Investing responsibly

for a better tomorrow

Investing responsibly for a better tomorrow

Our approach is built on best practices of incorporating ESG factors into investment considerations and active ownership.
Disclaimer

Our framework

At Scale Capital, we feel a deep obligation to play our part to make our future more sustainable. We invest responsibly to manage risks, add operational value, identify strategic opportunities, and create positive, lasting impact through our portfolio companies.

To help identify the environmental, social and governance (ESG) factors that are most material to our portfolio, we have implemented an extensive responsible investing framework to incorporate ESG materiality into our investment considerations and active ownership.

The framework (as seen below) consists of two parts; the first being how Scale Capital can utilize ESG factors pre-investment to mitigate risks; and in the second part, how we create value in the companies and engage with them on ESG materiality.

Pre-investment

Norms-based screening

Screening of investments according to their compliance with international standards and norms such as UN GC OECD RBC, and ILO

Exclusion

Excluding specific investments and classes of investments such as weapons, fossil fuels, nuclear power, palm oil, gambling, tobacco, drugs and pornography

Thematic investing

Investment in themes or assets supporting the long-term, sustainable development. Focus is on SDG number 4, 5, 7, 8, 9, and 11.

Best-in-class

Leading or best-performing companies on ESG and sustainability within tech and thematic focus are weighted and selected based on relevant ESG criteria

Post-investment

ESG-integration

Explicitly and systemativally including ESG risks and opportunities into investment analyses and decisions. Tools such are SASB, GRI and CDC are utilized.                                                                                                               

Engagement

Active ownership through engagement with portfolio companies on material ESG issues. ESG knowledge sessions are held to share learnings across portfolio.

Pre-investment

Norms-based screening

Screening of investments according to their compliance with international standards and norms such as UN GC OECD RBC, and ILO.

Exclusion

Excluding specific investments and classes of investments such as weapons, fossil fuels, nuclear power, palm oil, gambling, tobacco, drugs and pornography.

Thematic investing

Investment in themes or assets supporting the long-term, sustainable development. Focus is on SDG number 4, 5, 7, 8, 9, and 11.

Best-in-class

Leading or best-performing companies on ESG and sustainability within tech and thematic focus are weighted and selected based on relevant ESG criteria.

Post-investment

ESG-integration

Explicitly and systemativally including ESG risks and opportunities into investment analyses and decisions. Tools such are SASB, GRI and CDC are utilized.

Engagement

Active ownership through engagement with portfolio companies on material ESG issues. ESG knowledge sessions are held to share learnings across portfolio.

A real positive
impact

The 6 chosen goals align with our broader investment philosophy and strategy, and we believe that by actively focusing on these goals we can make real positive impact while also creating significant value for our companies, investors and the world as a whole.

At Scale Capital, we do not believe ESG to just be a method for risk minimization by simply shying away from the worst performing ESG companies. On the other hand, we strongly believe that to contribute to building a better world and ensuring long term sustainability of our portfolio companies, we must actively pursue an ESG-approach.

We have, based on this idea, implemented a set of goals that we and our portfolio companies are actively working towards. We have chosen 6 of the UN Sustainable Development Goals (SDGs), where we can maximize our impact, to be the basis for Scale Capital’s Sustainability Goals.,

Our standards

Our standards must be met to ensure that our companies are complying with our approach. To ensure that we do not invest in any companies violating these standards, we conduct two set of screenings; norm-based screens and activity-based screens. Companies in violation of either of these will be excluded from the investment process.

Norm-based screens

Scale Capital invests in companies adhering to our minimum standards of good governance. Before investing, we conduct a screening of potential investments based on internationally recognized norms and standards of the UN Global Compact principles, among others.

UN Global Compacts 10 principles guides Scale Capitals approach to investing. The principles provide a standard of human rights, workers right, environmental protection and well as business conduct that we expect from all our portfolio companies.

Norm-based screens

Scale Capital invests in companies adhering to our minimum standards of good governance. Before investing, we conduct a screening of potential investments based on internationally recognized norms and standards of the UN Global Compact principles, among others.

UN Global Compacts 10 principles guides Scale Capitals approach to investing. The principles provide a standard of human rights, workers right, environmental protection and well as business conduct that we expect from all our portfolio companies.

Activity-based screens

Scale Capital excludes any investments in companies deriving more than 5% of their revenue from the from the following industries:

Controversial weapons

  • Firearms
  • Thermal Coal
  • Fossil fuel extraction
  • Palm Oil
  • Gambling
  • Tobacco
  • Illicit drugs

Companies with revenue from any of these industries, and where the total revenue from any of the selected industries is below the 5% threshold, are set to be actively engaged in both the pre- and post-investment process to make the business model more sustainable.

