Sustainability-Related Disclosures
This disclosure ensures compliance with the Sustainable Finance Disclosure Regulation (SFDR 2019/2088 and 2022/1288).
As these regulations have not yet been fully consolidated, the first part of this disclosure addresses SFDR 2019/2088 and the second part SFDR 2022/1288.
SFDR Statement (2019/2088)
The following disclosure relates to StellaVent Capital GmbH (LEI: 529900G4E3449ZXHI029):
This statement includes three sections:
- Transparency of sustainability risk policies (2019/2088 – 3-1)
- Transparency of adverse sustainability impacts (2019/2088 – 4-1-b)
- Transparency of remuneration policies in relation to the integration of sustainability risks (2019/2088 – 5)
1. Transparency of Sustainability Risk Policies
StellaVent Capital GmbH (“StellaVent”) 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.
StellaVent includes the consideration of sustainability risks in its due diligence process before any investment. This also involves an assessment of sustainability risks, which is conducted through an informal process as appropriate, depending on the circumstances of the individual case. The results of this assessment are taken into account when making the investment decision.
However, StellaVent remains free to decide whether to refrain from investing or to proceed with an investment despite sustainability risks. In such cases, StellaVent can also apply measures to reduce or mitigate any sustainability risks. At all times, StellaVent will apply the principle of proportionality, taking into account the strategic relevance of an investment and its transactional context.
2. No Transparency of Adverse Sustainability Impacts
While StellaVent considers the adverse impacts of its investment decisions on sustainability factors, we do not currently report on them. Sustainability factors include environmental, social, and employee concerns, respect for human rights, and the fight against corruption and bribery.
With the Sustainable Finance Disclosure Regulation (EU 2019/2088) and the subsequent EU 2022/1288 RTS being recent legislative introductions, practical experience regarding their application is limited, leading to potential legal uncertainties in their enforcement. Despite this, StellaVent is dedicated to applying these provisions to the best of our ability, guided by a best-efforts approach to our strategy for B2B software entrepreneurs. StellaVent aims to re-evaluate reporting on the principal adverse impacts of its investment decisions in due course.
3. Transparency of Remuneration Policies in Relation to the Integration of Sustainability Risks
As a registered alternative investment fund manager within the meaning of section 2(4) of the KAGB, StellaVent is not required to have a remuneration guideline or policy under the requirements of the KAGB.
This exemption, however, does not affect our commitment to a fair and transparent remuneration policy. Our approach to compensation is rooted in principles of equity and fairness. We ensure that pay decisions are free from bias and based on objective factors such as job responsibilities, experience, performance, and market competitiveness. Our remuneration process is transparent, clearly communicating how pay levels and adjustments are determined, with regular benchmarks against local standards to ensure market competitiveness.
Additionally, we are fully compliant with relevant wage and labor laws, including the principles of minimum wage, overtime pay, and equal pay for equal work as outlined in Article 157 of the Treaty on the Functioning of the European Union.
While sustainability risks are not currently a factor in determining remuneration, our overall policy is designed to attract and retain talent while adhering to our core values of fairness and regulatory compliance.
SFDR Statement (2022/1288)
The following disclosure relates to StellaVent Capital GmbH (LEI: 529900G4E3449ZXHI029):
Statement of Principal Adverse Impacts on Investment Decisions on Sustainability Factors
Kindly refer above to the headline ‘Transparency of Adverse Sustainability Impacts’ for the PAI Statement. The present statement on PAI on sustainability factors covers the reference period from 1 January 2023 to 31 December 2023. The earliest historical comparison will be provided in June 2025.
The following disclosure relates to Stella One Fonds GmbH & Co. KG (“Fund”) (LEI: 529900Y7UQB5C5Q5DH61):
Summary
StellaVent’s financial product, classified as an Article 8 fund under the SFDR, integrates certain environmental and social characteristics into its investment decisions. While it does not seek to make sustainable investments as defined in the SFDR, StellaVent focuses on fostering B2B software companies in the DACH region. This initiative aims to ensure sustainable growth by providing capital and facilitating access to a network of investors who deeply understand the entrepreneurial journey.
StellaVent’s investment strategy is guided by its commitment to fairness, passion, ambition, responsibility, and curiosity. This approach includes both positive screenings and investment exclusions. Environmental and social characteristics are rigorously assessed before and after investments using qualitative and quantitative inquiries through a third-party tool. This comprehensive approach not only aims to create lasting value and shape markets responsibly but also empowers entrepreneurs to thrive in a dynamic and ethically driven business environment.
