Sustainable Finance Disclosure Regulation (SFDR) Statement
heal.capital Management GmbH (“Heal Capital”) is an alternative investment fund manager within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and as such publishes the following information on its website in light of the consideration of sustainability-related aspects in accordance with Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability disclosure requirements in the financial services sector („SFDR“).
The following statements refer to the management and investment decision-making processes of heal.capital I GmbH & Co. KG.
I. Sustainability risk policies statement
Heal Capital backs mission driven founders with Capital and HealthTech-specific expertise in order to noticeably improve medical care through the use of digital technologies. As such, Heal Capital’s investment strategy is focused on digital technologies for the healthcare sector.
Healthcare is one of the most regulated investment areas. Due to existing regulatory frameworks in healthcare Heal Capital considers the general sustainability risks as low. Heal Capital addresses sustainability risks as part of their investment decision-making process. 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. The main concerns we pay attention to are startup governance in general and the startup’s approach regarding data and health studies where applicable.
Based on our investment strategy, we automatically exclude certain companies like:
makers of controversial weapons such as cluster bombs or nuclear warheads and those making indisputably harmful products such as tobacco and firearms, along with companies engaged in human rights abuses such as child labor. Companies engaged in serious corporate governance breaches such as bribery or corruption and that show no willingness to resolve these issues, are also typically excluded.
We regularly review our policies to ensure that they address new and emerging risks as well as investors’ concerns.
II. Principal adverse sustainability impacts statement
Transparency of adverse sustainability impacts at entity level, Initial statement as of March 2021
Heal Capital considers principal adverse impacts of its investment decisions on sustainability factors. The present statement is the consolidated principal adverse sustainability impacts statement of Heal Capital.
‘Sustainability factors’ mean environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. The indicators are applicable to investments in investee companies. Heal Capital has identified the principal adverse sustainability impacts of the investments and taken actions thereto.
Heal Capital aims to noticeably improve medical care through the use of digital technologies by backing mission-driven founders. Post Investment, Heal Capital is in an ongoing and constructive dialogue with the startup’s leadership team to identify value drivers as well as risk mitigation strategies which include ESG related risk mitigation amongst others.
Heal Capital is convinced that sustainable value creation requires responsible acting in accordance with ESG principles and implementing adequate measures taking into account the diversity of starting points and prerequisites in startups. Heal Capital aims to promote and welcomes the pursuit of ESG considerations within startups.
Heal Capital commits to adhere to the United Nations Principles of Responsible Investment (“UN PRI”) in line with its fiduciary responsibilities towards its investors:
Heal Capital will incorporate ESG issues into its investment analysis and decision-making processes.
Heal Capital will be an active owner and incorporate ESG issues into its ownership policies and practices.
Heal Capital will seek appropriate disclosure on ESG issues by the entities in which it invests.
Heal Capital will promote acceptance and implementation of the UN PRI within the investment industry.
Heal Capital will work together to enhance its effectiveness in implementing the UN PRI.
Heal Capital will report on its activities and progress towards implementing the UN PRI.
Heal Capital is currently in the process of preparing an application to become a signatory with PRI (https://www.unpri.org/).
Heal Capital is committed to include environmental, social and governance (ESG) factors in investment decision making and ownership. Heal Capital’s commitment is paired with recognizing that there are no “one-size-fits-it-all” standard solutions as of yet when it comes to indicators and established ways to integrate ESG considerations.
Whilst there are some studies indicating that digital technologies have the potential to significantly reduce carbon emissions in the Health Sector, e.g. via telemedicine solutions that reduce transportation by car, there is not sufficient data available as of now and startups in their early stage may not be able to provide the required data with regard to the PAI regime in Article 4 of the SFDR, and in the final report on draft Regulatory Technical Standards which where published on 2 February 2021 (“RTS”). At the current point in time (10 March 2021) Heal Capital has therefore opted not to comply with the PAI regime after careful evaluation and taking these market realities into account.
As a newly established sector-specific Venture Capital Fund, Heal Capital considers itself at the beginning of a steep learning curve to make ESG measurable paired with its deep believe in improving healthcare via digital technologies. Heal Capital is committed to make ESG measurable and show that sustainable value creation requires responsible acting.
Last version: 10 March 2021