Vision and strategy
EQT's values, culture, and business model are linked to its vision to be the most reputable investor and owner. The interplay between a strong vision and the systematic work needed to develop a holistic view of business models, processes, and tools enables EQT to implement a sustainable mindset and behavior.
By providing access to ownership skills and operational expertise, EQT helps acquired companies grow and prosper, both under EQT's ownership and with future owners. Furthermore, EQT's diversified platforms provide an opportunity to leverage sustainability knowledge among sectors and strategies.
The EQT Responsible Investment and Ownership Policy (EQT RI&O Policy) was adopted in 2010 and describes EQT’s commitment to sustainability and approach to address material sustainability aspects throughout the entire investment process. The key lies in EQT’s thematic approach of investing in businesses with positive societal impact, advancing the progress of one or more of the United Nations Sustainable Development Goals (SDG).
The policy further outlines the standards for how EQT works on the structural development of portfolio companies in the context of sustainability, including a wide variety of environmental, social and governance (ESG) standards. EQT invests in good companies with a potential to become great, sustainable companies during ownership and beyond.
In addition to EQT's RI&O Policy, EQT has developed the EQT Sustainability Blueprint. This document offers guidance to portfolio companies and seeks to stimulate an innovative and strategic perspective on sustainability. It also sets out what EQT's expectations of portfolio companies are, including reporting on an EQT core set of sustainability KPIs as well as identifying, reporting and progressing on sustainability-related KPIs specific to their business. This framework enables value creation and enhanced contribution to society, including the SDGs. The EQT Sustainability Blueprint is continuously updated and refined based on input as well as industry and societal developments.
EQT has continued its engagement in achieving the SDGs. Having a sustainable investment mindset and ownership philosophy to future-proof businesses enables EQT to capture opportunities for long-term value creation. The EQT funds have made numerous investments in companies with products or services that contribute to solving societal challenges, such as responsible consumption and production and sustainable cities and communities. EQT is looking for ways to further accelerate portfolio companies' awareness of, and contribution to, this agenda. EQT has introduced a conceptual framework to assess and visualize Sustainability Performance to trigger people's mindsets and to guide engagement. The framework consists of two dimensions, where the y-axis assesses WHAT the company does, its business model, and how that contributes to solving environmental and social challenges using the SDGs as a lens. The x-axis scores HOW the company does it, based on the expectations set out in the EQT Sustainability Blueprint.
For the first set of these expectations, such as adhering to the UN Global Compact Principles and holding the board accountable to focus on what matters,the EQT funds demand absolute performance. For the other sets of expectations, transparency, ambition and relative performance to the portfolio company's own targets are rewarded. The EQT funds can therefore both support the transformation of a portfolio company with a negative societal impact profile to a neutral or even positive one through full potential plans or, invest in companies with already strong positive profiles and help them scale and develop as organizations.
Integrating sustainability throughout the investment cycle
EQT considers responsible investment and ownership principles and practices, including the consideration of material sustainability aspects, as an integral part of each phase of the investment and value-creation process.
To support the organization and portfolio companies, EQT has a dedicated Sustainability team that works in close liaison with other parts of the organization. The Sustainability team promotes sustainability awareness internally, follows up on EQT's RI Policy and Sustainability Blueprint and engages with external stakeholders on sustainability aspects. Additionally, to integrate and advance EQT's responsible investment and ownership practices within the organization, Sustainability ambassadors have been appointed for all investment strategies. The Sustainability ambassadors work closely with the Sustainability team to ensure complete dissemination of sustainability knowledge and best practice within the investment advisory teams.
External engagement and transparency
EQT is a strong promoter of responsible investment and ownership practices and increased transparency in the private equity and financial industry.
Since December 2010, EQT has been a signatory to the United Nations-supported Principles for Responsible Investment (PRI) Initiative. EQT has reported according to the PRI framework since December 2010 and has achieved the highest score (A+) for all the years it has been assessed.
EQT also frequently engages in discussions with investors, peers and advisors to share views on the implementation of sustainability principles and practices. EQT also supports and participates in various conferences and seminars. Moreover, EQT collaborates with academia, including meeting with, and presenting to, different schools and participating in interviews for several research papers on sustainability.
To address the climate change agenda, EQT considers the transition to a lower-carbon economy as an integral part of its business model. This means considering climate-related risks when sourcing and evaluating investment opportunities. EQT has also conducted an environmental review of existing EQT funds' portfolio companies together with an external advisor with the aim of increasing awareness, enhancing transparency levels and focusing engagement around core environmental issues. Portfolio companies are also expected to annually report their greenhouse gas ("GHG") emissions, water usage and waste to landfill.
For further information on EQT’s own GHG emissions and climate actions, please refer to the EQT GHG Emission Report 2018. Since 2015, EQT offsets all GHG that cannot be avoided or reduced through supporting different initiatives. In order to create further positive societal impact, EQT has partnered with TRINE, a crowdfunding platform investing in off-grid solar companies with operations in, among other countries, Sub-Saharan Africa.
To further contribute to meeting the global climate goals, all EQT offices operate on electricity from renewable energy sources, as a result of EQT acquiring clean energy certificates. This means that EQT's scope 1 and 2 carbon footprint from own operations was close to 0 in 2018.
Diversity and inclusion
EQT is a strong believer that diversity in people has a positive impact for both our investors and society. The firm has a multi-faceted approach to increasing diversity across the organization and fostering an environment that values and respects those differences. These initiatives are aimed at recruiting the best talent from all backgrounds and empowering individuals to succeed.
Among other initiatives, EQT has an employee-driven initiative, EQT WIN (Women’s International Network), which is focused on improving gender diversity at all levels through attracting more women to EQT, increasing retention of female EQTarians and implementing a set of policies to ensure an inclusive and harassment-free workplace.
EQT is not only actively working on multiple initiatives to create better gender diverse teams, but is also putting higher demands on third party suppliers to deliver more diverse teams.