For the reporting period of FY23, out of the five investments made, all companies complied with the transparency requirements to the best of their abilities, and provided data according to the sustainability indicators chosen for each aforementioned characteristic. No severe red flags were highlighted however, all companies will be requested to implement a human rights policy, anti-discrimination policy, anti-corruption policy, ESG policy and Code of Conduct going forward. As investors into software companies our prime objective was on data security, and data governance issues, therefore it is positive news that 80% of our current portfolio have a customer and employee privacy policy in place alongside a cybersecurity risks programme. From the scope 1,2 and 3 emissions data collected, total energy consumption and renewable energy consumption was relatively efficient in comparison to revenues generated by the startups.
For more information, please contact us for the periodic disclosure.
No sustainable investment objective but promote E or S characteristics
The Fund emphasizes environmental and social characteristics but does not prioritize sustainable investment as its primary objective.
Environmental or social characteristics of the financial product
The following environmental and/or social characteristics chosen from the BAFIN Guidance on Sustainability Risks are promoted by Stella One Fonds GmbH & Co. KG:
Environment
- Climate Mitigation
Social
- Compliance with recognized labor standards (no child labor, forced labor or discrimination)
- Compliance with employment safety and health protection
- Appropriate remuneration, fair working conditions, diversity, and training and development opportunities
- Exposure to controversial weapons
Governance
- Anti-corruption measures
- Board remuneration based on sustainability criteria
- The facilitation of whistle blowing
- Employee rights guarantee
- Data protection guarantees
- Information disclosure
Investment strategy
The Fund will invest in portfolio companies from the B2B software sector seeking holistic development within the DACH region. Investments are expected to cover a range of economic activities. The Fund will make both majority and minority investments, typically into established profitable companies.
Proportion of investments
The Fund invests strictly according to its investment strategy and investment restrictions. It does not intend to make any investments that do not align with its environmental or social characteristics, including its investment exclusions.
Monitoring of Environmental or Social characteristics
The Fund has heightened its awareness of the impact of sustainability risks on risk management and, consequently, on the investment’s potential value. The Fund engages with portfolio companies on an ad-hoc basis and conducts further checks if there are indications of potential issues with the Fund’s exclusion criteria. Therefore, ongoing monitoring of ESG compliance is conducted, with annual reporting on selected KPIs for all portfolio companies.
Methodologies
Currently, the Fund conducts qualitative and quantitative assessments of environmental and social characteristics. These assessments occur during the annual reporting using a third-party ESG data collection tool. The methodology for calculating Scope 1,2 and 3 emissions is done by the portfolio companies themselves or via the Business Carbon Calculator by Normative.
Environmental Indicators
- Scope 1: Direct GHG Emissions (#tCO2e)
- Scope 2: Indirect Emissions (#tCO2e)
- Scope 3: Indirect Emissions from Value Chain (#tCO2e)
- Total Energy Consumption (#kWh)
- Renewable Energy Consumption (#kWh)
- Activities in Fossil Fuels
- ESG Policy
Social Indicators
- Anti-Discrimination and Equal Opportunities Policy
- Human Rights Policy
- Work Related Injuries
- Female Full Time Employees
Governance Indicators
- Anti-Corruption and Anti-Bribery Policy
- Privacy and Data Security Policy
- Code of Conduct
- Cyber Security Risks Programmed/Training
- Number of Female Board Members
Data sources and processing
Information is obtained from the respective portfolio companies. An external review or verification of this information will only be conducted if misrepresentations are suspected.
Limitations to methodologies and data
The information collected from portfolio companies as part of the Fund’s due diligence or annual reporting requirements is externally verified only if misrepresentations are suspected. Therefore, it cannot be completely ruled out that false information may remain undetected in certain cases. Given that the Fund’s investments span several years, establishing and maintaining a trustworthy working relationship with portfolio companies is considered a priority to ensure compliance with the restrictions outlined in this section.
Due diligence
An initial assessment of how an investment aligns with the aforementioned characteristics is conducted as part of the due diligence process through an informal approach, tailored to the circumstances of each individual case. Generally, portfolio companies are requested to provide purely qualitative statements regarding environmental, social, or corporate governance aspects. These statements are then considered in the investment decision-making process. For more details, please request for our Responsible Investment Policy.
Engagement policies
The Fund decides at its sole discretion whether to make an investment based on sustainability factors and may implement risk mitigation measures where appropriate.
Date of Publication
This document was last updated on June 27th, 2024 to incorporate amendments and additions from the 2022/1288 SFDR update. If you have any questions, please do not hesitate to contact us at ESG@ace-alternatives.com.
