Presentation of financial products that have sustainable investments as their objective, financial market participants shall publish the information referred to in Article 10(1) of Regulation (EU) 2019/2088
Product name: Course Corrected Fund I AB (referred to as “the Fund”).
An “Investment” is a company (public or private) that the Fund owns equity in.
Course Corrected is a climate impact venture capital fund supporting outstanding entrepreneurs with fast growing and scalable businesses that drive the transformation towards climate positive alternatives and carbon efficient solutions with the potential to become leaders in their respective industries.
The Fund invests in companies with technologies that have the potential to significantly reduce global greenhouse gas emissions, while avoiding doing harm to other sustainability objectives, and operating in accordance with appropriate principles (including UN Global Compact Guiding Principles and OECD Guidelines for Multinational Enterprises).
The Fund only invests in companies that can be determined as sustainable, climate positive and SFDR aligned.
Progress towards the sustainability objective of the Fund (to reduce GHG emissions) is determined via impact assessments, including but not limited to life cycle assessments or avoided emission calculations.
As an active investor, the Fund helps investments mature on their sustainability journey, continuously improving their operations, governance, and reporting.
The funds requirements to Investments have been tailored to fit early-stage (mainly pre-seed, seed and A-round) ventures in their formative years (so called micro-enterprises and SMEs) which means that requirements for policies and controls will increase as the company progresses in maturity and size.
Course Corrected (CC.VC) takes sustainability risks into account in its investment decision-making process. “Sustainability Risks” as defined in Article 2(22) of the Regulation: “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 an investment”.
As part of Course Corrected’s standard procedure, sustainability risk is integrated into the investment decision process. This is done by flagging important risks in the investment proposals, identified by research, and through review of each investment by Course Corrected’s Climate Advisory Board.
Each investment is reviewed accordingly, and Course Corrected may decide to make an investment even if risks have been identified. If this occurs, Course Corrected may implement mitigation strategies, which may include but not limited to ESG mandates, reporting requirements, management follow-ups, third party expert reviews, and oversight committees, etc.
Consideration of principal adverse impacts indicators:
The assessment of an investment’s performance on the “do not significant harm” principle will occur in relation to the investment’s performance on Principle Adverse Impacts (PAIs). The fund will monitor all investments on the mandatory PAIs and will track the evolution. If performance on these indicators worsen, then the Fund will engage with the Investments to identify the causes and implement a corrective action plan.
The Fund also commits to monitoring their investments for environmental controversies. If a controversy is found, the Fund will engage with the companies to take appropriate action.
PAI Statement (Annex I)
Course Corrected is an impact venture capital fund supporting outstanding entrepreneurs and teams with fast growing and scalable businesses that drive the transformation towards climate positive alternatives, disrupting incumbents and with the potential to become leaders in their respective markets.
The investments will have a net-positive impact on climate change through the mitigation or avoidance of greenhouse gases (GHG). While Course Corrected recognises that there are many investment opportunities in companies that may have strong return potential, Course Corrected focuses only on those whose impact directly compounds with company growth.
Course Corrected is a stage agnostic fund with a primary focus on companies in the seed and Series A stages.
Course Corrected invests across five critical themes: Sustainable Food Solutions, Electrification and Energy Efficiency, Industrial Processes and Materials, Circular Systems and Sharing Economy, Climate Transparency and Accountability.
Course Corrected seeks to invest in companies that have the potential to be category leaders, with strong founders and management teams and highly scalable business models.
Course Corrected places consistent emphasis on impact in each step of the investment process, from screening, impact measurement and analysis, due diligence, periodic reporting and follow-up post-investment. Critical and instrumental to this process is our Climate Advisory Board, consisting of leading climate researchers from the Stockholm Environment Institute and the Stockholm Resilience Center. The Climate Advisory Board assess the climate impact for each investment that the Fund pursues and verifies the potential. The Climate Advisory Board supports in identifying potential weaknesses and/or adverse effects. Potential investments/investees provide an impact thesis and supporting documentation (which could be e.g. a life cycle assessment). This information is further analysed and included within the Investment Memorandum’s and considered by the Investment Committee as a fundamental part of its decision making criteria.
100% sustainable investments with an environmental objective.
