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Creating an impact on environmental, social and governance matters – IPR.VC ESG program

In the age of growing threats to the environment and multitudes of social issues, also businesses need to carry responsibility towards the society. We at IPR.VC are committed to actively work to be a good corporate citizen.

We think that responsibility and business goals can support each other. Companies that have top-notch management tend to both deliver good financial profits and have their processes in a shape that support responsibility goals.

As a professional fund manager, we need to have – and are happy to have – a program in place for environmental, social and governance impact, or in short “ESG”. When making an investment decision, we assess the potential investment against a four-page ESG check list. The assessment can lead to a no-go, if there are principal discrepancies (this has happened once; we do not fund first-person shooter games). We may also present some preconditions for the investment.

Once a year we conduct an ESG query to all of our portfolio companies. On that basis we present portfolio companies guidance or requirements for concrete actions.

On the basis of this year’s ESG query we identified three key areas, where we will take concrete actions. The areas are diversity, anti-harassment and environmental footprint of film and TV production.

In the area of diversity, we are gathering data on gender balance (the next year we will add more dimension to diversity as well). In our portfolio companies 25% of managers and 12% of board members are female. While there is enhancement from the previous year, the numbers are still low. In our deal flow (500+ cases) the share of female contact persons is 14%. Thus, there seems not to be a visible bias in our decision-making process but for some reason the companies and projects that come to our deal flow are to a large extent managed by male-dominated teams. This is an area, where more understanding is needed.

Looking at boards of our portfolio companies, only five out of 13 companies have both female and male board members. We have decided to require those companies where we are shareholders that there must be both female and male board members. When we discuss diversity, we also need to see beyond the diversity statistics and aim at inclusive workplaces, where everyone has open opportunities not depending on her or his background.

The #metoo movement has led TV and film industries to work on programs and codes of conduct that address harassment issues. The issue has now been, finally, recognised. In our experience all TV and film companies are fully aware of the need of anti-harassment work, while in gaming industry some companies still need to pay more attention to this. In our ESG program we require our portfolio companies to officially commit to an anti-harassment program. Here, also, a program is just the beginning, they are the concrete actions in the workplaces that matter.

In the area of environmental impact of our portfolio companies, we recognise that the biggest footprint is caused by TV and film shootings. In our ESG query, while all portfolio companies articulate their good intentions to reduce their environmental footprint, none of them have in practice any processes in place. To our knowledge this reflects the general status of production companies. We have decided to open discussion with the key industry players and other financiers and, if needed, create an industry-wide initiative to start a work to reduce the environmental impact of our portfolio companies and the whole industry.

We at IPR.VC are committed to work with our ESG program and tools to create positive impact through our portfolio companies and the industries we are working in. We believe that this is good for our business but, most importantly, this is what makes our work valuable in the long run. As investors we are in a good position to create positive impact to the society.