Sustainable Finance Last updated: 23.05.2024

Disclosures pursuant to the Sustainable Finance Disclosure Regulation (Regulation (EU) 2019/2088)

This disclosure applies to Futurum Ventures Management AS (“Futurum”) as an alternative investment fund manager registered with the Norwegian Financial Supervisory Authority.

I. Sustainability risks

Futurum Ventures Management AS considers sustainability risks in its investment decision-making process. As defined in the SFDR sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. Futurum analyzes potential risks, including sustainability risks,  in its due diligence process  prior to investing.

II. No consideration of adverse impacts of investment decisions on sustainability factors

At this time, Futurum does not consider principal adverse impacts in the manner set out in article 4 of the SFDR of its investment decisions on sustainability factors and does not use the sustainability indicators listed in Annex I of the Regulatory Technical Standards (Delegated Regulation (EU) 2022/1288, “RTS”) to assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery.

Given that the SFDR, the Regulation (EU) 2020/852 (“EU Taxonomy”) and the accompanying RTS are relatively new legislative acts, there is very little practical experience or practice with regard to the application of their respective provisions. Therefore, substantial legal uncertainties would remain when applying those provisions to the strategies pursued by Futurum. Moreover, as a minority investor to early-stage startups,  Futurm expects significant challenges in obtaining information of sufficient quality and level of detail from potential portfolio companies as would be required to meaningfully report on the principal adverse impact indicators set out in the regulatory technical standards accompanying the SFDR. Futurum will therefore not be issuing a principal adverse impact statement under article 4 of the SFDR.

Futurum will re-evaluate the integration of principal adverse impacts of its investment decisions in due course. In the meantime, Futurum remains free in its decision to use part of the sustainable indicators listed in Annex I of the RTS and/or an own set of indicators.

III. Remuneration policies in relation to the integration of sustainability risks

Futurum Venture Management’s remuneration policy promotes effective risk management and asset management in accordance with the investment mandates for The Fund.

Further, the remuneration policy is  in accordance with the company's and The Funds' business strategy, overall goals, risk tolerance and long-term interests. The remuneration policy, and in particular concerning the variable part of the remuneration, shall not encourage risk-taking that is incompatible with the risk profile, the mandate or other founding documents for funds under management.

The integration of sustainability risks is part of the total risk assessment of the investments for The Fund and is hence included in all risk references in the remuneration policy. Importantly, the remuneration policy does not encourage excessive risk‐taking with respect to sustainability risks and the variable component is linked to risk‐ adjusted performance and not just short-term goals.

IV. Sustainability-related disclosures

1. Futurum Ventures Fund I AS
a. Summary

Futurum is of the view that The Fund is covered by article 8 SFDR as it considers and promotes, among other characteristics, a combination of environmental and/or social characteristics in its investment decisions but does not seek to make sustainable investments as defined in the SFDR.

Certain environmental and/or social characteristics are evaluated both before and after the investment decision. In summary, this entails:

  • ESG risks and potentially positive ESG factors as a  part of Futurum’s investment analysis and screening process of potential portfolio companies
  • An exclusion mechanism in screening such that Futurum will not make investments with certain exposures
  • Active ownership meaning that Futurum will seek to exercise its ownership rights and have dialogue with the portfolio companies to promote integration of ESG factors on an on-going basis

In the event that material ESG risks are identified, Futurum may refrain from investing or apply measures to reduce or mitigate any sustainability risks as evaluated proportional.

b. No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have sustainable investment as its objective.

c. Environmental and social characteristics of the financial product

The Fund promotes environmental and/or social characteristics through the incorporation of ESG considerations within its investment process and portfolio management.

d. Investment strategy

(i) Investment strategy

The purpose of The Fund is to invest in, build, hold and manage a portfolio of equity-based and equity-related early-stage Nordic companies. The promotion of environmental and/or social characteristics and the evaluation other ESG criteria and ESG risks are integrated in  the investment process in the following manner:

