SFDR

Sustainability-related disclosures pursuant to Regulation (EU) 2019/2088 (“SFDR”)

Last update: 29.06.2023

I. Sustainability risks

Atlantic Labs Manager GmbH (“Atlantic Labs”, LEI: 391200BCAZLOERGVJB59) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. Atlantic Labs considers sustainability risks as part of its due diligence process prior to any investment. This also includes an assessment of sustainability risks. The results of such assessments are taken into account when the investment decision is being taken. However, Atlantic Labs remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case Atlantic Labs can also apply measures to reduce or mitigate any sustainability risks. At all times, Atlantic Labs will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

II. No consideration of adverse impacts of investment decisions on sustainability factors

Atlantic Labs does not consider any adverse impacts of its investment decisions on sustainability factors and, hence, does not use the indicators listed in Annex I of the Regulatory Technical Standards (C(2022) 1931 final, “RTS”) to identify and assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery. Given that SFDR and Regulation (EU) 2020/852 (“Taxonomy”) are relatively new legislative acts and that the accompanying RTS are not even applicable yet, there is very little or no practical experience or practice with regard to the application of their respective provisions. Therefore, substantial legal uncertainties would remain when applying those provisions to the investment decisions and strategies pursued by Atlantic Labs. Atlantic Labs pursues an active venture capital strategy, which means that only minority interests are held in the portfolio companies of the fund managed by Atlantic Labs. However, such minority interests are generally not sufficient to encourage portfolio companies to collect and provide the relevant data to Atlantic Labs. If and to the extent that the legal uncertainties will be resolved and a practicable market and administrative practice will evolve in this regard, Atlantic Labs will re-evaluate considering principal adverse impacts of its investment decisions in due course.

III. Remuneration Disclosures

As a registered alternative investment fund manager within the meaning of section 2 (4) of the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”). Atlantic Labs does not need to have a remuneration guideline or policy in accordance with the requirements of the KAGB.

IV. Sustainability-related disclosures

Financial product: Atlantic Labs V GmbH & Co. KG (the “Fund” / der “Fonds”)

LEI: 3912002QIC6ZO22G5F93

Summary

The Fund considers certain environmental and/or social characteristics as part of its investment decisions and monitoring processes but does not seek to make sustainable investments as defined in the SFDR. The consideration of environmental and/or social characteristics is carried out both before and after an investment. For this purpose, information is initially and regularly obtained from the portfolio companies by means of qualitative queries. The Fund incorporates exclusion (negative screening) aspects during the decision-making process. Thereby the Fund considers several ESG themes to be the key to responsible investing. The actions and decisions described in the following section are each made by Atlantic Labs for and on behalf of the Fund.

Zusammenfassung

Der Fonds berücksichtigt bestimmte ökologische und/oder soziale Merkmale im Rahmen seiner Investitionsentscheidungen und Monitoring-Prozesse, strebt aber keine nachhaltigen Investitionen im Sinne der SFDR an. Die Berücksichtigung von Umwelt- und/oder Sozialmerkmalen erfolgt sowohl vor als auch nach einer Investition. Zu diesem Zweck werden zunächst und regelmäßig Informationen von den Portfoliounternehmen durch qualitative Abfragen eingeholt. Der Fonds bezieht Exklusionsaspekte (negatives Screening) in seinen Entscheidungsprozess ein. Dabei betrachtet der Fonds mehrere ESG-Themen als Schlüssel für verantwortungsvolles Investieren. Die in diesem Abschnitt beschriebenen Handlungen und Entscheidungen erfolgen jeweils durch Atlantic Labs für den Fonds.

No sustainable investment objective

The Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

The Fund promotes environmental and/or social characteristics by implementing certain investment exclusions (see section ‘Investment strategy’) during the decision-making process.

