Our ESG objectives & key figures

We believe that incorporating Environmental, Social and Governance (ESG) considerations into our investment decisions and portfolio management is key to true value creation and the sustainable success of our portfolio companies and society. We set four objectives for our portfolio companies:

ESG maturity improvement

Companies will have different levels of ESG performance when they enter our portfolio. We assess ESG maturity by rating our companies on a five-point ESG maturity scale. Each company needs to improve at least one step on the ESG maturity scale with a minimum performance of “committed” while in our portfolio.

Environmental

All our companies measure their carbon emissions on an annual basis; set Paris Agreement aligned carbon reduction targets and develop a carbon reduction plan to achieve these targets. All our companies are also required to acquire an amount of nature-based carbon credits in line with their annual measured emissions. This provides management with a financial incentive to reduce emissions in line with carbon reduction targets. We encourage our companies to make external carbon reduction commitments by setting Net Zero, Science Based Targets.

Social

Our companies are required to perform above sector average on selected social metrics.

Governance

We promote good governance at our portfolio companies and ensure this through active ownership, an involved and well-balanced management team, efficient processes, and risk management.

How we support our companies

At Nordian, we believe that objectives become more attainable when we provide tangible support to our companies. We developed three plug-and-play ESG programs to support our companies:

CO₂ Reduction Program

The CO₂ Reduction Program has enabled portfolio companies to measure and structurally reduce their carbon footprint since 2018. The program is structured around three steps:

• Measure — annual measurement of Scope 1, 2 and selected Scope 3 greenhouse gas emissions, forming the basis for target-setting and progress tracking;

• Reduce — development of a carbon reduction action plan with Paris-aligned targets, prioritizing direct emission reductions across all scopes;

• Incentivize — companies are required to annually procure verified mitigation outcomes equal in volume to their measured emissions. This creates a direct financial incentive to reduce their footprint, while contributing to global climate action throughout their transition to net zero. These contributions are reported separately and do not reduce the companies' reported emissions.

Young Talents Program

The Nordian Young Talent program is a portfolio wide traineeship that helps our companies improve and retain young talents. The one-year program consists of several training sessions focused on personal development and leadership skills.

World Class Workforce program

The World Class Workforce program is a plug-and-play employee engagement survey with additional modular support options. The program measures employee engagement and supports management in the development and implementation of improvement projects.

How we integrate ESG in all steps of the investment process

1. Pre-investment

Screening

During the first stage of selection of targets we assess ESG risks and opportunities. We screen potential targets for compliance with our exclusion policy and use our proprietary ESG screener to map ESG industry risks, ESG company performance and principle adverse impacts. We select portfolio companies that are conscious of the relevance of ESG factors to their business performance and committed to actively improve.

Due Diligence

We systematically perform ESG due diligence on all potential acquisitions with the support of external consultants.

2. Value creation

100-day plan

During the first 100 days of our partnership, we develop an ESG strategy and action plan together with management.

Holding period

We actively monitor action plan implementation and execution through quarterly ESG meetings and annual ESG external and internal reporting. We have developed three portfolio wide programs to support our companies in improving their ESG performance.

3. Exit

We aim to embed ESG at our portfolio companies to such an extent that they will continue their ESG efforts after we exit. If considered relevant, we provide potential new shareholders with ESG vendor due diligence.

Commitments to International Initiatives

Nordian has committed to international standards to foster sustainable investment and positively contribute to sustainability goals and development of our society. We are committed to the following initiatives and standards.

Documents

Responsible investment policy

SFDR entity level disclosures

Remuneration Policy

PAI Statement

SFDR pre-contractual and product disclosures

Pre-contractual and product level disclosures are available on our investor portal.