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We, Dutch Founders Fund (“DFF”), like to challenge conventional wisdom, in business and in ESG
Resources in this world are limited, and unfairly distributed. Society needs to become more efficient and fair.
We believe that disruptive tech companies are an important enabler of sustainability, and we want to help by providing our knowledge, network, coaching, and capital.
We endeavour to build (and contribute to) a community which helps founders who are building sustainable companies, and those tackling big societal and environmental problems.
The world needs out-of-the-box thinking and disruptive business models to solve ESG issues that humankind faces. That’s where we come in - we back those businesses.
These terms have become increasingly important in the venture capital ecosystem, but we feel that they have always been part of DFF’s toolkit. Our objectives when it comes to ESG include the following:
Below, we clarify what Responsible Investment, Sustainability, and Impact mean to us and for the way we do business.
To us, responsible investment means active ownership of companies in our portfolio with respect to ESG matters, and integration of ESG into our investment decision-making and investment management approaches.
We believe that investors have an important role to play in the development and governance of a start-up, particularly in steering a company’s adherence to ESG principles. DFF can exercise active ownership in two ways:
In our capacity as active shareholders, we will promote ESG considerations when relevant to the company strategy and business activities, or where the portfolio company or other stakeholders request it.
We take into account environmental, social and governance factors in the selection, monitoring and management of our portfolio companies.
We perform an ESG analysis pre-investment as part of our due diligence process, whereby we identify and consider ESG risks and opportunities. We will also determine any improvement areas or risk mitigation strategies.
Our approach to ESG integration in portfolio management (post-investment) is also tailored to each company’s needs. We challenge management to think about specific ESG issues and determine to what extent they can impact their business, in a positive or negative way. In certain situations, we will ask management to develop a policy, or “perspective” on a certain ESG issue.
The ESG topics that are most often material to our portfolio companies include, but are not limited to:
Also refer to the SFDR Statement for further detail on integration of sustainability risks in our investment decision-making and management process.
We encourage the use of Govin, a company which forms part of our portfolio, by all our portfolio companies. Govin offers a tool that allows companies to obtain and provide clarity on corporate governance through a simple dashboard.
Exclusions: We can not yet determine a priori which companies or industries we will not invest in due to moral or ethical considerations; in our experience this is mainly situation-specific. Therefore, DFF does not maintain an exclusion list or divestment policy. In our investment process, we clearly document any decisions to not pursue an investment due to moral or ethical reasons if it would otherwise be attractive from a financial point of view. These cases can be shared with stakeholders upon request.
As a Venture Capital fund, we can make the most difference through our portfolio companies. That said, we also take responsibility for the ESG issues we can control directly, within our small organisation.
Our environmental footprint is already relatively small. We use office space in one of the most energy efficient buildings in Amsterdam; our international travel is limited, and most travel in the Netherlands is by bicycle or public transport.
We aim for our team to be a reflection of Dutch society in terms of gender, ethnic and socio-cultural make-up. We also value cognitive diversity, or diversity of thought, which means bringing together a range of different styles of thinking among members of our team (relevant factors here include different perspectives, abilities, knowledge, attitudes, information styles, and demographic characteristics). We believe that cognitive diversity, in particular, can contribute to better decision-making and business outcomes.
Good governance, to DFF, means putting in place the right people, processes and practices that will produce the investment results that meet the needs of our stakeholders. Furthermore, we recognize and uphold the following principles of good governance: transparency; participation; responsibility and accountability; effectiveness and efficiency; and moral integrity.
We define “Impact” as the positive social or environmental consequences that result from our business activities.
DFF does not intend to be positioned as an “impact fund”. Having said this, we still see it as our responsibility to encourage founders and management teams to find ways for their businesses to have (more) impact.
Instances of impact that we contribute to or facilitate:
We recognize and endorse the PRI principles, in particular the commitment to be active owners and to incorporate ESG considerations in active ownership practices.
DFF is not currently a PRI signatory – with our small size we feel the annual PRI reporting would be too onerous and not a good use of our investors’ and founders’ time and money.
We will, however, reconsider becoming a signatory to the PRI at a later date when our scale and resources allow this and if we feel joining the PRI community has significant added value for DFF.
We believe that measuring is important – what gets measured gets managed. At the same time, we recognize that many things in the start-up environment, especially those related to sustainability, ESG and impact, cannot be effectively measured. For things we cannot measure but that we believe are relevant to our investments, we develop proxies, measure ‘qualitatively’, or simply ask lots of questions.
DFF will report on its efforts, challenges and achievements in ESG on an annual basis. For this reporting, we will seek both quantitative as well as qualitative input from portfolio companies.
In reporting on climate and energy related issues we will be supported by the tools offered by our portfolio company, Minimum.
Bas Rieter from Dutch Founders 👋
Did you know we have open office hours every Friday?
Ask us all of your marketplace-related questions every Friday between 4:00 and 5:00 pm.
