Disclosures & Principal adverse impacts
Version 2.1
May 2nd 2024
Policies for integration of sustainability risks in the process of investment decision-making
Remuneration policy
The fund does not have a carried interest or other performance based remuneration models. This is the case to ensure that all investment decisions are based on holistic assessments. This, in turn, significantly reduces the sustainability risks.
Investment policy
Relevant passages from our Investment policy:
“The investment scope is limited to companies with a sustainable or regenerative business model. Within this scope we will diversify the investments in terms of industry, business model and risk-level.”
“The Partnership intends to follow the principles set out in the UN Global Compact Initiative and Principles for Responsible Investment (PRI); however not with respect to reporting obligations.”
“Prior to investing all companies are screened using our Planetary Impact Assessment. The assessment is evaluating to what degree the investment opportunity contributes to sustainable growth and don’t significantly harm any of the following environmental objectives:
Climate change mitigation
Protection and restoration of biodiversity and ecosystems
Transition to a circular economy
Sustainable use and protection of water and marine resources
Climate change adaption
Pollution prevention and control
“The impact assessment is built upon EU Taxonomy and will help ensure that all investments are within an SFDR Art 9 mandate.“
“When considering new investment opportunities they are evaluated using our Planetary Aspirations framework comprising investee purpose and investee operations:
Investee purpose:
Enables healthy systemic change
Facilitates transformative behavior
Regenerative
Investee operations:
Commitment to long term
Evidence driven
Empowered participation
Rooted in real economy
Respectful to all life
Edge effect abundance
Investment commitment form
When submitting the investing, new investors make a commitment to protect Planetary’s purpose: “By submitting the subscription form you commit to protect and promote Planetary’s purpose to create Inclusive Wealth and contribute to systemic change and consider the needs for future generations by investing with a long-term horizon.
Limited partnership agreement
In the limited partnership agreement, wealth is defined as follows: “wealth as an inclusive understanding of capital aligned with vital interdependencies such as natural, social and human capital;”
The partnership agreement has the following investment restrictions: “the Partnership will invest (directly or indirectly) in for-profit companies that have the potential to solve systemic problems and regenerate natural environments and communities. The Investments shall primarily be made in early-stage companies, principally based in, or which conduct a substantial proportion of their business in EU, mainly in the Nordics. The Fund shall invest in accordance with its Responsible Investment Policy”
Articles of association
The articles of association of the management company (Planetary Impact Ventures A/S) follows the B-Corp standards:
1.3. The company's object is to establish new sustainable businesses and to hold shares in sustainable companies, as well as to have a significant positive impact on society and the environment as a whole through its business and operations.
4.8. In its decision-making process, the Executive Board must take into account the impact of any decision on:
i. The company's employees and staff, its subsidiaries and suppliers,
ii. The interests of the Company's customers as a target group in relation to the Company's purpose of having a significant positive impact on society and the environment,
iii. The communities and societies in which the Company, its subsidiaries and suppliers operate,
iv. The local and global environment; and
v. The Company's short-term as well as long-term interests.
Constraints with regards to methods and data
A) Possible constraints regarding applied methods and data sources
Our portfolio companies are very early stage and have few resources available for reporting. This means that the quality of data is not perfect – and in all probability neither will be in the near future.
We base our reporting on data from the portfolio companies – there is a risk that mistakes will appear, with or without awareness of this.
The portfolio companies are unexperienced in reporting this type of data – hence the inherent risk OR in this lies the risk.
There is a risk that a portfolio company changes business model or focus, whereby the data becomes irrelevant.
B) Strategies and considerations pertaining to ensuring that the above-mentioned constraints do not hinder the fulfilment of the environmental and/or social goals, supported by the financial product:
We expect that the quality of the data will be improved significantly in 2024 and again in 2025. This happens when portfolio companies mature and are able to submit better reporting.
We screen each investment opportunity rigorously before investing, ensuring the lowest possible risk for unforeseen negative environmental and/or social consequences occurring.
Often, third party Life Cycle Assessments exist and can be included in the decision-making process.
We primarily invest in businesses which contribute to relieve the exploitation of the earth's resources – such as organic, plant based food production. It is most improbable that such undertakings should cause more harm than animal based food production, for example.
The financial products
a) Description of the environmental and social characteristics, and the sustainable investment goals of the fund:
In the Limited Partnership Agreement the goal is defined as:
“2.5.1. The Partnership is an evergreen investment fund, which enables the manager to raise funds to create Wealth and contribute to systemic change and take into account the needs of future gener- ations by investing with a long-term horizon. The Partnership shall carry on the business of identi- fying, researching, making, holding, monitoring, supporting and Realising Investments in accordance with the Investment Strategy and in particular but without limitation, subject always to the investment restrictions set out below, the acquisition, holding, sale and disposal of equity, quasi equity or debt related instruments issued by companies, undertakings or other entities subject to Clause 3.1.5(b).
2.5.2. In its pursuit of its investment purpose, the Partnership shall seek to create Wealth, including the vital patterns of interdependencies such as ecological, social and human capital, and the Partner- ship shall contribute to the regeneration of the planet. The Partnership shall endeavour to take into account the interests of all stakeholders and identify investment opportunities with regenerative and commercially viable business and the Partnership shall endeavour to offer capital, time, support and community in order to nurture the business opportunities and the humans behind.
2.5.3. The Partnership (acting through the General Partner or such persons otherwise authorised by the General Partner) may execute, deliver and perform all contracts and other undertakings (whether as agreement or deeds) and engage in all activities and transactions as may in the opinion of the General Partner be necessary, advisable or appropriate in order to carry out the foregoing purposes and objectives.
b) Information about the methods applied to estimate, measure, and monitor the environmental and/or social characteristics, or the impact of the sustainable investments selected for the financial product. Includes the data sources, screening criteria for the [underlying] assets and the relevant sustainability indicators, applied to measuring the financial products environmental and/or social characteristics or overall sustainable impact.
When Planetary evaluates and investment opportunity, its sustainability impact is screened using the three documents below:
Code of business ethics (aligned with the UN Global Compact)
EU Taxonomy screening (positive contributions and Do no significant harm assessment)
General disclosures (industries, practices, penalties, supply chain)
The ongoing assessment can be found in our PAI report below. We expect the data quality of the PAI reporting to be improved significantly in 2024 and again in 2025.