What is the SFDR?
The SFDR was set out in “Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability‐related disclosures in the financial services sector”. The “Regulation lays down harmonized rules for financial market participants and financial advisers on transparency with regard to the integration of sustainability risks and the consideration of adverse sustainability impacts in their processes and the provision of sustainability‐related information with respect to financial products.”
The objective of Satgana Fund 1 is to achieve long-term value creation, strong financial performance and lasting impact by investing in for-profit entrepreneurs that invent sustainable and scalable solutions with profitable unit economics and big market potential and to address environmental pillars of the United Nations’ sustainable development goals (the “SDGs”).
Satgana is a Climate Tech Venture Capital firm that intends to source innovators with ground-breaking ideas in order to invest in their founding capital and follow-on through pre-seed round and seed round. Satgana Fund 1 will focus on early stage. In order to source potential Investments, Satgana will focus on the assessment of targeted SDGs during the screening and due diligence process.
Satgana Fund 1 has sustainable investment as an objective as set out in Article 9 of the SFDR. Sustainable investment shall mean an investment in an economic activity that contributes to an environmental objective, provided that the investment does not significantly harm any environmental objective and that the investee companies follow good governance practices.
The General Partner shall implement and maintain an environmental and social management system, including environmental and social policy and procedures commensurate with the nature of Satgana’s investment activities and the level of environmental and social risks associated with the Investments.
The General Partner undertakes to consider the principle adverse impacts of investment decisions on sustainability factors and will update this Agreement by 30 December 2022 in accordance with Article 7 of the SFDR (or as otherwise required under the SFDR).
In parallel with the provision of funding, Satgana will also provide operational support to companies in which it invests.
"Throughout all the funding stages, Satgana will incorporate impact assessment in its portfolio management by (i) defining impact metrics and targets, (ii) co-creating impact management plan and (iii) monitor the contributions to a planet-positive impact of its investments".
Satgana will target companies that (i) possess highly capable and motivated team, (ii) have the potential to positively impact on People-Planet-Prosperity, and (iii) have high commercial potential.
Target investments For-profit entrepreneurs from diverse geographies who invent sustainable and scalable solutions to address social and environmental issues.Their business model must be intentionally designed to have a positive impact on at least one of the following primary SDGs:
Satgana has particular interest in firms that address climate change, and ecosystem and biodiversity loss.
Satgana sees Gender Equality as an intersectional topic, and applies a gender-lens across its investment strategy.
Any additional impact on other SDGs is viewed positively upon. Further, the firm must have measurable KPIs to track their impact in relation to their identified SDGs.
Target investments are diversified on sectors and technologies. Investments will also be geographically diversified, with a focus on Europe and Africa.
The following sectors are excluded from any investments:
- production of or trade in weapons or ammunitions;
- gambling, casinos and equivalent enterprises;
- businesses or project involving nuclear power generation and coal-fired power generation;
- production or trade in alcoholic beverages (excluding beer and wine);
- production or trade in tobacco;
- production, distribution and/or promotion of adult entertainment products or pornography, including but not limited to videos, magazines, audio recordings or website;
- more generally any target that does not fit the criteria entailed in the Investment Objectives;
- new constructions of electric and thermal coal-fired power plants and modernization of such operating and decommissioned stations with or without long-term carbon capture and storage;
- nuclear projects;
- hydro-electric projects with a capacity above 20 MW;
- biofuel projects (biodiesel and ethanol), certain biomass and organic waste projects (e.g. from production of palm oil) unless it can be demonstrated that these projects meet the aspects of sustainable development after a detailed study and that they apply robust environmental and social safeguards (e.g. no threat to food security, to deforestation, forest degradation, wetland drainage through an indirect land use change);
- Industrial gas projects (HFC, N2O, PFC, SF6) only if they are related to carbon market activities. Oil production entailing major local pollution problems;
- Certain types of mining activities in which waste handling involves special risk;
- Unlawful logging and other particularly damaging logging;
- Unlawful fishing and other particularly damaging fishing activities;
- Dam projects which may cause serious environmental damage;
- Projects and activities with severe and irreversible consequences for particularly valuable and/or protected areas;
- Mining and power companies that derive more than 30% of income from thermal coal or base more than 30% of their operations on thermal coal; and
- Companies that have more than 30% of income from oil exploration or base more than 30% of their operations on oil exploration.
Satgana maintains a remuneration policy that is overseen by a Compensation Committee with oversight from the Board of Directors. The policies are structured so as to promote appropriate and effective risk management, and to avoid the encouragement of excessive risk-taking, including that of sustainability risks. In addition, the Compensation Committee is charged with ensuring good governance practices and upholding an impeccable record on human rights and relevant social issues (as it pertains to compensation) at all levels of the firm.