NBI Investors: SFDR Statement (version: 04-01-2023)

With this statement, as part of the Sustainable Finance Disclosure Regulation EU 2019/2088 (SFDR), NBI Investors provides information about its policies and procedures considering both sustainability risks and adverse sustainability impacts during investment decision making across our fund portfolio.

In addition, we provide an overview of the relevant sustainability related information associated with underlying funds that are currently managed by NBI Investors.

1. Our broader ESG commitment

Besides NBI Investors having an overall impact investing objective, we also seek to incorporate broader Environmental, Social, and Governance (“ESG”) factors in our responsible investment decision making. In addition to the primary impact objectives of our investments we set high standards for ecological, social and sustainable business operations. This means we take into account factors such as CO₂ emissions, safety, employee relations, diversity and equality in our due diligence process and identify areas for improvement during the investment period.

We apply the Do No Significant Harm (DNSH) principle in accordance with the EU Taxonomy. This principle means that an investment can only be a sustainable investment if it achieves its sustainable objective without significantly harming other environmental or social factors.

NBI also incorporates good governance into its investment strategy as a means of judging if an investment company has its norms and practices in order (assessment of sound management structures, employee relations, remuneration and tax for our underlying investments).

We stand by our Code of Conduct and screen all investments against it. We are one of the committed investors supporting FundRight to work towards a more diverse gender mix in company management teams (at least 35% female).

2. Adverse Sustainability Impacts (SFDR Article 4)

At NBI investors we do not consider the Principal Adverse Impacts in line with SFDR (Article 4). Our portfoliocompanies are not required to publish this data and we therefore cannot guarantee accurate and complete reporting to fulfil the requirements. In accordance with SFDR, when sufficient data is available, we will monitor the full series of PAIs (16 indicators) on an annual basis, including the 14 mandatory indicators as well as the environmental indicator ‘Emissions of ozone-depleting substances’, and the social indicator ‘Rate of accidents’. We will periodically review whether portfoliocompanies report this data and when they do, we will start considering adverse impacts at entity level (article 4). 

On an individual fund level, we do consider adverse impacts (article 7). Prior to investment we define one to three PAI’s that could be material to the company (e.g. energy consumption intensity for software solutions that depend on significant amounts of data processing) and obtain data for these as part of the due diligence process. As the companies under consideration are early-stage and may not have this data readily available, qualitative data is also deemed sufficient at this stage. We also consider other material adverse sustainability impacts of our (potential) portfolio companies as part of a general ESG-risk assessment in due diligence and monitor these risks post-investment. 

Because of our early stage (startup) investment strategy and the fact that we invest in companies with a sustainable objective we generally do not expect significant adverse/negative impacts on these indicators. Our typical investment companies are also likely to be inherently conscious about their potential adverse impacts and strive to mitigate these where possible. 

3. Sustainability risk policies and procedures (SFDR Article 3)

NBI Investors has integrated sustainability risks into its investment decision-making process. This means that we evaluate potential sustainability risks that our investments may be exposed to (an environmental, social or governance event or condition that, if it were to occur, would cause a real or potential material adverse effect on the value of the investment). This includes climate change adaptation risks such as potential exposure to acute physical climate change risks such as extreme weather events, as identified by the TCFD.

We do this by flagging important risks in our investment proposals and are monitoring these risks on an annual basis. We encourage portfolio companies to mitigate these risks where necessary and possible.

4. Remuneration (SFDR Article 5)

Remuneration at NBI Investors aims at effective risk management. It takes into account careful and diligent decision making and lacks any form of incentives for its employees in excessive risk taking for both business and sustainability. Renumeration is also aligned with the long-term interest of the entity.

NBI's remuneration is based on a fixed monthly salary and benefits for all employees. A discretionary short-term incentive, annual bonus, is in place for non-executive personnel at medior and senior level. The bonus is based on individual performance. For NBI’s latest fund, SHIFT Invest III, the carried interest vehicle of the fund manager (20%) is also partly based on the realisation of impact targets based on impact KPIs identified for the companies. These incentive schemes should drive behaviour and decision making that is aligned with the genuine interests of investors and is grounded in sustainability principles.

NBI Investors remuneration policy and salary house are reviewed at least yearly by its shareholders to comply with the values and mission of the entity and the laws and legislation of its jurisdiction.

5. Sustainable investment objectives of our funds (SFDR Article 10)

NBI Investors manages three venture capital funds that exclusively invest in innovative enterprises with a significant positive environmental impact potential. SHIFT III, with a clear sustainable investment objective, is currently the only fund under management that undertakes new investments. Other funds managed by NBI Investors are either closed (in divestment period) or are not subject to disclosure under the SFDR Regulation.

The table below gives an overview of the funds managed by NBI Investors that are subject to disclosure under SFDR regulation:

 

Funds	Sustainable Investment Objective	Strategy
SHIFT Invest III Coöperatief U.A.	To invest in innovative solutions to fight climate change, biodiversity loss, and the depletion of natural resources by    means of the following investment themes: 1.       the energy transition, 2.       green industry, 3.       smart food and agriculture, 4.       sustainable mobility and logistics.	We proactively source deals with outbound industry scans and deep dives. When we have found a company with potential, we set up an impact case upfront to ensure contribution to our sustainable investment objectives is not assumed at face-value. To do this, we assess the company’s theory of change, identify measurable impact KPI’s and targets, deliberate the additionality of the solution, and consider any risks and tradeoffs it may entail. For more information, please refer to our 2021 Impact Report.
SHIFT Invest Coöperatief U.A.	Closed fund which has the objective to invest in innovative start- and scale-ups with a positive impact on ecological and/or social sustainability, by means of the following investment themes: 1.       agriculture and nutrients, 2.       bio-based and clean technologies, 3.       health and nutrition.	As the fund is no longer adding any investments to the portfolio, we currently monitor, update and/or adjust the prior-identified impact-KPIs and risks on an annual basis. When necessary, we actively engage with companies to improve performance on the latter.
Dutch Greentech Fund	Closed fund which had sustainable charateristics to invest in innovative start- and scale-ups with a positive impact on  ecological sustainability, by means of the following investment themes: 1.       Food & agriculture 2.       Sustainable mobility and energy transition	As the fund is no longer adding any investments to the portfolio, we currently monitor, update and/or adjust the prior-identified impact-KPIs and risks on an annual basis. When necessary, we actively engage with companies to improve performance on the latter.