Integration of Sustainability Risks (Article 3) 

Sustainability risk refers to an environmental, social or governance (ESG) event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment, as defined by the Regulation (EU) 2019/2088 on sustainability‐related disclosures in the financial services sector (SFDR).

This disclosure describes how Hadean integrates sustainability risks at the entity level, while information on sustainability risk integration at the product level is provided to potential investors prior to investment. Website disclosures pursuant to Article 10 of the SFDR for funds under management are available at https://hadeanventures.com/the-hadean-impact/. Findings from Hadean’s annual ESG review are presented in the Annual ESG Report, which is distributed to investors preferably by 30 June of the corresponding financial year and no later than 15 November.

ESG considerations are integrated into Hadean’s investment process, evaluated prior to every investment decision, and continuously monitored throughout the ownership period. This approach is formalized in Hadean’s internal policies and procedures, including the Impact & ESG Policy and the Sustainability Risk Policy. Hadean has delegated day-to-day responsibility for for coordinating the integration, ongoing monitoring, training and reporting of ESG, including sustainability risks, to a dedicated employee. Management has operational responsibility for implementing these policies, while the Board retains ultimate responsibility and oversight.

For potential investment opportunities, the investment team conducts ESG due diligence prior to the investment decision by requiring companies to complete Hadean’s ESG questionnaire. Findings from this due diligence, including identified sustainability risks, are then summarized and integrated into the decision-making process, before the investment opportunity is subject to approval by the Investment Committee. Hadean will not proceed with investments where sustainability risks are deemed to be at an unacceptable level and it is not considered feasible to implement sufficient risk-mitigating measures.

In the case of a positive investment decision, the ESG due diligence findings should be incorporated into the post-investment decision process, ensuring that material ESG matters are appropriately addressed at board level. Further, we conduct annual ESG reviews and work with portfolio companies on a best-effort basis to improve ESG practices. This includes encouraging them to strengthen internal governance mechanisms to ensure sound management and effective oversight, and providing tools and resources, such as sharing policies and procedures, where appropriate. If increased sustainability risk is identified during the ownership period, Hadean will implement additional measures and may consider exiting the investment if such measures do not reduce the risk level to an acceptable level.

Consideration of Principal Adverse Impacts (Article 4)

Hadean Ventures considers the principal adverse impacts (PAIs) of investment decisions on sustainability factors.

For detailed information and insights into portfolio performance concerning PAI indicators, please refer to our consolidated PAI Statement, which is published annually by June 30th.

Integration of Sustainability Risks into the Remuneration Policy (Article 5)

Hadean’s remuneration policy does not incentivize risk-taking that conflicts with Hadean’s overarching objectives, policies, procedures, or other agreements governing the funds under management, including risks that could harm people, the environment, or the long-term value of investments.

Our remuneration policy ensures that employees receive a combination of fixed and variable remuneration. Variable remuneration shall be based on a holistic assessment and consider, not only financial results, but also alignment with Hadean’s policies and procedures, including with respect to sustainability risk integration. All employees shall prioritize the long-term impact of their decisions and actions, refraining from actions that compromise the long-term value of investments for short-term financial or personal gain. While no ESG KPIs are directly linked to our remuneration policies, the combination of fixed and variable remuneration – along with the integration of sustainability into our governance framework and investment process – ensures that ESG factors are naturally considered in performance and remuneration reviews.

Through the balance between fixed and variable remuneration, combined with the integration of sustainability risks into Hadean’s investment process, our remuneration practices are consistent with the integration of sustainability risks in the investment decision-making processes

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