Sustainability-related disclosures

Sustainability-related disclosures pursuant to Regulation (EU) 2019/2088 (“SFDR”)

Date of publication: March 2021

Date of update: January 2025 (addition of Ananda Impact Fund V GmbH & Co. KG, formal adjustments in line with recent regulatory changes)

I. Sustainability risks

Ananda Ventures GmbH (LEI: 894500X87WNAH532XA67; “Ananda”) considers sustainability risks as part of its investment decision-making process. 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. Ananda considers sustainability risks as part of its due diligence process prior to any investment. Such assessment is being conducted by a multidimensional impact analysis which also covers  sustainability risks. As an impact investor, Ananda’s core principle is that sustainable returns are only possible with clear ESG risk management. Accordingly, it is central for Ananda to consider risks in the areas of environment, health, and social issues that affect our investments. The results of such assessment are taken into account when the investment decision is being taken. However, Ananda remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case Ananda can also apply measures to reduce or mitigate any sustainability risks. At all times, Ananda will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

II. Remuneration policies

As a registered AIFM within the meaning of section 2 (4) of the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”), Ananda does not have and does not need to have a remuneration policy in accordance with the requirements of the KAGB.

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

Ananda does not consider principal adverse impacts (PAI) of its investment decisions on sustainability factors on entity level within the meaning of Art. 4 (1) lit. a SFDR. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery.

Ananda is below the regulatory threshold for mandatory PAI consideration as defined in Art. 4 (4) SFDR. As an impact investor, Ananda is highly committed to transparency and responsible investing. As an Art. 9 SFDR investor, Ananda is further committed to 100% sustainable investments within the meaning of Art. 2 (17) SFDR. For ensuring compliance with the “Do No Significant Harm” principle Ananda collects PAI on fund level from all portfolio companies. This enables Ananda to monitor and assess potential adverse impacts at fund level and allows Ananda to align the practices with the investment strategies and objectives of each fund.

Given the venture capital strategy pursued by Ananada, which focuses on early-stage emerging technology companies in Europe, applying PAIs at entity level presents challenges in terms of proportionality and relevance. By focusing on product-level PAI consideration, Ananda can ensure that its sustainability considerations are tailored to the specific context of each fund and its portfolio.

While Ananda currently prioritizes this targeted fund level PAI approach, Ananda reviews its practices at least annually (usually in Q4) to ensure alignment with evolving regulatory expectations. Hence, Ananda remains committed to adapting its practices as regulatory clarity regarding the application of SFDR and its accompanying RTS emerges.

IV. Sustainability-related disclosures 

1. Ananda Impact Fund V GmbH & Co. KG

LEI: 391200W38NFZGIY63340

Summary

Ananda Impact Fund V GmbH & Co. KG (the “Fund”) is managed by Ananda. The Fund pursues an impact investing strategy.

The Fund has sustainable investments as its objective. Sustainable investment within the meaning of Art. 2 (17) SFDR means an investment in an economic activity that contributes to an environmental or social objective, provided that the investment does not significantly harm any environmental or social objective and that the investee companies follow good governance practices.

The process to attain the sustainable investment objective is carried out both before and after an investment. Ananda has developed criteria and qualitative standards that define when an investment has a positive impact. Prior to each investment, Ananda conducts a multidimensional impact analysis which, in addition to evaluating ESG risks, is also designed to explicitly invest only in impactful companies. To achieve this, Ananda thoroughly examines the output and outcome of each company as well as possible negative effects of each company.  The Fund incorporates inclusion (positive screening) as well as exclusion (negative screening) aspects during the decision-making process and considers principal adverse impacts of its investment decisions. Thereby the Fund considers several impact themes to be the key to responsible investing. The actions and decisions described in the following section are each made by Ananda for and on behalf of the Fund.

Zusammenfassung

Ananda Impact Fund V GmbH & Co. KG (der „Fonds”) wird von Ananda verwaltet. Der Fonds verfolgt eine Impact-Investing-Strategie.

Der Fonds hat nachhaltige Investitionen zum Ziel. Eine nachhaltige Investition im Sinne des Art. 2 (17) SFDR ist eine Investition in eine wirtschaftliche Tätigkeit, die zu einem ökologischen oder sozialen Ziel beiträgt, vorausgesetzt, dass die Investition kein ökologisches oder soziales Ziel wesentlich beeinträchtigt und dass die Unternehmen, in die investiert wird, eine gute Unternehmensführung praktizieren.

