Sustainability related disclosures
MOMENI Ventures Management GmbH (“MOMENI Ventures Management”) is an alternative investment fund manager within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and as such publishes the following information in light of the consideration of sustainability-related aspects in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosure requirements in the financial services sector (“SFDR”).
Art. 3 SFDR – Sustainability risk policies statement
MOMENI Ventures Management addresses sustainability risks in its investment decision-making process insofar as relevant. “Sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. During the due diligence on potential investments, MOMENI Ventures Management conducts a careful analysis of the investment's exposure to environmental, social, and governance risks that could impact its value. When identifying a sustainability risk during the due diligence on potential investments, MOMENI Ventures Management decides in light of the specific situation taking due account of the proportionality principle whether it gives up on the investment or proceeds with the investment alongside appropriate measures to mitigate the relevant sustainability risk. MOMENI Ventures Management regularly reviews its policies to ensure that they address new and emerging risks as well as investors’ concerns.
Art. 4 SFDR – No consideration of principal adverse impacts
MOMENI Ventures Management does not consider principal adverse impacts of investment decisions on sustainability factors. “Sustainability factors” mean environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.
The standardized catalog of key performance indicators (“KPIs”) provided by Annex I of the regulatory technical standards (RTS) issued under the SFDR is not tailored to the specific needs of MOMENI Ventures Management's early-stage investment strategy. Several KPIs, such as “Exposure to companies active in the fossil fuel sector”, “Energy consumption intensity per high impact climate sector”, “Emissions to water”, “Hazardous waste and radioactive waste ratio” and “Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons)”, do not offer relevant insights into portfolio companies of Funds managed by MOMENI Ventures Management.
MOMENI Ventures Management currently monitors energy saved per annum and avoided GHG CO2 in kg, and at present, we believe that these KPIs adequately assess all potential negative impacts of portfolio companies of Funds managed by MOMENI Ventures Management. Introducing additional KPIs would not only increase the administrative burden and costs but also fail to provide more valuable insights.
MOMENI Ventures Management is open to considering PAI in the future if it becomes evident that doing so would significantly enhance its Funds’ ability to identify and mitigate possible adverse impacts of the investments while maintaining operational efficiency and cost-effectiveness.
Art. 5 – Remuneration Disclosure
As a registered alternative investment fund manager within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB), MOMENI Ventures Management does not have and does not need to have, a remuneration guideline or policy in accordance with the requirements of the KAGB. Sustainability risks are not considered with respect to the determination of remuneration.
Published: January 26th, 2024
Art. 10 SFDR – Sustainability-related information about financial products that promote environmental or social characteristics
MOMENI Ventures Management GmbH (“MOMENI Ventures Management”) is the alternative investment fund manager of MOMENI REACT Fund GmbH & Co. KG (“MOMENI REACT Fund”) within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and as such publishes the following information in light of the consideration of sustainability-related aspects in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosure requirements in the financial services sector (“SFDR”).
Summary
This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment. The MOMENI REACT Fund aims at accelerating the decarbonization of the construction and real estate sectors, by investing in start-ups that are actively involved in increasing energy efficiency, circularity, new building materials, carbon and ESG management platforms, assessing and improving biodiversity, etc. Further promoted characteristics are investment restrictions. 100% of the investments will be in line with its investment strategy and investment restrictions.
No reference benchmark has been designated to attain the environmental or social characteristics promoted by the financial product.
Zusammenfassung
Dieses Finanzprodukt bewirbt ökologische oder soziale Merkmale, strebt aber keine nachhaltigen Investitionen im Sinne der Definition des Art. 2 Nr. 17 SFDR an. Der MOMENI REACT Fund zielt darauf ab, die Dekarbonisierung des Bau- und Immobiliensektors zu beschleunigen, indem er in Start-ups investiert, die aktiv an der Steigerung der Energieeffizienz, der Kreislaufwirtschaft, neuen Baumaterialien, Kohlenstoff- und ESG-Managementplattformen, der Bewertung und Verbesserung der Biodiversität usw. beteiligt sind. Weitere beworbene Merkmale sind Ausschlusskriterien. 100 % der Investitionen werden im Einklang mit der Anlagestrategie und den Anlagebeschränkungen getätigt.
Es wurde kein Referenzwert benannt, um die mit dem Finanzprodukt beworbenen ökologischen oder sozialen Merkmale zu erreichen.
No sustainable investment objective
This financial product promotes environmental or social characteristics but does not have as its objective sustainable investment.
Environmental or social characteristics of the financial product
The MOMENI REACT Fund aims at accelerating the decarbonization of the construction and real estate sectors, by investing in start-ups that are actively involved in increasing energy efficiency, circularity, new building materials, carbon and ESG (environmental, social, and governance) management platforms, assessing and improving biodiversity, etc. The focus of the portfolio companies is on sustainability, but ESG factors will be assessed during due diligence, using an ESG-Checklist.
Further promoted environmental and/or social characteristics are investment restrictions as described below.
No reference benchmark has been designated for the purpose of attaining the environmental and social characteristics promoted by the MOMENI REACT Fund.
Investment strategy
The MOMENI REACT Fund intends to seek long-term capital appreciation through equity and quasi-equity investments in early-stage technology companies with a focus on climate tech for the construction and real estate industry.
No investments are made in the area of investment restrictions as stated below. As part of the due diligence and ongoing investment management, the investment team for the MOMENI REACT Fund will initially and continuously monitor whether the investment falls within the investment policies and whether the investment restrictions are abided by.
