General entity and fund informaton
SDG Capital BV is regarded a financial market participant (FMP) under the Sustainable Finance Disclosure Regulation (SFDR), qualifying as an Alternative Investment Fund Manager (AIFM) (SFDR, art. 2.1.e). The funds under management of SDG Capital are:
SDG Capital Fund I Coöperatief UA (# 85325031)
SDG Capital Fund II Coöperatief UA (# 88846709)
SDG Capital aspires to create impact both directly through its investments as well as indirectly by setting an example of impact investing in companies in a private equity setting. There are few, if any, impact-focussed investors available for mature mid-sized companies in the Benelux region, as most impact-focussed investors seem to focus on ventures. SDG Capital has the ambition to invest only in companies where the core of the business model makes a positive contribution to the UN Sustainable Development Goals 3 (good health and wellbeing), 7 (affordable and clean energy) or 12 (responsible consumption and production).
SDG Capital is still at the outset of its impact investing journey. The first funds were only raised and invested in 2023, and most of the current team joined late 2023 or early 2024. As a result, the impact measurement framework required to substantiate the impact ambitions, is still under development. SDG Capital aspires to comply with all disclosure requirements that are set out under the SFDR for funds with environmental, sustainable and social scopes. However, for the reporting period of 2023-2024, we are not able to provide impact measurements. Therefore, for this first year, SDG Capital (the “entity level”) will report according to the general disclosure requirements adherent to all financial market participants (“FMPs”) instead of those directed at environmental, social or sustainable FMPs.
Get reporting Principle Adverse Impact indicators (PAIs)
Because of the early stage of SDG Capital, we do not yet have the relevant information to report Principal Adverse Impact indicators[1] (PAIs) on fund or entity level (SFDR, art. 4; art. 7). SDG Capital has the ambition to report on these matters starting from the next reporting period, following the guidelines stated in article 8 and/or 9 of the SFDR (SFDR, art. 4.1.b).
Integration of sustainability risks in investment process
Within the SFDR, sustainability risks are defined as environmental, social, or governance events or conditions (“ESG”) that, if they occur, could cause an actual or a potential material negative impact on the value of the investment (SFDR, art. 3).
SDG Capital views responsible investing in terms of ESG as a hygiene factor for professional investors and all the more for investors with impact investment ambition. ESG considerations and risks of a potential investment are an important topic in the company selection, due diligence process and resulting investment decision. As a shareholder, SDG Capital deems itself responsible for sustaining continuous dialogue with management boards of its portfolio companies regarding ESG considerations. as a key factor in strategic decision-making.
Links between sustainability risks and remuneration (SFDR, art. 5)
Compensation plans at SDG Capital are based on experience, skills and performance. The compensation is made up of both fixed (salary and benefits) and variable compensation (bonusses and carried interest) linked to the financial returns of the funds. Given the strong ambition to invest solely in companies making a positive impact through the core of their business model and having limited ESG risks, the variable compensation is indirectly linked to positive impact and ESG, as financial growth and success of such companies will be aligned with increasing positive impact.
[1] Intended as impact of investments on ESG or sustainability indicators, set out by the Regulatory Technical Standards (RTS) developed jointly with ESA (European Supervisory Authorities)
SDG Capital - Apollolaan 151 - 1077 AR Amsterdam - KvK 81095384 - BTW NL861927230B01