Responsible Investments Approach

The Novo Holdings way
As a sizeable investor with a global footprint, we take our responsibility as an investor seriously. We integrate environmental, social and governance (ESG) aspects as well as societal impact into our investment processes, which is further underpinned by our commitment to the UN-supported Principles for Responsible Investment (UNPRI) and anchored in Novo Holdings’ Responsible Investments Policy.

We invest into the full spectrum of companies from start-ups to established businesses, both within and outside of the life sciences sectors, and across multiple asset classes. We continuously work to improve our approach to meaningfully capture ESG-related risks and opportunities for sustainable value creation throughout the diversified spectrum of investments. Our investment teams are experts both in their sectors and in the companies in which we invest. As a result, they are committed to spearheading our ESG-integration and engagement efforts by ensuring that risks are well managed and that ESG aspects become value creation drivers with the aim of futureproofing the businesses we are investing in.

Pre-investment phase
To assess the long-term sustainable value creation and to mitigate risks affiliated with potential investments, we analyse the societal impact potential of our investments as well as material ESG-related risks during our due diligence process. We favour investments with direct, positive societal impact through products and services and companies where ESG-related risks are embedded in robust policies, management, governance and transparency. As part of due diligence, we screen potential investments according to widely accepted international standards, such as the UN Global Compact, as well as adhering to our exclusion principles to conclude on the eligibility of the company for potential investment. We exclude investments in certain industries, such as weapons in breach of UN treaties or conventions, tobacco, adult entertainment, gambling, predatory lending, fossil fuels and palm oil.

Ownership phase
We work closely with our portfolio companies, as our investment comes with an engaged and supportive approach for companies, its board and management to realise their full potential. We review on an ongoing basis the ESG practices of our investments, and we view our board positions and dialogue with management as critical means of encouraging companies’ own societal impact and ESG-related initiatives with the aim to futureproof businesses. At a minimum, we aim to engage through Annual General Meetings, exercising our voting rights.

Exit phase
As a responsible investor, Novo Holdings works towards enhancing and adding transparency on our investments’ ESG and societal impact profile and progress when exiting a company. This enables potential investors to assess relevant information related to a company’s potential ESG risks and opportunities in the process.