  • Application of Futurum’s ESG Investment and Risk Policy in the management of The Fund
  • Preclusion of investments that conflict with Futurum's ESG related exclusion mechanism (see Futurum’s ESG Investment and Risk Policy)
  • Preclusion of investments that are exposed to unmanageable ESG related risks
  • Positive assessment of investments with the potential to contribute positively to the environmental and/or society. Environmental or social contribution includes,  but is not limited to the following selected UN Sustainable Development Goals: (3) Good Health and Well-being; (4) Quality Education; (5) Gender quality; (6) Clean Water and Sanitation; (7) Affordable and Clean Energy; (8) Decent work and economic growth; (9) Industry, Innovation and Infrastructure; (10) Reduced inequalities ; (11) Sustainable Cities and Communities; (12) Responsible Consumption and Production; (13) Climate Action; (14) Life below water; (15) Life on land; (16) Peace, justice and strong institutions

e. Proportion of investments

The Fund does not commit to make a minimum proportion of sustainable investments as defined in the SFDR and/or environmentally sustainable economic activities as defined in the EU Taxonomy Regulation. In consideration of ESG risks and promotion of environmental and/or social characteristics Futurum will apply the ESG Investment and Risk Policy and The Fund's exclusion criteria in relation to all of the Fund's investments.

f. Monitoring of environmental or social characteristics

In order to measure the Fund’s attainment of its promoted environmental and social characteristics, Futurum will monitor on an ongoing basis:

  • The Fund's adherence to the ESG Investment and Risk Policy in its investments, measured by the share of investments assessed in accordance with the ESG Investment and Risk Policy
  • The Fund's adherence to its exclusion criteria, measured by the share of investments in activities on The Fund's exclusion list.


g. Methodologies for assessing environmental or social characteristics

Pre-investment
Before doing an investment in a company, the following methodology is used:

  • A mapping of which SDGs and sub-targets the company contributes to and how 
  • A qualitative "impact scoring" in line with the funds impact evaluation framework
  • We do a preliminary screening of EU Taxonomy eligibility and alignment, by identifying relevant activities and assessing potential negative effects to the environment and the society to the extent possible within a reasonable effort from us and the potential investee companies

Post-investment
During our ownership period, the following methodology is used:

  • We collect data on ESG and impact from the investee companies at minimum on annual basis through web research, questionnaires and interaction, whether in formal or informal setting, with the management team of the investee companies

h. Data sources and processing

Information on ESG factors and risks will as a main rule be obtained directly from potential portfolio companies, and processed by The Fund as part of the ESG analysis and screening process. Additional data sources may include web research. Futurum will establish a dialogue with potential portfolio companies and seek to ensure that the data collected is of the highest possible quality. No external sources are used to verify the data received from potential and existing portfolio companies.

i. Limitations to methodologies and data

The methodologies and data described above have limitations, including that estimations, which are less reliable than observable data, may be used and that observable data will in most cases not be verified by external third party sources. However, the ESG Investment and Risk Policy and the exclusion criteria specific to The Fund will be integrated in the investment process with respect to any potential investments.

j. Due diligence

For every potential investment, Futurum will perform an assessment and screening process of the portfolio companies. An ESG analysis is integrated as part of this process. As a result of this analysis and screening, Futurum may exclude companies that do not follow fundamental international and national laws and norms, as well as companies investing in certain product categories and industries inconsistent with the environmental and social profile of The Fund. Furthermore, Futurum will not make investments where the portfolio company is assessed to be exposed to unmanageable sustainability risks. As a main rule, Futurum will seek to make investments that have the potential to make positive environmental and social contributions.

The ESG assessment will usually be performed by Futurum, and the screening and analysis process may be subject to monitoring and review by the Board of Directors of Futurum and/or the Advisory Committee of The Fund.

k. Engagement

Engagement is an integral part of The Fund’s environmental strategy. The Fund holds minority positions, but takes an active ownership role and influences the investee companies e.g. through:

  • Adding ESG topics regularly to the agenda of the Board of Directors
  • Engaging with management to encourage that ESG opportunities and risks (including sustainability risks) are embedded in business planning and strategy
  • Asking portfolio companies to develop their own core environmental and social policies
  • Asking portfolio companies to define key ESG metrics and, where applicable, at least one sustainability-related KPI (measuring positive impact of their core business) for annual reporting for continuous awareness and engagement

The Fund will avoid most sustainability-related controversies in investee companies through our exclusion policy that is designed to avoid investments with non-manageable sustainability risks. Should there be any sustainability-related controversies, we will engage in dialogue at the board and management levels, and use our voting rights as shareholders to vote against any unwanted initiatives.

Futurum has appointed an internal ESG representative within the Partnership to ensure ESG compliance and to further develop the Fund Managers processes and operations in regards to ESG.