SFDR: Fund Level Disclosure
Rubio Impact Ventures (managed by its general partners in Rubio Fund Management B.V.) manages Coöperatieve Social Impact Ventures NL Fund I U.A. (“Fund 1” which launched in 2014) and Rubio Impact Fund II Coöperatie U.A. (“Fund II” which launched in 2020) and is subject to disclosure under SFDR regulation.
Both Funds are classified as financial products with a sustainable investment objective (Article 9.2 SFDR) and have the following objectives:
A. Sustainable investment objective
We strongly believe that societal challenges lead to business opportunities, triggering social entrepreneurs to find innovative and sustainable solutions for the world’s most pressing issues. The Funds invest in the transition to a sustainable and inclusive economy by focusing on three main Impact Themes:
- Innovative technologies and services that accelerate the transition to a circular and zero carbon future (circular solutions)
- Businesses that empower people to create sustainable livelihoods, championing equal education and employment opportunities (people power)
- Solutions that create positive change in human health, food, nutrition and medicine (healthy living)
Within these thematics and their corresponding UN Sustainable Development Goals, the Funds invest in social ventures that have the potential and drive to change an entire industry.
As such, the Funds contain 100 percent investments with a sustainable (environmental or social) investment objective.
Because the Funds have a broad scope in terms of Impact Themes, they do not merely focus on (one of) the EU’s six environmental objectives for which Taxonomy criteria and thresholds exist, or are being developed. The Funds also do not have as their objective to invest in environmentally sustainable economic activities under the Taxonomy regulation. As such, we have not set a minimum share of Taxonomy-aligned investments within the Funds and – also because of the early stage nature of our investee companies and the lack or usable data on green revenues, green investments and green operational expenditures – the Funds will report a 0 percent Taxonomy-alignment.
In order to meet their sustainable investment objective, the Funds will only consider companies that have a clear Theory of Change at the heart of their business: the entire business is geared at solving a social and/or environmental challenge using an economically viable business model, with direct and measurable impact.
Per investment 1 to 3 Key Performance Indicators (KPI’s) are determined along with a three-year impact target. Subsequently, for the Funds a Weighted Overall Rubio Impact Target is calculated to determine the Fund’s actual impact performance compared to their three-year impact target.
This is the main indicator used to measure the attainment of the Fund’s sustainable investment objective and its development and governance (including external pre-deal and post-deal validation) have been the cornerstone of our approach since 2014.
B. ESG & Impact methodology
Our investment process takes eight steps from sourcing towards validated closing. As part of that process an impact proposal with the proposed Theory of Change is presented by the deal team first to the Investment Committee and second to an independent Impact Advisory Board, pre deal.
This proposal includes – at present – a qualitative assessment of the below Environmental, Social and Governance (ESG) risks.
Rubio ESG risk assessment
Moreover, we include a qualitative review of Impact Risk (the risk that the causality between the proposed Theory of Change and associated impact indicators does not hold), the risk of Negative Externalities (the unintended negative consequences of the business model) and the risk of Misalignment (the risk that the business and its impact are misaligned).
Although the above process aligns with the requirements under Recital 17 SFDR, the assessment of ESG risks does not (yet) include a full review of all indicators for adverse impacts provided in Tables 1, 2 and 3 of Annex I SFDR.
During 2023 and early 2024 we aim to further improve our own periodic Principal Adverse Impacts (“PAI”) reporting in step with the improvement in data coverage and quality we see with our investee companies, and are actively engaging with them on this through questionnaires and capacity building. We intend to use these insights to further improve our pre-deal ESG risk assessment, set policy accordingly and formulate escalation strategies.
All investments are monitored on their impact KPI’s during the investment period and we report quarterly to investors and annually to our other stakeholders on the realised impact of the Fund and its investee companies. Our annual Impact Reports are available through rubio.vc.
C. More information
The Funds are managed in line with all applicable policies and processes of Rubio Impact Ventures.