Der Prozess zur Erreichung des nachhaltigen Investitionsziels wird sowohl vor als auch nach einer Investition implementiert. Ananda hat Kriterien und qualitative Standards entwickelt, die definieren, wann eine Investition eine positive Wirkung hat. Vor jeder Investition führt Ananda eine mehrdimensionale Wirkungsanalyse durch, die neben der Bewertung von ESG-Risiken auch darauf abzielt, explizit nur in wirkungsvolle Unternehmen zu investieren. Um dies zu erreichen, untersucht Ananda gründlich den Output und das Ergebnis jedes Unternehmens sowie mögliche negative Auswirkungen jedes Unternehmens. Der Fonds bezieht sowohl Inklusions- (positives Screening) als auch Exklusionsaspekte (negatives Screening) in seinen Entscheidungsprozess ein und berücksichtigt die wichtigsten nachteiligen Auswirkungen seiner Investitionsentscheidungen auf Nachhaltigkeitsfaktoren. Dabei betrachtet der Fonds mehrere Impact-Themen als Schlüssel für verantwortungsvolles Investieren. Die in diesem Abschnitt beschriebenen Handlungen und Entscheidungen erfolgen jeweils durch Ananda für den Fonds.

No significant harm to the sustainable investment objective

The Fund will not significantly harm any sustainable investment objective by means of considering principal adverse impacts on sustainability factors in the investment decision process.

To achieve this, the Fund takes the PAIs as stated in Annex I of the Delegated Regulation (EU) 2022/1288 supplementing the SFDR (“SFDR RTS”) into account.

The Fund collects all PAIs stated in table 1 of the SFDR RTS. Out of table 2 (“Additional climate and other environment-related indicators”) and table 3 (“Additional indicators for social and employee, respect for human rights, anti-corruption and anti-bribery matters”) the two PAIs “Investments in companies without carbon emission reduction initiatives” and “Lack of anti-corruption and anti-bribery policies” are collected. Further, all indicators from Table 2 and Table 3 that are relevant for a specific investment will be taken into account.

In addition to the PAIs, a further set of “ESG metrics” is collected. Those metrics especially cover topics such as diversity, unbiased hiring, and mental health which are not to a full extent covered by the PAI indicators but are deemed to be relevant from Ananda’s point of view.

As a responsible investor, the Fund strives to ensure that good governance practices are in place and adhered to during and after investment. This includes the portfolio company’s compliance with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. This is assessed through a checklist as part of every due diligence process prior to any investment made by the Fund.

In addition, as part of its impact strategy, the Fund has categorically excluded investments in certain economic activities. Therefore, the Fund does not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies or other entities whose business activity consists of:

  • Performing research and innovation activities considered as illegal according to the applicable legislation in the country of the portfolio company;
  • Any illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to the Fund or the relevant portfolio company, including without limitation, human cloning for reproduction purposes);
  • The production of, and trade in, tobacco, distilled alcoholic beverages, other non-alcoholic recreational drugs and related products;
  • The financing and production of, and trade in, weapons and ammunition of any kind;
  • Gambling;
  • Oil and gas or metals and mining exploration, extraction or operations;
  • Retail banking;
  • Pornography;
  • the research, development or technical applications relating to electronic data programs or solutions, which (1) aim specifically at supporting any activity referred above; internet gambling and online casinos; or pornography, or (2) are intended to enable to illegally enter into electronic data networks or download electronic data.
  • Fossil fuel-based energy production and related activities, as follows (1) Coal mining, processing, transport and storage; (2) Oil exploration & production, refining, transport, distribution and storage; (3) Natural gas exploration & production, liquefaction, regasification, transport, distribution and storage; (4) Electric power generation exceeding the Emissions Performance Standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs.
  • Energy-intensive and/or high CO2-emitting industries, as follows (1) Manufacture of organic and inorganic basic chemicals, (2) Manufacture of fertilisers and nitrogen compounds, (3) Manufacture of plastics in primary forms, (4) Manufacture of cement, (5) Manufacture of basic iron and steel and of ferro-alloys, (6) Manufacture of tubes, pipes, hollow profiles and related fittings, of steel, (7) Manufacture of other products of first processing of steel, (8) Aluminium production, (9) Manufacture of aircraft and related machinery, (10) Air transport, airports and service activities incidental to air transportation.

