Environmental, Social and Governance (ESG) Policy
Telstra Ventures believes that responsible corporate behaviour with respect to environmental, social and governance (ESG) factors can mitigate risk and have a positive influence on long-term financial performance.
To the extent consistent with our fiduciary duties, our fund private placement memoranda and our limited partnership agreements with our investors, we take ESG factors into account as part of our investment analysis and ongoing portfolio company management.
We adhere to the Guidelines for Responsible Investment developed by the Private Equity Growth Capital Council. Furthermore we take into account, to the extent applicable, the UN Guiding Principles on Business and Human Rights and the UN Sustainable Development Goals.
INVESTMENT; ONGOING PORTFOLIO COMPANY MONITORING AND ENGAGEMENT
We consider ESG factors as part of our investment process, as well as during our ongoing monitoring of and engagement with portfolio companies. Recognising that the relative importance of ESG factors vary across industries, geography and time, our consideration of ESG factors is tailored to the particular investment. Our focus is on ESG issues that are, or could become, material to long-term financial performance, including as applicable salient human rights risks.
Telstra Ventures seeks to identify relevant ESG risks and opportunities as part of the due diligence process for each portfolio company acquisition.
Our due diligence takes into account, to the extent applicable, information from the target company, third party information and data, third party standards and guidance and stakeholder engagement. Our internal investment professionals are supported by third party consultants to the extent relevant to the particular investment. During the due diligence process, the investment team, together with our compliance personnel, identify opportunities where policy development and/or implementation of ESG initiatives would add material value to the portfolio company.
At the conclusion of the due diligence process, any material findings will be incorporated as part of the final reporting by our deal professionals to the Investment Committee.
Telstra Venture’s commitment to responsible investment does not end upon acquisition. We have an ongoing management and monitoring program to mitigate ESG risks and invest in ESG opportunities throughout our ownership period. As part of this program, we follow up on risks identified in due diligence.
Telstra Venture’s commitment to responsible investment is communicated to the Boards of Directors and senior leadership of portfolio companies and portfolio companies are encouraged to adopt appropriate policies and programs relating to relevant ESG matters. Portfolio companies also are periodically required to provide us with information on their ESG initiatives.
In addition, we seek to be accessible to relevant stakeholders and will consider engagement with relevant stakeholders as appropriate.
Disclosures in accordance with Regulation (EU) 2019/2088 Sustainable Finance Disclosures Regulation (the “SFDR”)
It is important to Telstra Ventures that all employees are fully aligned with the Telstra Ventures’ Environmental, Social, and Governance practice that drive our Sustainable and Responsible Investment Policy document (the “ESG Policy”) and adherence to such ESG Policy will be considered in every individual’s performance assessments.
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 (“Sustainability Risk”). Telstra Ventures’ criteria used to determine the remuneration level of employees take into account relevant Sustainability Risks. Sustainability Risk is treated in the same way as other risks which could cause a material negative impact on the value of a fund or portfolio. Generally, Telstra Ventures reward long term performance and promote among its employees (as is relevant to their role) a focus on financial sustainability.
Telstra Ventures do not currently consider the adverse impacts of investment decisions on sustainability factors within the meaning of the SFDR. Whilst ESG considerations are integrated into Telstra Ventures’ investment process as outlined in Telstra Ventures’ ESG Policy, the detailed rules underlying the SFDR will require Telstra Ventures to ascertain the availability of the data expected to be reported under the new requirements of the SFDR. As such, the position will continue to be monitored and reviewed by Telstra Ventures as the underlying rules are finalised and market practice becomes apparent.
INVESTOR RELATIONS & REPORTING
Telstra Ventures is dedicated to transparency in the reporting to our investors of our ESG policy, its implementation and results. We value the ESG-related experience and expertise of our investors and will engage with them and solicit feedback so we may better align our responsible investing goals with theirs.
ONGOING PROGRAM MONITORING AND MANAGEMENT
This policy and Telstra Venture’s ESG program are monitored, and our ESG initiatives are led, by senior Telstra Ventures personnel.
This policy will be attested to by all Telstra Ventures employees. Training on the implementation of this policy also will periodically be provided to relevant Telstra Ventures personnel.