ESG Policy

At Node Ventures, we believe in having a sustainable, and responsible approach in our investment and ownership activities.

First Node Ventures Fund considers sustainability matters as a standard part of our investment decisions and ownership activities. The aim is to create value, mitigate risks, and contribute to the more sustainable society we all strive for.

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Summary

Sustainability is a key component of the First Node Ventures Fund investment strategy.

First Node Ventures Fund is an Article 8 fund under the EU Sustainable Finance Disclosure Regulation (SFDR). As such, the fund promotes certain environmental, social and governance (ESG) characteristics.

Prior to investing, First Node Ventures Fund performs an ESG due diligence with a focus on specific sustainability factors and risks. These due diligence findings are integrated into our investment decision process.

During our ownership period, First Node Ventures Fund promotes continuous improvement of selected sustainability metrics within investees. Data on the selected sustainability metrics, are collected as part of our portfolio monitoring framework.

First Node Ventures Fund promotes good investee corporate governance, including a focus on business code of conduct principles such as those from the UN Global Compact.

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No Sustainable Investment Objective

First Node Ventures Fund promotes environmental or social characteristics but does not have sustainable investments as its objective.

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Environments or Social Characteristics Of The Financial Product

First Node Ventures Fund promotes environmental, social and governance characteristics with particular focus on the following focus areas:

First Node Ventures Fund incorporates specific environmental and social requirements into the appropriate investment agreements with the Fund’s investee companies.

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Investment Strategy

First Node Ventures Fund invests in early-stage technology companies across the Nordics. Investments are focused on technology intensive start-ups across a wide spectrum of technology sectors. The sectors addressed include, but are not limited to: Consumer Software, Platform Technologies, and Enterprise Software.

First Node Ventures Fund integrates several sustainability factors into its investment process.  A detailed ESG-questionnaire is used to record sustainability factors at the Fund’s investees, this questionnaire evaluates factors in relation to the focus areas Gender Equality (SDG no. 5), Responsible Production & Consumption (SDG no. 12) and Climate Action (SDG no. 13), as well as matters of good corporate governance including with respect to sound management structures, employee relations, remuneration of staff, and tax compliance.

The First Node Ventures Fund ESG strategy includes measuring, evaluating, and promoting certain environmental and social criteria at the Fund’s investees, during our ownership period.

First Node Ventures Fund integrates sustainability related metrics alongside other business metrics in our investee monitoring framework which collects all agreed metric data from each investee via an automated system on a defined periodic basis.

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Proportion Of Investments

100 % of investments will be in investees which align with the environmental and social characteristics promoted by the Fund.

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Monitoring Of Environmental Or Social Characteristics

First Node Ventures Fund treats sustainability as an integral part of our investment process.

Prior to investing, First Node Ventures Fund performs negative screening, thereby excluding opportunities that are active in specific industry sectors.

ESG due diligence is performed with a focus on specific sustainability factors and risks, and due diligence findings are integrated into the investment decision-making process in our investment committee.

First Node Ventures Fund promotes continuous improvement of selected sustainability metrics within investees, these include aspects of Gender Equality (SDG no. 5), Responsible Production & Consumption (SDG no. 12) and Climate Action (SDG no. 13). Data on the selected sustainability metrics, are also collected as part of our portfolio reporting process.

First Node Ventures Fund promotes good investee corporate governance, including a focus on business code of conduct principles such as those from the UN Global Compact.  The fund also promotes board chair independence, and board diversity at the Fund’s investees.

First Node Ventures Fund investment professionals join the boards of investees, and our board representatives follow up on the progress of agreed sustainability related targets throughout the ownership period.

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Methodologies

The following sustainability metrics are evaluated and improved at the Fund’s investees during the ownership period. Evaluation and improvement efforts are conducted in concert with the investee’s board and management team, with particular focus on:

• Gender Equality (SDG no. 5).
• Gender Balance.
• Gender Pay Gap.
  

• Responsible Production & Consumption (SDG no. 12).
• Material Usage.
• Equipment Service Life.
• Recycling.
  

• Climate Action (SDG no. 13).
• Energy Consumption Intensity.
• Replacing Travel with Online Meetings.
• Usage Of Public Transport.
  

• Investee Company Board/Company Governance.
• Independent Board Chairperson.
• Gender Balance in Board.
• Business Code of Conduct.

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Integration of Sustainability Risk in Our Investment Decision-Making Process

First Node Ventures considers sustainability-related risks in its investment decision process. Sustainability-related risks and sustainable investments are core to our investment policy and are considered through selecting or excluding certain investments based on the potential investment’s environmental or social objectives, such as the investment’s effect on for example environment and climate, human rights, labor rights, equal treatment, and anti-corruption.

Given the type of investments we seek i.e., mainly smaller early-stage companies, First Node Ventures assesses sustainability risks as such to impact the returns of the company to a minor extent.

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No Consideration of Adverse Impacts of Investment Decisions on Sustainability factors

First Node Ventures has considered, and continues to consider, ESG factors in its investment process as set out above including the principal adverse impacts on sustainability (PASI) that the investment decisions have. These factors are addressed based on their type and materiality, rather than factors as specifically set out in the SFDR.  First Node Ventures has chosen not to evaluate PASI, for the present time, as it considers that its existing ESG code is appropriate and tailored to the investment strategies of its investment funds.

First Node Ventures continues to closely monitor regulatory developments with respect to the SFDR and other applicable ESG-focused laws and regulations, including the implementation of related and secondary legislation and regulatory guidance, and will, where required or otherwise appropriate, make changes to its existing policies and procedures.

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Data Sources & Processing

First Node Ventures Fund integrates sustainability related metrics alongside other business metrics in our investee monitoring framework and automated portfolio data collection systems.

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Data Sources

The data sources are the investees themselves. All agreed metrics data from each investee is collected via an automated portfolio data collection system on a defined periodic basis.

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Data Quality

First Node Venture Fund investment professionals are part of investee boards and are connected to investee management teams. Sustainability related metric data is periodically reviewed with the investee board, as well as internally in our team.

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Data Processing

Sustainability related metrics data is processed on a per-investee basis and also processed into cross-portfolio aggregates and dashboards within our portfolio data collection systems for the purposes of evaluation and intra-portfolio benchmarking.

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Estimated Data

Only primary data, directly sourced from investees, is used.

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Limitations To Methodologies And Data

First Node Ventures Fund methodologies and data are deemed sufficient to secure the selected environmental, social and governance characteristics promoted by the fund.

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Due Diligence

ESG due diligence is performed, prior to the fund’s investment, with a focus on specific sustainability factors and risks.

A detailed ESG-questionnaire is integrated into our standard pre-investment legal DD process which is performed by our external fund counsel.

ESG Due Diligence findings are evaluated, alongside all other due diligence findings by our internal investment committee as part of every investment decision.

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Contact

In case you have any questions relating to Node Ventures sustainability efforts, kindly contact us via: hi@node.vc.