Notwithstanding the above, investments in Energy-intensive and/or high CO2-emitting industries shall be allowed if the business activity of the respective portfolio company either (i) qualifies as environmentally sustainable investment as defined in the EU Taxonomy or (ii) is eligible under the European Investment Fund’s Climate Action & Environmental Sustainability (CA&ES) criteria for green financing.

Sustainable investment objective of the financial product

The Fund has sustainable investments as its objective (cf. Art. 9(2) SFDR). The Fund pursues an impact investing strategy and will invest only in companies with the purpose to achieve impact by providing entrepreneurial solutions to a societal (social and/or environmental) issue based on a scalable approach and who expressly state such purpose in their articles of association or similar corporate documents. To achieve this, the Fund thoroughly examines the output and outcome of each company as well as possible negative effects of each company.

To identify and realize impactful opportunities, the Fund adopts a research-driven approach to deal sourcing. This strategy enables investments across diverse topics, addressing societal challenges such as equitable humanity, mental health and well-being, education, and healthcare, as well as environmental issues like energy transition, nature and biodiversity, and climate change. By tackling these interconnected areas, the Fund aims to drive systemic change for both people and planet.

The Fund contributes to the objectives of creating positive impact by building, holding, and managing a portfolio of investments in portfolio companies whose business success is directly linked to positive change, e.g. by tackling to one or more of the above-mentioned challenges. This impact needs to be clearly measurable and inherently integrated into the business model of the portfolio companies.

While there are no relevant reference benchmarks available that can be applied to the Fund, reference solutions were determined for investments to assess the impact potential in a consistent manner

Investment strategy

The Fund will conduct investments in portfolio companies mainly based in Europe from all sectors with innovation capacity and growth potential with the purpose to achieve impact by providing entrepreneurial solutions to a societal (social and/or environmental) issue based on a scalable approach and expressly state such purpose in its articles of association or similar corporate documents. Early stage investments in emerging technology companies will be a specified target segment. As such, investments are expected to be spread across a wide range of economic activities. The Fund intends to make its initial investments in the early stage (including pre-seed and seed rounds) and growth stage.

Investment decisions are subject to a structured selection process with clearly defined investment criteria, particularly regarding the social impact and economic viability of a business model. The Fund seeks to invest in enterprises where the social or environmental impact of the organisation’s activities is tightly integrated into the enterprise’s business model. In other words, the activities carried out by the enterprise must be inherently socially or environmentally impactful.

Good governance practices are assessed through a checklist as part of every due diligence process prior to any investment made by the Fund. Such practices include, in particular, sound management structures, employee relations, remuneration of staff and tax compliance within the portfolio companies. Moreover, the Fund will conduct regular monitoring of the good governance practices in its portfolio companies during the holding period. If the Fund becomes aware of severe governance issues, it will investigate them and work with all parties involved to find an appropriate solution. Anandas’s goal is to ensure the best possible good governance of the portfolio companies of the Fund. Therefore, Ananda usually also takes board seats in the portfolio companies if available.

To find out more about the Fund’s investment strategy please refer to the Fund’s Website and Manifesto: ananda.vc/how-we-select-invest-and-add-value/

Proportion of investments

The intention is that 100% of the investments made by the Fund shall be aligned with the sustainable investment objective. The Fund will invest fully in line with its impact-investment strategy and investment restrictions, i.e., will only make investments which are aligned with its sustainable investment objective.

Monitoring of sustainable investment objective

At or prior to the time of an investment in a portfolio company Ananda defines one to maximum five environmental/social impact goals (“Impact KPIs”). The Impact KPI(s) reflect the environmental/social purpose of the portfolio company and its “Theory of Change” pursued in the portfolio company’s environmental/social mission; “Theory of Change” is a model that specifies the desired outcomes of an activity, project or programme, evidencing the underlying logic of causality between action and result, and making transparent its assumptions, influences, and the potential risks of producing undesired effects, which shall be taken into account when establishing the level of desired outcomes achieved.

