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Nordic Capital

PRI reporting framework 2020

You are in Strategy and Governance » Governance and human resources

Governance and human resources

SG 07. RI roles and responsibilities

07.1. Indicate the internal and/or external roles used by your organisation, and indicate for each whether they have oversight and/or implementation responsibilities for responsible investment.

Roles

Select from the below internal roles

          Partners, directors and principals
        

Other description (1)

          Our legal advisory team
        

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

Sustainability factors are fully integrated into all stages of our investment and ownership process from evaluation through to exit. Nordic Capital investment professionals are well placed to address sustainability risks and opportunities with the support of a dedicated in-house Sustainability Team and external advisors.

Potential investments must be assessed for financial, legal and sustainability risk. We have therefore developed a robust method that our investment teams apply when performing risk and opportunity assessments during the due diligence phase. This enables Nordic Capital to address sustainability matters in a systematic and consistent manner and at the earliest stage.

The Nordic Capital toolbox includes a clear responsible investment checklist and supporting DDQs to address sustainability factors and risks in the pre investment phase. This helps us to better understand the current and potential impact that sustainability factors have on the investment's financial performance, operations and reputation. Nordic Capital includes a mandatory assessment of sustainability risk and opportunity in all final investment recommendation material that is presented to the GP Board. Nordic Capital provides sector specific training for its investment teams and is also a member of the Sustainability Accounting Standards Board (SASB).

Nordic Capital has also enhanced this investment assessment process and due diligence by developing sector specific training, templates and tools to better assess risks and opportunities related to different ESG factors. Nordic Capital includes a mandatory assessment of ESG risk and opportunity in all final investment recommendation material that is presented to the GP Board for the investment decision. In addition, Nordic Capital embeds the standards issued by the Sustainability Accounting Standards Board to further strengthen the investment teams' capabilities in analysing how sustainability factors impact corporate value. These tools are reinforced through our training programmes.

During 2019, Nordic Capital took steps to enhance its investment assessment process and due diligence by instructing all external counsel to assess issues related to anti-bribery, competition / antitrust, trade sanctions, data protection, information security and working conditions when analysing and assessing investments.

Nordic Capital actively engages with its portfolio companies during the ownership stage to promote the importance of sustainability and share best practice. It sets out clear expectations for portfolio companies, ensuring that sustainability is addressed appropriately at boardroom level and throughout the organisation. 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.

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.

In addition, we encourage portfolio companies to communicate their sustainability agenda to important stakeholders and disclose key ESG related data in line with international standards and frameworks.

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

2.5 Number

07.4. Additional information. [Optional]

Our dedicated sustainability team continuously works to ensure and develop Nordic Capital's investment framework and to promote best practice in the way that Nordic Capital and its portfolio companies approach governance and their impact on society and the environment. This team is also responsible for developing training programmes and sustainability evaluation methods in order to measure progress.

Nordic Capital has a clear operating model with defined roles and responsibilities for sustainability during its ownership. This model includes the responsibilities for the portfolio company board, portfolio company management team and the sustainability function. Following is a few examples;

Portfolio company board to ensure:

  • definitions, expectations and actions are included in value creation plan
  • clear ownership and adequate resources and governance structure
  • annual review

Portfolio company management to ensure:

  • Appointment of adequate sustainability resources
  • Definition and implementation of sustainability strategy and compliance to Nordic Capital's minimum requirements
  • Report to the board (at least) on annual basis

NC Sustainability function

  • Input and review sustainability in value creation plan
  • Provide training, tools and support
  • Perform sustainability scorecard, follow-up and review as well as benchmarking between portfolio companies

SG 07 CC. Climate-issues roles and responsibilities

07.5 CC. Indicate the roles in the organisation that have oversight, accountability and/or management responsibilities for climate-related issues.

Board members or trustees

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

Other Chief-level staff or heads of departments

Portfolio managers

Investment analysts

Dedicated responsible investment staff

Investor relations

External managers or service providers

Other role, specify (1)

          Our legal advisory team
        

07.6 CC. For board-level roles that have climate-related issue oversight/accountability or implementation responsibilities, indicate how these responsibilities are executed.

Nordic Capital has enhanced this investment assessment process and due diligence by developing sector specific training, templates and tools to better assess risks and opportunities related to different ESG factors. Nordic Capital includes a mandatory assessment of ESG (including climate related) risk and opportunity in all final investment recommendation material that is presented to the GP Board for the investment decision. In addition, Nordic Capital has embedded the standards issued by the Sustainability Accounting Standards Board to further strengthen the investment teams' capabilities in analysing how sustainability factors impact corporate value. These tools are reinforced through our training programmes that are also offered for our GP board members. Nordic Capital is committed to understand and integrate climate risks and actions to reduce our carbon footprint both on firm and portfolio level.

07.7 CC. For management-level roles that assess and manage climate-related issues, provide further information on the structure and processes involved.

Sustainability factors (including climate related risks) are fully integrated into all stages of our investment and ownership process from evaluation through to exit. Nordic Capital investment professionals are well placed to address sustainability risks and opportunities with the support of a dedicated in-house Sustainability Team and external advisors. Nordic Capital has an objective to increase focus on assessing climate related risks and opportunities into the investment phase and disclosing climate related data to reduce our carbon footprint both on GP level as well as portfolio level.

The Nordic Capital toolbox includes a clear responsible investment checklist and supporting DDQs to address sustainability (including climate related) factors in the pre-investment phase. This helps us to better understand the current and potential impact that sustainability factors have on the investment's financial performance, operations and reputation. Nordic Capital includes a mandatory assessment of sustainability risk and opportunity in all final investment recommendation material that is presented to the GP Board. Nordic Capital provides sector specific training for its investment teams and is also a member of the Sustainability Accounting Standards Board (SASB).

Nordic Capital actively engages with its portfolio companies during the ownership stage to promote the importance of sustainability and share best practice. It sets out clear expectations for portfolio companies, ensuring that sustainability is addressed appropriately at boardroom level and throughout the organisation. 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.

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 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.

In addition, we encourage portfolio companies to communicate their sustainability agenda to important stakeholders and disclose key ESG related data in line with international standards and frameworks.


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

08.1b. RI in personal development and/or training plan

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

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Other C-level staff or head of department

          Partners, directors and principals
        

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Portfolio managers

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Investment analysts

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Dedicated responsible investment staff

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Investor relations

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

Other role (1) [from SG 07]

          Our legal advisory team
        

08.1a. RI in objectives, appraisal and/or reward

08.1b. RI in personal development and/or training plan

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

Staff retention and training have always been a high priority for Nordic Capital, and the Firm considers its learning agenda for the professionals to be first class. The learning agenda includes an intensive introduction program for all new recruits and “responsible investing” is part of it. All staff at Nordic Capital are required to attend  ESG I training containing important elements of corporate governance, basic sustainability, performing sustainability risk and opportunity assessments and building sustainable strategies.

Each individual will be provided continuous feedback and support in the its professional development. All investment professionals are reviewed at least annually in our Performance Review Process, during which skills, development areas and potential issues are discussed with each individual. ESG factors are not evaluated as an alone-standing component, but is an integral part of reviewing performance in areas of ownership and value creation, board meeting contribution and leveraging NC ownership excellence toolbox. In our efforts in talent retention, we are continuously following up on workload and engagement score. Following the Performance Review Process, training/coaching sessions are planned to address the areas for individual development. The Nordic Capital Performance Review Process and training programs are essential retention tools to ensure that investment professionals remain highly motivated and engaged. A similar process is also applied to mid and back office processionals.


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