General
At VP Capital, we believe creating impact means ‘contributing to solutions for key challenges that we have identified for each of our eight investment areas’. That includes (theme) funds that call themselves impact funds. In recent years, the impact sector has evolved considerably, partly due to the COVID-19 pandemic and a range of climate developments. Many new impact funds have been created, often focusing on one specific theme. Impact is gradually becoming mainstream, creating a different competitive environment. Regular PE parties with different reputations are also focusing on impact.
That is why we are especially alert to impact washing and want to be able to judge more objectively when we consider something to be impactful. Our take is that companies that achieve a 4 or 5 on the impact ladder have a positive impact. We combine these positive impact indicators with a broader set of negative impact indicators based on the Principle Adverse Impact Indicators (PAI).
Due to various changes in the law, it will become easier in the future to select impact funds: then we will be able to label a fund as an ‘impact fund’ on the basis of it classifying as an Article 9.
Do you want to know how we (a family office) and an impact fund manage impact investments?
Jeroen Heine (VP Capital) and Guus Verhees (SHIFT Invest) explain everything in this video.
We already see a good representation of Article 9 funds and expect this proportion to increase in the future. The changing legislation in Europe should be of great help in the years to come. For example, PAI indicators stem from the Sustainable Finance Disclosure Regulation (SFDR). Under the SFDR, funds have to publicly state whether they take into account the main adverse effects of investment decisions on sustainability factors. They also have to report these adverse effects. To this end, a list of nine mandatory environmental indicators (including carbon emissions and impact on biodiversity) and five mandatory social indicators (including gender pay gap and diversity in governance) has been drawn up. As many funds will be reporting on these indicators and we will also request these indicators from our direct investments, we hope to eventually have an aggregated overview of the negative impact of our investment portfolio. Together with the positive impact indicators that we draw up for each domain, we will then have a nuanced understanding of the impact that our entire investment portfolio has on the environment and society.
We are closely monitoring the legislation and making preparations, not only at VP Capital but also with our investment partners.
Close-up Innovation
Our goal is to invest at least 5% of our assets in innovation. In 2021, we invested 19% more in innovation than in 2020. We will further refine this KPI in upcoming year. After all, innovation, impact and donations are often interwoven.
Innovations are defined as companies or funds working on (yet to be developed) technology or ideas. Usually, they are still in the start-up phase and the (underlying) companies still have negative ebitda. In innovations, we often see the seeds of tomorrow's business and solutions. Examples of innovations that we are directly investing in today are: Accyss, Vibers en Aquaporin. Examples of innovations we indirectly invest in are: Mosameat, Zipline, Protix en Northvolt.
Our Sustainable Progress measured
At VP Capital, we want to contribute to sustainable progress. We screen our entire investment portfolio on the metrics above. Read more about this in our Progress Report via the button below.