For each Impact KPI, one target value reflecting the ambition in proving the realization of the portfolio company’s Theory of Change, during the holding period of the investment, is defined. This Impact KPI is measured, monitored, and revised on a yearly basis. Ananda’s Impact Advisors and Advisory Board provide an independent outside view and expertise in our assessment.

Impact KPIs are individually tailored to the specific portfolio company and can include, for example #of clients who are measuring and reporting on biodiversity for the first time, #of patients receiving digital closed loop model based care, % of users with ethnic-minority background, Regeneratively farmed area per farmer tracked [hectar]. For more information on Ananda’s impact assessment and more examples of Impact goals please refer to our Impact Report: https://impact2022.ananda.vc

Methodologies

In order to quantify the attainment of the sustainable investment the Impact KPI(s) are collected at least on an annual basis and benchmarked against the respective target value of each Impact KPI. The impact performance is then calculated on three different levels: Impact goal, company’s impact multiple and overall portfolio multiple.

Further, the Fund uses the PAI indicators in order to consider principal adverse impacts of its investment decisions on sustainability factors and collects the relevant data from its portfolio companies on a regular basis. Hence, the Fund measures and evaluates the attainment of its sustainable investment objective on an ongoing basis.

Data sources and processing

The Impact KPIs and PAIs are collected at least on an annual basis from each portfolio company. The Fund uses reasonable efforts to quality check and pressure test the collected data. The goal is to use objective and quantitative data. However, some metrics may rely – to a certain extent – on estimations. Most data is obtained from the (potential) portfolio companies and less than 5% of the relevant data is estimated or supplemented by information publicly available. Should data on the PAI indicators not be readily available, the Fund may carry out additional research, cooperate with third party data providers or external experts, or make reasonable assumptions.

Limitations to methodologies and data

In general, the Fund relies on data collected from the portfolio companies to measure attainment of its sustainable objective. Some limitations may arise from the stage of the portfolio company. When the company is in an early stage, data to evaluate the impact potential might be limited or needs to be based on certain assumptions. In the event of a strategic pivot of the portfolio company, the impact KPIs may also need to be adjusted. The adjustment follows the same process as for the initial determination. Furthermore, the Fund invests in novel or nascent technologies. In these cases, established methodologies or historical data to quantify the positive impact may not be existent.

The Fund will approach these methodological and data limitations by capitalizing on its 10+ year of experience in impact measurement as well as continuously improving the existing and developing new standards. Furthermore, the Fund actively works together with impact advisors who provide an independent outside view on potential limitations. All this assures that the limitations do not affect the attainment of the sustainable investment objective.

Due diligence

The Impact Assessment is a key component of any due diligence (pre-investment) at the Fund. The Impact Assessment follows a clear process. It is incorporated at the first touch point (“Screening Phase”) between the Fund and the potential portfolio company (“Target Company”) and gets progressively more detailed and comprehensive throughout the Due Diligence process.

During the initial assessment (i.e., after reviewing the pitch deck and before and/or after the first call with the founders of the Target Company), critical knock-out points related to impact are assessed. These include (among others) the following aspects:

  • Relevance: The solution has the potential to significantly improve a relevant problem in a way that would not have occurred otherwise (“additionality”).
  • Impact Business Model: The impact needs to be clearly measurable and inherently integrated into the business model. The impact vision of founders and investors is fully aligned.
  • Scalability: The impact is scalable as the business model: the more revenue, the more impact is generated in lockstep.
  • Risk: The analysis of negative externalities is a vital building block. Risk events are assessed, and mitigating strategies are put in place where necessary

When the Due Diligence process continues (“Light Due Diligence”), potential knock-out points related to impact are further assessed with the help of an internal-built Impact Assessment Tool. The tool supports a detailed impact summary (incl. systemic impact of a company) and impact risk management. In addition, the Impact Assessment Tools helps to define the Target Company’s Theory of Change and to set the Impact KPIs in a structured way.

During the last phase of the Due Diligence (“Deep Due Diligence”), the team works towards a structured documentation of the potential impact, Theory of Change, Impact KPIs, and impact risks.

The impact process is accompanied by experienced members of the investment team. If necessary, an external impact advisor is consulted. The result of the impact assessment is an important part of the investment decision by the investment committee.

