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EQT

PRI reporting framework 2017

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities

07.1.

Roles present in your organisation

          EQT Executive Committee
        
          Legal and Compliance
        

Other description (1)

Other description (2)

          RI ambassadors
        

07.2. For the roles for which you have RI oversight/accountability or implementation responsibilities, indicate how you execute these responsibilities.

The general partners and managers of the EQT funds engage their Investment Advisor, EQT Partners, to support them in the evaluation and monitoring of RI Factors. It is the EQT Partners investment advisory teams’ responsibility to make sure that RI Factors are considered and assessed during investment screening and due diligence. The general partner and/or manager of the relevant EQT fund also engages, as appropriate, various experts during the investment process including, without limitation, commercial, legal, insurance, technical and sustainability advisors and the investment advisory teams are tasked with ensuring that any due diligence advisor involved is aware of EQT’s RI Policy. The outcome of the RI analysis will be documented in the investment recommendation materials, enabling the boards of the general partners and/or managers to take RI Factors into account when making investment decisions.

The investment advisory teams are also responsible for assisting the respective general partners and managers of the EQT funds with ongoing monitoring and evaluation of RI Factors along with the overall development and performance of the portfolio companies during the ownership period. As part of these processes, EQT funds’ portfolio companies’ boards of directors and management teams are made aware of EQT’s RI Policy and hence, can comply with its standards. Management teams of portfolio companies are supported in promoting a culture of compliance with EQT’s RI Policy through access to best practice information and tools. For example, and as mentioned in the response to indicator SG 06.2 above, the EQT Sustainability Blueprint is a valuable tool to further guide this group on what EQT’s expectations of portfolio companies are in practice as well as inspire them how to engage on sustainability issues strategically.

The governance and management structure that is put in place for each portfolio company is an essential part of EQT’s value creation model. The EQT funds usually make control and co-control equity or equity related investments in portfolio companies. Through such investments, EQT is able to put in place a governance framework and structure that enables alignment of interests between the portfolio company management and EQT. This framework inherently provides the EQT funds with the ability to exercise ownership and to assist portfolio companies as they address RI factors primarily through a board of directors over which EQT typically has appointment rights. The board of directors of each of EQT funds’ portfolio companies is responsible for defining strategy and policies as well as setting sound environmental, labor and human rights and ethical standards. EQT’s RI Policy explicitly gives the board of directors of every portfolio company a mandate to define, address and monitor relevant RI Factors and it is expected that the board of directors discusses RI Factors at least once a year. Each portfolio company’s CEO and management team are responsible for executing the strategy and running the daily operations of the company according to the policies established by the board. Again, those EQT funds which do not typically have control or co-control have adapted an appropriate governance model and their influence on RI Factors may be limited.

To further support the organization, EQT has a dedicated RI team that works in close liaison throughout all functions, general partners and managers. The RI team promotes RI awareness internally, follows up on EQT’s RI Policy as well as engages with external stakeholders on sustainability/ESG matters. The activities are led by the Head of RI, who reports to the CEO/Managing Partner. The RI team further reports to the board of directors on an annual basis and the EQT Executive Committee on a monthly basis or when needed, and semi-annually to the respective general partners and managers of the EQT funds. To further integrate and advance EQT’s responsible investment and ownership practices within the organization, RI ambassadors have been appointed for all investment strategies at EQT. The RI ambassadors act as promoters and contact points for sustainability matters within the investment advisory teams and are working closely together with the RI team.   

07.3. Indicate the number of dedicated responsible investment staff your organisation has.

3 Number

07.4. Additional information. [Optional]

It should be noted that the number above in indicator SG 07.3 refers to the number of people in the EQT RI team.

As emphasized in indicator SG 07.2 above, EQT applies an integrated approach to responsible investment and sustainability/ESG aspects permeates all functions at EQT, not only the roles listed in SG 07.1. 


SG 08. RI in performance management, reward and/or personal development

08.1. Indicate if your organisation’s performance management, reward and/or personal development processes have a responsible investment element.

Board members/Board of trustees

08.2. Describe any activities undertaken during the reporting year to develop and maintain Board members’ skills and knowledge in relation to responsible investment.

During 2016, continued training by means of recurrent reporting and/or conferences/meetings with sustainability-specific elements were held to contribute to the development of board members’ skills and knowledge in relation to responsible investment and ownership matters.

Chief Executive Officer (CEO), Chief Investment Officer (CIO),  Investment Committee

Other C-level staff or head of department

          EQT Executive Committee
        

Portfolio managers

Investment analysts

Dedicated responsible investment staff

Investor relations
Other role (1) [from SG 07]
          Legal and Compliance
        
Other role (2) [from SG 07]
          RI ambassadors
        

08.3. Provide any additional information on your organisation’s performance management, reward and/or personal development processes in relation to responsible investment.

All EQT staff are reviewed in a 360° review system on an annual basis. With this tool, career paths are developed and every employee has a high quality feedback system at hand that helps him or her develop within the organization. Adherence to EQT’s values (being: ambitious, high performing, respectful, industrial, entrepreneurial, informal and transparent) is a key component in this feedback system for all employees and forms an integral part of ensuring a responsible and sustainable approach to investment and ownership.

In addition, on a portfolio company level, the performance of the chairman, the overall board of directors and the respective investment advisory professional is assessed once a year in a comprehensive appraisal process, where RI/sustainability is one of the components evaluated. 


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