the implementation of sustainability measures.
- Identification and impact of the sustainability risks on the Fund’s returns
The Sustainability Risks are identified using an ESG annual questionnaire.
A failure to take sustainability risks into account could lead to a significant adverse effect on the ability of the Fund to sell an Investment, an Investment’s ability to generate income, the market price of an Investment and/or reputational issues that could have an impact on financial returns to the Fund.
Alven’s voting policy
Alven exercises the voting rights on securities not traded on a European or foreign regulated market held in the portfolios of the vehicles it manages under the following conditions :
- Voting rights are exercised in the sole interest of the holders of the funds,
- The Management Company exercises the voting rights for all portfolio holdings,
- The Management Company reviews each of the resolutions submitted to the meetings.
People authorized to exercise the voting rights are the partners and principals of Alven or the members of the management team who hold a power of attorney conferred by the managing partners.
A report for each of the funds reports on the exercise of voting rights during the year.
Prevention and management of real or potential conflicts of interest
Alven has established and maintains operational a conflict of interest management policy which consists of defining procedures with a view to detecting and managing situations which give rise or are likely to give rise to a potential conflict of interest during the implementation of our management activities. For more information, we invite you to contact the management company.