No investments will be made into companies whose business activities involve specific practices and sectors, including illegal economic activities, tobacco, distilled alcohol, weapons and ammunition, casinos, or equivalent enterprises, as well as electronic data programs or solutions that (i) refer to the above activities, internet gambling and online casinos or pornography; or (ii) enable illegal entry into data networks or to download data.
Policy to assess good governance practices of the investee companies
As part of the due diligence and ongoing investment management, the investment team will review whether a potential investee company has good governance practices in place. This might include using ESG criteria to evaluate companies' performance in areas such as labor practices, human rights, and corporate governance, conducting due diligence on investee companies to assess their management structures, employee relations, and tax compliance, engaging with investee companies through to encourage improvements in governance practices if necessary. The intensity of the assessment is carried out in accordance with the principle of proportionality. Where the manager sees higher risks of a non-compliance, they will intensify the audit.
Proportion of investments
The MOMENI REACT Fund will invest fully in line with its investment strategy and investment restrictions. The MOMENI REACT Fund will not invest a portion of its capital in any other asset class.
Monitoring of environmental or social characteristics
MOMENI Ventures Management will identify KPIs during due diligence before investment, aiming to include measures and milestones in regular reporting. It is not possible to define the KPIs beforehand, as relevant individual indicators have to be agreed with the portfolio companies in the course of an investment. Climate tech investments along the real estate value chain can range from new materials for construction to carbon mitigation management platforms in real estate operations.
The following examples and indicators could be considered: estimated energy savings (kWh/year), reduction in net energy consumption, primary energy demand, resource consumption, or CO2e emissions, production of renewable energy (installed capacity kW), storage of electricity, energy or heat (storage capacity kWh), integration of biodiversity and ecosystems in and around buildings (no indicator, yet) etc.
The investment team for the MOMENI REACT Fund will initially and continuously monitor whether the investment restrictions are abided by and whether the investment falls within the investment policies. The MOMENI REACT Fund will not make any investment in the excluded sectors unless previously approved by the advisory committee.
Methodologies for environmental or social characteristics
In order to measure the attainment of the promoted environmental or social characteristics, the MOMENI REACT Fund conducts an initial assessment of the promoted environmental or social characteristics in the course of its due diligence, using an ESG checklist.
During the holding period, the so conducted assessment forms the basis to measure and monitor if the characteristics are continuously being met.
In cases where the MOMENI REACT Fund invests in enabling technology companies, i.e., companies that support third parties to decrease their ecological footprint, proxies are used as sustainability indicators.
We aim to implement an ESG Clause in all our Term Sheets and investment agreements to which portfolio companies need to adhere. We proactively promote awareness among our portfolio companies regarding their ESG impact and urge them to adapt their businesses accordingly.
The exclusion list is used to measure how the investment restrictions are met.
Data sources and processing
The MOMENI REACT Fund receives data provided by the (potential) portfolio companies as part of the due diligence process and at regular intervals after the investment. The pertinent data is examined for our portfolio companies using the same predetermined set of indicators as in the pre-investment phase. Where necessary or beneficial, the MOMENI REACT Fund also makes use of publicly available data. Data processing is exclusively internal and DSGVO compliant. Estimates of data are only made if portfolio companies offer enabling technologies. An external review or verification of the information obtained will only be carried out if misrepresentations are suspected.
Limitations to methodologies and data
The MOMENI Ventures Management is partly reliant on the information provided by portfolio companies during the due diligence process. Moreover, in the post-investment phase, MOMENI Ventures Management is reliant on the company’s reported data. In both cases, complete data may not always be available due to the nature of the investments. The information is verified only if and to the extent misrepresentations are suspected.
Since the MOMENI REACT Fund’s investments are made for a multi-year investment period, MOMENI Ventures Management places a high priority on establishing a trusting working relationship with the portfolio companies to ensure that data is submitted reliably and completely and that the above restrictions are met.
Due Diligence
An initial assessment of how an investment relates to the aforementioned characteristics is carried out as part of the due diligence process through an informal process as appropriate in light of the circumstances of each individual case. For example, we ask about a company’s reliance on fossil fuels and the potential negative impact of its production facilities on biodiversity-sensitive areas. This approach allows us to identify and assess potential ESG opportunities and challenges related to ESG considerations before committing to an investment. Based on the results of such assessment the MOMENI REACT Fund identifies pre-investment whether the environmental or social characteristics promoted by the MOMENI REACT Fund are met. Internal and external reviews or verifications of the information obtained will only be carried out if misrepresentations are suspected.
The due diligence process is not externally monitored.
Engagement policies
The MOMENI REACT Fund invests in the portfolio companies for a period of several years. Therefore, MOMENI Ventures Management makes it a priority to establish and maintain a trusting working relationship with the portfolio companies in order to continuously comply with the investment restrictions. MOMENI Ventures Management thus also intends to establish or strengthen the consideration of sustainability risks at the portfolio level. MOMENI Ventures Management is in constant dialogue with the portfolio companies, but as a venture capitalist without majority ownership, the influence MOMENI Ventures Management can exert on the portfolio companies is limited. To further evaluate opportunities and challenges related to ESG-driven value creation, and to monitor adherence to our ESG policy, we administer a comprehensive questionnaire to our portfolio companies both during the onboarding process and annually throughout the post-investment phase. This approach allows us to gauge the ESG progress of each portfolio company and identify any potential opportunities or issues in the early stages.
Published: January 26th, 2024