ESG Insights from Our Portfolio
Conducting ESG due diligence before an investment is essential. But just as critical is the work we do after an investment is made. Ongoing, structured monitoring allows us to assess how companies are performing not only in terms of risk and return, but also in their ESG progress. This helps us identify areas where we can offer support, drive improvement, and ensure long-term value.
In 2024, we took a significant step forward by implementing the Novata platform, enabling more consistent and structured sustainability data collection. This has allowed us to develop a clearer, portfolio-wide view of ESG metrics and strengthen our engagement with each company.
We collected ESG data from 46% of borrowers in P Capital Partners IV, 78% in P Capital Partners V, 86% in the Transition Fund, and 100% in the Growth Fund. The lower reporting rate in P Capital Partners IV is due to the absence of formal ESG reporting requirements. However, over time, as our exposure shifts toward P Capital Partners V, Transition, and Growth - all of which fall under Article 8 requirements - the overall share of reporting companies is expected to rise steadily.
Results from the 2024 annual screening are summarised as follows.
In 2024, we took a significant step forward by implementing the Novata platform, enabling more consistent and structured sustainability data collection. This has allowed us to develop a clearer, portfolio-wide view of ESG metrics and strengthen our engagement with each company.
We collected ESG data from 46% of borrowers in P Capital Partners IV, 78% in P Capital Partners V, 86% in the Transition Fund, and 100% in the Growth Fund. The lower reporting rate in P Capital Partners IV is due to the absence of formal ESG reporting requirements. However, over time, as our exposure shifts toward P Capital Partners V, Transition, and Growth - all of which fall under Article 8 requirements - the overall share of reporting companies is expected to rise steadily.
Results from the 2024 annual screening are summarised as follows.
Environmental
Emissions
Climate impact remains one of the most material sustainability considerations across our portfolio. As active lenders, we view it as our responsibility to understand how our investments both contribute to, and can help mitigate, climate change.
We assess greenhouse gas (GHG) emissions at the portfolio level by aggregating data reported by our borrowers across Scope 1, 2, and 3. All borrowers included in the screening are asked to respond to a standardized set of questions regarding their emissions. Scope 2 emissions, representing indirect emissions from purchased energy, are estimated using either location-based or market-based methods, depending on the data available. In addition, borrowers have access to a carbon calculator tool to help assess and estimate their own emissions.
Climate impact remains one of the most material sustainability considerations across our portfolio. As active lenders, we view it as our responsibility to understand how our investments both contribute to, and can help mitigate, climate change.
We assess greenhouse gas (GHG) emissions at the portfolio level by aggregating data reported by our borrowers across Scope 1, 2, and 3. All borrowers included in the screening are asked to respond to a standardized set of questions regarding their emissions. Scope 2 emissions, representing indirect emissions from purchased energy, are estimated using either location-based or market-based methods, depending on the data available. In addition, borrowers have access to a carbon calculator tool to help assess and estimate their own emissions.
The chart presents total aggregated emissions of our portfolio companies across all three scopes, offering a consolidated view of the climate footprint associated with our portfolio.
In 2024, over 90% of total emissions, amounting to 720,333 tCO₂, were classified as Scope 3 emissions. Although these emissions do not arise directly from our own operations or assets, we recognize their significant scale and the opportunity they present for meaningful climate action. This is why we actively encourage all our borrowers to:
In 2024, over 90% of total emissions, amounting to 720,333 tCO₂, were classified as Scope 3 emissions. Although these emissions do not arise directly from our own operations or assets, we recognize their significant scale and the opportunity they present for meaningful climate action. This is why we actively encourage all our borrowers to:
- Measure and report emissions across all scopes
- Identify material sources of emissions within their value chains
- Use these insights to drive effective, data-informed climate action
Activities close to biodiversity areas
Our environmental responsibility extends beyond carbon emissions. In line with evolving global frameworks, including Target 15 of the Kunming-Montreal Global Biodiversity Framework, which calls on businesses to assess and disclose their nature-related risks, we are also evaluating how our portfolio companies may interact with biodiversity and sensitive ecosystems.
To support this, we evaluate whether portfolio companies operate near biodiversity-sensitive areas. As illustrated in the chart below, only 7% of companies reported activities near such areas, indicating low overall exposure. Another 7% did not disclose this information, while the remaining 86% confirmed no operations in proximity to biodiversity-sensitive zones. This insight supports our ongoing commitment to responsible investment and environmental stewardship.
