It is our policy that Nordic Bloom Funds A/S, in its decision-making process regarding any investment, also considers sustainability of the investment and refrains from investments that involve special sustainability risks.
According to EU regulation 2019/2088 of 27 November 2019, sustainable investments are understood as: “An investment in an economic activity which contributes to an environmental goal as measured e.g. using key resource efficiency indicators for the use of energy, renewable energy, raw materials, water and land, for waste production and greenhouse gas emissions, or for its impact on biodiversity and the circular economy, or an investment in an economic activity that contributes to a social goal, in particular an investment which contributes to combating inequality or which promotes social cohesion, social integration and industrial relations, or an investment in human capital or economically or socially disadvantaged local communities, provided that such investments are not significantly detrimental to any of these objectives, and that the companies invested in follow good management practices, particularly with regard to sound management structures, labor relations, remuneration of staff and compliance with tax regulations.”
Through our venture funds, investments are made in future technology, pharmaceuticals, medical devices and other future solutions in today’s world. The investment policy will be much broader than investing in projects with the promotion of sustainability as an objective, but the funds’ portfolios will usually also contain such investments. We seek to ensure that no investments are made in companies whose project or actions involve sustainability risk.
Our primaries funds are invested through 15-20 top tier American venture funds – primarily Silicon Valley based – carefully selected based on their management teams’ historical performance. In this connection, we encurage that the fund in question has joined Principles for Responsible Investment (PRI) or in some other way, as part of its investment policy, opts out of investments in companies whose purpose or actions are contrary to principles of sustainability.
In our secondary funds, investments are made partly through venture funds and partly through direct investments in companies. When selecting venture funds, we encurage, just like in the primaries funds, that the fund in question has joined PRI or in some other way, as part of its investment policy, opts out of investments in companies whose purpose or actions are contrary to principles of sustainability. And with the direct investments, we ourselves opt out of such companies.
When assessing whether a company’s purpose or actions are contrary to principles of sustainability, we take the following into account in particular:
- Whether the company’s product or service either during its production or when delivered through unnecessary use of black energy, through harmful, including polluting or dangerous substances, through noise, vibrations, smoke or equivalent negatively affects the climate, environment, nature, wildlife, people, the surrounding community,
- Whether the company ensures compliance with principles of non-discrimination, and the company’s management ensures a working environment, both physical and psychological, that does not expose the company’s employees to danger, injury or unnecessary stress,
- That the company complies with applicable regulations, including paying taxes, levies and other mandatory services to public authorities, acts in accordance with good business practice and otherwise acts responsibly towards the surrounding community.
Impact on returns
It is our expectation that the reduction of sustainability risks, which our above-mentioned investment policy and decision-making process entails, will mean a reduction of the total risk in our funds and thus – all other things being equal – an improved return in relation to risk (risk-return).
The integration of assessment of sustainability and opting out of sustainability risks in our investment policy and decisions, cf. above, is not part of our remuneration policy, but is covered by the responsibility of the relevant employees.