Investment strategy

The purpose of the Fund is to build, hold and manage (including to divest) a portfolio of equity and equity-related investments in portfolio companies. The Fund will invest in portfolio companies with digital / internet based business models able to scale internationally, with a focus on digital health, future of work, AI & data, industrial automation, mobility, fintech, proptech and community, as well as other consumer or B2B mobile, software and tech-related business models, provided that the Fund will not invest in companies with business models and products focusing on the future of food or the food value chain. The Fund will focus on co-creation and early stage, i.e., pre-seed, seed, start-up and other early stage investments. As such, investments are expected to be spread across a wide range of economic activities.

The Fund is bound by the investment restrictions and limitations set out in the Fund’s limited partnership agreement and shall procure that such requirements, restrictions and limitations are complied with at all times. In particular, the Fund will screen each investment opportunity against its investment exclusions and no investments will be made in the area of such exclusions.

The Fund shall not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies or other entities,

(1) whose business activity consists of an illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to the Fund or the relevant company or entity, including without limitation, human cloning for reproduction purposes); or

(2) which substantially focus on:

 a) The production of and trade in tobacco and distilled alcoholic beverages and related products;

 b) The financing of the production of and trade in weapons and ammunition of any kind;

 c) Casinos and equivalent enterprises;

 d) The research, development or technical applications relating to electronic data programs or solutions, which

  a. aim specifically at: supporting any activity referred to un-der items a) through d) above; internet gambling and online casinos; or pornography, or

  b. are intended to enable to illegally enter into electronic data networks; or download electronic data.

 e) Fossil fuel-based energy production and related activities, as follows

  a. Coal mining, processing, transport and storage;

  b. Oil exploration and production, refining, transport, distribution and storage;

  c. Natural gas exploration and production, liquefaction, re-gasification, transport, distribution and storage;

  d. Electric power generation exceeding the emissions performance standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs;

 f) Energy-intensive and/or high CO2-emitting industries, as follows:

  a. Manufacture of other inorganic basic chemicals (NACE 20.13);
  b. Manufacture of other organic basic chemicals (NACE 20.14);
  c. Manufacture of fertilisers and nitrogen compounds (NACE 20.15);
  d. Manufacture of plastics in primary forms (NACE 20.16);
  e. Manufacture of cement (NACE 23.51);
  f. Manufacture of basic iron and steel and of ferro-alloys (NACE 24.10);
  g. Manufacture of tubes, pipes, hollow profiles and related fittings, of steel (NACE 24.20);
  h. Manufacture of other products of first processing of steel (NACE 24.30, incl. 24.31-24.34);
  i. Aluminium production (NACE 24.42);
  j. Manufacture of conventionally-fuelled aircraft and related machinery (sub-activity of NACE 30.30);
  k. Conventionally-fuelled air transport and airports and ser-vice activities incidental to air transportation (NACE 51.10, 51.21 and 52.23).

Notwithstanding the above, investments in sectors mentioned in item 2 f) above, shall be allowed if Atlantic Labs confirms that the relevant investment either (i) qualifies as environmentally sustainable investments as defined in the Taxonomy – even though the Fund does not intend to make any sustainable investments – as supplemented by the technical criteria established under the “EU Taxonomy Delegated Acts” (Commission delegated Regulations (EU) supplementing Regulation (EU) 2020/852 or upcoming Taxonomy Delegated Acts, as amended from time to time, respectively), or (ii) is eligible under the EIF’s Climate Action & Environmental Sustainability (CA&ES) criteria for green financing.

Good governance practices are assessed through our questionnaire and investment memo as part of every due diligence process prior to any investment made by the Fund. Such practices include, for example, sound management structures, employee relations, remuneration of staff and tax compliance within the portfolio companies. Moreover, the Fund will conduct regular monitoring of the good governance practices in its portfolio companies during the holding period. If the Fund becomes aware of severe governance issues in the portfolio companies during the holding period, the Fund will investigate them and work with all parties involved to find an appropriate solution.

Proportion of investments

The Fund will invest fully in line with its investment strategy and investment restrictions, i.e., will only make investments which are aligned with its environmental or social characteristics (i.e., its investment exclusions). The Fund does not make and does not intend to make sustainable investments within the meaning of Art. 2 (17) SFDR or environmentally sustainable investments within the meaning of Art. 2 Taxonomy; hence, no portion of its investments will be aligned with the Taxonomy.