To deepen our knowledge of how biodiversity intersects with investment risk and opportunity, we hosted a lunch discussion in Stockholm in October 2024 together with FERI (Forest Ecosystem Restoration Initiative), gathering Scandinavian asset owners for a focused exchange. Drawing on FERI’s report “The Biodiversity Advantage – Business Solutions and Investment Opportunities for Nature” and insights from the Global Asset Owner Meeting in Frankfurt, the conversation highlighted biodiversity’s foundational role in global economic systems and the importance of nature-positive investment strategies. In light of evolving frameworks like the EU Nature Restoration Law, the session reinforced the value of integrating biodiversity considerations into financial decision-making, complementing P Capital Partners ongoing efforts to assess potential exposure to biodiversity-sensitive areas across our portfolio.
Our environmental responsibility extends beyond carbon emissions. In line with evolving global frameworks, including Target 15 of the Kunming-Montreal Global Biodiversity Framework, which calls on businesses to assess and disclose their nature-related risks, we are also evaluating how our portfolio companies may interact with biodiversity and sensitive ecosystems.
To support this, we evaluate whether portfolio companies operate near biodiversity-sensitive areas. As illustrated in the chart below, only 7% of companies reported activities near such areas, indicating low overall exposure. Another 7% did not disclose this information, while the remaining 86% confirmed no operations in proximity to biodiversity-sensitive zones. This insight supports our ongoing commitment to responsible investment and environmental stewardship.
To deepen our knowledge of how biodiversity intersects with investment risk and opportunity, we hosted a lunch discussion in Stockholm in October 2024 together with FERI (Forest Ecosystem Restoration Initiative), gathering Scandinavian asset owners for a focused exchange. Drawing on FERI’s report “The Biodiversity Advantage – Business Solutions and Investment Opportunities for Nature” and insights from the Global Asset Owner Meeting in Frankfurt, the conversation highlighted biodiversity’s foundational role in global economic systems and the importance of nature-positive investment strategies. In light of evolving frameworks like the EU Nature Restoration Law, the session reinforced the value of integrating biodiversity considerations into financial decision-making, complementing P Capital Partners ongoing efforts to assess potential exposure to biodiversity-sensitive areas across our portfolio.
High Climate Impact Sector
Alongside topics such as biodiversity and emissions, we also track whether our portfolio companies operate in sectors considered pivotal to the climate transition, defined as ’high climate impact’ under EU Regulation 2019/2089.
In 2024, we found that approximately 50% of our portfolio companies operate in sectors classified as high climate impact. These sectors are critical to climate solutions due to their enabling role in reducing greenhouse gas emissions or shifting toward a low-carbon economy. Our exposure reflects a deliberate strategy to support the transformation of industries vital to the climate transition.
Alongside topics such as biodiversity and emissions, we also track whether our portfolio companies operate in sectors considered pivotal to the climate transition, defined as ’high climate impact’ under EU Regulation 2019/2089.
In 2024, we found that approximately 50% of our portfolio companies operate in sectors classified as high climate impact. These sectors are critical to climate solutions due to their enabling role in reducing greenhouse gas emissions or shifting toward a low-carbon economy. Our exposure reflects a deliberate strategy to support the transformation of industries vital to the climate transition.
Social
Just as we engage with companies to drive environmental transformation, we also recognize that long-term resilience depends on social progress, especially in fostering inclusive leadership and equitable workplaces. Diversity is not only a matter of fairness; it is a catalyst for better governance, sharper decision-making, and stronger business outcomes.
To advance this across our portfolio, we track key indicators such as board gender diversity and the unadjusted gender pay gap. These data points help us assess representation and equity and inform us how we can best support companies in building more inclusive and forward-looking organizations.
Board Gender Diversity Across the Portfolio
In 2024, we began systematically tracking gender composition of boards across our portfolio, establishing a baseline for future measurement and engagement. Currently, an average of 16% of board seats are held by women, with representation varying across funds. To drive progress we combine ongoing dialogue with clear expectations, including, where appropriate, requirements embedded in our loan agreements. Through this approach, we encourage companies to adopt more inclusive board recruitment practices and to actively strengthen gender diversity at management levels.
Unadjusted Gender Pay Gap
The Unadjusted Gender Pay Gap measures the average difference in earnings between men and women across an organization, without adjusting for role, experience, or education. We are proud to report that, across our portfolio, the average unadjusted gender pay gap is 9%, significantly lower than the 18% universal benchmark. This is a positive indication. While female representation is still lagging, the renumeration of female employees is relatively strong.
To advance this across our portfolio, we track key indicators such as board gender diversity and the unadjusted gender pay gap. These data points help us assess representation and equity and inform us how we can best support companies in building more inclusive and forward-looking organizations.
Board Gender Diversity Across the Portfolio
In 2024, we began systematically tracking gender composition of boards across our portfolio, establishing a baseline for future measurement and engagement. Currently, an average of 16% of board seats are held by women, with representation varying across funds. To drive progress we combine ongoing dialogue with clear expectations, including, where appropriate, requirements embedded in our loan agreements. Through this approach, we encourage companies to adopt more inclusive board recruitment practices and to actively strengthen gender diversity at management levels.
