Responsible Investment Policy
1 Introduction
1.1 Purpose
OneVentures (1V) understands that our investment decisions have an impact on our funds’ returns and society. We believe that by investing in companies which operate with and adopt high standards of corporate responsibility, we can better manage risk, generate sustainable businesses and enhance long term investment returns for OneVentures, society and our investors.
The purpose of this Policy is to set out the framework for responsible investment at OneVentures (1V) to ensure that our funds adequately consider environmental, social, and governance (ESG) risks and opportunities as part of our investment process, decision making and day to day operations.
In developing our responsible investment program, 1V has sought to apply best practice approaches for responsible investment and has taken guidance from the UN Principles for Responsible Investment to which we are a signatory and the United Nations Sustainable Development Goals (UN SDGs).
A key tenant of our responsible investment policy is the avoidance of harm through our investment and operational activities. Beyond the promise to “do no harm”, 1V strives to create positive impact not only for its portfolio companies, employees and investors, but also to society and the economy.
Our commitment to investors goes beyond delivering superior returns to create compelling, differentiated opportunities that have meaningful impact on society with the potential to improve lives.
All investments and financing shall be structured to meet the requirements of this Policy.
1.2 Scope
This policy is applicable to 1V’s operating business, current investee companies and all investments considered by the 1V Funds when presented for approval to each relevant funds’ Investment Committee.
1V’s commitment to ESG is summarised below:
Lead by Example: 1V seeks to become a leader in building a sustainable business in its own internal operations from being carbon neutral, achieving high level of diversity and inclusion within the firm through to ensuring our suppliers operate in a sustainable way.
ESG Analysis: Funds shall consider and provide a risk assessment on
environmental impacts (such energy consumption, resource depletion, waste and pollution and other climate change considerations),
social issues (such as working conditions, fair work, forced labour and health & safety issues) and
governance issues (such as the quality of management and the board, executive pay, management conflicts, tax and treasury matters and organisational diversity) associated with target companies when assessing potential investments.
UN SDG Alignment: Funds shall consider the alignment and opportunity to meet UN SDGs.
Active Ownership: 1V will be active in our Funds’ ownership of portfolio companies to ensure they incorporate ESG issue management through their internal policies and practices. Through our active management, we shall seek to grow and improve the performance of our investee companies to support their achievement of long-term sustainability goals and to benefit all stakeholders:-
1V will build ESG principles into investment documentation including terms sheets and shareholder deeds,
1V will support and encourage portfolio investee companies to advance the same principles and practices upheld by our firm,
1V investment teams will utilize the relevant governance tools available working through their board roles within portfolio companies to understand ESG issues with the goal of improving performance and mitigating any adverse impacts,
1V will employ governance structures that enhance oversight in the key areas of audit, risk management, and potential conflicts of interest, and to implement policies that align the interests of owners and management,
1V will remain committed to compliance with applicable international and local HR laws in the countries in which our Funds invest and portfolio companies operate, including supporting the payment of competitive wages and benefits to employees of portfolio companies; provide a safe and healthy workplace in compliance with national and local law and all other measures consistent with applicable law, and to respect the rights of employees, and
1V will respect the human rights of those affected by our Fund’s investment activities and seek to confirm that our Funds do not invest in companies that utilize child or forced labour or maintain discriminatory policies;
ESG Disclosure: 1V is committed to the principles of transparency, accountability and stakeholder engagement. In that light 1V shall provide regular and timely information to our Funds’ limited partners on ESG issues, and foster transparency around our Funds’ and portfolio company activities;
Regular Review: 1V commits to ESG as an interactive and on-going process of assessment and evaluation and is therefore committed to updating its policies and procedures accordingly; and
Promote Acceptance: 1V will commit to promoting acceptance and implementation of responsible investment principles in the venture capital and broader investment industry.
1.3 Delegations, responsibilities and accountability
1V’s investment professionals have delegated responsibility for management of ESG matters as well as collaborations on ESG initiatives and integration into investment decisions. ESG considerations will be addressed throughout the life cycle of the Fund and investment, from fund and mandate establishment, during the due diligence, screening and investment selection process, and through ongoing monitoring and management of the portfolio.
1.4 Review
This Policy will be reviewed annually, and more frequently if deemed appropriate. Any material changes to the Policy will be provided to the Board of Directors of 1V for review and approval.
2 Our approach to responsible investment
1V has a three-dimensional investment philosophy which places responsible investment at the core of our investment process. Our investment philosophy is for our investments to:
grow as profitable enterprises,
avoid harm to stakeholders, and
benefit society through contribution to one or more UN SDGs.
We understand that for many of our investors the positive social impact of their portfolios is an important consideration in combination with investment performance.
ESG failures can highlight improper governance and impact not only investment value, but also have the potential to cause harm to society and the environment more broadly.
Companies that are unwilling or unable to take ESG issues into consideration may:
put the company’s reputation at risk;
put 1V’s reputation at risk;
cause loss of market opportunities;
diminish company value; and
inadvertently affect other companies within 1V’s portfolio.
