Date of publication: 10 March 2021
Updates: 9 May 2024, see details in Schedule 1 at the end of the page
Fund Manager: Creandum Select Fund Manager AB and Creandum Fund Manager AB hereby together referred to as the “Fund Manager”
LEI: 636700MQ1IFVN0Q8VC43 and 254900RTPQZISY90BN31
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 (the “SFDR”) and (EU) 2020/852 on the establishment of a framework to facilitate sustainable investment (the “Taxonomy”)
The SFDR, Article 2(22), defines sustainability risk as “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”, below “ESG factors”. The SFDR does not define more specifically what is meant by “material” in this context. The assessment and management of sustainability-related risks are an integral part of the investment process. As part of the due diligence of a potential investment, sustainability risks are considered and evaluated through an ESG rating, which forms part of any investment recommendation. If deemed relevant, appropriate steps may be taken to avoid or mitigate the sustainability risk.
In the Fund Manager’s view, sustainability risks, particularly where unmitigated, could affect the value of investments held by a fund and/or the ability of the fund to dispose of investments, and hence the value of the fund. However, given the type of investments targeted by the funds, the Fund Manager currently assesses and finds that the sustainability risks impact the returns of the funds only to a minor extent.
Currently, the Fund Manager has decided not to consider any adverse impacts of investment decisions on sustainability factors as set out in the SFDR. Adverse impacts on sustainability factors refer to the investment’s negative impacts on environmental, social, and employee matters, respect for human rights, anti-corruption, and anti-bribery matters. Therefore, the Fund Manager does not report on the sustainability indicators listed in Annex I of the Regulatory Technical Standards (Delegated Regulation (EU) 2022/1288, “RTS”) to identify and assess potential adverse impacts.
The Fund Manager has instead decided to focus on specific sustainability risk indicators in the investment decision process fit for the fund’s investment strategy, rather than to consider the indicators set out in Table 1-3 of Annex 1. The Fund Manager therefore considers the existing sustainability due diligence processes are appropriate, proportional, and tailored to the investment strategy of the funds it currently manages.
The Fund Manager will, however, continuously assess whether the existing sustainability due diligence processes and procedures are appropriate, proportional, and tailored and will where required or otherwise advisable, evaluate whether to consider principal adverse impacts.
The Fund Manager has a total remuneration model consistent with the integration of sustainability risks in the investment process and consisting of both fixed and variable remuneration. Where variable remuneration is paid, it is based on the fulfillment of criteria/targets, both financial and non-financial, as well as an individual's compliance with policies and procedures, including sustainability-related policies
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Date of publication: 7 May 2024
Updates: None
Financial product: Creandum VII (E) AB and Creandum VII (D) AB (the "Fund" / the "Funds")
LEI: 254900LNIDVZFWO36X50 and 254900LNIDVZFWO36X50
The Fund promotes, along with the investment strategy, environmental and social characteristics in the investment decision and the monitoring process but does not seek to make sustainable investments as defined in the SFDR. The Fund aims to allocate 100% of its assets to promote environmental and social characteristics and the process is based on actively promoting gender balance within the investee companies and refraining from investing in companies operating in areas the Fund considers negative such as fossil fuels, tobacco, gambling, etc. (the “Exclusion List”).
The assessment and management of sustainability-related risks, including good governance practices, are an integral part of the investment process and are performed through an ESG rating for each potential investment. If deemed relevant, appropriate steps may be taken to avoid or mitigate the sustainability risk.
The Fund monitors ESG compliance of the investee companies during the ownership period by internal mechanisms. In the monitoring, the Fund consults the investee companies continuously and carries out further checks to identify potential issues. In cases of non-compliance, the Fund will perform further analysis and measures will be recommended for rectification.
The quality of the collected data is ensured by close cooperation with the relevant investee company. The main limitation of the methodology used is that the data collected could be considered insufficient, incomplete, or lacking quality. In case of a situation where the collected data is deemed to be inadequate, a dialogue with the relevant investee company is initiated to ensure improvement of the data quality. The Fund is engaged in the investee companies during the holding period through close cooperation and dialogues with the investee companies.
The Fund does not apply an index as a reference benchmark to meet the environmental or social characteristics promoted by the Fund.
The fund promotes environmental and social characteristics but does not have sustainable investment as its objective.
Along with the investment strategy, the Fund promotes environmental and social characteristics. More specifically, the Fund:
Promote social characteristics by promoting gender balance within the investee companies and equal distribution of venture capital across genders. The target is that at least 25% of companies invested by the Fund shall be in gender-balanced or women-led teams (the “Balanced-Ambition Target”). To be considered a gender-balanced team, at least two genders (women, men, and others) should be represented as founders and/or the CEO.
Promote environmental and social characteristics by not making any investments in companies operating in areas the Fund considers negative, i.e., the Exclusion list such as for example fossil fuels, tobacco, gambling, etc.