Unadjusted Gender Pay Gap
The Unadjusted Gender Pay Gap measures the average difference in earnings between men and women across an organization, without adjusting for role, experience, or education. We are proud to report that, across our portfolio, the average unadjusted gender pay gap is 9%, significantly lower than the 18% universal benchmark. This is a positive indication. While female representation is still lagging, the renumeration of female employees is relatively strong.
Governance
Alongside inclusive leadership and equitable workplaces, strong corporate governance is fundamental to building resilient businesses. Governance metrics help us assess how companies are structured and managed.
Across our portfolio, companies demonstrate sound governance practices. Notably, there were no reported violations of international frameworks such as the UN Global Compact or OECD Guidelines, reflecting a shared commitment to responsible business conduct.
However, an identified area for improvement is that around 40% of our portfolio companies do not yet have formal ESG policies in place and/or Supplier Codes of Conduct. These are often entrepreneur-led or family-owned businesses where sustainability is integrated informally. — A lack of documentation, however, can limit consistency, accountability, and long-term alignment. To address this gap, we actively support our portfolio companies to:
Across our portfolio, companies demonstrate sound governance practices. Notably, there were no reported violations of international frameworks such as the UN Global Compact or OECD Guidelines, reflecting a shared commitment to responsible business conduct.
However, an identified area for improvement is that around 40% of our portfolio companies do not yet have formal ESG policies in place and/or Supplier Codes of Conduct. These are often entrepreneur-led or family-owned businesses where sustainability is integrated informally. — A lack of documentation, however, can limit consistency, accountability, and long-term alignment. To address this gap, we actively support our portfolio companies to:
- Stay informed on relevant policy and regulatory developments at both national and international levels
- Understand the practical value of ESG-related policies for managing risks, building stakeholder trust, and improving performance
- Develop and implement tailored policies, with the help of P Capital Partners-provided templates, guidance, and strategic input
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As we transition to CSRD reporting standards for the period from July 2025 to June 2026, we may value discussions with other organisations under the P Capital Partners umbrella that have already commenced CSRD reporting.
Navigating Sustainability Challenges Together
At P Capital Partners, our role extends beyond financing. We aim to be an active partner, offering tools, insights, and guidance to help our portfolio companies navigate evolving sustainability expectations. Every year, we ask our borrowers subject to ESG reporting “What sustainability-related support would you need next year?”
One theme stood out in the 2024 responses: navigating the Corporate Sustainability Reporting Directive (CSRD). This new regulation, which replaced the Non-Financial Reporting Directive (NFRD), significantly expands ESG disclosure requirements, raising expectations for data quality, comparability, and reliability across the EU.
In response, we hosted a CSRD seminar in autumn 2024. This was open to all portfolio companies and focused on:
One theme stood out in the 2024 responses: navigating the Corporate Sustainability Reporting Directive (CSRD). This new regulation, which replaced the Non-Financial Reporting Directive (NFRD), significantly expands ESG disclosure requirements, raising expectations for data quality, comparability, and reliability across the EU.
In response, we hosted a CSRD seminar in autumn 2024. This was open to all portfolio companies and focused on:
- Navigating the new disclosure requirements
- Sharing best practices across companies and sectors
- Exploring tools and processes for efficient reporting
This session was well received and positioned P Capital Partners both as an investor and a hands-on partner in sustainability transitions.
In early 2025, however, the EU amended the guidance for CSRD under the Omnibus directive. One key change was the exemption of companies with fewer than 1,000 employees from the reporting requirements. This amendment affects the majority of companies in our portfolio, as they are no longer required to comply with CSRD reporting obligations.
This sudden change has, understandably, caused confusion and frustration. For us, tit highlights the need to stay on top of regulatory changes and to offer support in close dialogue with our borrowers. Reduced CSRD requirements could potentially influence our ability to gather reliable data and further emphasize the need for lenders and investors at large to work with partners to access reliable estimates and comparable data.
In early 2025, however, the EU amended the guidance for CSRD under the Omnibus directive. One key change was the exemption of companies with fewer than 1,000 employees from the reporting requirements. This amendment affects the majority of companies in our portfolio, as they are no longer required to comply with CSRD reporting obligations.
This sudden change has, understandably, caused confusion and frustration. For us, tit highlights the need to stay on top of regulatory changes and to offer support in close dialogue with our borrowers. Reduced CSRD requirements could potentially influence our ability to gather reliable data and further emphasize the need for lenders and investors at large to work with partners to access reliable estimates and comparable data.
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We plan to utilise external support when moving into detailed CSRD reporting from 2025 onwards.