ESG Policy
Are you looking for our ESG framework?
Wellstreet has developed a unique ESG framework to support our portfolio companies. We are sharing and explaining that framework together with our models, tools and best practices to the startup and VC community here: Wellstreet ESG Framework
1. Introduction
Wellstreet Holding AB (hereinafter "Wellstreet”) is a Swedish Venture Capital firm with the primary focus to invest in early-stage enterprises. We consider the impact that our portfolio companies have on Environmental, Social and Governance (“ESG”) factors and are dedicated to integrating ESG into our decision processes and in the management of all Wellstreet funds.
2. Scope and responsibilities
This ESG Policy (the “Policy”) reflects Wellstreet’s commitment to responsible portfolio management, investment processes, and business practices. Our policy also outlines Wellstreet’s commitment to the management of ESG risks and prevention of adverse impacts on the environment and society. Wellstreet will act in a manner to influence the portfolio companies in material aspects relating to sustainability through education and operational support, the board of directors, shareholders’ meetings and/or potential further follow-on investments.
It is the responsibility of the Compliance Officer to enforce and ensure the content, accuracy, and relevance of the ESG policy. The Fund managers are responsible for the daily operationalisation of the policy in the management of the portfolio companies. The Policy has been approved by the Board and shall be reviewed, and if necessary, revised every year.
The ESG Policy applies to all funds within Wellstreet and should be read together with fund-specific policies. The fund-specific policies complement Wellstreet’s ESG Policy. Should there be any inconsistencies between the fund-specific Policy and that of Wellstreet Holding AB, the stricter interpretation shall prevail.
3. The basis of the policy
The Policy is based on the articles 3, 6 and 7 requirements in Sustainable Finance Disclosure Regulation (SFDR), AIFMD directives, Principles for Responsible Investment, and the OECD Guidelines for Multinational Corporations.
4. Responsible investing
Wellstreet will always act as a responsible active owner, meaning that in our investment analysis and decision-making process we will consider compliance with national legislation and international conventions. Wellstreet’s ESG Policy and investment principles are aligned with the Principles for Responsible Investment and the OECD Guidelines for Multinational Corporations.
Wellstreet should always incorporate ESG factors into our entire investment cycle and business practices, by proactively seeking for opportunities to invest in companies with good corporate ESG governance or with high ambitions to improve. It is Wellstreet’s ambition to continuously seek to improve the sustainability performance and governance of our portfolio companies.
5. ESG risk management
ESG risks are environmental, social or governance events or conditions that, if occurring, could cause an actual or potential material negative impact on the value of an investment. To ensure long-term value creation and compliance. Wellstreet shall appropriately consider how potential ESG risks could impact our investments, by ensuring that sustainability risks and possible negative impacts are:
- translated into policies and procedures regarding risk management, due diligence and investment decision making
- considered in organisational structure, compliance controls, internal reporting, and record keeping included in identification of conflicts of interest
- integrated in activities by Senior Management
Sustainability risks and negative impacts are screened as a part of the initial due diligence before investing in a company, taking the risks related to all four ESG areas – human rights, labour rights, environment, and anti-corruption - into account. Sustainability risks and ESG maturity are also monitored with a yearly self-assessment questionnaire during the investment period, to measure maturity, monitor progress, assess risks and opportunities, as well as incorporate necessary actions.
Should material sustainability risks be identified that cannot be managed or mitigated, the Investment Committee shall decline the investment. Sustainability risks that can be managed and mitigated, on the other hand, will be addressed in the monitoring and management of the investment. If an existing portfolio company were to develop its operations in a way so it conflicts with Wellstreet’s exclusion list, Wellstreet will evaluate opportunities to influence this development, and if necessary prepare for exit/termination of the investment.
6. Exclusion list
The portfolio companies shall always be screened against excluded sectors. The Fund shall not invest in entities involved in production and selling or trading of weapons or operations related to oil. Neither shall the Fund invest in entities that operate in the pornography industry, or entities where gambling is the main point of focus.
7. Principal Adverse Impacts (PAI)
Principal Adverse Impact (PAI) is defined as the negative impact an investment has on environmental matters, respect for human rights, social and employee issues, anti-corruption, and anti-bribery matters. Wellstreet shall always consider PAI in our portfolio management, investment processes, and business practices, and regularly monitor the performance and development in relation to PAI and other ESG risks. This is done by continuously collecting data from portfolio companies.
