ESG

Sustainability-Related Disclosures

This disclosure ensures compliance with the Sustainable Finance Disclosure Regulation (SFDR 2019/2088 and 2022/1288).

As these regulations have not yet been fully consolidated, the first part of this disclosure addresses SFDR 2019/2088 and the second part SFDR 2022/1288.

SFDR Statement (2019/2088)

The following disclosure relates to Join Capital GmbH (LEI: 52990035XX7SKN96EO09):

This statement includes three sections:

Transparency of sustainability risk policies (2019/2088 – 3-1)
Transparency of adverse sustainability impacts (2019/2088 – 4-1-b)
Transparency of remuneration policies in relation to the integration of sustainability risks (2019/2088 – 5)

1. Transparency of Sustainability Risk Policies

Join Capital GmbH (“Join Capital”) 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.

Join Capital considers sustainability risks as part of the due diligence process prior to any investment. This also includes an assessment of sustainability risks. Such assessment is being conducted by using a checklist. The results of such assessment are taken into account when the investment decision is being taken.

However, Join Capital remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case Join Capital can also apply measures to reduce or mitigate any sustainability risks. At all times, Join Capital will apply the principle of proportionality, taking due account of the strategic relevance of an investment as well as its transactional context.

2. Transparency of Adverse Sustainability Impacts

While Join Capital considers the adverse impacts of its investment decisions on sustainability factors, we do not currently report on them. Sustainability factors include environmental, social, and employee concerns, respect for human rights, and the fight against corruption and bribery.

With the Sustainable Finance Disclosure Regulation (EU 2019/2088) and the subsequent EU 2022/1288 RTS being recent legislative introductions, practical experience regarding their application is limited, leading to potential legal uncertainties in their enforcement. Despite this, Join Capital is dedicated to applying these provisions to the best of our ability, guided by a best-efforts approach to our strategy for “The Neue Industry” entrepreneurs. Join Capital aims to re-evaluate reporting on the principal adverse impacts of its investment decisions in due course.

3. Transparency of Remuneration Policies in Relation to the Integration of Sustainability Risks

As a registered alternative investment fund manager within the meaning of section 2(4) of the KAGB, Join Capital is not required to have a remuneration guideline or policy under the requirements of the KAGB. However, Join Capital has a Remuneration Policy in place to ensure an appropriate framework exists to support our strategic priorities. These include an annual alignment of our employees’ remuneration with local market benchmarks to attract and retain talent; Join Capital incorporates any regulatory updates into the policy. Employee salaries are determined by their role and experience and align with the Venture Capital industry standards of the local markets. Fixed salaries are set to sufficiently compensate for their responsibilities, independent of variable remuneration.

SFDR Statement (2022/1288)

The following disclosure relates to Join Capital GmbH (LEI: 52990035XX7SKN96EO09):

Statement of Principal Adverse Impacts on Investment Decisions on Sustainability Factors

Kindly refer above to the headline ‘Transparency of Adverse Sustainability Impacts’ for the PAI Statement.

The present statement on PAI on sustainability factors covers the reference period from 1 January 2023 to 31 December 2023.

The following disclosure relates to Join Capital Fund I GmbH & Co. KG (LEI: 529900B3ZT2EIF3TES63) (“JCF1”):

Summary

Join Capital Fund I GmbH & Co. KG, classified as an Article 8 fund under the SFDR, integrates certain environmental and social characteristics into its investment decisions. While Join Capital does not seek to make investments with a sustainable investment objective as defined by the SFDR, it acknowledges that some of the world’s most pressing challenges arise from inefficient industry practices and legacy operations. Believing in the transformative power of today’s entrepreneurs, Join Capital supports those at the forefront of building ‘The Neue Industry’—a new ecosystem representing a paradigm shift towards more sustainable, equitable, and efficient business models and technologies. Join Capital’s investment approach includes both positive screenings and investment exclusions, rigorously assessing environmental and social characteristics before and after investments using qualitative and quantitative inquiries through a third-party tool.

For the reporting period of FY23, out of the ten investments made, nine complied with the transparency requirements to the best of their abilities, and provided data according to the sustainability indicators chosen. No severe red flags were highlighted in the sustainability indicators compared with local and industry benchmarks. All portfolio companies also did a holistic standardized ESG assessment, with the portfolio averaging 63.5 out of 100. However, upon analysis it was found that the assessment was geared more toward manufacturing companies than pre-seed and seed startups resulting in lower Environmental scores.

For more information, please contact us for the periodic disclosure.

No sustainable investment objective but promote E or S characteristics

The Fund emphasizes environmental and social characteristics but does not prioritize sustainable investment as its primary objective.

