daphni Sustainability disclosures
daphni actively supports innovative projects aimed at reducing the carbon footprint from 10 to 2 tons eq/year/person and addressing social inequalities by 2050, contributing to the realization of a more balanced world. Our unwavering commitment to Environmental, Social, and Governance (ESG) principles has been ingrained in daphni’s ethos since its inception. As a mission-driven company and bolstered by our B-Corp Certification, we are steadfast in our dedication to building a more sustainable world. These frameworks not only guide our purpose but also serve as a testament to our resolute commitment to creating positive and lasting impact.
Engagement & Voting Strategy
Our exclusion list is based on OECD Guidelines
Sustainability knowledge base
At daphni, we believe that sharing knowledge is pivotal in addressing climate and social issues. We are committed to disseminating our insights within the ecosystem to empower other stakeholders. Our goal is to create a dynamic, inclusive environment where collective intelligence drives innovative solutions for lasting positive impact.
No consideration of adverse impacts of investment decisions on sustainability factors
daphni does not consider any adverse impacts of its investment decisions on sustainability factors. We do not consider principal adverse impacts at an entity level because we have investment vehicles with completed investment periods, so we wish to focus our efforts on our newer vehicles that do consider key negative impacts. daphni will re-evaluate considering principal adverse impacts of its investment decisions in due course, depending on the evolution of the regulation.
In accordance with SFDR regulations, daphni discloses its sustainability risk policy governing investment decision-making for the Yellow fund, this statement also applies to all our other investment vehicles classified under SFDR. A 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 arising from an adverse sustainability impact” as defined in article 2(22) of the SFDR regulation.
daphni is committed to making a minimum of sustainable investments within its yellow fund of 30%. The sustainable objective is assessed using our proprietary methodology, which evaluates the impact of an investment opportunity on the SDGs. In addition, taxonomy-aligned investments are also considered sustainable under the SFDR regulation. In addition, the investment team believes that each of these non-neutral influences must be justified by the intentionality of the founders, the additionality of the solution and the measurability of the impact. We comply with the DNSH strategy through a mix of 3 characteristics:
- Quantitative assessment unsing our proprietary impact tool based on the SDGs
- Taking into consideration material PAIs
- Qualitative impact assessment of the Intentionality, Additonality and Mesurability of the investment oppurtinity
As part of our due diligence process, we assess the principle of good governance. This methodology may evolve depending on the assessment of the management company. More detailed information can be found in our ESG Doctrine
daphni promotes environmental and/or social characteristics, on the basis of the 17 UN Sustainable Development Goals (SDGs)
daphni’s investment strategy is set out in daphni Yellow’s constitutive document. Please refer to our by-laws for further information. daphni integrates the environmental and/or social characteristics mentioned above as well as good governance practices throughout its investment process. Moreover, some biding elements of our strategy apply to all investments:
- Our exclusion policy protect In order to protect ourselves against specific sustainability risks and to invest in line with our values and beliefs
- Restriction from investment in opportunities that are rated below 0 through our proprietary scoring.
The fund will invest in accordance with its investment strategy and investment restrictions, which are:
- prohibition to invest if the SDG impact score is below 0
- our exclusion policy.
We aim for 100% of our investments to be I/O aligned.
The monitoring of the environmental or social characteristics is performed on the basis of a continuous application investment process which as ESG embedded in itself. Here are a few examples on how we ensure that ESG is continuously assessed:
- Annual ESG questionnaires
- Usage of external providers for extra-financial data
- Quarterly and Annual reports of the fund
The Fund carries out qualitative and quantitative assessments to monitor the promotion of its environmental and social characteristics. Our scoring methodology is published in our ESG_Doctrine:
- Contribution to the SDGs using a proprietary quantitative and qualitative scoring prior to the investment decision
- Monitoring of quarterly and yearly ESG KPIs while the investment is in our portfolio
We use several sources of data, both internal and external. Some of the data is collected directly from our investors via questionnaires or third-party platforms. When data from the invested company is not available, we have to rely on:
- raw data from third-party suppliers
- data aggregated and calculated from third-party suppliers according to their methodology
- proxies and estimates calculated by our internal team
As the SFDR regulation is relatively recent, methodologies for calculating certain key performance indicators may change over time. We rely primarily on data provided by our portfolio companies and cannot control or verify the robustness of each data point. If we feel that a data point is inconsistent, we will raise the issue with our shareholder. However, through our engagement policy, we ensure that the companies we invest in provide us with increasingly reliable data. We also rely on the methodologies of third parties, which may also evolve and which we cannot audit.
Each investment opportunity is subject to thorough due diligence. These due diligences include ESG, legal and HR aspects, and many others aspects. They also help us to assess the impact of the investment opportunity on the SDGs and to highlight any red flags.
The aim of our engagement policies is to support our portfolio companies in their sustainable development approach with all the help and expertise we can provide. Our engagement policies are part of our ESG process, which is integrated into our wider investment process. More detailed information can be found in our engagement & voting policy published on our website.