Alternative Investments

At HCP, CSR & ESG Two Sides Of The Same Coin

Helsinki Capital Partners

Stockholm (NordSIP) – Finnish global asset management firm Helsinki Capital Partners (HCP) is a company with a vision on a mission. With three funds under management – HCP Black, a multi-strategy fund, HCP Focus, a concentrated global long-only equity fund, and HCP Quant, a long-only equity fund focusing on SMEs (its youngest, incepted in 2014), the firm has distinguished itself as a trailblazer committed to both Corporate Social Responsibility (CSR) and ESG. The Helsinki-based firm is the purveyor of number of unique sustainability initiatives, programmed “into the DNA of company culture from the outset” since inception a decade ago this year, which make it stand out from the rest of the Nordic asset management industry in its bid to lead the way towards a more sustainable future.

Indeed, HCP this month became the first Finnish company to be distinguished by the B Corp Certification, a measure awarded to enterprises meeting the most rigorous standards of social and environmental performance. Certified B Corporations, which are are issued by B Lab, a non-profit organization that serves a global movement to redefine the meaning of success in business, are designed to encourage companies to compete not only to be among the best in the world, but to compete for the world’s best. Certifications are awarded through a rigorous company evaluation that determine qualifying measures such as strong CSR company cultures and their expansion to encompass stakeholder interest. At present, there are over 2,000 Certified B Corporations from over 130 industries and 50 countries.

As such, HCP meets the B Corp profile to perfection. HCP’s mission statement from its inception has been to be an honest asset manager with a profound commitment to transparency across all levels of operation. This includes openly telling customers how much they pay both directly and indirectly for the services they receive, an effect of its atypical fee-only policy, and fostering cooperation with stakeholders to determine shared values with HCP employees. “Looking at it from another perspective than just the balance sheet lends a much broader perspective,” HCP CEO Tommi Kemppainen told NordSIP in an exclusive interview, underscoring his belief that developing the tools with which HCP serves a broader social purpose can only be a sound strategy that ultimately benefits both society and the bottom line. It is time to stop thinking of such solidarity “as a hippie impulse, but rather as common sense,” Mr Kemppainen affirmed. “We operate in an industry that many think is rotten, so this isn’t the easiest arena in which to gain people’s trust.” Through the B Corp status, he says, “we think that we have even more tools to continue redefining the financial sector and the business world.”

The B Corp Profile certification comes at an optimal time for the asset manager. With the EU Markets in Financial Instruments Directive II (MiFID II), the purpose of which is to make financing more transparent, set for launch in January 2018 in the broader European context, and an increasingly pronounced drive towards sustainable investment immanent to the Nordic alternative investments industry itself, HCP’s niche of transparency and social engagement means it has been at the vanguard of innovation as the reality of change in the industry moves into focus – as opposed to following the leads of others. Long an adherent to the Global Reporting Initiative (GRI), according to which guidelines HCP prepares its yearly CSR Audit reports, Mr Kemppainen expects a perfect storm of the MiFID II, GRI and B Corp Certification standards to determine the norms of sustainable investment across the industry in coming years, creating “a more formal way in which we are useful to society,” he says. True to form, he explains, it was the initiative of a younger intern at HCP to encourage launching the firm’s process of qualification for the B Corp certification in the first place.

Because, as Mr Kemppainen suggests, the next generation holds the key as to whether broader measures of sustainability can be implemented efficiently and quickly enough to prevent, among other things, irreversible climate change. Over a quarter of investors under the age of 45 have allocated at least 25% of their investments in socially responsible companies, according to a study by the Spectrem group, and at HCP, the thinking is that it is not enough simply to preach the virtues of sustainable investing or to allocate a percentage to socially responsible companies in order to meet PRI or other criteria. Instead, HCP lives and breathes sustainability within its corporate culture such that it is an integrated part of every decision the company makes. For example, the asset management firm employs a cultural centre for its HQ, and a common sight in Helsinki and around the country may be HCP’s mobile office tour bus on its way to a cultural event of social significance.

But HCP’s efforts go beyond mere hipster window dressing. The asset manager has taken the unprecedented step of incorporating artists (part of its #HCPSPIRIT initiative) and athletes among its stakeholders, alongside private investors and institutions. Collaboration with artists contributes to defining the socially responsible relationship of the company to its social surroundings; in the case of athletes, HCP takes into account aspects specific to their career and season. Collaborative cultural initiatives such as these, the company believes, contribute in turn to balancing responsible investment with business stability and sound strategy. Combined with the fee-only service returning all commissions to its private investors and cooperation with efficient institutions that can serve as financiers and coordinators of long-term cultural, social and humanitarian projects, these initiatives permeated with a realist idealism are one side of how HCP views its role in wider society and how it integrates stakeholder value into company culture, giving it a competitive advantage in this field.

The other side is the standard of impartiality and equanimity that the firm demonstrates towards its own employees. Fully 86% of HCP employees own a share of the company, with 35% of the company owned by full-time employees excluding founders. In addition, management does its utmost to minimise differences between the highest and lowest paid employees, by, for example, raising salaries by the same amount for all employees simultaneously. It is clear, then, that at HCP, CSR and sustainable investment are two sides of the same coin, neither of which can reach maximum impact without the other. This is exemplified on its recently re-launched website, where the thread interweaving the two with opportunities for higher returns and smart strategy sews together the HCP vision.

With this wealth of initiative, it is not hard to imagine HCP meeting its objective of playing a central role in changing prevailing attitudes and norms, first in Finland and then on a broader scale. “For every EUR 990,000, HCP spent EUR 100,000 on investments in cultural production. Imagine the scale of possible change if big Nordic banks were to allocate the same proportion to culture and sustainability,” Mr Kemppainen exclaims. Imagine, indeed.

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  1. Pingback: The Week in Green (September 16th edition) | NordSip

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