Updated February 2023
At Norwest, we aim to incorporate environmental, social and governance (ESG) and diversity, equity and inclusion (DEI) considerations into our decision-making and portfolio services. ESG is a framework for considering relevant focus areas that contribute to financial performance and sustainable growth. DEI is one of the highly relevant focus areas we identified to focus on internally and with our portfolio companies. We believe optimizing ESG and DEI performance can drive value creation, while ignoring ESG and DEI performance exposes a company to material risks. This has been reflected in how we do business for decades.
We take pride in helping our companies enhance their value and long-term sustainability. We recognize the value of strong ESG and DEI consideration in our internal operations as a firm and aim to hold ourselves to the same standard as our portfolio companies.
Our ESG and DEI policy defines our approach to considering ESG value creation opportunities and risks, and our focus on DEI efforts.
We aim to consider relevant ESG issues in our due diligence and in engaging with portfolio investments. DEI is one of the ESG issues we are focused on as a firm, and for our portfolio companies.
This policy is intended to help us:
Norwest follows a definition of ESG adapted from the Venture ESG initiative.
Our commitment to the concepts of diversity, inclusion and equity, are consistent, though the acronyms may change over time.
We seek to take a responsible approach to investment. We aim to recognize the potential impact of portfolio companies on the environment, workers, communities and society, as well as the potential impacts of ESG issues on the companies the firm invests in.
Building on Norwest’s values and firm culture, and representing a formalization of our long-running commitment to responsible investing, we are currently focusing on three areas related to ESG.
We aim to screen companies and exclude from investment any company that we are reasonably able to determine to be in direct and knowing violation of UN Global Compact Principles, and inquire about ESG risks and opportunities during the due diligence process. Our risk screening and due diligence process will enable us to flag risks, make better investment decisions, and indicate what forms of ESG portfolio services may be most valuable to the investee over time. We will also inquire during the due diligence process whether the target is willing to engage on ESG topics.
We hope companies we invest in will share our commitment to ESG integration. We will seek to include an ESG clause in term sheets that expresses our mutual intent to improve the company’s ESG performance over time.
A central focus of our approach includes engaging with and educating our portfolio companies on ESG and DEI topics, and relevant risks and opportunities. Once invested in, we will aim to support our companies in developing best practices related to ESG and DEI performance.
At Norwest, an intentional commitment to diversity, equity, and inclusion is foundational to our team’s work. This belief is core to how we have operated for decades. Some of our DEI initiatives include:
Norwest and its affiliated investment funds will make reasonable efforts to encourage all portfolio companies to consider relevant ESG and DEI-related principles. In certain investments, factors such as our ownership stake or influence may affect our ability to assess, set or monitor ESG and DEI-related performance goals.
We and our affiliated investment funds will also apply the policy to our internal operations, based on the belief that effective ESG and DEI management begins with diverse and inclusive governance and team environments.
Norwest has developed an “ESG and DEI Steering Committee” composed of internal team members representing key functions at the firm, and ESG/DEI advisors. The Steering Committee is responsible for the implementation of this policy.
Our investment team, with the assistance of the Steering Committee, is responsible for ensuring the consideration of ESG issues is integrated into investment decisions and management (in collaboration with the legal team), and for ensuring we implement initiatives related to our focus on DEI.
The Steering Committee is responsible for the following:
This policy has been approved by the Managing General Partners and will be reviewed and updated annually.