Responsible Investment. (ESG)
Who cares wins. Together with the founders of our portfolio companies, we create longterm value – for all stakeholders.
We do this by:
- implementing and promoting Environmental, Social, and Governance (ESG) policy;
- committing to FundRight; and
- monitoring several United Nations Sustainable Development Goals (SDGs).
Environmental, social and
ESG stands for Environmental, Social, and Governance. A company’s ESG policies reflect its advancement in sustainability. These policies may include CO2 emissions, energy efficiency, working conditions, and business ethics. Implementation of ESG policies mitigates the risk for all stakeholders, as insight and control create long-term value. Moreover, research shows that companies with strong ESG policies have higher dividends; lower risk; and higher valuations (Giese et al., 2019; see figure below).
We are in the process of creating an ESG dashboard that will monitor, visualize, and report various ESG factors of our portfolio companies. Our goal is to make ESG more insightful and most importantly: actionable.
As of 2019, we’re committed to #FundRight a VC initiated movement aimed at ensuring a more diverse ecosystem at both VC level and portfolio company level. Following this initiative, we make sure that in every shareholders’ agreement we sign, contains an inclusion clause. Meaning that all our portfolio companies have an “inclusion clause” in its shareholders’ agreement and HR policies so that at least one woman and/or member of a population currently underrepresented within the company shall be formally interviewed for any open executive position. As a part of our ESG policy, we also add diversity and inclusion data in our quarterly report to our investors.
Sustainable Development Goals. (SDGs)
The United Nations initiated the Sustainable Development Goals (SDGs) in 2015 as universal guidelines for sustainable development. Based on our investment hypotheses and portfolio companies, we have an impact on and monitor 4 SDGs: Good health and well-being (3), Gender equality (5), Decent work and economic growth (8), and Responsible consumption and production (12).
Proper governance is at the heart of any successful business. A company needs to achieve its objectives and drive improvement, as well as maintain legal and ethical standing in the eyes of shareholders, regulators, and the wider community. We have developed a tool, named Govin, that centralizes governance and makes it insightful and tangible. We have done this by simplifying three main topics:
1. terms of shareholders’ agreements and articles of association;
2. capitalization tables; and
3. voting actions and records.