Policy of responsible investing
Korona Invest is a private equity company. The best way of contributing to responsibility is through the development of portfolio companies in our funds. We have integrated responsibility as a part of our investment activity, and when making investment decisions, we take account of financial perspectives as well as matters related to the environment, society, and good governance. We believe that our portfolio companies which operate responsibly are more profitable investments for our funds and fund investors due to sustainable growth.
Commitment to responsible investment activity
The policy of responsible investing is binding on all employees of Korona Invest, and it guides our investment activity for taking account of ESG factors. Korona Invest is committed to the responsibility policy the company has specified and is aware of its social responsibility. Korona Invest is a member of the Finnish Venture Capital Association and complies with the Association’s guidelines on disclosure and transparency and Code of Conduct. The funds managed by Korona Invest observe the International Private Equity and Venture Capital Valuation Guidelines (IPEVG) in the valuation of portfolio companies, the international Invest Europe guidelines, and agreements signed with investors on investor reporting. We are a member of Suomen Yrittäjät and the networks of responsible corporate activity (FiBS and Finsif).
Korona Invest undertakes to include ESG factors as part of investment analysis and the decision-making process on investments, to serve as an active owner and to incorporate ESG factors in its owner practices. The company aims to advance appropriate responsibility reporting related to ESG factors of its investments, and reports on its activities and progress in the adoption of the principles of responsible investing.
Implementation of responsibility
We expect companies we invest in to act in a responsible manner. We analyse responsibility as part of the investing process, and we only make investments in companies that meet our investment criteria.
Taking account of ESG factors in the selection and monitoring of investments is part of the job description of every person making investment decisions and analysing investments. We have integrated ESG due diligence as part of due diligence investigations in the initial investment phase, which helps us determine any ESG risks. We believe this to be a positive value in the potential exit stage which will thus improve the value of the investment. Also, we may withdraw from investing in any company that ignores responsibility matters. Our goal is to develop the responsibility of our portfolio companies and ESG matters, so that no ESG risks preventing a sale of the portfolio company exist at the moment of the exit. We monitor the development of ESG matters in our portfolio companies with an annual survey.
When analysing risks of an investment, we observe matters related to the environment, social responsibility and governance as part of the whole. We develop tools of responsible investing and actively monitor the various practices.
As the basis for an investment’s responsibility analysis, we use information collected from public sources and Korona Invest’s own responsibility survey. Responsibility is analysed on both a quantitative and qualitative basis. In the analysis of investments and making of investment decisions, dialogue with company management is an essential part of the responsibility analysis of the investment. If necessary, we use external experts in the assessment of matters related to responsibility.
Monitoring of responsibility
Monitoring of portfolio companies from the responsibility perspective is an ongoing process. If we observe abuses or breaches of norms in a portfolio company, such as violations related to human rights, employment or the environment, we take action on a case-specific basis, depending on the severity, nature and scope of the violation.
Korona Invest reports on its corporate responsibility more extensively in Korona Invest’s annual responsibility report. We use the annual ESG survey on portfolio companies as support material for our reporting. Responsibility matters of our portfolio companies are also reported as part of our financial reporting. We meet with our stakeholders on a regular basis, and often such meetings involve review of matters concerning responsibility. We also want to help advance the themes of responsible investing and sustainable value creation and growth in our industry.