Sustainable Finance Disclosure Regulation
Acton Capital Partners GmbH (“Acton Capital”) is an alternative investment fund manager (“AFIM”) within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and/or the EuVECA-Regulation. The following paragraphs contain information regarding the sustainability related disclosure obligations for the Fund pursuant to Art. 8(1) of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector („SFDR“).
The Fund intends to promote environmental or social characteristics or a combination of those (cf. Art. 8 SFDR) but does not have sustainable investment as its objective (Art. 9 SFDR). Acton does not designate an index as a reference benchmark for the purpose of attaining environmental or social characteristics promoted by the Fund (Art. 8(1)(b) SFDR).
Sustainability risk policies statement
Acton Capital incorporates sustainability risks in investment decisions relating to the Fund (Art. 6(1) SFDR), whereas “sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the Investment. Acton Capital aims to identify, consider, and prevent the occurrence of sustainability risks as early as possible in the investment decision making process in order to minimize their possible impacts on Investments and the return of the Fund. Acton Capital incorporates environmental, social or governance (“ESG”) principles within its investment and portfolio management processes as described below.
Principal adverse sustainability impacts statement pursuant Art. 4(1) SFDR
Art. 4 SFDR provides for a framework aimed at achieving transparency with regard to any principle adverse impacts of investment decisions on sustainability factors. For this purpose, financial market participants such as Acton Capital must disclose certain information (in the future, considering the Regulatory Technical Standards “RTS”). Currently, Acton Capital does not consider any principle adverse impact of investment decisions on sustainability factors, as it believes that the information provided to it by the portfolio companies in relation to the investments is not sufficient to allow it to do so. Acton Capital will monitor developments with regard to available information and consider whether it is reasonably possible in the future to disclose the information required by the Art. 4 SFDR-framework (including the future RTS).
Disclaimer pursuant Art. 6 Regulation (EU) 2020/582
The “do no significant harm” principle applies only to those investments underlying the financial product that take into account the EU criteria for environmentally sustainable economic activities. The investments underlying the remaining portion of this financial product do not take into account the EU criteria for environmentally sustainable economic activities.
Sustainability at Acton Capital
Acton Capital is systematically analyzing its corporate environmental, specifically carbon footprint. Acton Capital is measuring its carbon footprint on an annual basis, defining reduction initiatives and compensating for becoming carbon neutral. Acton Capital’s target is to sustainably reduce its carbon footprint per employee by at least 50% till 2025 (compared to 2019). Acton Capital fosters diversity in venture capital and strives to support female entrepreneurs and investors.
Sustainability in Acton Capital’s target company selection process
Acton Capital maintains an “exclusion list”, listing sectors, industries or business areas in which Acton Capital does not invest. The exclusion list is reviewed and updated on a regular basis and contains among others business activities related to tobacco, distilled alcohol, weapons and ammunition, gambling, pornography, or illegal software (hacking). In addition, Acton Capital considers the sustainability of the business model and the potential negative impact of a business on ESG criteria.
Sustainability in Acton Capital’s investment process
Acton Capital integrates ESG factors early on when considering potential investments. Acton Capital prepares a concise deal fact sheet for potential investment opportunities including a business model description and a compliance check with respect to the Funds’ investment strategy and investment restrictions, including ESG considerations. ESG compliance is one criterion when evaluating a potential investment.
Acton Capital has developed a standardized ESG Due Diligence questionnaire to be completed by the potential portfolio company as part of the Due Diligence process. This questionnaire covers various ESG categories (such as environmental footprint, corporate social responsibility, diversity, and general corporate governance) and assures that sustainability is considered in the investment decision. Identified problematic issues need to be pointed out to Acton Capital’s investment committee (IC) and taken into consideration when making an investment decision.
Sustainability in Acton Capital’s portfolio management
Acton Capital strives for integrating an ESG clause within the investment documentation obliging the portfolio companies to commit towards ESG and to develop initiatives for improving its own ESG policies on an ongoing basis (including the reduction of its CO2 footprint and the promotion of diversity). In addition, Acton Capital asks that ESG matters shall be included in the board agenda regularly, thus the board shall revisit all ESG matters at least once a year. Among others, Acton Capital supports employee diversity and decent working conditions at the portfolio company’s level. Acton Capital does not quantitatively measure ESG indexes or use sustainability indicators at the portfolio companies yet, but considers doing so in the future.