Voima Ventures Responsible investment policy
CONCERNING: Voima Ventures Fund III
Voima Ventures Fund III (‘The Fund’) is considered an ’Article 8’ fund type product under the Sustainable Finance Disclosures Regulation (“SFDR”). This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment.
Investment Strategy
The Fund is an early stage technology fund focusing on science based deep tech. The Fund makes investments in the Nordics and Baltics. The Fund will seek to invest in portfolio companies focusing on areas such as life sciences, clean energy, food, fashion, health, ICT or technology, or otherwise target technological, non-technological, organisational or social innovation by investing, inter alia, in portfolio companies that pursue any activity comprising the design, the creation, the renewal and enlargement of a range of products and services and their associated markets and/or the establishment of new methods of design, production, supply and distribution and/or the introduction of changes in management, work organisation, and working conditions as well as skills of the workforce. In addition, the Fund will seek to make investments (a) that promote, among other characteristics, environmental or social characteristics, or a combination of those characteristics; and (b) in portfolio companies that follow good governance practices, as referred to in Article 8 of the SFDR.
The Partnership will seek to invest 80% of its invested capital in investments that are aligned with E/S characteristics and 20% of its invested capital in other investments.
Methodology
The Fund promotes environmental and social characteristics by seeking to invest in activities whose contributions to environmental and/or social characteristics clearly outweigh any (possible) environmental and social costs.
Social contributions are considered in a broad sense that also recognises contributions to humanity’s knowledge and public health. Environmental contributions aligned with the objectives defined in the EU Taxonomy include:
· climate change mitigation;
· climate change adaptation;
· the sustainable use and protection of water and marine resources;
· the transition to a circular economy;
· pollution prevention and control; and
· the protection and restoration of biodiversity and ecosystems.
The Fund may also seek (i) environmental and (ii) social contributions beyond the ones defined in the EU Taxonomy, which may include:
· aim to promote or enable treating and recycling waste as well as the re-use of materials (environmental);
· aim to contribute or enable removing or reducing GHG emissions emitted (environmental);
· aim to promote people’s physical and mental health (social); and/or aim to promote or enable good nutrition with respect for nature, animal and/or human welfare (social).
The Fund will seek to make only investments that fulfil at least one of the following criteria:
1. The portfolio company has a existing positive impact in relation to the size of the company (e.g. positive net impact ratio if Upright Project net impact metrics are applied or positive net impact ratio calculated using similar metrics provided by other service provider(s)); or
2. The portfolio company has a positive impact due to the mitigation of a negative impact compared to the currently best available alternatives in relation to the size of the company (e.g. positive impact ratio improvement compared to currently available benchmarks if Upright Project net impact metrics are applied or positive impact ratio improvement calculated using similar metrics provided by other service provider(s)); or
3. The portfolio company has a significant impact opportunity once scaled in at least one (1) dimension as assessed by the AIF Manager at the seed stage that clearly outweigh the expected negative impacts (e.g. the company net impact ratio is expected to be +20% or greater once scaled); or
4. The portfolio company taxonomy-aligned revenue, CapEx, or OpEx is greater than 10%.
In the event that the Fund recognises any sustainability risks associated with any prospective investment and/or portfolio company, such risks and their contemplated impacts on sustainability factors and the profitability of the investment are analysed during the investment process before any final investment decision is made. During the due diligence phase of an investment, the Fund uses its own ESG due diligence analysis and/or external advisers to identify and assess any relevant sustainability factors and risks relating to the investment (including environmental, social and governance matters).
Engagement with portfolio companies
While we engage ourselves in the processes and policy-creations, we require each portfolio company to take an active ownership of their ESG and corporate responsibility matters, and to implement them in a way that best serves value-creation in the company. They must adopt a corporate governance policy which advances good governance and a Code of Conduct based on the company’s values. In addition, the Fund intends to discuss and assess any potential sustainability risks recognised during the Fund’s due diligence processes in respect of any portfolio company with the board members and the operative management of such portfolio companies in order to mitigate any negative impacts such sustainability risks may have.
The Fund expects that sustainability risks (including environmental, social and governance matters) are considered as part of the investment analysis before any investment by the Fund and that, where applicable and reasonably practicable, an appropriate governance model is adapted in respect of a portfolio company so that the Fund would be able to monitor and manage any sustainability risks relating to such portfolio company throughout the Partnership’s ownership period, it being acknowledged that the Partnership will only have a minority ownership and hence the Fund may not even have any board representative in any given portfolio company.
Furthermore, during due diligence, the Fund intends to re-evaluate that each potential portfolio company does not have a predominantly negative impact on environment or social characteristics nor does significant harm on any of the six (6) environmental objectives categorised in the EU taxonomy. The evaluation and assessment are done by using both formal and heuristic methodologies and depending on the case, for example, by utilising public databases, requesting information from the company, and applying schematic frameworks.
Any questions may be directed to the Voima Ventures ESG leader Niko Elers. Document updated on 14.8.2023
