Evli Private Equity Co-investment Fund I

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments.

The fund promotes environmental and social characteristics as part of investment activities by integrating sustainability factors into the due diligence process carried out prior to investment, assessing fund managers and the target companies during the investment period, excluding certain sectors, and engaging with fund managers through active dialogue. The fund complies with both Evli’s general and the fund’s own Principles for Responsible Investment.

The Fund’s main form of investment is co-investments, i.e., direct minority investments in the target company, which are managed by a private equity fund manager. When the Fund co-invests in a target company managed by a fund manager, the efforts to promote environmental and/or social characteristics are carried out by engaging the fund manager that is managing the investment in the target company. Before investing, the ESG (Environmental, Social, Governance) risks and opportunities of the target company are assessed on the basis of a report prepared by the fund manager managing the target company. The level of ESG governance of the fund manager is also assessed.

The Fund encourages the fund managers of target companies to incorporate sustainability factors into the various areas of their operations. During the investment period, the portfolio managers regularly monitor and assess the ESG practices and performance of the target companies and fund managers on the basis of ESG reports by the fund managers and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing. Evli’s Principles of Responsible Investment and the Fund’s own principles set the framework for Evli’s engagement.

In addition, the Fund encourages fund managers to report climate data about the target companies and set their own climate targets for the target companies. The minimum requirement in investment decisions is that the fund manager has an ESG policy and that the target company is not on Evli’s list of excluded industries. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50% reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

The fund’s approach to ESG integration is driven by a need to understand key ESG questions from the perspective of the target company and how the fund manager takes ESG matters into account at different stages of the investment process. Before making an investment, the principal objective is to understand the primary ESG risks and opportunities of the target company and the current level of ESG management of the fund manager of the target company. The Fund requires all fund managers of the target companies to set their own ESG policy and to commit to responsible investment practices, as this will also be reflected in the selection criteria set by the fund manager for the target companies and in any engagement of the fund manager in the target companies. The Fund will not make a commitment to a target company that has significant ESG risks or issues that the fund manager does not seek to correct or cannot correct, or if the target company is managed by a fund manager that does not have an ESG policy or that is not committed to responsible investment practices (such as the United Nations Principles for Responsible Investment, UNPRI). The methods are based on data collected from the fund managers and target companies, which are not verified by a third party.

A minimum of 50% of the fund’s active investments promote environmental and social characteristics. The metric used to measure the attainment of the environmental or social characteristics promoted by the Fund is the proportion of commitments to target companies that have an ESG strategy, a code of conduct and have set emission reduction targets. During the investment period, the portfolio managers regularly monitor and assess the ESG practices and performance of the target companies and fund managers on the basis of ESG reports by the fund managers and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing. All investments of the Fund follow Evli’s Principles for Responsible Investment and the responsibility principles of the Fund. The completeness of the data does not affect compliance with the above principles.

This financial product promotes environmental or social characteristics, but its objective is not to make sustainable investments. 

The fund promotes environmental and social characteristics as part of investment activities by integrating sustainability factors into the due diligence process carried out prior to investment, assessing fund managers and the target companies during the investment period, excluding certain sectors, and engaging with fund managers through active dialogue. The fund complies with both Evli’s general and the fund’s own Principles for Responsible Investment.

The Fund’s main form of investment is co-investments, i.e., direct minority investments in the target company, which are managed by a private equity fund manager. When the Fund co-invests in a target company managed by a fund manager, the efforts to promote environmental and/or social characteristics are carried out by engaging the fund manager that is managing the investment in the target company. Before investing, the ESG (Environmental, Social, Governance) risks and opportunities of the target company are assessed on the basis of a report prepared by the fund manager managing the target company. The level of ESG governance of the fund manager is also assessed. In addition to the report prepared by the fund manager, the fund may collect information on the ESG characteristics of the target company as far as it is available from other sources and investigates the industry of the target company from an ESG perspective.

The Fund encourages the fund managers of target companies to incorporate sustainability factors into the various areas of their operations. During the investment period, the portfolio managers regularly monitor and assess the ESG practices and performance of the target companies and fund managers on the basis of ESG reports by the fund managers and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing.

