ESG - part of our DNA

ESG is part of our DNA

Environmental, Social and Corporate Governance

Economic Sustainability
NAP fundamentally believes that advanced technology as well as new processes and business models are key to enable the green transition – in a financially sustainable way. In fact, we believe in “economic sustainability” – an economic philosophy stating that the planet’s resources must forever be able to service global economic growth and prosperity, which is only possible in combination with advanced technology transformation. NAP’s mission and mandate is to identify hard-tech companies with the potential to impact the future towards viable economic sustainability.

The responsibility of private equity
Almost all impactful and transformative technology companies created in that last 30 years were supported by private equity or alternative investments – and the future will be no different. Private equity investors have a responsibility far beyond investment return, as the selection influence and impact they enforce are decisive for the success of tomorrow’s technology transformers.

The NAP Model
NAP’s highly operational investment approach and Value Creation Model enable NAP to support early hardtech companies with critical skills to the benefit of founder teams, NAP investors, job creation and the environment. Specifically, NAP’s Toolbox offers people capacities, professional business infrastructures and a unique methodic strategy toolbox tailored to support in creating the basis for hyper growth and global expansion while managing the inherent complexity.

Transparency
To provide transparency on NAP’s impact on economic sustainability and ESG, we have engaged an ESG advisory to score and track the environmental impact of NAP’s investment portfolio.

Portfolio Sustainability Performance

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CO₂e Saved

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Waste Recycled

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Green Hydrogen Produced

Assumptions

Figures are based on various assumptions and will depend on the end-use of products.
The Tickers are made using historic activity numbers combined with a linear forecast of company activity for year 2021. Historical primary activity levels and derived impact for each company are validated by Klinkby Enge, except for AquaGreen and GHS, which are made using company estimates.
The first ticker shows an estimate on accumulated CO₂e savings contributed since 2016 for DyeMansion, GHS, Mater, Re-Match and Spirii.
The second ticker shows an estimate of accumulated waste recycling since 2016 for Mater and Re-Match. Recycled waste includes sand, rubber, turf fibres, plastics and mask.
The third ticker shows an estimate of accumulated renewable energy produced (hydrogen) on GHS equipment since 2020.

See explanation on assumptions and calculations here

Portfolio SDG impact

At NAP we believe that 4 specific SDGs within environment and recycling are particularly relevant impact drivers for our daily investment work and operational value creation. These 4 SDGs are:

SDG 9: Update infrastructure and retrofit industries to make them sustainable.
SDG 7: Increase the share of renewable energy in the energy mix.
SDG 3: Reduce harm from hazardous chemicals and air, soil pollution and contamination.
SDG 12: Reduce waste through prevention, recycling, and reuse.

All NAP’s portfolio companies contribute widely to the Sustainable Development Goals including Paralenz who indeed has impact in terms of SDG 14 (see full list here).

All SDGs metrics have been validated by ESG-consultancy Klinkby Enge.

SFDR disclosures
While we do consider sustainability risks in our investment decisions, we do not consider all of the specific adverse impact indicators set out in Table 1-3 of Annex 1 of the Commission’s delegated regulation supplementing Regulation (EU) 2019/2088 (the Sustainable Finance Disclosure Regulation) in our investment decisions as we have decided to focus on a few specific sustainability risk indicators fit for the Fund’s investment profile. We will, however, on a continuous basis, assess whether to consider all of these specific adverse impact indicators in our investment decisions.

General ESG policy of NAP

Our focus on the environmental, social and governance impact of our investments serves as part of our DNA to support long-term competitive returns.

We are committed to ensure that our investments are environmentally and socially responsible and we support a sustainable financial environment characterized by good governance, diversity, high ethical standards, integrity, and accountability.

ESG considerations are built into all our core activities and decision-making processes, from screening, evaluation, and due diligence of potential target companies, to our portfolio governance, strategy development and daily growth journey execution. More specifically, we follow the below policies in each state of our investment process:

Screening
When considering prospective investments including their purpose and business model, we will not:

Invest in companies that deliberately and repeatedly violate applicable local rules of law.
Invest in companies from countries subject to trade embargoes imposed by the UN or EU.
Engage in activities that may be legal but promotes violent conflicts or that have as main purpose tax evasion.
Make investments which would result in violation of sanctions adopted by the UN or EU.

Due diligence
Environmental and social impact forms a specific part of our due diligence and include:

Review of the purpose and business model of the target company.
Review policies and procedures of the target company.
Review any existing issues as declared by the company or discovered as part of our analysis.
Conduct own interviews with key stakeholders (customers, suppliers etc.) when needed and appropriate.
In specific cases – use external consultants to investigate key issues/concerns related to the particular case.

Ongoing monitoring of portfolio companies
We require all portfolio companies to have a clear position on ESG-issues, and we ensure that the Rules of Procedure for the Board of the portfolio companies includes periodic reviews of ESG issues as part of the board agenda. Internally, we review ESG issues, status, and policies as part of the semi-annual review of the portfolio.

Responsible renumeration policies
Our remuneration policies are structured to the effect that these do not encourage excessive risk-taking with respect to sustainability risks. Further, our remuneration structures are linked to risk-adjusted performance.

Diversity & Inclusion (D&I) policy

NAP believes that venture capital and entrepreneurship should be open for all people despite of background, gender and ethnicity. Therefore, we commit to a culture of equality, diversity and inclusion both internally and externally.

We consider our D&I policy especially important, as the hardtech industry traditionally has been male-dominated. For this reason, NAP dedicates one full resource to handle its SWAT network and comply with its D&I policy. NAP identifies three overall areas of D&I impact:

1. Investment process:

We consider D&I metrics during the screening, evaluation and Due Diligence processes.
Our CSR policy is always an integrated part of the investment agreement and framework, which helps to promote diversity and inclusion (gender & ethnicity).

2. Daily work with portfolio companies:

We encourage our portfolio companies to work with D&I objectives.
We offer our portfolio companies access to a diverse set of talents from our SWAT team network.
We target a minimum of 40% of all deals to have diverse senior management teams.
We strive to reach 33% of female management in each portfolio company before 2025.
We strive to reach minimum one female board member in each portfolio company before 2025.

3. Internal recruitment:

Generally, we post job openings publicly, thereby allowing all candidates to apply.
We inform our interviewers of techniques to help mitigate implicit bias and ensure that they are aware of our goals regarding diversity and inclusion.
Our hiring decisions are taken in a committee to recognize multiple perspectives.
We strive to reach 33% female employees internally before 2025.