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Nordic Capital

PRI reporting framework 2020

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Post-investment (monitoring)

PE 09. Proportion of companies monitored on their ESG performance

09.1. Indicate whether your organisation incorporates ESG issues in investment monitoring of portfolio companies.

09.2. Indicate the proportion of portfolio companies where your organisation included ESG performance in investment monitoring during the reporting year.

 (in terms of total number of portfolio companies)

09.3. Indicate ESG issues for which your organisation typically sets and monitors targets (KPIs or similar) and provide examples per issue.

ESG issues

List up to three example targets of environmental issues

Example 1

          Greenhouse Gas emissions (GHG) and Energy usage
        

Example 2 (optional)

          Water usage
        

Example 3 (optional)

          Transportation
        

List up to three example targets of social issues

Example 1

          Diversity, equality and inclusion
        

Example 2 (optional)

          Employee engagement
        

Example 3 (optional)

          Organic employment growth and decent job creation
        

List up to three example targets of governance issues

Example 1

          Training in Corporate Governance and Compliance including areas of anti-bribery, antitrust, trade sanctions, data protection, information security, whistle-blowing and ethical business frameworks.
        

Example 2 (optional)

          Sustainability as a recurring item on the agenda for board meetings.
        

Example 3 (optional)

          Having a sustainability strategy, a code of conduct and/or a whistle blowing system in place.
        

09.4. Additional information. [Optional]

Since 2014, our portfolio companies have been required to perform a sustainability status review each year-end. Since 2016, we have used a sustainability software platform for non-financial information to systemise and improve the reporting processes. This platform was developed and is maintained by an external provider. The software is of great use to both Nordic Capital and its portfolio companies in the process of collecting, aggregating and analysing status, data and progress in different areas of sustainability, and in total we collect and analyse around 50 different data points. The reporting tool has been further developed in order to improve insights within new relevant areas and to link company reporting to GRI Standards and Sustainable Development Goals. The software also supports portfolio companies in the collection and analysis of sustainability data in order to meet increasing regulatory requirements on non-financial reporting.


PE 10. Proportion of portfolio companies with sustainability policy

10.1. Indicate if your organisation tracks the proportion of your portfolio companies that have an ESG/sustainability-related policy (or similar guidelines).

10.2. Indicate what percentage of your portfolio companies has an ESG/sustainability policy (or similar guidelines).

(in terms of total number of portfolio companies)

10.3. Additional information. [Optional]

This answer is based on status of portfolio companies at year-end 2019. It is important to understand the development of the portfolio as a whole may fluctuate over time as new companies are acquired and mature companies are exited. When Nordic Capital exits businesses that are more sustainable, they are often replaced with companies for which these processes still need to be developed. Therefore, Nordic Capital monitors both development of the portfolio as well as progress (year-over-year) to see the improvements made. 


PE 11. Actions taken by portfolio companies to incorporate ESG issues into operations

11.1. Indicate the types of actions taken by your portfolio companies to incorporate ESG issues into operations and what proportion of your portfolio companies have implemented these actions.

Types of actions taken by portfolio companies

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

(in terms of total number of portfolio companies)

Implemented by percentage of portfolio companies

Implemented by percentage of portfolio companies

          Portfolio companies board of directors, management team and relevant executives attending Nordic Capital ESG training program.
        

(in terms of total number of portfolio companies)

11.2. Describe how your organisation contributes to the portfolio companies’ resourcing and management of ESG issues.

Nordic Capital is providing training, workshops and facilitation of best-practice-sharing of related sustainability topics among portfolio companies. We believe this initiative will lead to increased positive results in all companies' long-term performance and value creation. Typically, we work with portfolio companies for example in the following ways:

  • Developing sustainability strategies
  • Identifying business risks and opportunities from a sustainability perspective
  • Establishing internal control functions
  • Sustainability reporting
  • Establishing and implementing policies
  • Sustainability presentations and training sessions with people in management positions

In 2019, Nordic Capital further developed its process for structured feedback. Nordic Capital provides a Sustainability Scorecard per portfolio company to clarify requirements at an ownership level and also to follow-up the progress of each company's sustainability work on a yearly basis. The Sustainability Scorecard is shared with the Board of Directors and Executive management to help the company to better understand the sustainability challenges and opportunities and indicate where we can provide support or follow up on progress.


PE 12. Type and frequency of reports received from portfolio companies

12.1. Indicate the type and frequency of reports you request and/or receive from portfolio companies covering ESG issues.

Type of reporting 

Typical reporting frequency 

Typical reporting frequency 

          ESG Case studies are performed and reported for various portfolio companies throughout the year
        

Typical reporting frequency 

12.2. Describe what level of reporting you require from portfolio companies, and indicate what percentage of your assets are covered by ESG reporting.[OPTIONAL]

Nordic Capital drives transparency and accountability throughout the investment process and performs regular ESG reporting on both our own organisation and our portfolio companies. We adhere to international standards and guidelines to ensure a robust and consistent approach and we are continuously developing the sustainability evaluation methods in order to enhance the accuracy and transparency of reporting to our investors and other important stakeholders.

Nordic Capital monitors progress of each portfolio company against its Value Creation Plan (VCP). Since 2014, all of our portfolio companies have been required to perform a sustainability status review each year-end. Our well-established reporting platform is of great use to both us and our portfolio companies in the process of collecting, aggregating and analysing status, data and progress in different areas of sustainability. In total we collect and analyse around 50 different data points.

In addition to the more formal reporting, there is a continuous dialogue and exchange of information between the management teams, Operating Chairmen and Nordic Capital of the respective portfolio companies. Depending on the type of information, data collection occurs annually, quarterly, monthly or on ad-hoc.


PE 13. Disclosure of ESG issues in pre-exit

13.1. Indicate whether during the reporting year your organisation disclosed information on ESG issues to potential buyers prior to exit for private equity investments.

13.2. Apart from disclosure, describe how your organisation considers ESG issues at exit.

The goal for Nordic Capital is to transfer ownership in the best possible way so that portfolio businesses continue to grow and outperform in the long-term. In preparation for exit, steps are taken to ensure the portfolio company is in a position to continually improve its performance within sustainability. Nordic Capital measures the progress during the ownership phase and also includes a toolkit to include sustainable progress in the sales process. The aim is that the value of improvements within sustainability, made during the ownership phase, will be realised upon exit.

13.3. Additional information.


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