Assessing ESG risks in the investment process is therefore consistent with 1V’s objectives as long-term investment managers, and our fiduciary duties and responsibilities to 1V investors. We actively engage with our portfolio companies on a range of commercial, strategic and ESG related matters and encourage them to advance these same principles in a way that is consistent with their fiduciary duties.
2.1 Screening
1V’s investment process is structured to align with the values of our investors including in the interest of their financial assets.
Positive Screens
1V’s philosophy is that our healthcare and technology-based investments must have a positive societal and economic impact.
As an asset owner, 1V has utilised the United Nations Sustainable Development Goals (UN SDGs) as a framework for aligning the purpose of our investments to attainment of global development goals.
As part of our investment management and reporting processes we will:
Select investment opportunities which support achievement of the UN SDGs
Map our portfolio investments in terms of their alignment with UN SDGs
Specifically reporting to our investors how each investment contribute to the attainment of UN SDG’s
Use of the UN SDG framework to report on our responsible investment outcomes
Negative Screens
1V shall not invest directly in the following sectors:
Gambling businesses,
Pornography
Alcohol manufacture or distribution (other than for a healthcare related purpose),
Tobacco manufacture or distribution, or
Controversial weapons and weapons banned by UN convention (for example Nuclear, Biological, Chemical, APMs, Cluster Munitions, Laser Blinding and Undetectable Fragments).
3 Stewardship
3.1 Objective
As active asset owners who are focussed on responsible investment, we will use our stewardship rights at investee companies to engage on each company’s ESG considerations and management processes.
3.2 Activities
Engagement
Engaging with investee companies is a vital part of maintaining investment oversight and ensuring that investor views are considered in the governance of companies and assets we manage through our funds on investors’ behalf. We believe that by exercising these ownership rights and maintaining our 'seat at the table' we can maximise value for our investors.
Direct Engagement
Where relevant and appropriate, we will engage directly with companies, with the aim to:
Improve the way a company is managing ESG issues;
Encourage companies to improve their performance in any area of material concern; and
Encourage the disclosure by companies of material ESG issues adopting relevant analytical tools and standards.
Collaborative Engagement
1V recognizes that positive engagement on ESG issues with investee companies can take many forms. Therefore, the company aims to participate in collaborative engagement activities to further the discussion and disclosure of material ESG issues and develop practical tools for the reporting of ESG related activities. A collaborative approach acknowledges the opportunity for improvement and that we need buy-in from portfolio company stakeholders to drive and implement any practices and processes with the businesses.
4 Reporting
1V commits to annual reporting to investors on our responsible investment outcomes and ESG issues and to working closely with our portfolio companies to achieve this aim.
We will assist our portfolio companies to incorporate ESG principles in their own reporting frameworks.
5 Case Studies
1V has a proud heritage of investing in truly innovative healthcare and technology companies tackling global problems. Below are some examples of 1V’s stewardship of our portfolio companies, ensuring ESG considerations are sufficiently managed, risks minimised, and opportunities acted upon.
Vaxxas
Portfolio Company
Vaxxas is a next-generation vaccine delivery platform that elicits a robust immune system activation through their proprietary High Density Micro-array patch (HD-MAP) technology. The HD-MAP aims to provide an optimised, differentiated needle-free vaccine delivery solution that safely and cost effectively amplifies vaccine efficacy, removes the need for cold storage and can provide for self-administration.
Pre/Post Investment
1V originated the investment opportunity in Vaxxas through early identification of the ground-breaking R&D at the University of Queensland. Since the initial investment, OneVentures Managing Partner, Dr Paul Kelly, has played a critical role as Chair of the Board. In this capacity he has supported the CEO in the development of major partnerships with global healthcare foundations and investors including the Bill & Melinda Gates Foundation, the World Health Organisation and US Department of Health Biomedical Advanced Research and Development Authority. 1V has been instrumental in defining Vaxxas’ pipeline of proprietary vaccinations targeting globally critical infectious viruses and diseases.
ESG Opportunity
Our investment in Vaxxas highlights our focus on going beyond investing in companies that “do no harm”, but actively seeking to partner with and steer those businesses with products that have the potential to be globally relevant game-changing technologies that improve lives. Vaxxas’ HD-MAP technology platform could help provide efficient, cost-effective, needle-free vaccine delivery, including to vulnerable communities and the developing world. This is particularly important for people living in geographies that have cost, cold supply chain and broader healthcare availability challenges.
Backing Vaxxas’ mission to reduce the prevalence of preventable diseases through accessible, efficient vaccine delivery highlights 1V’s commitment to creating positive social and environmental impact and to consider these impacts when making investment decisions. Throughout the investment period, 1V has also provided the role of CFO of Vaxxas, providing significant oversight and ensuring strong governance and reporting practices are in place. A well-structured board of investors oversees the company.
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