Introduction to our digital Sustainability Report
We are happy to again present Polaris Sustainability Report in a digital format instead of a conventional document.
By transitioning to a digital format, we can make real-time updates and over time integrate multimedia and interactive features into our report. This allows us to create a more dynamic and engaging experience. With this digital online Sustainability Report, we invite you to explore our progress, initiatives, and future aspirations.
If you need this report as a separate document, you can also download the content as a PDF here.
Introduction
- Polaris Management A/S (“Polaris”) is a Copenhagen-based fund manager and the issuer of this sustainability report.
- Polaris Management A/S manages funds under the Polaris name, investing in mid-sized businesses in the Nordic region. As of 31 December 2025, we had three investment strategies managing four active funds, with total assets under management of EUR 1.6bn [1]:
- Polaris Private Equity strategy (PPE): majority equity investments
- Polaris Flexible Capital strategy (PFC): junior debt and minority investments
- Polaris Public Equity (PPU): minority investments in listed Nordic companies
- Our investors are reputable institutions based in the Nordics and Europe.
- We are committed to promoting sustainability across Polaris as part of our responsibility to stakeholders. We work with sustainability for two reasons:
- It is a moral imperative – it is the right thing to do.
- It is an integrated part of long-term value creation.
- Within the scope of sustainability, we include the assessment and management of potential environmental, social (including human rights and labor rights), and economic impacts, in line with the internationally agreed principles for sustainable development reflected in the UN Guiding Principles and the OECD Guidelines for Multinational Enterprises. We refer to these as our Sustainability Principles.
- Our sustainability commitment is integrated across Polaris, including our investment process, active ownership, exit process, portfolio company engagement, and the operations of Polaris Management A/S.
- We believe sustainability-related risks and opportunities are specific to each company. Our mid-sized portfolio companies are at different stages of their sustainability journeys, and our ability to influence and collaborate with them depends on the governance rights we hold, which vary by investment strategy. We therefore assess each potential investment and portfolio company individually and tailor our sustainability approach to the company’s context and our governance position, while maintaining Polaris’ general principles and minimum requirements. In practice, we apply a common sustainability approach across Polaris and operationalize it for each investment strategy.
- To provide transparency on how we address sustainability, we regularly report on the status and progress of our work. This is our fifth sustainability report. As majority owners, we can provide more detailed information on developments in the portfolio companies in the Polaris Private Equity strategy. In addition to our public sustainability reporting and policies, we provide investors with further information on the sustainability status and performance of our portfolio companies.
- Our industry is subject to extensive regulation and industry guidelines, and we invest significant resources in maintaining compliance and alignment. As an Alternative Investment Fund Manager (AIFM), our funds fall under the EU Sustainable Finance Disclosure Regulation 2019/2088 (“the SFDR”). The sustainability approach described in this report applies to our most recent active funds in our private equity strategy, Polaris Private Equity IV and Polaris Private Equity V, launched in 2015 and 2021, respectively, which fall under SFDR – Article 8. The first fund in Polaris Flexible Capital and the fund in Polaris Public Equity also fall under SFDR – Article 8. In March 2025, we assumed management of the fund now named Polaris CS Fund I K/S from Core Sustainability Capital A/S. This fund is also an SFDR – Article 8 fund, and its investments are managed by the PPE and PFC investment teams. These strategies and funds constituted 100% of our invested capital as of 31 December 2025.
Letter from our managing partner
Since our last report, sustainability has continued to evolve as a business issue for our portfolio companies, driven not primarily by new regulation, but increasingly by market expectations. Across the industries in which we invest, companies are facing rising demands from customers and other business partners to demonstrate credible sustainability performance.
Market expectations are becoming more specific, more operational, and more closely linked to commercial outcomes. For example, customers are asking more detailed questions about climate performance, workforce practices, and supply‑chain transparency. Thus, sustainability capabilities are increasingly relevant for competitiveness, resilience, and long‑term positioning. As active owners, our role is to help portfolio companies navigate this shifting environment in a focused and commercially meaningful way.
Against this backdrop, our approach to sustainability has continued to mature. Rather than expanding scope or increasing reporting for its own sake, we have further sharpened our focus on identifying which sustainability topics are material to each business and where targeted action can support value creation. This means helping companies concentrate their efforts where sustainability performance genuinely matters for customers, operations, and future growth while avoiding unnecessary complexity or burden.
A concrete example of this approach is included in this year’s report through our case study on Contour Design. At Contour, focused sustainability work linked to ergonomics and workplace health has translated directly into commercial performance, influencing customer dialogue, purchasing decisions, and standard-setting behavior. The case illustrates how sustainability, when grounded in material business drivers, can support differentiation and long-term positioning rather than remaining a compliance exercise.
Climate remains a core focus area across our private equity portfolio. During the year, Polaris’ own science-based climate targets were approved, providing a clear long-term framework for our decarbonization ambitions. In parallel, we have continued to support portfolio companies in advancing their climate work and have strengthened internal capabilities through targeted training for deal teams. Recent volatility and increases in fossil-based energy prices have further underlined the financial relevance of decarbonization, reinforcing the link between climate action, cost management, and resilience.
More broadly, sustainability work across the portfolio continues to reflect the diversity of our companies. Material topics, starting points, and priorities differ by sector, business model, and geography. Our role as an active owner is therefore not to impose a one‑size‑fits‑all framework. It is rather to support each company in building the capabilities and governance needed to address the sustainability issues that matter most to its business, in a way that is proportionate, practical, and integrated into day‑to‑day operations.
During the year, we also welcomed Frances Owen as Head of Sustainability. Fran brings experience from both sustainability advisory and private equity, and the Polaris sustainability program is in excellent hands as we continue to develop our approach in close collaboration with our investment teams and portfolio companies.
Looking ahead, we expect market‑driven sustainability demands to continue to evolve amid ongoing regulatory uncertainty. Our ambition is to remain focused, disciplined, and pragmatic in how we work with sustainability, helping our portfolio companies translate sustainability expectations into commercial opportunities, stronger resilience, and long‑term value creation. We believe this approach supports both responsible ownership and attractive investment outcomes over time.
Jan Johan Kühl | Managing Partner | Polaris Management A/S
“We have further sharpened our focus on identifying which sustainability topics are material to each business and where targeted action can support value creation."
Our progress
Explore the highlights of our work during the year
During the year, Polaris streamlined its sustainability reporting requirements for portfolio companies, reducing the number of required data points from more than 300 to approximately 150, and adopted the Novata platform as its core sustainability data collection and reporting tool.
This transition supports more efficient data collection and should improve consistency and comparability across the portfolio over time, including for key investor and regulatory disclosures such as SFDR PAIs and EDCI. As a result of these changes, and as noted in each case, certain metrics in this report are not fully comparable to prior years.
During 2025, Polaris updated its sustainability requirements for portfolio companies, reflecting a stronger focus on materiality and value creation.
The updated requirements strengthen expectations on governance and strategy, including defined governance structures, double materiality assessments, and the integration of sustainability priorities into business strategy and value creation plans. They also introduce a more focused KPI set across Polaris’ core priorities, climate change, gender equality, and working environment.
The new requirements will be implemented from the 2026 reporting cycle and are therefore not reflected in this year’s reporting.
During 2025, Polaris’ science-based climate targets were formally approved, providing a clear decarbonization framework aligned with international standards. The target includes a specific portfolio coverage target for both Polaris Private Equity (PPE) and Polaris Public Equity (PPU). PPE will target 100% portfolio coverage by 2030 and PPU 50% by 2030. Although we have promoted science-based targets among our private equity portfolio companies for a number of years, the formalization of our commitment will help drive our work in this area.
In parallel, targeted training was delivered to investment teams to support implementation at portfolio company level and strengthen integration into investment decision-making and ownership practices.
This year’s report includes a case study on Contour Design, illustrating how sustainability initiatives can translate into commercially relevant outcomes at portfolio company level. The case highlights how performance in ergonomics and workplace health has supported customer dialogue, influenced purchasing decisions, and contributed to differentiation in core markets.
As of this year’s report, reference to the UN Sustainable Development Goals (SDGs) has been discontinued in our public sustainability reporting. While widely used as a global policy reference, the SDGs were developed for nation‑states and do not provide a clear or consistently applied framework for business or investment decision‑making. Moreover, they are scheduled to conclude in 2030. Our sustainability reporting, targets, and strategic priorities remain focused on topics that are both relevant for regulatory compliance and demonstrably material to value creation, risk management, and long‑term commercial performance across our investments.
During 2025, Polaris appointed Frances Owen as Head of Sustainability, succeeding Martin Bang-Löwgren. Fran brings extensive sustainability expertise in private equity, with previous roles at PwC and Altor Equity Partners and a background in environmental technology. Following Fran’s subsequent leave, Stephanie Erev is serving as Interim Head of Sustainability, supporting continuity in Polaris’ sustainability work. Stephanie brings experience from FSN Capital and Scottwood Capital Management, as well as a PhD focused on sustainability and the green transition.
Frances Owen
Stephanie Erev
We continue to recognize and promote successful sustainability initiatives across our portfolio companies, including improvements in governance and responsible business practices.
In 2025, Distriktstandvården received the Polaris Sustainability Award for strengthening its internal processes for identifying, managing, and reporting incidents and operational deviations. Through a more structured and systematic approach, the company has enhanced transparency and oversight of potential risks across its operations.
This work supports more consistent management of adverse impacts and reflects a maturing sustainability platform, with clearer accountability and improved data quality—both internally and in external reporting.
Distriktstandvården was shortlisted alongside 7N and Micropower, both of which demonstrated strong performance in sustainability reporting and the use of impact assessment frameworks and KPIs.
How to navigate our sustainability reporting
The purpose of our sustainability reporting is to provide an overview and status update on the work with sustainability at Polaris. The following sections define how we structure our work with sustainability and provide a comprehensive overview and status of our work.
1. Sustainability at Polaris
This section is an introduction to sustainability in Polaris along with the highlights of the period.
2. Our Sustainability Strategy Go to section
Outlines our Sustainability Strategy at Polaris across investment strategies, including our ambitions and approach to working with sustainability as an investment manager, hereunder;
- How sustainability plays a role in our investment strategy, investment process and ownership process
- Our main focus areas within sustainability
- The frameworks and standards we use and why we use them
3. Polaris Private Equity Go to section
How we are working with sustainability in our private equity strategy and in our portfolio through ‘Polaris Sustainability Program’, how our portfolio is performing, and the progress on our sustainability focus areas.
4. Polaris Management Go to section
Summary of our work with sustainability in our own organization in Polaris Management and our office in Copenhagen. As with our portfolio companies, we have also conducted the work that is outlined in ‘Polaris Sustainability Program’ internally and provides a status hereof in this section.