If the sustainability risks are too profound, Wellstreet shall, if possible, seek to reduce the exposure to the investment and/or act to address sustainability risks through active ownership and engagement. Should the negative impact be material and cannot be managed or mitigated, then the Investment Committee will decline the investment.
8. Engagement policy
Active monitoring of portfolio companies is an integral part of Wellstreet’s ESG Investing approach and strategy. It is our ambition to enhance the governance in relation to ESG of portfolio companies where necessary and possible under our stewardship as advisor and active owner to the portfolio companies. As a shareholder, Wellstreet can influence companies in a more sustainable direction and should do so by being active in board recruitment processes, at board meetings and general meetings, through our operational support, in discussions with executive management, and through workshops and education with the portfolio companies.
Wellstreet can also choose to continue/deepen the engagement in portfolio companies by further investment decisions, so called follow-on investments. These investment decisions are preceded by the same investments process (ESG risk assessment and due diligence report) as new portfolio companies and therefore provide an opportunity to assess a portfolio company's progress and if necessary further influence the company in its reporting, monitoring and actions towards ESG risk management and Principal Adverse Impacts.
9. Wellstreet Holding as a fund management company
The purpose of Wellstreet Holding is to invest in companies with great potential and make them better in partnership with the founders and thereby create financial return for our investors. Although our own operation is small, we have a responsibility towards a broad range of stakeholders such as investors, employees, customers, suppliers, business relationships, founders and our wider entrepreneurial community and the communities in which we operate.
We take this responsibility seriously and we are committed to actively promoting sustainability, which includes equality and good governance, throughout Wellstreet. While our biggest contribution will always be by working with sustainability in our investment activities, we also promote sustainability in our own daily operations. In this work we apply the principles, structures and focus areas for promoting sustainability as those we have set out for the whole of our portfolio companies. In Wellstreet Holding, we are therefore committed to reducing our own environmental footprint, continuously improve our working environment and promoting gender equality. We conduct our business with the highest ethical standards and expect the same from our business partners and we employ and promote best practice international standards as the foundation for our work with sustainability.
Wellstreet Holding AB (hereinafter "Wellstreet”) is a Swedish Venture Capital firm with the primary focus to invest in early-stage enterprises. We consider the impact that our portfolio companies have on Environmental, Social and Governance (“ESG”) factors and are dedicated to integrating ESG into our decision processes and in the management of all Wellstreet funds.
2. Scope and responsibilities
This ESG Policy (the “Policy”) reflects Wellstreet’s commitment to responsible portfolio management, investment processes, and business practices. Our policy also outlines Wellstreet’s commitment to the management of ESG risks and prevention of adverse impacts on the environment and society. Wellstreet will act in a manner to influence the portfolio companies in material aspects relating to sustainability through education and operational support, the board of directors, shareholders’ meetings and/or potential further follow-on investments.
It is the responsibility of the Compliance Officer to enforce and ensure the content, accuracy, and relevance of the ESG policy. The Fund managers are responsible for the daily operationalisation of the policy in the management of the portfolio companies. The Policy has been approved by the Board and shall be reviewed, and if necessary, revised every year.
The ESG Policy applies to all funds within Wellstreet and should be read together with fund-specific policies. The fund-specific policies complement Wellstreet’s ESG Policy. Should there be any inconsistencies between the fund-specific Policy and that of Wellstreet Holding AB, the stricter interpretation shall prevail.
3. The basis of the policy
The Policy is based on the articles 3, 6 and 7 requirements in Sustainable Finance Disclosure Regulation (SFDR), AIFMD directives, Principles for Responsible Investment, and the OECD Guidelines for Multinational Corporations.
4. Responsible investing
Wellstreet will always act as a responsible active owner, meaning that in our investment analysis and decision-making process we will consider compliance with national legislation and international conventions. Wellstreet’s ESG Policy and investment principles are aligned with the Principles for Responsible Investment and the OECD Guidelines for Multinational Corporations.