Monitoring of environmental or social characteristics

The Fund has an increased awareness of the impact of environmental or social characteristics on risk management and thus on the value potential of investments. In order to monitor the environmental or social characteristics promoted by the Fund (i.e., its investment exclusions), the Fund consults with its portfolio companies in regular intervals and will carry out further checks in order to identify potential issues with such characteristics. Therefore, the Fund monitors compliance with its environmental or social characteristics (i.e., its investment exclusions) on an ongoing basis. External monitoring mechanisms are not in place.

Methodologies for environmental or social characteristics

Currently the Fund applies qualitative assessments with regard to its environmental or social characteristics (i.e., its investment exclusions). The Fund conducts its initial assessment in the course of its due diligence. The Fund’s due diligence takes the form of an investment memo which the Fund completes after consultation with its (potential) portfolio companies.
Based on the results of such assessment the Fund identifies whether the environmental or social characteristics promoted by the Fund are met.
In order to measure how the environmental or social characteristics are met during the holding period, the Fund consults with the portfolio companies in regular intervals and will carry out further checks in order to identify potential issues with such characteristics.

Data sources and processing

In order to attain each of the environmental or social characteristics promoted by the Fund (i.e., its investment exclusions), the Fund consults with the (potential) portfolio companies and documents the results in an investment memo. Hence, data is obtained only from the (potential) portfolio companies. An internal or external review or verification of the information obtained will be carried out if misrepresentations are suspected.
The results of the data obtained are considered in the investment decision and, during the term of the Fund, in the monitoring process.

Limitations to methodologies and data

The information collected from the (potential) portfolio companies via the investment memo as part of the due diligence on behalf of the Fund is internally or externally verified only if and to the extent misrepresentations are suspected. Thus, it cannot be ruled out completely that false information may remain undetected in certain cases. As the Fund’s investments are made for several years, the Fund considers it a priority to establish and maintain a trustful working relationship with its portfolio companies in order to ensure compliance with the environmental or social characteristics promoted by the Fund (i.e., its investment exclusions).

Due diligence

An initial assessment of how an investment relates to the environmental or social characteristics promoted by the Fund (i.e., its investment exclusions) is carried out as part of the due diligence process using an investment memo. As a rule, purely qualitative statements of an environmental or social nature or relating to corporate governance are requested from the portfolio companies and then taken into account in the investment decision-making process. An internal or external review or verification of the information obtained will only be carried out if misrepresentations are suspected.

Engagement policies

Engagement is, in general, not part of the environmental or social investment strategy of the Fund. However, should the Fund determine any potential issues relating to the environmental or social characteristics promoted by the Fund, the Fund may engage the respective portfolio companies in discussions in order to resolve, reduce or mitigate any adverse effects. Yet, it remains at the sole discretion of the Fund to determine which efforts are appropriate and proportionate in light of the size and strategic importance of the respective portfolio company as well as the transactional context.

Designated reference benchmark

No index has been designated as a reference benchmark to meet the environmental or social characteristics promoted by the Fund.

Atlantic Lab’s commitment to OPERATE responsibly

Regardless of SFDR or Taxonomy requirements, Atlantic Labs implemented collaborations and procedures to
address ESG matters internally as follows:

1. Environment

  • Energy consumption is 100% from renewable energy
  • Further CO2-emissions are 100% compensated
  • Member of “Leaders for Climate Action”
  • Travel/Eco policy

2. Social

  • Promoting diversity in the startup ecosystem
  • Promoting work-life balance:
    • Home office possible
    • Fair salaries
    • Subsidized/free collaborations: Kindergarten, eBike subscriptions, sport discounts, mental health subscriptions,
    • Free vegetables, fruit & drinks
    • Free corona tests and flu vaccinations

3. Governance

  • Yearly financial audits with focus on AML procedures
  • LP Advisory Board
  • Investment Committee