ESG Policy

Our Policy on ESG, Responsible Investment, Sustainability, and Impact

We, DFF, like to challenge conventional wisdom in business and in ESG

The problem

Resources in this world are limited, and unfairly distributed. Society needs to become more efficient and fair.

The solution

We support sustainable startups with knowledge, networking, coaching, and capital to foster a community addressing environmental and societal challenges. Disruptive tech companies play a vital role, and we're dedicated to backing them.

Responsible Investment, Sustainability, ESG and Impact

These terms have become increasingly important in the venture capital ecosystem, but we feel that they have always been part of DFF’s toolkit. Our objectives when it comes to ESG include the following:

To align investments with our values

To better manage investment risk and generate long-term value in our portfolio companies

To contribute to society and the environment and to do no harm

For us, responsible investment entails actively engaging with companies in our portfolio on ESG issues and integrating ESG into our investment decision-making and management approaches.

Responsible investment

Investors play a crucial role in shaping a startup's development and governance, particularly in upholding ESG principles. DFF exercises active ownership through direct involvement, such as sitting on boards or exercising shareholder voting rights, and indirect involvement by serving as mentors, advisors, and leveraging our networks. As active shareholders, we advocate for ESG considerations aligned with the company's strategy and stakeholder requests.

ESG integration

We incorporate environmental, social, and governance (ESG) factors throughout our investment process, from selection to management of portfolio companies. Pre-investment, we conduct ESG analysis as part of due diligence, identifying risks and opportunities, and devising mitigation strategies. Post-investment, our ESG integration is tailored to each company's needs. We engage management on specific ESG issues and encourage policy development where necessary. Common ESG topics for our portfolio include carbon emissions, diversity, and governance transparency.

Collaboration - Governance

We encourage the use of Govin, a company which forms part of our portfolio, by all our portfolio companies. Govin offers a tool that allows companies to obtain and provide clarity on corporate governance through a simple dashboard.  Exclusions: We can not yet determine a priori which companies or industries we will not invest in due to moral or ethical considerations; in our experience this is mainly situation-specific. Therefore, DFF does not maintain an exclusion list or divestment policy. In our investment process, we clearly document any decisions to not pursue an investment due to moral or ethical reasons if it would otherwise be attractive from a financial point of view. These cases can be shared with stakeholders upon request.

Environmental

Our environmental footprint is already relatively small. We use office space in one of the most energy efficient buildings in Amsterdam; our international travel is limited, and most travel in the Netherlands is by bicycle or public transport.

Social

We strive for diversity within our team to mirror Dutch society in terms of gender, ethnicity, and socio-cultural background. Additionally, we value cognitive diversity, which encompasses a range of thinking styles, perspectives, abilities, and knowledge. We believe cognitive diversity enhances decision-making and business outcomes.

Governance

To DFF, good governance entails establishing the appropriate individuals, procedures, and methodologies to achieve investment outcomes aligned with stakeholders' needs. We adhere to principles such as transparency, participation, responsibility, accountability, effectiveness, efficiency, and moral integrity.

Impact

"Impact" to us signifies the positive social or environmental outcomes from our business activities. Though we're not labeled as an "impact fund," we encourage founders to boost their businesses' impact. Examples of our impact: Many portfolio companies tackle environmental, social, and governance challenges. We back our portfolio companies' impact claims by understanding and supporting their theories of change. Our investments often provide crucial support, enabling portfolio companies to achieve significant milestones. We foster opportunities for unforeseen innovations, including those with substantial societal or environmental impact.

Principles for Responsible Investment (PRI)

We recognize and endorse the PRI principles, in particular the commitment to be active owners and to incorporate ESG considerations in active ownership practices.  DFF is not currently a PRI signatory – with our small size we feel the annual PRI reporting would be too onerous and not a good use of our investors’ and founders’ time and money.  We will, however, reconsider becoming a signatory to the PRI at a later date when our scale and resources allow this and if we feel joining the PRI community has significant added value for DFF.

Measurement & Reporting

We believe that measuring is important – what gets measured gets managed. At the same time, we recognize that many things in the start-up environment, especially those related to sustainability, ESG and impact, cannot be effectively measured. For things we cannot measure but that we believe are relevant to our investments, we develop proxies, measure ‘qualitatively’, or simply ask lots of questions.  DFF will report on its efforts, challenges and achievements in ESG on an annual basis. For this reporting, we will seek both quantitative as well as qualitative input from portfolio companies.  In reporting on climate and energy related issues we will be supported by the tools offered by our portfolio company, Minimum.