Wellstreet should always incorporate ESG factors into our entire investment cycle and business practices, by proactively seeking for opportunities to invest in companies with good corporate ESG governance or with high ambitions to improve. It is Wellstreet’s ambition to continuously seek to improve the sustainability performance and governance of our portfolio companies.
5. ESG risk management
ESG risks are environmental, social or governance events or conditions that, if occurring, could cause an actual or potential material negative impact on the value of an investment. To ensure long-term value creation and compliance. Wellstreet shall appropriately consider how potential ESG risks could impact our investments, by ensuring that sustainability risks and possible negative impacts are:
- translated into policies and procedures regarding risk management, due diligence and investment decision making
- considered in organisational structure, compliance controls, internal reporting, and record keeping included in identification of conflicts of interest
- integrated in activities by Senior Management
Sustainability risks and negative impacts are screened as a part of the initial due diligence before investing in a company, taking the risks related to all four ESG areas – human rights, labour rights, environment, and anti-corruption - into account. Sustainability risks and ESG maturity are also monitored with a yearly self-assessment questionnaire during the investment period, to measure maturity, monitor progress, assess risks and opportunities, as well as incorporate necessary actions.
Should material sustainability risks be identified that cannot be managed or mitigated, the Investment Committee shall decline the investment. Sustainability risks that can be managed and mitigated, on the other hand, will be addressed in the monitoring and management of the investment. If an existing portfolio company were to develop its operations in a way so it conflicts with Wellstreet’s exclusion list, Wellstreet will evaluate opportunities to influence this development, and if necessary prepare for exit/termination of the investment.
6. Exclusion list
The portfolio companies shall always be screened against excluded sectors. The Fund shall not invest in entities involved in production and selling or trading of weapons or operations related to oil. Neither shall the Fund invest in entities that operate in the pornography industry, or entities where gambling is the main point of focus.
7. Principal Adverse Impacts (PAI)
Principal Adverse Impact (PAI) is defined as the negative impact an investment has on environmental matters, respect for human rights, social and employee issues, anti-corruption, and anti-bribery matters. Wellstreet shall always consider PAI in our portfolio management, investment processes, and business practices, and regularly monitor the performance and development in relation to PAI and other ESG risks. This is done by continuously collecting data from portfolio companies.
If the sustainability risks are too profound, Wellstreet shall, if possible, seek to reduce the exposure to the investment and/or act to address sustainability risks through active ownership and engagement. Should the negative impact be material and cannot be managed or mitigated, then the Investment Committee will decline the investment.
8. Engagement policy
Active monitoring of portfolio companies is an integral part of Wellstreet’s ESG Investing approach and strategy. It is our ambition to enhance the governance in relation to ESG of portfolio companies where necessary and possible under our stewardship as advisor and active owner to the portfolio companies. As a shareholder, Wellstreet can influence companies in a more sustainable direction and should do so by being active in board recruitment processes, at board meetings and general meetings, through our operational support, in discussions with executive management, and through workshops and education with the portfolio companies.
Wellstreet can also choose to continue/deepen the engagement in portfolio companies by further investment decisions, so called follow-on investments. These investment decisions are preceded by the same investments process (ESG risk assessment and due diligence report) as new portfolio companies and therefore provide an opportunity to assess a portfolio company's progress and if necessary further influence the company in its reporting, monitoring and actions towards ESG risk management and Principal Adverse Impacts.
9. Wellstreet Holding as a fund management company
The purpose of Wellstreet Holding is to invest in companies with great potential and make them better in partnership with the founders and thereby create financial return for our investors. Although our own operation is small, we have a responsibility towards a broad range of stakeholders such as investors, employees, customers, suppliers, business relationships, founders and our wider entrepreneurial community and the communities in which we operate.
We take this responsibility seriously and we are committed to actively promoting sustainability, which includes equality and good governance, throughout Wellstreet. While our biggest contribution will always be by working with sustainability in our investment activities, we also promote sustainability in our own daily operations. In this work we apply the principles, structures and focus areas for promoting sustainability as those we have set out for the whole of our portfolio companies. In Wellstreet Holding, we are therefore committed to reducing our own environmental footprint, continuously improve our working environment and promoting gender equality. We conduct our business with the highest ethical standards and expect the same from our business partners and we employ and promote best practice international standards as the foundation for our work with sustainability.