Engagement policies

The Fund will work through appropriate governance structures (e.g., board of directors) with portfolio companies with respect to environmental, public health, safety, and social issues, with the goal of improving performance and minimizing adverse impacts. The goal is to not only measure impact and ESG related topics but to actively engage with and motivate the portfolio companies on that regard. For this reason, Ananda requires that all investees sign certain impact requirements in a term sheet at point of first investment that typically includes clauses on (among others):

  • Sustainability: Our portfolio companies are committed to reducing their environmental footprint (GHG emissions).
  • Founder Health: The Fund seeks to support the mental health of portfolio company founders by helping them set up HR assessments and coaching. Read more about this topic here.
  • Diversity, Equity, and Inclusion: The Fund’s portfolio companies are encouraged to become category leaders in team diversity.

The Fund will respond with individual measures when becoming aware of ESG-related incidents or controversies at portfolio company level. The Fund will regularly review and, as necessary, adjust its engagement policy.

Attainment of the sustainable investment objective

Not applicable.  A reference benchmark for attaining the sustainable investment objective has not been designated for the Fund.

2. Ananda Impact Fund IV GmbH & Co. KG

LEI: 89450083XDKEHSJZIL85

The disclosures relating to the Fund apply accordingly to Ananda Impact Fund IV GmbH & Co. KG (“AIF IV”) with the exception that the investment exclusions differ.

AIF IV applies the following investment exclusions and does not invest, guarantee or otherwise provide financial or other support directly or indirectly, to companies or other entities (i) whose business activity consists of:

  • whose business activity consists of an illegal economic activity (i.e. any production, trade or other activity, which is illegal under the laws or regulations applicable to Ananda IV or the relevant company or entity, including without limitation, human cloning for reproduction purposes); or which substantially focus on:
  • the production of and trade in tobacco and distilled alcoholic beverages and related products;
  • the financing of the production of and trade in weapons and ammunition of any kind, it being understood that this restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies;
  • casinos and equivalent enterprises;
  • the research, development or technical applications relating to electronic data programs or solutions, which (1) aim specifically at supporting any activity referred above; internet gambling and online casinos; or pornography, or (2) are intended to enable to illegally enter into electronic data networks or download electronic data.
  • Fossil fuel-based energy production and related activities, as follows (1) Coal mining, processing, transport and storage; (2) Oil exploration & production, refining, transport, distribution and storage; (3) Natural gas exploration & production, liquefaction, regasification, transport, distribution and storage; (4) Electric power generation exceeding the Emissions Performance Standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs.

Energy-intensive and/or high CO2-emitting industries, as follows (1) Manufacture of organic and inorganic basic chemicals, (2) Manufacture of fertilisers and nitrogen compounds, (3) Manufacture of plastics in primary forms, (4) Manufacture of cement, (5) Manufacture of basic iron and steel and of ferro-alloys, (6) Manufacture of tubes, pipes, hollow profiles and related fittings, of steel, (7) Manufacture of other products of first processing of steel, (8) Aluminium production, (9) Manufacture of aircraft and related machinery, (10) Air transport, airports and service activities incidental to air transportation.

3. Ananda Impact Fund III GmbH & Co. KG

LEI: 894500AWBFKYPNPA4U43

The disclosures relating to the Fund apply accordingly to Ananda Impact Fund III GmbH & Co. KG (“AIF III”) with the exception that the investment exclusions differ.

Ananda III applies the following investment exclusions and does not invest, guarantee or otherwise provide financial or other support directly or indirectly, to companies or other entities (i) whose business activity consists of:

  • an illegal economic activity (i.e. any production, trade or other activity of the company or entity, which is illegal under the applicable laws or regulations to Ananda III including without limitation, human cloning for reproduction purposes); (ii) the production of and trade in tobacco and distilled alcoholic beverages and related products;
  • the financing of the production of and trade in weapons and ammunition of any kind;
  • casinos and equivalent enterprises;
  • the research, development or technical applications relating to electronic data programs or solutions, which (1) aim specifically at supporting any activity above, internet gambling and online casinos; or pornography or (2) are intended to enable to illegally enter into electronic data networks or download electronic data.

4. Social Venture Fund II GmbH & Co. KG

LEI: 894500X7WTJR76FBM678

The disclosures relating to AIF III apply accordingly to the Social Venture Fund II GmbH & Co. KG.