Sustainability-related disclosure requirements in the financial services sector pursuant to Regulation (EU) 2019/2088.
Ananda Ventures GmbH (“Ananda”) is a Capital Management Company within the meaning of the German Capital Investment Code. It publishes the following information on its website in accordance with Regulation (EU) 2019/2088 on sustainability-related disclosure requirements in the financial services sector.
Unless information is explicitly provided in relation to a specific fund managed by Ananda, the following statements refer to Ananda’s management and investment decision-making processes in general:
I. Policies on the integration of sustainability risks in the investment decision-making process (Art. 3(1))
For Ananda, an investment’s social impact, including sustainability risks, takes on an important role in their investment decision-making processes.
“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.
We have developed criteria and qualitative standards that define when an investment has a positive social impact. These criteria also serve to exclude investments that entail sustainability risks. In this way, we ensure that we only invest in Impact Companies.
“Impact companies” are companies that are focused on generating positive social or environmental value while operating in an inherently sustainable way.
The consideration of ESG factors and sustainability is accordingly a central component of our investment process and portfolio management. To ensure sustainability and ESG compliance, we take into account, among other standards, the Impact Reporting and Investment Standards (IRIS+) of the Global Impact Investing Network (GIIN), the creation of an Impact Map, the OECD Better Life Initiative model, the Impact Management Principles of the European Venture Philanthropy Association (EVPA), the United Nations Sustainable Development Goals, the Planetary Boundaries and the guidelines of Diversity VC and Leaders for Climate Action, when evaluating our investments. Furthermore, we comply with the United Nations Principles for Responsible Investment. Prior to each investment, we conduct a multidimensional impact analysis which, in addition to evaluating ESG risks, is also designed to explicitly invest only in impactful companies. To achieve this, we thoroughly examine the output and outcome of each company as well as possible negative effects of each company. We take sustainability aspects into account before the investment itself, as part of the due diligence process, as part of the preparation of the term sheet, which usually contains provisions on diversity & inclusion and sustainability & environmental governance, and throughout the investment period. As an impact investor, our core principle is that sustainable returns are only possible with clear ESG risk management. Accordingly, it is central for us to consider risks in the areas of environment, health and social issues that affect our investments.
Under the following link you can see the fundamental goals and thoughts behind our investments: Manifesto
We regularly review our strategy to ensure that it takes into account new risks as well as investor concerns.
II. Consideration of principal adverse impacts of investment decisions on sustainability
Ananda considers the main adverse impacts of investment decisions on sustainability factors.
The “main adverse impacts on sustainability factors” are to be understood as those impacts of investment decisions that have adverse impacts on sustainability factors.
“Sustainability factors” mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
The “sustainability indicators” can be divided into three categories: (i) climate and other environment-related indicators; (ii) social and labour concerns, respect for human rights, anti-corruption and anti-bribery; and (iii) indicators applicable to investments in states and supranational companies.
The indicators apply to investments in portfolio companies.
Ananda identifies and considers all sustainability indicators as part of the due diligence of a company using the strategies and methods listed under I.
Ananda considers this impact in its investment process as part of an overall qualitative assessment to proactively identify potential risks and exclude high-risk companies from further investment process.
To ensure sustainability and ESG compliance, we take into account the Impact Reporting and Investment Standards (IRIS+) of the Global Impact Investing Network (GIIN), the creation of an impact map, the OECD Better Life Initiative model, the Impact Management Principles of the European Venture Philanthropy Association (EVPA), the United Nations Sustainable Development Goals, the Planetary Boundaries and the guidelines of Diversity VC and Leaders for Climate Action, among other standards, when evaluating our investments. We also comply with to the United Nations Principles for Responsible Investment.
Ananda is focused on direct investments in impact businesses. As impact is at the thematic core of Ananda’s investment thesis, Environmental, Social and Governance (ESG) factors are inextricably linked into the investment process and active portfolio management of our investee companies.
Ananda aims to invest only in mission driven businesses with the recognition that the generation of long-term sustainable returns is dependent on stable, well-functioning and well-governed social, environmental and economic systems.
Ananda commits to consider material ESG issues during the pre- and post-investment phases and therefore defines in this policy its approach to integrate the ESG factors into investments. Material ESG issues have the potential or have a direct substantial impact on the investee’s ability to create or protect economic value, as well as environmental and social value for itself and its stakeholders.
Ananda strives for continuous improvement on ESG topics. The team educates itself continuously on this topic and discusses latest knowledge, as part of the yearly assessment of the ESG policy and practices. Furthermore, dialogue with LPs and other stakeholders is sought to improve our reporting and disclosures and the way we manage ESG issues.
ESG factors are integrated alongside the impact mapping as part of the investment process at Ananda. This ensures the early identification of the relevant ESG factors for the investments, and where to further focus our attention in case of an investment.
Ananda believes that proactive measures are less costly than regulation or forced compliance. Furthermore, ESG factors reduce the risk exposure and let to higher revenues leading to sustainable investment results in both financial and societal benefits. Thus, Ananda seeks to:
- Consider environmental, public health, safety, and social issues associated with target companies when evaluating (pre-investment phase), during the period of ownership (post-investment phase) and at exit.
- Be accessible to, and engage with, relevant stakeholders either directly or through representatives of portfolio companies, as appropriate.
- Grow and improve the companies in which Ananda invests for long-term sustainability and to benefit multiple stakeholders, including on environmental, social, and governance issues. To that end, Ananda 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.
- Respect the human rights of those affected by Ananda’s investment activities and seek to confirm that Ananda does not invest in companies that utilize child or forced labour or maintain discriminatory policies.
- Adhere to the highest standards of conduct to avoid even the appearance of negligent, unfair, or improper practices. Proactively comply with applicable national, state, and local labour laws in the countries in which we invest; support the payment of competitive wages and benefits to employees; provide a safe and healthy workplace in conformance with national and local law;
- and, consistent with applicable law, respect the rights of employees to decide whether or not to join a union and engage in collective bargaining.