SFDR

Ada Ventures’s Fund II identifies as an Article 8 fund under the European Union’s Sustainable Disclosure Financial Regulation (‘SFDR’). It does not have as its objective a sustainable investment objective, but promotes environmental and social characteristics, with an aim to have 60% of its investments in sustainable investments. No reference benchmark has been designated to attain the environmental / social characteristics  promoted by the Fund.

About Ada Ventures & Fund II Objectives

Ada Ventures’s Fund II is an inclusive venture capital fund built on the principles of Inclusive Alpha®. The Fund invests in three core themes of: Economic Empowerment, Healthy Ageing and Climate Equity. These are themes which align with the environmental and social characteristics referred to by the SFDR.  Almost every investment in the fund will be made in line with these core themes, with any deviations by exception only, or made by the Ada Angels (in the UK or in Denmark).

Investments will be made in pre-seed and seed companies in the UK (or with a strong link to the UK), established in the main, but not limited to, founders from underserved areas of the market which seek to solve global problems using defensible technology.

No reference benchmark has been designated to attain the environmental / social characteristics promoted by the Fund. The objectives of the fund relate to the number of people in marginalised communities which our portfolio companies are able to improve.

Each investment into a company that scores highly on impact (per our process below) will be asked for impact KPIs that can be used to track our progress against the above objectives when the timing is appropriate for the stage of company.

Our current investment process, including (1) how we assess whether our companies do not cause significant harm to an environmental or social investment objective; and (2) our alignment with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights is set out below.

Before we make an investment, we aim to assess each company as follows:

• Against a negative screen of things we won’t invest in, for example anything that will cause harm to humans or society.
• Assess against the Fund’s investment restrictions in the fund documents e.g. no investments into armaments or pornography.
• Consider if the investment has a potential to contravene human rights.
• Complete a full impact assessment on the company, based on the Impact Frontiers framework and the OECD Guidelines for Multinational Enterprises (the “OECD Guidelines”). This takes into account the potential social and environmental impact of a company and how they affect the planet & society around them, including any potential negative risks.
• Complete an ESG assessment of every company, regardless of their impact score, and based on the stage of the company.

How have the indicators for adverse impacts on sustainability factors been taken into account?

Given the size of our companies and the early stage at which we invest, we do not take into account the Principle Adverse Indicators (“PAIs”). We aim to use the PAIs to update the ESG framework which we share with our companies to encourage good ESG practices, and will use our best efforts to assess and track the main positive and negative impacts of our portfolio. We will select the most relevant PAIs proposed in the SFDR alongside other sustainability indicators as relevant and appropriate to the size and stage of our fund and our portfolio.

Note that any data will only be collected on the main investments made by the Fund, and not the Ada Angel investments (in the UK or in Denmark). No investments will be made into companies active in the fossil fuel sector, or in companies manufacturing or selling weapons.

What is the policy to assess good governance practices of the investee companies?

As noted above, we have a set of standard ESG questions we aim to ask prior to investment into each company.In addition, we have developed a founder scoring framework for each founder to assess how well they will run the company.

What is the policy to assess good governance practices of the investee companies?

A portion of the Fund has been carved out for the Ada Angels program. This involves two programs: (a) £10,000 cheques provided to 20 UK individuals to make angel investments in the UK (up to £50,000 per Angel); and (b) a total of £500,000 provided to 10 individuals in Denmark to make angel investments in Denmark (in companies with a strong link to the UK – up to £50,000 per angel). The Danish Ada Angels have been trained on our impact & ESG process outlined above.

The remainder of the fund is expected to be aligned with our three themes and will go through the impact & ESG assessment process above.