Turning Ideas into Action: First Steps in Driving DEI in Private Equity and Venture Capital Together with Inklusiiv
Despite the progress made in recent years, there is still a stark lack of diversity in the private equity and venture capital industry. Recognising the need for concrete action, we partnered up with Inklusiiv to develop a diversity, equity, and inclusion (DEI) guideline for private equity and venture capital investors. While the guideline is not intended to be binding, it offers inspiration and tangible steps investors can take across three different areas – internal matters, deal flow, and portfolio companies.
Why Was the Guideline Made?
Like many good ideas, the process towards creating a DEI Guideline was initiated in response to our members’ requests for support in implementing DEI initiatives. There has been a lot of discussion in the private equity and venture capital (PE & VC) industry in Finland about the importance of DEI, but no collective, concrete steps had yet been taken. Our members specifically requested assistance in turning ideas and all this motivation into real action.
There are several reasons to promote DEI in the PE & VC industry. Firstly, due to Finland’s population structure, there is an impending shortage of skilled labour that will only worsen in the coming years. Therefore, as an industry, we must ensure that we seek skills from the widest possible pool of individuals to secure a competent workforce for the future – both for PE & VC firms and portfolio companies. No talent slips through our fingers when different people can see themselves working in the industry. DEI is also essential for performance and growth. Research has shown that diverse teams, where individuals feel comfortable expressing their opinions, foster innovation, enhance problem-solving abilities, boost motivation, and exhibit resilience to risks. A psychologically safe environment helps individuals and teams perform at their best while failing to prioritise DEI leads to growth limitations regarding markets but also with respect to the workforce. Thirdly, the PE & VC industry has acted as a pioneer in many issues, such as accelerating the green transition, and taking a leading role in DEI is crucial for the industry’s reputation in addition to ethical considerations.
“Our wish, as an association, is that DEI considerations would be widely applied in the industry and differing backgrounds, mindsets and opinions would be appreciated and valued. This is an important building block for ensuring sustainable growth in the future”, says Suvi Collin, FVCA’s Head of Legal & ESG.
Making of the Guideline
In March 2023, we organised a keynote and a workshop for our ESG Committee members in collaboration with Inklusiiv to kickstart the work on the guideline. As the leading organisation in creating and sharing knowledge about DEI, Inklusiiv was a natural partner in the project, and we were excited to learn from their vast experience. The three-hour workshop, facilitated by Inklusiiv’s professionals, served as a platform for brainstorming and sharing best practices among our ESG Committee members. The workshop’s main purpose was to come up with concrete actions that professionals in the industry can implement in their own DEI work – to bring the conversation down from high-level discussion on the importance of DEI to tangible and graspable activities. Together, with the help of Inklusiiv’s knowledge, we were able to identify the actions proposed in the guideline.
“Advancing DEI is about increasing understanding and enabling dialogue on these themes, but it is also about taking concrete action. The workshop provided a space for both, and it was great to see the level of commitment and resolve the workshop participants had towards driving real, tangible change in the state of diversity, equity and inclusion in the VC/PE industry in Finland”, comments Maria Ristimäki, Research & Insights Manager at Inklusiiv.
Content of the Guideline
After the workshop, we gathered and refined the ideas for the final FVCA DEI Guideline.
The guideline itself is divided into sections. The first section explains what DEI means, while the second section highlights why DEI is crucial for the PE&VC industry. Following these sections is a dedicated portion that delves into unconscious bias, which is highly significant in understanding and promoting DEI.
The last section of the guideline includes the juicy part – the action steps. During the workshop, we outlined key actions to be taken across three crucial areas: internal matters, deal flow, and portfolio companies. Chopping action into these three categories helps with recognising the most important aspects for your operations while understanding the big picture. Finally, there is a summary table of the actions for those reading in a hurry and some additional material for those looking to get more inspiration and help.
The First Steps in Advancing DEI Have Been Taken – More is Yet to Come
Inspired by the entire process, we co-organised an event with Merilampi Attorneys Ltd, where the finalised DEI Guideline was presented to the participants. In addition to the launch, the event featured a keynote by Inklusiiv and a panel discussion where investors shared their thoughts on the topic. The event served as a platform for collective learning and further emphasised the importance of DEI in our industry’s future success.
We would like to thank Inklusiiv for their invaluable partnership as well as our ESG Committee members who participated in the work. This collaboration is one concrete step toward advancing DEI in the private equity and venture capital industry, and while it is a significant achievement, we recognise that there is more work to be done. We remain committed and will continue to explore new avenues for promoting DEI within the industry. By embracing DEI, we can drive sustainable growth, unlock untapped potential, and shape a vibrant and equitable future for the industry in Finland.
Find the DEI Guideline here and get inspired!
More information:
Suvi Collin, Head of Legal & ESG
050 560 3532
suvi.collin@paaomasijoittajat.fi
