Nordic Capital continues to drive sustainable change | Nordic Capital

Nordic Capital continues to drive sustainable change

AUGUST 04 2023

Sustainability is not merely a way to do good, but rather an integral and fundamental part of a successful business strategy. During 2022, Nordic Capital worked tirelessly to further embed this belief in its culture, investment framework and ownership strategy.

Nordic Capital seeks to invest in businesses that can make a positive contribution to society at large and are committed to drive transformative sustainable change in the companies we own. We are also integrating high sustainability standards within our own organisation.

This aspiration and ambition find expression in various ways.

Partnerships to drive sustainable growth

Nordic Capital actively engages with its portfolio companies to help better understand the importance of sustainability. Clear expectations are set out to ensure that it is addressed appropriately at boardroom level and throughout the organisation. To maximise the impact of our sustainability efforts, Nordic Capital focuses on areas that are material to the company and where we have the genuine ability to influence. To this end, Nordic Capital seeks to equip the companies with appropriate tools and training to further embed sustainability into their value creation plans. To date, Nordic Capital has trained more than 1,044 investment professionals, in sustainability, and, at the end of 2022, 87 percent of the portfolio had a sustainability strategy in place.

Data driven ESG performance promotes transparency

As part of our ongoing efforts to increase the transparency of our ESG activities and progress, Nordic Capital is guided by the UN Sustainable Development Goals. Nordic Capital’s contribution to society is measured across the portfolio with five targeted KPIs that focus on organic employment growth, reducing climate impact, promoting inclusion and diversity, implementing sustainable business practices and ensuring high ethical business standards. In 2022, Nordic Capital took further steps by linking the sustainability performance of underlying assets to ESG linked credit facilities for three funds. The revolving facilities strongly underline Nordic Capital’s longstanding commitment.

Adherence to industry standards and adapting to new ESG regulation

Nordic Capital is a signatory to the UN-supported Principles for Responsible Investment Initiative, ESG Data Convergence Initiative and is also committed to following the standards of Invest Europe and the local Venture Capital Associations of which we are members. Nordic Capital’s Responsible Investment Policy builds on the Ten Principles of the UN’s Global Compact and recognises the UN Sustainable Development Goals as a guideline in our investment process. With the EU Sustainable Finance Disclosure Regulation now in force, Nordic Capital has classified Funds IX, X, XI and Evolution as Article 8 funds which are expected to promote environmental and social characteristics.

Key focus areas to drive sustainable progress

Climate change, social inequalities, and the prevention of corruption and unethical business practices are among the most critical challenges of our time. We measure our positive progress in each of these areas, with the aim of making a meaningful impact on our world. Strong governance creates greater resilience. We believe strong corporate governance, including sustainable supply chain management, legal compliance, business ethics, cybersecurity and whistleblowing systems are key to creating greater resilience. Nordic Capital expects our portfolio companies to work proactively against corruption in all its forms and involve them in a centralised Corporate Compliance Programme. The programme includes training, risk assessments and the provision of policy templates alongside implementation plans and support. In 2022, 92% of portfolio companies had adopted a Code of Conduct and 95% had implemented a whistleblowing policy and/or system.

Reducing climate impact

Awareness of the importance of climate action and the consequences of climate change is growing rapidly and putting pressure on businesses to act. Nordic Capital is committed to reducing its carbon footprint within its own organisation and throughout the entire portfolio. Applying an environmental lens, Nordic Capital continues to encourage its portfolio companies to take a precautionary approach, ensuring resource-efficient practices and disclosing information on carbon reduction efforts. Nordic Capital’s climate commitment was further strengthened by joining the PRI-supported climate initiative iCI. Nordic Capital seeks to act as a role model by measuring, acting and increasing environmental awareness within our own organisation. We are pleased to conclude that we have leveraged new ways of working and continued to reduce our climate footprint during 2022.

Advancing diversity and inclusion

Nordic Capital encourages all portfolio companies to recognise the importance of matching talent to the right roles at the right time. The ability to attract, develop and retain talent, as well as safeguard employees is critical for our portfolio. Nordic Capital believes that a diverse work environment leads to better performance. The best decision-making and highest quality governance require the broadest range of perspectives and Nordic Capital has recently taken steps to further advance its diversity, equity, and inclusion efforts. These include trainings, mentorship programmes and efforts of our Women Accelerator Programme. In addition, Nordic Capital contributed to multiple cross-industry collaborative initiatives on D&I topics during 2022 through its membership of Level 20.

"It has never been more important for investors navigating uncertainty to sharpen their ESG approach. Both to manage volatility and to develop greater resilience. Big transitions are made possible by millions of small steps so let’s join forces to shape the future, bringing new insight, implementing high ESG standards and taking action to create a more prosperous society."

Elin Ljung, Managing Director, Head of Communication and Sustainability, Nordic Capital Advisors

* The Nordic Capital CSR Committee (or “we”, “us” or “our”) consists of senior partners at Nordic Capital Advisors with a deep and long-term commitment to Nordic Capital’s mission, vision and values, and oversees CSR-commitments by Nordic Capital Advisors, its partners and Nordic Capital foundations.