In addition, the Fund encourages fund managers to report climate data about the target companies and set their own climate targets for the target companies. The minimum requirement in investment decisions is that the fund manager has an ESG policy and that the target company is not on Evli’s list of excluded industries. Evli’s goal is to achieve carbon neutrality by 2050 at the latest, and it has set an interim target of a 50% reduction in indirect emissions from all investments by 2030, provided that this is possible in the investment environment. The comparison year is 2019. The fund-specific share of the emission reduction target may vary between funds.

Environmental and social factors are also promoted through the fund’s broad exclusion practices. The fund aims to exclude investments that are harmful or controversial industries such as tobacco, adult entertainment, controversial lending, manufacture of controversial weapons, and peat production. The fund also does not invest in target companies that are guilty of child labor and corruption, for example, and do not intend to correct this.

The fund complies with both Evli’s general and the fund’s own Principles for Responsible Investment. The Fund will not make a commitment to a target company that has significant ESG risks or issues that the fund manager does not seek to correct or cannot correct, or if the target company is managed by a fund manager that does not have an ESG policy or that is not committed to responsible investment practices (such as the United Nations Principles for Responsible Investment, UNPRI).

When deciding upon new investments, investing is avoided in industries that Evli has excluded. Before making a commitment to a target fund, the fund will carry out a separate ESG assessment of the target fund’s management company.

The Fund requires the managers of the target companies to assess and promote good governance practices of the target companies. An assessment of the quality of corporate governance and developing good governance practices is an integral part of the assessment of the fund’s potential investments. The governance assessment deals with four aspects of the corporate governance of the business activities of the target company and its management (effective governance structures, relationships with employees, remuneration of personnel and compliance with tax provisions), and the risk assessment capacity related to corporate governance and the tools available for this. The Fund is dependent on the information received from the fund manager about the target companies and reporting practices may vary from one fund manager to another.

A minimum of 50% of the fund’s active investments promote environmental and social characteristics.

The metric used to measure the attainment of the environmental or social characteristics promoted by the Fund is the proportion of commitments to target companies that have an ESG strategy, a code of conduct and have set emission reduction targets. During the investment period, the portfolio managers regularly monitor and assess the ESG practices and performance of the target companies and fund managers on the basis of ESG reports by the fund managers and engage in active cooperation with the aim of reducing the likelihood of sustainability risks materializing.

The environmental and social characteristics promoted by the financial product are monitored and reported using the sustainability indicators mentioned above.

Before making an investment, the principal objective is to understand the primary ESG risks and opportunities of the target company and the current level of ESG management of the fund manager of the target company. The assessment is carried out on the basis of a report prepared by the fund manager managing the target company. The level of ESG governance of the fund manager is also assessed. In addition to the report prepared by the fund manager, the fund may collect information on the ESG characteristics of the target company as far as it is available from other sources and investigates the industry of the target company from an ESG perspective. The information is not verified by a third party and the completeness of the data is reported at the same time.

The achievement of the promoted environmental and social characteristics is reported annually through the sustainability indicators mentioned above, in conjunction with which the completeness of the data is also reported. All investments of the Fund follow Evli’s Principles for Responsible Investment and the responsibility principles of the Fund. The completeness of the data does not affect compliance with the above principles.

The fund’s approach to ESG integration is driven by a need to understand key ESG questions from the perspective of the target company and how the fund manager takes ESG matters into account at different stages of the investment process. Before making an investment, the principal objective is to understand the primary ESG risks and opportunities of the target company and the current level of ESG management of the fund manager of the target company. The Fund requires all fund managers of the target companies to set their own ESG policy and to commit to responsible investment practices, as this will also be reflected in the selection criteria set by the fund manager for the target companies and in any engagement of the fund manager in the target companies. The Fund will not make a commitment to a target company that has significant ESG risks or issues that the fund manager does not seek to correct or cannot correct, or if the target company is managed by a fund manager that does not have an ESG policy or that is not committed to responsible investment practices. The methods are based on data collected from the fund managers and target companies, which are not verified by a third party.

The financial product can be used to engage with the target funds’ management companies as part of the promotion of environmental and social characteristics.  Evli’s Principles of Responsible Investment and the Fund’s own principles set the framework for Evli’s engagement and conduct in the event of observed breaches of the norms.

The fund does not have a benchmark index.