The Fund’s overall objective is to deliver long-term, consistent performance following its investment strategy. The main investment focus of the Fund will be to create a balanced portfolio of investments in privately held companies within the technology sector, with a primary focus on the consumer, software, and hardware sectors. The primary geographical focus of the invested companies will be Europe. The assessment and management of sustainability-related risks including good governance practices are an integral part of the investment process. As part of the due diligence of a potential investment, sustainability risks including good governance practices are considered and evaluated through an ESG rating.
The Fund will as part of the due diligence, collect information through a questionnaire from the investee companies, review the governance aspects of the transaction documentation, and/or review the overall governance set-up of the company to assess good governance practices. Good governance practices include, but are not limited to sound management structures, employee relations, remuneration of staff, and tax compliance within the investee companies. The information collected will be considered and evaluated through a good governance rating which forms part of the investment recommendation.
On an annual basis, the Fund will review available information on the governance set-up and collect information from the investee companies (to the extent deemed needed), to assess the investee companies’ good governance practices and, when necessary, re-evaluate the investee companies’ good governance rating. If the Fund becomes aware of severe governance issues, it will investigate them and work with all parties involved to find an appropriate solution.
The Fund will allocate 0% of assets in investee companies directly engaged in activities included in the Exclusion List. Conversely, the Fund aims to allocate 100% of its assets to promote environmental and social characteristics. Further, out of the investee companies, at least 25% of the investee companies shall consist of companies with gender-balanced or women-led teams. To be considered a gender-balanced team, at least two genders (women, men, and others) should be represented as founders and/or the CEO.
The Fund does not make and does not intend to make sustainable investments within the meaning of Article 2 (17) SFDR or environmentally sustainable investments within the meaning of Article 3 Taxonomy; hence, no portion of its investments will be aligned with the Taxonomy.
The Fund monitors ESG compliance of the investee companies’ ESG criteria during the ownership period by internal mechanisms. In the monitoring, the Fund consults the investee companies continuously and carries out further checks to identify potential issues with such characteristics. In cases of non-compliance, the Fund will perform further analysis and measures will be recommended for rectification.
The Fund applies qualitative and quantitative assessments regarding its environmental or social characteristics (i.e., its Exclusion list and ESG criteria). As part of the due diligence of a potential investment, sustainability risks are considered and evaluated through an ESG rating, which forms part of any investment recommendation. During the ownership period, the Fund monitors and consults with its investee companies to assess whether the characteristics are met.
To attain each of the environmental or social characteristics promoted by the Fund, sustainability risks are considered as part of the due diligence of a potential investment and evaluated through an ESG rating, which forms part of any investment recommendation. The data is therefore obtained from the potential investee company and no proportion of data is estimated collected from publicly available sources. The quality of the collected data is ensured in close cooperation with the relevant investee company. During the ownership period, the investee companies provide the relevant ESG data by internal mechanisms on at least an annual basis for reporting and monitoring purposes.
Before any investment, the information is collected from the investee company as part of the due diligence and evaluated internally through an ESG rating. However, the methodology is dependent on the quality of data provided by the investee companies. Therefore, the main limitation of the methodology is that the collected data could lack quality or be considered insufficient and/or incomplete. In such a situation, a dialogue with the relevant investee company is initiated to ensure the improvement of data quality. If this is not considered sufficient, a fundamental analysis of the data can be made to ensure that the limitations or quality of data do not affect the Fund's environmental or social characteristics.
To prevent and identify the use of any incomplete or false data in the investment stage, several data sources may be used to supplement and verify the information provided by the investee companies. The Fund strives to only use external data from sources that are credible, widely used, and quality-checked by other independent parties. To further ensure the reliability of data we work closely with our investee.
As part of the due diligence of a potential investment, the sustainability risks including good governance practices are considered and evaluated through an internal ESG rating, which forms part of any investment recommendation. Furthermore, the potential investment is screened against the Exclusion list.
The due diligence process also includes an assessment of the potential investee company’s compliance with the key criteria of good governance. The key criteria of good governance are sound management structures, employee relations, remuneration of staff, and tax compliance.
If deemed relevant, appropriate steps may be taken to avoid or mitigate the sustainability risks. Where no effective mitigation is possible, the potential investment may be excluded on this basis. During the ownership period, the Fund monitors and consults with its investee companies to assess whether said characteristics are met.
The Fund's engagement during the holding period is mainly expressed through close cooperation and dialogues with the investee companies, such as participation in general meetings, participation in election committees, proactive dialogues via collaboration partners, and reactive dialogues via collaboration partners or individually, all as deemed appropriate in the relevant situation to ensure the quality of the ESG work in the investee companies, in general, or on specific issues. The engagement role may depend on the ownership stake in each investee company.
No index has been designated as a reference benchmark to meet the environmental or social characteristics promoted by the Fund. Contact information Suna Wickforsen, Regulatory and Compliance Manager at Creandum
2021-03-10: Publication of the sustainability-related disclosures information
2024-05-09: Implementation of recent legislative developments, addition of sustainability-related disclosures regarding Creandum Fund Manager AB and Creandum VII, and editorial amendments and clarifications