Environmental or social characteristics of the financial product

The following environmental and/or social characteristics chosen are promoted by Join Capital Fund I GmbH & Co. KG:

Environment:

Decarbonization: Increasing energy efficiency in factories, buildings and mobility.
Scarcity of raw materials: Alternative manufacturing methods and optimized procurement.
Disruption of supply chains: Optimized shipping routes and yield management.

Social

Shortage of skilled labor: Decreased dependency on humans through automation and autonomy

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 growth-oriented seed and early-stage Portfolio Companies with a focus on technology sectors that are active or engaged in B2B, Industry 4.0, PropTech and Enterprise SaaS. The Fund shall conduct investments in Portfolio Companies originating, in Germany, Europe (including the United Kingdom and Switzerland), the United States and opportunistically elsewhere.

Proportion of investments

The Fund invests strictly according to its investment strategy and investment restrictions. It does not intend to make any investments that do not align with its environmental or social characteristics, including its investment exclusions.

Monitoring of Environmental or Social characteristics

The Fund has heightened its awareness of the impact of sustainability risks on risk management and, consequently, on the investment’s potential value. The Fund engages with portfolio companies on an ad-hoc basis and conducts further checks if there are indications of potential issues with the Fund’s exclusion criteria. Therefore, ongoing monitoring of ESG compliance is conducted, with annual reporting on selected KPIs for all portfolio companies.

Methodologies

Currently, the Fund conducts qualitative and quantitative assessments of environmental and social characteristics. These assessments occur during the annual reporting using a third-party ESG data collection tool. The standardized test was developed by a third-party focusing on ESG topics in accordance with international standards such as Global Reporting Initiative ‘GRI’, Sustainability Accounting Standards Board ‘SASB’, etc. The results of this assessment aid in identifying material ESG risks. The methodology for calculating Scope 1,2 and 3 emissions is done by the portfolio companies themselves or via the Business Carbon Calculator by Normative.

Sustainability Indicators

ESG Assessment Score
- Environment Score
- Social Score
- Governance Score
Scope 1: Direct GHG Emissions (#tCO2e)
Scope 2: Indirect Emissions (#tCO2e)
Scope 3: Indirect Emissions from Value Chain (#tCO2e)
#days lost to injuries, accidents, fatalities, or illness

Data sources and processing

Information is obtained from the respective portfolio companies. An external review or verification of this information will only be conducted if misrepresentations are suspected.

Limitations to methodologies and data

The information collected from portfolio companies as part of the Fund’s due diligence or annual reporting requirements is externally verified only if misrepresentations are suspected. Therefore, it cannot be completely ruled out that false information may remain undetected in certain cases. Given that the Fund’s investments span several years, establishing and maintaining a trustworthy working relationship with portfolio companies is considered a priority to ensure compliance with the restrictions outlined in this section.

Due diligence

An initial assessment of how an investment aligns with the aforementioned characteristics is conducted as part of the due diligence process through an informal approach, tailored to the circumstances of each individual case. Generally, portfolio companies are requested to provide purely qualitative statements regarding environmental, social, or corporate governance aspects. These statements are then considered in the investment decision-making process. For more details, please request for our Responsible Investment Policy.

Engagement policies

The Fund decides at its sole discretion whether to make an investment based on sustainability factors and may implement risk mitigation measures where appropriate.

The following disclosure relates to Join Capital Fund II GmbH & Co. KG (LEI:

529900LFE24CIP857E55) (“JCF2”):

Join Capital Fund II GmbH & Co. KG, classified as an Article 8 fund under the SFDR, integrates certain environmental and social characteristics into its investment decisions. While Join Capital does not seek to make investments with a sustainable investment objective as defined by the SFDR, it acknowledges that some of the world’s most pressing challenges arise from inefficient industry practices and legacy operations. Believing in the transformative power of today’s entrepreneurs, Join Capital supports those at the forefront of building ‘The Neue Industry’—a new ecosystem representing a paradigm shift towards more sustainable, equitable, and efficient business models and technologies. Join Capital’s investment approach includes both positive screenings and investment exclusions, rigorously assessing environmental and social characteristics before and after investments using qualitative and quantitative inquiries through a third-party tool.

For the reporting period of FY23, out of the nine investments made, eight complied with the transparency requirements to the best of their abilities, and provided data according to the sustainability indicators chosen. One company was written off as an investment and was therefore unable to provide any data. No severe red flags were highlighted however, all companies will be requested to implement a human rights policy, anti-discrimination policy, health and safety policy, DEIB policy, ESG policy and Customer and Employee Privacy policy going forward. JCF2’s portfolio has a higher ratio of female founders in comparison to our deal flow, and majority of our companies have a ratio consistent with industry benchmarks for female FTEs. All portfolio companies also did a holistic standardized ESG assessment, with the portfolio averaging 68.3 out of 100. However, upon analysis it was found that the assessment was geared more toward manufacturing companies than pre-seed and seed startups resulting in lower Environmental scores.