ESG and sustainability risks & principles regarding the investment process and investment related decision making in Voima Ventures
Voima Ventures takes ESG and sustainability risks into consideration at every stage of the investment process. Sustainability risks mean risks related to the environment, corporate social responsibility and governance, that can have adverse, material effects on the value of our investments.
In more detail, Voima Ventures divides the sustainability risks in the following categories:
Eg. Climate change, biodiversity, plastic use, pollution, energy efficiency etc.
Corporate social responsibility
Eg. Human rights, employee satisfaction, workplace diversity, workplace safety, work conditions etc.
Eg. Cybersecurity, business ethics, non existent board governance, management incentives, corruption, management ESG capabilities etc.
At the selection phase each partner and employee of Voima Ventures estimates the relevant ESG risks that a case might have before bringing the case to an internal deal flow meeting. Voima Ventures aims to select only companies with sustainable development, environmentally positive impact and sound business practices.
In the investment phase, potential ESG risks are mapped out and recorded into the investment memorandum. This includes the best possible estimation of the effect the risks might have on the value of the investment. If the case advances, further risk management and mitigative actions might be required in the investment offer or term sheet.
ESG and sustainability risks are tracked firstly by any members of the board of directors and board observers that Voima Ventures might place. ESG and sustainability risks and issues arising from these risks are tracked on the quarterly portfolio updates given by the portfolio companies. Furthermore, ESG and sustainability risks are always evaluated before the fund participates in follow-up rounds of financing into the portfolio companies.