Climate impact of investments in support of active ownership

Situation

Pontos Group is an active and long-term real estate and private equity investor operating in Finland, Estonia, and Portugal. The combined revenue of its portfolio companies (with an ownership stake of over 10 %) is approximately 1 300 million euros.

Pontos Group focuses on socially, environmentally, and economically sustainable investments and considers climate change mitigation to be a key responsibility. The carbon footprint is therefore one of Pontos Group’s key sustainability metrics.

Challenge

The majority of climate impacts arise where capital is allocated.¹ In 2021, CDP estimated that financed emissions in the financial sector are on average more than 700 times higher than the sector’s own direct emissions. As a result, most of an investor’s climate impact typically originates from the operations of portfolio companies, and Pontos Group is no exception.

However, managing climate work can be challenging, particularly when visibility into emission sources is limited or the required emissions data is fragmented across portfolio companies. As sustainability and active ownership are at the core of Pontos Group’s value creation, it was essential for them to gain a deeper understanding of the emission sources within their holdings, their distribution across different investment types, and the Group’s own ability to influence these impacts as an owner.

Pontos Group turned to us in 2023 with the goal of strengthening its active ownership approach from a climate perspective. The need had already been identified for a more in-depth assessment and understanding of climate impacts, as well as for more systematic use of the insights generated in climate-related decision-making. An additional complexity was introduced by Pontos Group’s dynamically changing ownership structure and varying ownership shares, which needed to be carefully accounted for in attributing emissions from investments to the Group.

Solution

The carbon footprint of Pontos Group’s investments was calculated and allocated to the Group based on ownership shares, making the overall impact of its investment activities visible. From the perspective of Pontos’ ownership share, the emissions of significant portfolio companies were incorporated into Pontos’ own carbon footprint (scopes 1, 2, and 3). The emissions of the remaining portfolio companies and other investments were categorized under category 3.15 Investments.

Through a carefully selected consolidation approach and a detailed carbon footprint calculation based as much as possible on actual data, a realistic and comprehensive view of the climate impacts of the investment portfolio was obtained. The analysis also made it possible to identify Pontos Group’s key emission sources and highlight where the company has the greatest potential to influence emissions as an active owner.

At the end of the project, Pontos Group received a summary of the current state of climate work in each of its portfolio companies, along with concrete recommendations for next steps. These enable Pontos Group to implement its active ownership approach in close collaboration with its portfolio companies.

Next steps

The true value of carbon footprint calculation is realized only when the results are actively used in decision-making. For Pontos Group, the analysis supports active ownership and the development of portfolio companies toward more sustainable business practices. It enables fact-based discussions with portfolio companies on which measures are most impactful from a climate perspective, where emissions can be influenced, and over what timeline. We have had the opportunity to act as Pontos Group’s climate partner for several years, supporting the transition toward more structured and impactful climate work on an ongoing basis.

Investing in the future increasingly requires combining sustainability, impact, and strategic ownership. For a long-term owner like Pontos, tracking climate impacts is not an additional task – it is a core tool for value creation and more impactful ownership.

“For us, sustainability perspectives are an integral part of value creation. Understanding climate impacts guides both our investment decisions and our long‑term ownership activities.”

Päivi Tomula, Investment Director of Real Estate, Pontos Group