SUSTAINABILITY POLICY

Sustainability-related disclosures

Last updated: 2024-06-12

BackingMinds Management AB, reg. no. 559278-2675 (“BackingMinds”), is a registered alternative investment fund manager under the supervision of the Swedish Financial Supervisory Authority (Finansinspektionen). This page contains BackingMinds’ disclosures under Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (“SFDR”).

Our approach

Our mission is to address a funding gap in the market by investing in underinvested entrepreneurs and segments. We believe that long-term robust returns for our investors are best achieved by investing in companies that strive to maximise their positive impact on people’s lives and the planet.

We work actively to redistribute capital to founders with non-traditional profiles, such as female founders, founders with an immigrant background and companies based outside the traditional financial centres. In doing so, we aim to diversify the venture capital market.

1. Integration of sustainability risks (SFDR Article 3)

A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could cause an actual or potential material negative impact on the value of an investment. We integrate sustainability risks in every stage of the investment lifecycle, from sourcing and screening to ownership and exit.

Sourcing. We have built non-conventional channels to reach founders who are often overlooked by traditional venture capital. We actively seek companies whose products and services aim to solve major environmental and social challenges.

Screening and due diligence. We assess sustainability risks alongside other risks in our due diligence. The process includes management interviews, review of performance history, environmental and HR data, industry research, organisational and strategic evaluation, and publicly available data. Environmental, social and governance factors are prioritised according to their materiality to the business, its stakeholders and the investment. We also assess good governance practices through due diligence and AML/KYC processes covering management teams and owners.

Material sustainability risks that cannot be resolved or mitigated lead to a decision not to invest. Where we invest despite identified risks, we work with the company to reduce or mitigate them, applying the principle of proportionality.

Exclusions. Our funds do not invest in businesses that:

• result in violations of human rights;

• conduct illegal economic activities;

• produce tobacco or distilled alcoholic beverages;

• manage casinos or internet gambling; or

• provide IT or software systems that support illegal economic activities, internet gambling, online casinos or pornography.

Ownership and monitoring. We take an active ownership role through board representation, voting at general meetings and contractual rights. We encourage and support our portfolio companies in maintaining good governance practices and engage with them on sustainability matters as needed. We regularly measure the share of portfolio companies that assess their impact against the UN Sustainable Development Goals. If a portfolio company cannot improve its sustainability performance despite repeated efforts, we may ultimately decide to divest.

Key sustainability risks. Because our funds invest at an early stage, we consider the main sustainability risk to be ensuring board diversity and good governance in companies where such processes may not yet be fully in place. Our focus on the green transition also means that we may invest in companies that have not yet completed their transition and may therefore have a negative environmental impact, for example on CO₂ emissions, for longer than anticipated.

We report annually to the investors in our funds on the implementation of our sustainability policy.

2. No consideration of principal adverse impacts (SFDR Article 4)

BackingMinds does not currently consider the principal adverse impacts of its investment decisions on sustainability factors within the meaning of Article 4 of SFDR. Both BackingMinds and the early-stage companies our funds invest in are small organisations, and the data collection, measurement and reporting required would not be proportionate at this stage. We keep this decision under review and may begin to consider principal adverse impacts in the future.

3. Remuneration policy (SFDR Article 5)

BackingMinds’ remuneration policy is consistent with the integration of sustainability risks. Remuneration is structured so that it does not encourage excessive risk-taking with respect to sustainability risks, and no variable remuneration is linked to investment performance.