Policies on the Integration of Sustainability Risks into the Investment Decision-Making Process
The information below regarding the policies of IK Investment Partners AIFM (together with IK Investment Partners Limited and their principal group companies, [“IK”]) on the integration of “sustainability risks” in its investment decision-making process is provided in accordance with Article 3(1) of the EU Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088) (“SFDR”).
Responsible investment (“RI”) practices are integral to IK’s business philosophy and are embedded throughout the investment lifecycle to contribute to the achievement of our funds’ financial performance goals and in line with applicable fiduciary duties and our investors’ RI expectations.
The purpose of the IK RI Policy (“Policy”) is to outline IK’s approach to responsible investing throughout the investment process and is applicable to all IK Funds as well as to IK, with respect to the management of and advice provided to those funds. However, certain steps in the investment process may be modified or applied differently across strategies, commensurate with the Firm’s level of influence, particularly in the context of minority investments and co-investments.
In summary, our investment approach aims to seamlessly integrate sustainability-related risks and opportunities throughout the investment lifecycle, including through rigorous assessments of material sustainability-related matters and active ownership strategies. IK considers a sustainability matter to be material if it has, or has the potential to have, a significant impact on a portfolio company’s ability to create or preserve financial value. We follow the process set out below to identify and manage sustainability risks.
• Investment Sourcing & Selection
o All investments must align with the IK RI Policy and any additional fund-specific commitments outlined in the governing legal documentation. This is considered in pre-investment screening and due diligence, with material findings incorporated into Investment Committee (“IC”) materials.
o IK’s investment professionals, with the support of the IK RI Team, will assess material sustainability-related risks using internal and (where applicable) external tools, frameworks, research and analysis. IK may also instruct external specialists to perform enhanced sustainability due diligence on potential targets.
• IC Memorandum & Decision-Making
o The IC Memorandum includes an overview of material sustainability-related risks and opportunities and key screening and due diligence findings, including an overview of alignment with any fund-specific sustainability-related requirements.
• Active Ownership and Portfolio Monitoring
o We encourage our portfolio companies to periodically report sustainability key performance indicators and we perform fund level sustainability risk analysis. IK’s RI Team is responsible for aggregating and analysing the data provided by PCs. The collected data may be used to enable IK and our funds to conduct risk analysis, meet regulatory reporting requirements and fulfil data requests received from investors.
Version 3
Date of publication: 10 March 2021 (v1)
Date of updates: 19 July 2024 (v2), 21 May 2025 (v3)
