Sustainability

Environmentally, socially, and economically sustainable business practices are a prerequisite for positive impact.

Sustainable, responsible business practices add value to investments and contribute to generating a positive impact. They play a key role in the risk management of each project and in ensuring that the “do no harm” principle is respected in our investments, as it helps to anticipate unexpected risks and impacts, enhances cooperation with stakeholders, and strengthens the social licence to operate.

Simultaneously, responsible and environmentally, socially, and economically sustainable business practices can improve the operational and financial performance of a company, enhance employee wellbeing and commitment, and bring a competitive advantage.

Impact creation in Finnfund’s investment process.

When financing private companies, financial profitability is key to creating an impact. If a company fails to keep its business running, it will not achieve the desired impact. Therefore, the viability of the business model is another prerequisite for Finnfund’s investment. Therefore, we have three criteria for every investment: positive impact, sustainability, and profitability. All these aspects also play an integral role in our investment process.

Most of our investee companies also have community development projects alongside their core business activities. This is particularly typical of businesses operating in remote rural areas where public services are weak.

What the company does – and how it works…

Economic sustainability – profitability, responsible tax
Environmental and social sustainability – responsible business practices and risk management
Corporate governance – how the company is managed
Know-your-customer – we want to know the people we work with

… generates posive impacts

Direct effects such as good jobs, training, better infrastructure, financial services, clean energy
Indirect effects such as local purchases of products and services in supply and distribution chains
Positive impact in wider society, such as taxes, poverty reduction, climate change mitigation and adaptation

Leverage and impact through cooperation

Together with like-minded investors, such as the other members of the Association of European Development Finance Institutions (EDFI), Finnfund builds leverage and maximises impact and sustainability in its investments.

Finnfund has endorsed the EDFI Principles for Responsible Financing of Sustainable Development and the Operating Principles for Impact Management (OPIM). We have aligned our practices and investee requirements with the jointly agreed harmonised minimum environmental and social requirements applicable to EDFI co-investments, including the Exclusion list.