Sustainability disclosure regarding the Sustainable Finance Disclosure Regulation (SFDR)
Sustainability risks (Article 3 of the SFDR)
StartGreen's ESG policy describes how sustainability risks are identified and mitigated by the funds. 'Sustainability risk' means an environmental, social or governance event or condition which, if it occurs, could cause a material adverse effect on the value of the investment.
The goal of our ESG policy is to identify both ESG risks (potential negative returns effects) and ESG opportunities (potential capital appreciation). For example, we exclude sectors that are not in line with our values, such as the arms industry. During the due diligence phase, we identify potential company-specific ESG risks, such as nitrogen emissions, and opportunities, such as enhancing diversity. If we decide to invest, these material items are included in an ESG action plan or 100-day plan and monitored periodically. The combination of these practices should lead to fewer risks (e.g. reputational risk), more future-proof and attractive companies (both for talent and future investors) and thus a better return. Below you can see the ESG process in a schematic overview.
With the ESG survey, we thoroughly investigate whether the company has a possible negative impact on sustainability factors (inside-out), such as environmental pollution or child labor in the supply chain. We also analyze per company whether it faces serious external sustainability risks (outside-in), for example a physical climate risk that, if materialized, could lead to a material adverse effect on the value of the investment.
Below is an overview of the ESG items we analyze for each financing:
Consideration of the Principal Adverse Impacts (Article 4 of the SFDR)
For both 2021 and 2022, StartGreen Capital has asked its portfolio companies to report on the 'adverse effects on sustainability' arising from the SFDR, better known as 'Principal Adverse Impacts' (PAIs). These are indicators about potentially unfavorable effects on people (including diversity, employee safety, human rights) and the environment (including greenhouse gases, biodiversity, waste).
Many of StartGreen Capital's portfolio companies are relatively young and small. Due to the size of the companies, data on this is often not publicly available or via a data provider (as is the case with some large listed companies). In addition, the portfolio companies themselves often do not have the resources and/or obligation to report on these PAI indicators. The survey is therefore completed on a best-effort basis.
For the above reasons, StartGreen Capital cannot guarantee the necessary completeness and quality that is currently required for public publication. Therefore, StartGreen Capital currently does not publicly report on the Principal Adverse Impacts (PAIs) in accordance with Article 4 of the SFDR at the entity level. This position will be reviewed periodically in accordance with market practices, information availability and regulatory developments. The aim of StartGreen Capital is to improve the quality and completeness of this information year after year.
Since StartGreen Capital invests in sustainable companies at its core and many of the PAI indicators have already been assessed during the ESG due diligence, the probability that material negative effects will occur is small.
Remuneration policy with regard to the integration of sustainability risks (Article 5 of the SFDR)
StartGreen Capital pays all employees a fixed monthly fee that is not dependent on objectives. StartGreen Capital can pay out discretionary variable remunerations, these are remunerations that are linked to the achievement of criteria in relation to the performance of the employee, but also to the financial soundness of StartGreen Capital. The ratio between fixed and variable remuneration is appropriate and can never exceed 20 percent of the fixed income. StartGreen Capital does not work with guaranteed variable remuneration.
StartGreen has the statutory objective to 'have a significant positive impact on society and the environment in general through its business operations and activities'. The remuneration of employees is therefore always linked to objectives that ideally make a positive contribution to, but in no case have a negative impact on, one of the Sustainable Development Goals. Investments and financing may only qualify for the quantitative targets if the ESG risks have been sufficiently assessed and endorsed in advance by the committee mandated for this purpose.
Read it here full remuneration policy.
Fund disclosures website (Article 10 of the SFDR)
In addition to the sustainability policy the most important aspects of sustainability information are summarized below for each fund. These overviews are in accordance with the template of the (draft) RTS (Articles 45 to 57) of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability information in the financial services sector.
Energiefonds Overijssel – SFDR article 10 – Web site disclosure
North Holland Sustainable Economy Participation Fund – SFDR article 10 – Web site disclosure
Borski Fund – SFDR article 10 – Web site disclosure
The other StartGreen labels do not fall under the SFDR or have since been closed and are therefore not included in the above overview.
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