Extantia Capital Management GmbH (“EXTANTIA”) is a venture capital firm that invests in European start-ups which develop technology solutions that provide (a) mitigation for or (b) adaptation to the climate crisis.
Re (a): Mitigation is working on the causes of the climate crisis through either emissions reduction or drawdown of existing greenhouse gases from the atmosphere. EXTANTIA will focus on solutions that have the potential at full scale to reduce at least 0.5% of the current annual global emissions (50GtCO2e).
Re (b): Adaptation is working on the consequences of the climate crisis, such as increased risk of floods. In both cases, most of the companies EXTANTIA will invest in have physical solutions (in comparison to being digital only).
According to the Regulation (EU) 2019/2088 the following information shall be provided. Please be aware that the subsequent information is subject to change and further amendments.
Integration of sustainability risks in the investment decision‐making process [Article 3 (1)]
Momentarily EXTANTIA has not yet finalized a general policy to address the integration of sustainability risks in the 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. Even without having a proper policy in place, sustainability risks are examined during the due diligence process in order to identify and prevent sustainability risks with regard to new investments.
Transparency of adverse sustainability impacts [Article 4(1)]
As part of Extantia’s investment process and due diligence before conducting an investment, also principal adverse effects on sustainability factors are taken into account. Sustainability factors are environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters. Consequently, potential portfolio companies and the corresponding product or technology are evaluated on the basis of a life cycle assessment in order to define the impact on these sustainable factors.
Transparency of remuneration policies in relation to the integration of sustainability risks [Article 5 (1), (2)]
Extantia is not obliged to provide a remuneration policy according to AIFMD/MiFID II. Therefore EXTANTIA is not able to consider sustainability risks with regard to such policy.
Transparency for financial products that have sustainable investment as its objective [Article 9 (3), (4)]
Extantia has sustainable investments as its objective. Sustainable investment means an investment in an economic activity that contributes to an environmental objective, provided that the investment does not significantly harm any environmental objective and that the investee companies follow good governance practices.
The reference benchmark/indicator for the purpose of attaining the sustainable investment objective is the reduction of CO2. In this respect, Extantia invests in companies whose technologies/products have the potential, when deployed at scale by the year 2050, to reduce 250 million tons of CO2, each.
During the lifetime of the fund, the development and deployment of the technologies and the actual CO2 reduction will be tracked continuously.
Further details on the investment strategy can be found on the EXTANTIA homepage.
Transparency of the promotion of environmental or social characteristics and of sustainable investments [Article 10 (1)]
Key characteristic of the EXTANTIA pledge fund is a clearly defined sustainable investment objective. While sustainable investment means, amongst others, an investment in an economic activity that contributes to an environmental objective, as measured, for example, by key resource efficiency indicators on the use of energy, renewable energy, raw materials, water and land, on the production of waste, and greenhouse gas emissions, provided that such investments do not significantly harm any of those objectives and that the investee companies follow good governance practices, the EXTANTIA pledge fund has particular focus on the significant reduction of green house gases.
As a result, the asset allocation of the fund is purely dedicated to companies, whose newly created product or technology will have the ability to notable reduce emission of GHG.
Consequently, the EXTANTIA management team will start its investment process with an evaluation of the potential impact of the technology. To be clear, the technology needs to have the potential, at full scale, to reduce at least 0.5% of the current annual global greenhouse gas emissions (50GtCO2e).
Further key parameters for a target company to qualify as a Extantia investment are (i) Readiness: demonstration and execution of a pilot to show that the technology has been proven in the lab or a test environment, i.e. Technology Readiness stage 4 and beyond and (ii) Ability to commercialize: the team has the ability to transition from a pure tech to a more commercial focus.
Methodologies used to assess, measure and monitor the impact of the sustainable investments are dependent on the underlying technology of the specific investee/portfolio of the fund. In particular, the CO2-reduction potential of each sold product unit of the corresponding portfolio company will be calculated using methodologies like life-cycle assessment and carbon footprint. In our assessment we also use publicly available tools and resources such as The Drawdown Project and the CRANE tool.