Activity-based screens

Scale Capital excludes any investments in companies deriving more than 5% of their revenue from the from the following industries:

Controversial weapons

  • Firearms
  • Thermal Coal
  • Fossil fuel extraction
  • Palm Oil
  • Gambling
  • Tobacco
  • Illicit drugs

Companies with revenue from any of these industries, and where the total revenue from any of the selected industries is below the 5% threshold, are set to be actively engaged in both the pre- and post-investment process to make the business model more sustainable.

Active ownership

Scale Capital is committed to improving the performance of our portfolio companies, both their financials and their impact on the world. In fact, a core belief of ours is that the two are intrinsically linked.

We acknowledge that every company is different, thus we review each company on an individual basis. While some standards will be uniform across all our portfolio companies, we also utilize an approach that maximizes impact for the given company and sector.

In our work, we incorporate ESG factors into all investment decisions and active ownership. We take great pride in introducing ESG on our companies’ board meetings and likewise engaging our founders on ESG materiality.

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Sustainable Finance Disclosure Regulation (SFDR) for Scale Capital

1.1 Fund information

SC Management ApS, CVR-number: 40557679 has the following alternative investment funds under management.

Scale & Friends K/S – CVR-number 40552677

Scale Invest Feeder K/S – CVR-number 41103655

Scale Capital Fund II K/S – CVR-number 40583033

The funds listed above will for the remainder of this Sustainable Finance Disclosure be referred to as ‘the funds’.

1.2 Integration of sustainability risks in the investment process and active ownership

Scale Capital considers environmental, social, and governance (ESG) consequences of any investment made by the funds. The fund managers at Scale Capital are guided by the principles set out in the UN Global Compact Initiative and Principles for Responsible Investment (PRI). Furthermore, investment decisions are sought to be aligned with the UN Sustainable Development Goals (SDGs) number 4, 5 7, 8, 9 and 11.

The funds actively integrate sustainability risks into investment decisions, including screenings, due diligence, and during ownership where portfolio companies are engaged and monitored on material ESG issues.

1.3 No consideration of sustainability adverse impacts

Scale Capital’s fund managers consider sustainability risks as an integral part of all investment decisions, but they do not consider all of the specific adverse impact indicators in investment decisions as 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).

The reason for this is that the factors determined by the regulations, such as tracking of areas of high-water stress and soil degradation, have limited relevance for Scale Capital given its role as an alternative investment fond focusing on early-stage tech startups in the Nordics.

Rather, Scale Capital puts additional emphasis on their own ESG-framework that includes a flexible but diligent sector-specific approach to assessing sustainability risks in their investments.

1.4 Remuneration policies

Scale Capital’s remuneration policies for its fund managers are structured so as they do not encourage any excessive risk-taking when it comes to sustainability risks.

Sustainable Finance Disclosure Regulation (SFDR) for Scale Capital

1.1 Fund information

SC Management ApS, CVR-number: 40557679 has the following alternative investment funds under management.

Scale & Friends K/S – CVR-number 40552677

Scale Invest Feeder K/S – CVR-number 41103655

Scale Capital Fund II K/S – CVR-number 40583033

The funds listed above will for the remainder of this Sustainable Finance Disclosure be referred to as ‘the funds’.

1.2 Integration of sustainability risks in the investment process and active ownership

Scale Capital considers environmental, social, and governance (ESG) consequences of any investment made by the funds. The fund managers at Scale Capital are guided by the principles set out in the UN Global Compact Initiative and Principles for Responsible Investment (PRI). Furthermore, investment decisions are sought to be aligned with the UN Sustainable Development Goals (SDGs) number 4, 5 7, 8, 9 and 11.

The funds actively integrate sustainability risks into investment decisions, including screenings, due diligence, and during ownership where portfolio companies are engaged and monitored on material ESG issues.

1.3 No consideration of sustainability adverse impacts

Scale Capital’s fund managers consider sustainability risks as an integral part of all investment decisions, but they do not consider all of the specific adverse impact indicators in investment decisions as 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).

The reason for this is that the factors determined by the regulations, such as tracking of areas of high-water stress and soil degradation, have limited relevance for Scale Capital given its role as an alternative investment fond focusing on early-stage tech startups in the Nordics.

Rather, Scale Capital puts additional emphasis on their own ESG-framework that includes a flexible but diligent sector-specific approach to assessing sustainability risks in their investments.

1.4 Remuneration policies

Scale Capital’s remuneration policies for its fund managers are structured so as they do not encourage any excessive risk-taking when it comes to sustainability risks.

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