From Complience to Impact: esgResilience Drives Sustainable Business Development in Korona Invest’s Investment Portfolio
Korona Invest is a Finnish private equity investor specializing in small and medium-sized growth companies. It helps its portfolio companies achieve their growth potential through a strategic and long-term approach. Impact and sustainability assessment has been ingrained in the company’s DNA since the beginning as part of the investment decision-making process.
Financial sector regulations and reporting requirements have tightened significantly with the Paris Agreement and the EU’s climate targets. Korona Invest reports annually on the principal adverse impacts (PAI) indicators under the Sustainable Finance Disclosure Requirements (SFDR) as part of its sustainability work. However, the Korona team did not want to focus solely on collecting ESG data but aimed to support their portfolio companies in developing sustainable business practices. In the fall of 2023, Korona conducted a competitive bidding process to harmonize data collection and ensure quality, and analytical support. esgResilience Oy was selected as the reporting partner.
The esgResilience service enabled Korona Invest’s portfolio companies to easily and quickly map their carbon footprint, i.e. emissions and other key ESG factors. The analytics provided by the service helped companies identify areas for improvement, set goals, enhance collaboration between owners and management, and communicate their responsibility actions to stakeholders.
“Consistency in reporting requires close cooperation,” emphasizes Anni Salo, Korona Invest’s Sustainability and Communications Manager. “This is necessary to ensure that information is as comparable, consistent, and useful as possible for our fund investors, regulatory authorities, and other stakeholders, as well as for the companies themselves to improve decision-making, performance, and responsibility. Along the way, it was great to see that the esgResilience team was agile in responding to the needs that arose from our portfolio companies, and we received comprehensive ESG analytics reports as well as sustainability reports tailored to different stakeholder needs.”
Herkkumaa – Sustainable Food Production
Herkkumaa Oy is a respected domestic food company known for its innovative products, where attention to corporate responsibility and sustainability has long been a priority. The company is committed to the international Science Based Targets initiative, which aims to support companies in setting and achieving emission reduction targets in line with the Paris Climate Agreement.
“As a long-standing player and manufacturer in the food industry, we at Herkkumaa have been familiar with various aspects of operational systems for years. Our food safety management system certification has been in place for nearly ten years, first in the form of FSSC 22000 and then BRC.
Product safety and quality have increasingly been accompanied by requirements from stakeholders, such as customers and suppliers, to consider and verify ESG aspects. We have made sustained efforts in areas such as environmental considerations and building sustainable supplier relationships but but we identified areas for improvement in communicating these issues.
The esgResilience service enabled us to identify, analyze and report on all relevant ESG factors. The reporting platform was easy to use, and the system’s guidance supported us as first-timers in responding. The esgResilience team was available to assist us whenever we had questions, and we also reviewed the final results together with ESG experts.
Now, with our first ESG analytics report and a Sustainability Report for stakeholder communication in hand, we have additional tools and fact-based documentation in our toolkit for the continuous improvement of our operations and stakeholder communication. We are extremely proud of our achievement,” says Sari Paavola, Factory Manager at Herkkumaa, sharing her experiences.
Korona Invest’s team was provided with a comprehensive portfolio analysis and summary of the ESG factors of their portfolio companies, highlighting each company’s strengths and areas for development. Additionally, they received a ready-made compilation of data and metrics required for SFDR PAI reporting.
“esgResilience service provided excellent visibility into the sustainability of our portfolio companies businesses. This facilitates our managers’ work in developing best ESG practices,” notes Jaakko Isotalo, Investment Director at Korona Invest.
Matti Kangas (pictured), Investment Director at Korona Invest and Chairman of the Board of Herkumaa, is pleased with the development of his portfolio company Herkkumaa Oy.
A More Holistic View of Sustainability
User feedback from Korona Invest’s portfolio companies indicates that the esgResilience service is user-friendly, and responding to industry-specific questions was quick and easy. Answering the questionnaires and reviewing the reports increased the understanding of sustainability factors. A comprehensive sustainability profile helps companies to make informed decisions to improve their business and communicate their sustainability performance.
The cooperation between Korona Invest and esgResilience helped to enhance the sustainability expertise of portfolio companies across different industries and development stages. Consistent ESG reporting provided Korona Invest’s investment directors with, for the first time, a comprehensive view of the sustainability profile of their portfolio companies to support sustainable business development.
“Our collaboration gave us a great opportunity to get to know Korona Invest IV Fund portfolio companies more closely and to guide them in identifying and analysing ESG factors relevant for sustainable business development. We found the cooperation very valuable, as in addition to the engaging dialogue with both the portfolio companies and the Korona Invest team, we received valuable user feedback to improve the content, guidelines and reporting of the service. This is a good starting point for the next reporting cycle.” says Marja Honkaniemi from the esgResilience team.
