Our view and influence
Industrivärden’s strategy to develop and create value in its portfolio companies over the long term naturally entails a sustainability focus. Sustained value growth can only be created in long-term competitive companies that pay close attention to environmental, social and governance issues. Industrivärden is a responsible owner with high ambitions to participate in the development of enduring businesses. In this way, it is possible to contribute to sustainable portfolio companies, which benefits the communities in which they operate. This involves minimizing sustainability-related risks while capitalizing on sustainability-related opportunities in a rapidly changing world.
Industrivärden sets clear demands for its portfolio companies. These include establishing strong market positions, good cash flows and financial strength, as well as a distinct capacity for development. This forms a stable foundation for well-integrated sustainability work with innovations, products and services that contribute to sustainable development. By investing capital in operationally and financially enduring companies and contributing to the portfolio companies’ strategic sustainability work, Industrivärden takes responsibility for sustainable development.
Particular focus is put on material sustainability risks and sustainability-related opportunities from risk mitigation and value creation perspectives. Industrivärden’s overarching ambition is to be a well-informed and demanding owner with a sustainability perspective that contributes to the long-term success of its portfolio companies, and to offer a long-term and sustainable investment with an attractive total return at balanced risk.
To materialize these ambitions, Industrivärden:
- Performs continuous analysis and follow-up of the respective portfolio companies in accordance with its integrated sustainability analysis;
- Formulates owner agendas for the respective portfolio companies and exerts influence in accordance with its business model;
- Conducts dialogues with selected stakeholders aimed at soliciting views in support of further development of its sustainability work.
From an overarching perspective Industrivärden expects the portfolio companies to have a sustainable approach in all aspects of their operations, and that they will:
- View sustainability as an important, strategic issue and conduct salient sustainability work within their respective sectors, where sustainability aspects are integrated into their business models, business cultures, strategies, processes and product offerings;
- Continuously develop and strengthen their sustainability work in a structured way with support from relevant guidelines and measurable goals;
- Monitor, evaluate and continuously communicate the progress of their sustainability work and convey the ways in which they contribute to long-term sustained development in the communities in which they operate.
In its sustainability work Industrivärden also adheres to global initiatives such as the OECD’s Guidelines for Multinational Enterprises, the ILO’s eight fundamental conventions and the UN Guiding Principles on Business and Human Rights. From an influence perspective, the business sector has a central role in creating a sustainable world. Industrivärden is therefore a signatory of the UN Global Compact and has worked since 2015 to promote its ten principles.
To be able to conduct a qualitative analysis of portfolio companies’ sustainability work – and exercise influence when needed – Industrivärden needs to have a depth of knowledge about the respective companies’ operations and sustainability-related matters. The sustainability analysis is therefore an integrated part in the company analysis of the respective portfolio companies. In this way, material sustainability aspects are evaluated from a holistic perspective, with a base in the portfolio companies’ respective operations, geographies and stages of development. This means that the sustainability perspective is included in evaluations of the portfolio companies’ boards and management teams, strategic issues and financial performance.
Individuals who represent or have ties to Industrivärden shall have a current and pertinent understanding of the value creation measures identified for respective portfolio companies. Against this background, Industrivärden’s owner agendas are continuously presented and evaluated by Industrivärden’s Board. This allows Industrivärden to have an influence on strategic sustainability issues over time.
Industrivärden’s stakeholder and materiality analysis clearly shows that the Company’s most important task is to contribute to sustained shareholder value in its portfolio companies. To this end, major emphasis is put on ensuring well-integrated and structured sustainability work in the portfolio companies. Based on the materiality analysis, its sustainability work has particular focus on the following areas and underlying goals:
- Responsible corporate governance and a sustainable role in society
– Good corporate governance, good business ethics and anti-corruption
– Good diversity
– Decent working conditions - Minimized negative climate and environmental impact
– Reduced climate impact - Sustainable production and innovation
– Sustainable production
– Sustainable innovation