The Fund monitors the following sustainability indicator(s) to measure the attainment of the sustainable investment objective:
This indicator is collected on a quarterly basis and is an important input in the wider engagement with the Investment. Based on the Investment’s performance on this indicator, the Fund may provide resources to support execution of the agreed progress plan (Sustainability Action Plan), to help the Investment deliver on the targets agreed in connection with the investment agreement.
As mentioned above, Course Corrected monitor holistic KPIs of each investment. This extends to both financial and impact metrics. At minimum, Course Corrected’s portfolio companies provide information quarterly. In addition to active advisory roles within our early-stage companies, Course Corrected strive to proactively contribute to our portfolio companies.
In the due diligence process, Course Corrected assesses the climate impact potential of each investment. Course Corrected’s Climate Advisory Board consisting of climate research experts and climate researchers review the potential climate impact, including potential adverse effects and weaknesses of each investment.
Calculations are based on the best available scientific evidence and involve collaboration with the Fund’s technical and climate advisors. Course Corrected recognises that for some products, little information exists about the baseline case, and assumptions and estimations have to be made. Over time, this information gap is expected to reduce within our portfolio. Material adjustments to the calculations and baselines (if material and significant) will be outlined in reporting documents.
Carbon avoided calculations are simply defined as:
Where possible, Course Corrected and the portfolio companies will update both factors as more data becomes available, using more rigorous assessment methods as data allows.
To develop impact assessments, the Fund and the Companies work together, using data from public databases and other (private) databases, and (verifiable) data from the Investment’s own operations.
The data is then used to assess the Investment’s performance on Avoided Greenhouse Gas Emissions, the impact indicator used to measure achievement of the Fund’s main objective, climate change mitigation.
The Fund and the Investment:
Where possible, Course Corrected and the portfolio companies will update both factors as more data becomes available, using more rigorous assessment methods as data allows.
The Fund will estimate GHG emissions, including avoided emissions, of all investments on a quarterly basis.
Course Corrected recognises that there will always be a lag between the databases and operations in the real world, and projections into the future have uncertainty built-in. The methodology is deemed to adequately contribute to the defined sustainable objective targeted by the Fund. The Fund will regularly review the methodologies and data used to assess the attainment of the sustainable investment objective to ensure the most up-to-date approach possible. When severe limitations are identified, actions will be taken immediately to overcome them.
Climate Change mitigation impact (“avoided emissions”) calculations and impact thesis from the company.
The Fund may decide to make an investment even if Sustainability Risks have been identified. In such cases, the Fund may apply appropriate mitigation measures, including but not limited to offering training for the Investments to support their capacity to control, mitigate and/or reduce such adverse impacts.
During the holding period, the Fund uses the results of the due diligence process to ensure that sustainability impacts and risks are continuously evaluated and reported on – and risks mitigated as needed.
During the holding period, the Fund ensures that the investment actively works with the identified sustainability impacts and risks just as the Investment will be obliged to periodically report on the agreed set of sustainability KPIs identified and agreed on in the due diligence phase. These KPIs are reviewed on a regular basis to ensure that the Investment measures, manages and reports on relevant sustainability impacts and risks. As an active investor the Fund helps investments mature on their Sustainability journey, including helping them develop relevant policies, codes of conduct, and LCAs. Where the Fund has a significant influence on the investment’s structure and governance, it will exercise such influence via the board of directors of the Investment, ensuring that sustainability impacts and risks are on the board agenda and are a continued focus of the Investment.
In the event of ESG incidents, the Fund will always engage in dialogue with the Investment and ask them to mitigate their negative impact in dialogue with the affected stakeholders.
For engagement activities that are conducted in response to an incident or due to insufficient adaptive capacity, investments will be given the opportunity and resources to improve.
The main objective of the Fund’s engagement activities is to reduce principal adverse impacts of investments and enhance the positive impacts of the Investments’ operations.
The Fund is committed to having a positive impact in the fight against climate change, in alignment with the Paris Agreement.
Given that there is no relevant benchmark index for early-stage businesses, an index has not been designated as a reference benchmark.
In the event that the regulation is changed in the future in ways that affect the possibility for the Fund to operate compliant to the new amended directives the Fund will in order to stay compliant with regulatory without changing the funds mission and focus to invest in climate mitigation and climate-positive early stage software and hardware businesses, seek the possibility to degrade to such regulation in order to remain compliant if deemed necessary and justified by the funds legal advisors and auditors. Any such decision will always be taken together with the main investors of the fund.
This document was approved: June 29, 2023