Sustainability is an integrated part of our business model, from the sourcing and assessment of new business opportunities to the ongoing development of our companies and the re-allocation of capital into new opportunities. Read more under each pillar of our business model below.
Our Business Model
Kinnevik applies a holistic view on value creation. We are long term business builder that provide hands-on operational support to our companies, as well as a high-level strategic perspective
Kinnevik has a well-defined process to source and assess potential new investments involving the Management Team, Investment Team and the Sustainability Function. Kinnevik’s Board of Directors is also involved in the investment process depending on the size of the investment and if the investment goes beyond our strategy execution plan.
In pipeline discussion meetings, the team takes a broader view of our target sectors and maps the opportunities in each sector. A small selection of companies is brought to stage one of the Executive Investment Committee (the “EIC”) and evaluated based on Kinnevik’s investment criteria. Kinnevik’s investment team only brings companies that fit our investment ethos to pipeline discussion meetings and to the EIC.
The most promising opportunities move on to stage two of the EIC. A key evaluation aspect is the quality of the team and the passion, drive and values of the founders. During this stage we also conduct thorough due diligence on the companies across key functions including among others, financial, legal, commercial and sustainability.
In the sustainability due diligence, companies are evaluated based on their performance and structures in relation to economic, social and environmental aspects, and the key risks and opportunities are identified. We use the Kinnevik Standards as a basis for the due diligence. It includes, among other aspects, human rights screening and a corruption risk assessment. In instances where potential investments do not adhere to relevant standards or are not considered to be likely to undertake the required improvements, Kinnevik refrains from proceeding with the investment.
When a portfolio company is seeking additional funding, they are evaluated again in stage two of the EIC and a key condition for follow-on investments is that the company has shown clear sustainability progress, including D&I, in accordance with their roadmap. Kinnevik’s Board of Directors oversees and conducts an annual evaluation of the EIC process.
Investing in the best companies is critical, but how we contribute to the development of our companies after investment is key to creating value. We develop a plan for each company depending on each business’ characteristics and needs. We can provide hands-on operational support as well as high-level strategic guidance. We also provide access to the Our Group Platform, a global network of companies, advisors and experts.
We conduct bi-annual investment reviews with all our companies in which our investment team discusses the companies’ development across a number of parameters, including sustainability aspects. In addition, Kinnevik’s Sustainability Function conducts yearly assessments of all portfolio companies, including implementation of the roadmap, and sets targets and priorities for the coming year.
Kinnevik systematically re-allocates capital from companies where we believe our tenure as owner is over into new venture and growth companies. With a distribution of companies along the growth and maturity curve, we benefit from a unique system of companies spanning from venture and growth businesses that are not accessible on the public markets to more mature listed companies providing stability to the portfolio.
We believe that companies that operate in a responsible and ethical manner will be able to offer better products and services that meet the demands of their customers, as well as recruit the best employees, thereby outperforming their competitors in the long run.
The value we create for our stakeholders
To create value for our companies as well as other key stakeholder groups, we draw on various types of resources: financial, intellectual, human, social and natural resources.
Shareholders and the Financial Community - Long-term economic and sustainability performance
Employees - Strong corporate culture, improved skills and knowledge, equal opportunities, compensation, diversity and work-life balance
Portfolio Companies and Entrepreneurs - Economic and sustainability performance, financial and operational support, network and knowledge sharing. Through our portfolio companies we provide consumers with more and better choice
Society and Authorities - Well-governed companies that contribute positively to society. Good corporate citizenship and improved policy landscape
Read more in the Annual Report 2019: