For sustainable value creation
Our starting-point is that the goals of sustainability, growth and profitability are compatible and mutually supportive. The Government’s mission for Fouriertransform identifies sustainability as a success factor on the future markets of Swedish industry.
The climate question is one of the greatest challenges of our times, and will have a fundamental impact on the global economy and the potential for sustainable value creation. Other global trends, like population growth and water shortages, will also have a direct or indirect impact. Innovation and forward-looking business development will enable businesses to be part of the solution.
Our strategy of investing in companies with unique and commercially viable offerings is usually synonymous with a product or production method being more efficient and climate-adapted than predecessors. Several of the companies we have invested in provide solutions with directly positive environmental qualities, primarily for vehicles. By addressing the world’s growing need for products and solutions to save resources and alleviate adverse environment and climate impacts, Fouriertransform can contribute to the necessary realignment, while simultaneously sharpening the competitiveness of Swedish industry..
Focusing on value creation
The value creation process is the engine of Fouriertransform, and also the primary focus of the company’s sustainability strategy. Creating a sustainable business from a sustainable business concept and technology requires operations that are equipped for growth in a globalized and changeable world. A world where environmental, social and business ethical challenges await, but also competitive advantages for those companies capable of managing them. Sometimes, there are clear customer standards, such as in the automotive industry for example, which are decisive for the company to be considered as a supplier.
As an owner, we endeavor for portfolio companies to factor material sustainability questions into business models, decisions and plans at an early stage. We are convinced that this increases the company’s profitability and value over time. The day a company is floated on the stock market or becomes an acquisition target, having a rigorous sustainability process in place is a strength. We are also witnessing how the standards applying to business transparency are increasing generally, not least within the EU, with its new directive on sustainability reporting, which comes into effect in 2016.
Part of our investment process
A more systematic approach to sustainable value creation within Fouriertransform began in 2014, and continued in 2015. Due to the fact that substantial uncertainty regarding Fouriertransform’s future persisted in the year, implementation of a sustainability strategy slowed somewhat, although its direction is unchanged.
We have developed a clear working method to integrate sustainability as an important dimension of our investment process and ownership governance. In the year, we focused primarily on adapting tools and methodologies to the various stages of the investment process, and creating effective divisions of responsibility. Giving sustainability aspects their place in the day-to-day business of investors and owners should be natural and uncomplicated.
Sustainability should be part of the process from day one when we take an interest in a new investment. Our Investment Directors conduct a summary sustainability review of the company in question in the evaluation and analysis phase. Its purpose is to identify material sustainability aspects in the company’s value chain, and questions that may be relevant as the company grows and develops. This may be about operations being dependent on material that risks becoming a shortage in the future, or that is controversial from an environmental perspective. One potential risk facing several of our companies is the incidence of conflict minerals in products. A company may have decided to locate its manufacturing in a low-cost country, where there is a risk of unsatisfactory working conditions. Another risk factor appears when a company wants to enter markets where bribery and corruption are common. The analysis process should capture these issues. The conclusions are presented to Fouriertransform’s Board of Directors for their investment decision, and remain as part of the due diligence process that precedes every investment.
After the investment, Fouriertransform operates on each company’s board to develop its companies in the sustainability segment. Fouriertransform’s board representative is responsible for bringing significant issues to the attention of other board members, and for identifying the need for action. Because Fouriertransform only holds minority shareholdings in companies, gaining the acceptance of other partners and taking these questions forward together is decisive.
Owner standards and policies
In its owner guidelines, the Swedish Government has set clear standards for state-owned companies to act as role models in terms of environmental and social responsibility.
Since 2007, all state-owned companies must publish an annual third-party reviewed sustainability report based on the guidelines of the Global Reporting Initiative (GRI). Through the Ministry of Finance, the Government announced a requirement for the boards of state-owned companies to present the goals of their sustainability work in 2012. The Board of Directors decided Fouriertransform’s sustainability goals in 2013. The Ministry follows up on performance management regularly.
Since inception in 2009, Fouriertransform has applied a Code of Conduct and a Sustainability Policy approved by the Board of Directors. The Code of Conduct and Sustainability Policy include and outline business ethics, corporate social responsibility, responsibilities to employees, environmental responsibility, communication with internal and external stakeholders, and compliance with laws and guidelines. The Code of Conduct has been distributed to all employees. Fouriertransform also has an Ownership Policy and an Equality and Diversity Policy. All of the policies have been uploaded to Fouriertransform’s website: www.fouriertransform.se
Fouriertransform as an employer
Working at Fouriertransform brings freedom with responsibility. Every employee has an influence on his or her job situation, and Fouriertransform’s ambition is to be an accommodating, stimulating and responsible employer. Employee appraisal interviews are an opportunity for our people to put their opinions forward, manage their career and competence development, and influence the working environment. Fouriertransform staff have appraisal interviews at least once a year, where their performance, satisfaction and progress are evaluated. Fouriertransform is a knowledge-intensive company, where every employee embodies unique competences and has a network that is important to Fouriertransform’s business.