Sustainability at Polaris
At Polaris, we work with sustainability because doing the right thing is both a moral imperative and important for long-term value creation. It is critical to take our responsibility seriously in order to be a successful investor in mid-sized companies.
We have a responsibility towards our many stakeholders, and we recognize that our responsibility goes beyond our own organization. It includes the broader impact we have on all stakeholder of Polaris: Our employees, customers, suppliers, and the societies where we and our portfolio companies are active.
Polaris and EU regulations on sustainability
The Sustainable Finance Disclosure Regulation (SFDR) is a European regulation introduced to improve transparency in the market for sustainable investment products, to prevent greenwashing and to increase transparency around sustainability claims made by Polaris and other financial market participants. Compliance with the EU regulations on sustainability is a high priority and fully integrated in our work with sustainability at Polaris.
You can read more about how Polaris’ work with sustainability is aligned with the EU requirements in the SFDR here:
The EU regulations through SFDR defines certain mandatory sustainability-related disclosures related to Polaris and Polaris funds which you can find here:
Our commitment and focus
To honor our responsibility, we have integrated sustainability throughout Polaris at three different levels and our performance is evaluated accordingly:
1
Polaris as a fund manager: How we integrate sustainability in our investment processes in all of our investment strategies
2
Polaris’ portfolio: How our holdings and portfolio companies work with sustainability and their progress
3
Polaris Management: How we work with sustainability in our own organization and our progress
We also work to promote sustainability throughout the investment industry, and we pledge to be transparent and report on our progress in our annual sustainability report.
Within our scope of sustainability, we include potential social, environmental, and economic impacts across Polaris including our portfolio companies and their supply chains. We dedicate extra attention to three focus areas across Polaris:
Climate action
Work to combat climate change.
KPI: CO2e emissions.
Gender Equality
Support gender equality and gender diversity.
KPI: Gender distribution.
Working environment
Work to ensure a high standard working environment across Polaris.
KPI: Employee turnover.
Our investment criteria
At Polaris, we have pledged to support the continued improvement of sustainability performance of the mid-sized companies we have invested in during our ownership. But first, the following sustainability criteria need to be met for an investment to be within Polaris’ investment mandate and for it to be considered an eligible investment for Polaris, from a sustainability perspective:
- The company sector, and the sectors it is exposed to, is determined to be defensible and viable and not part of a “no-go” area.
- The company does not have an unacceptable exposure to countries, persons, or entities on the UN sanctions list.
- The risks of adverse impacts relating to Polaris’ target companies, as defined in our Sustainability Principles, are determined to be acceptable and manageable.
- The portfolio companies have processes, procedures, and policies in place to govern and manage sustainability and the company’s adverse impact, or we believe that we will be able to establish these, in collaboration with the management team, post-acquisition.
At Polaris, we have chosen a broad investment mandate, which allows us to invest in most companies as long as they offer their customers and society a defensible and viable product. Our aim is then to support these mid-market companies to improve their sustainability performance during our ownership. This is how we at Polaris believe that we can create a positive impact.
The Polaris Sustainability Platform
Polaris Sustainability Approach
Our strategic approach, ambitions, and rationale behind our sustainability work in Polaris are based on internationally recognized standards within sustainability and is continuously updated.
Definition of Sustainability
Within the scope of sustainability, we include social, environmental, and economic impacts according to the internationally agreed principles for sustainable development consisting of the UN Guiding Principles (UNGPs from 2011), and as referenced by the OECD Guidelines (OECD from 2011) and we refer to these as the basis for our “Sustainability Principles”.
Investment criteria
We have well defined minimum criteria that define which companies that we are willing to invest in and not.
Polaris Sustainability Due Diligence
A structured approach for how we evaluate potential investments with respect to sustainability. The evaluation includes an assessment of the maturity of the company’s sustainability structure and processes. The due diligence is based on our approach to sustainability and tailored to suit the needs and specific investment processes of each of our investment strategies.
Polaris Sustainability Program
A standard program containing structure and processes related to sustainability which is used to support the development of a sustainability agenda in Polaris’ portfolio companies and also defines a minimum standard. The program is an integrated part of Polaris Excellence Model which is our way of working together with our portfolio companies. The execution of the program is adapted to the governance structure of the different investment strategies.
Polaris Sustainability Group
We regularly gather all the lead sustainability officers in our majority owned portfolio companies in a joint working group to share knowledge, best practices and to discuss important sustainability topics.
Polaris sustainability reporting
In order to be transparent about our work and performance related to sustainability we produce the following information:
- Polaris Private Equity Sustainability Update
- Polaris Management A/S Sustainability Report
- SFDR - Polaris Principle Adverse Impacts Statement
- Polaris Private Equity Sustainability Assessment (only for investors)
- SFDR - Periodic reporting (only for investors)
For 2020 and 2021, we published Polaris Sustainability Report which focused on our private equity strategy and combined information about Polaris Sustainability Platform, an annual portfolio update, updates from our portfolio companies as well as a sustainability report for Polaris Management A/S. You can find these historic reports here. In the latest report you will learn more about:
- Our approach towards sustainability in Polaris
- How we integrate sustainability in our investment process
- How we work with sustainability in our portfolio companies
- How each portfolio company is doing with respect to sustainability
- What we are doing at Polaris Management A/S to address sustainability
- The governance process around sustainability
Polaris policies regarding sustainability
Our commitment to sustainability is set out and detailed in Polaris Responsible Investment Policy (“RIP”). Our RIP describes our work with sustainability in our private equity strategy (PPE), in our flexible capital strategy (PFC) and in our public equity strategy (PPU). Our commitment to sustainability is further elaborated in certain other Polaris policies: our Anti-Corruption Policy, Gender Equality Policy, Privacy Policy and Remuneration Policy. All of these documents are publicly available on our web-page below.
Attachments to this web page
