IPR.VC Management’s board of directors has approved this Sustainability Policy on March 9th, 2021. The policy covers environmental, social and governance sustainability matters (“ESG”).
IPR.VC has the mission to enable ambitious content creation, production and distribution companies to reach commercial success with their film, TV and other entertainment intellectual properties. Growing content industry will also bring employment and welfare to society. Our sustainability policy aims at fostering our industry’s contribution to society and mitigating sustainability-related financial risks and ensuring and enhancing the companies’ positive footprint on sustainability matters.
At IPR.VC, we are committed to applying this policy to our own operations as well.
This policy complies with the EU regulation on sustainability-related disclosures in the financial services sector.
Sustainability risks
Sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.
IPR.VC’s investment portfolio may comprise of asset-backed investments (“Project Investments”) and equity investments in companies. Project Investments can be divided into development, production and acquisition projects. These are typically structured as strategic partnerships with operators over a series of assets.
Each type of project investments carries its own sustainability risk profile.
| Type of investment | Key activities | Typical sustainability risks |
|---|---|---|
| Project/development | Writing and planning | Minimal risks in the actual development workDevelopment may have an impact on environmental and social risks in the upcoming production phase as development sets requirements on how production is organised |
| Project/production | Production Execution: filming, post-production, delivery | Environmental risks can add costs (reduced resource efficiency) or cause significant costs in case of causing material negative environmental impactHealth-related risks may lead to hiatuses or at worst abortion of the project, causing extra costsSocial-related issues such as harassment incidents may lead to delays or additional costs and at worst to reducing of project’s market value |
| Project/acquisition | Rights acquisition | Failures to comply with sustainability practices that have occurred before rights acquisition can cause reputational risks affecting sales income |
| Strategic partnership (covering several projects) | All of the above | Project-related risks as described aboveEnvironmental, social and governance risks depending on the partner’s strategy and operations |
| Corporate equity | Long-term ownership of a company | Environmental, social and governance risks depending on the company’s strategy and operations |
The risks affecting target asset may also indirectly carry adverse reputational risks for IPR.VC.
Sustainability factors
Sustainability factors are environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
Key environmental sustainability factors are in the areas of logistics, power supply, catering and waste management. Deciding the film shooting location is the most important decision affecting the environmental footprint of a film project.
Key social sustainability factors are within areas of workforce diversity, inclusivity, equality and avoidance of harassment; and working conditions and agreements of employees, including freelancers.
Key governance-related factors are anti-corruption and anti-bribery. Productions must not engage in any corruption or bribery towards public or private entities in any dealings, directly or indirectly, in respect of the project.
Failing to address these sustainability factors would lead to adverse sustainability impact in the projects financed.
Sustainability processes at IPR.VC
IPR.VC has created a tailored sustainability analysis framework, which applies to the subsectors of the media and entertainment industry it invests in. The framework is based on Invest Europe recommendations and is complemented with content industry specific questions.
There are three versions of the framework:
- Full version/projects, to be applied to production projects;
- Light version, to be applied to development and acquired projects; and
- Full version/companies, to be applied to company investments and strategic partners.
The table below summarises use of the different framework versions and reporting frequency.
| Type of investment | Key activities | Relative level of adverse sustainability impact risk of investment | ESG at investment phase | Reporting frequency |
|---|---|---|---|---|
| Project/development | Writing and planning | Low | Light framework | n/a |
| Project/production | Production Execution: filming, post-production, delivery | Medium | Full framework (project) | One-time reporting once project is ready |
| Project/acquisition | Rights acquisition | Low | Light framework | n/a |
| Strategic partnership (covering several projects) | All of the above | Medium | Full framework (company) | Annual reporting |
| Corporate equity | Long-term ownership of a company | High | Full framework (company) | Annual reporting until exit |
As a part of our investment process, we always assess and require that the potential investment target complies with this sustainability policy. Sustainability compliance will be assessed as a part of investment due diligence process. Commitment to the sustainability policy is also included in the representations and warranties provisions in the relevant agreements.
For project investments involving production we require final sustainability report after production is completed. For corporate equity investments and strategic partners, we require annual reporting according to the framework template.
We provide our fund investors a consolidated portfolio sustainability report once a year, in conjunction with Q1 reporting in April.
We have appointed a responsible board member, who is in charge for the sustainability policy and its implementation. We co-operate on an on-going basis with industry organizations to develop sustainability policies in the content industries.
IPR.VC is member of Finnish Venture Capital Association and complies to their code of conduct.