A new blueprint for impact investing

We want to drive systemic change through our investments and our engagement in the impact investing community.

For real change, capital is not enough

Vastly more capital is needed to support and grow the ideas of daring founders. But we also need more diversity to drive the progress. We need more rigorous impact measurement and management standards from LPs and GPs to prevent impact-washing.

At Aurum Impact, we want to raise the bar for the whole impact investing ecosystem through our investments and our engagement in the community.

CleanHub

Cleanhub

The Landbanking Group

UNDO

Voltfang

UNDO

“Impact investing means investing with the intention to generate positive, measurable social and environmental impact alongside a financial return.”

We are pushing for better and higher standards in the entire impact investing ecosystem.

We feel it is critical to improve the alignment between impact intentions and impact management practices, as well as to drive more consistency and rigor in the approaches LPs and GPs are taking, to ultimately raise the bar for all collective impact investing efforts.

The ecosystem of impact

Our goal is to inspire, support, promote, and collaborate with the impact investing ecosystem on all levels - from talents to fund investors, from startups to funds. To achieve real changes in the entire ecosystem.

Talents

We want to inspire bright minds to choose a career that makes a difference. We collaborate with talent initiatives and impact programs to foster the next generation of purpose-driven entrepreneurs.

Startups

We invest in daring entrepreneurs who challenge the system and drive real change. We work with startup programs and hubs. Impact and ESG are firmly integrated into our investment process.

Portfolio

We work with all our portfolio companies on their theory of change, impact KPIs, ESG policy, strategy, and progress, as well as their commitment to diversity, equity, and inclusion.

Venture capital

We co-invest with leading impact investors such as Lowercarbon Capital, Planet A, AENU, Yes VC, Übermorgen Ventures, and other well-known and established players such as Lakestar, UVC Partners, 468, and more. And we collaborate closely with impact investing players globally, such as Breakthrough Energy Ventures, 2150, SystemiQ, Revent, Fifth Wall, or Counteract.

Limited partners

We invest in funds driving impact. When we evaluate funds, we look at eight core impact areas, from setup through investment to portfolio management. We collaborate with family offices and LPs to drive more consistency and rigour in impact management practices.

Broader ecosystem

We seek to use our voice to educate, to inspire, and to raise awareness of relevant issues. We support communities, initiatives, frameworks, and standards that bring the ecosystem forward by establishing best practices and aligned ways of working.

Our Impact and ESG methodologies for founders and funds

Impact

ESG

Impact for founders

Every company we screen is analyzed across six impact dimensions:

Intentionality

Is the founders’ and the businesses’ intention to solve an environmental and social issue? Are they targeting the right stakeholders in the system they are trying to change?

Evidence

Is their approach in solving their key issue backed by a scientific understanding? Is there clear evidence, data, and research that their approach is contributing positively to the issue and moving the right levers?

Interlock

Are the financial returns and the social or environmental outcomes interlocked and inextricably linked?

Depth and breadth

Does the approach move the needle in terms of depth (e.g., percentage of emission reductions per product sold) and breadth (e.g., how many people are reached)?

Additionality

Would the desired impact occur anyway? What other approaches are solving the same issue? Is the approach new or innovative?

Measurability and management

Can you measure and manage the social and environmental outcomes?

ESG for founders

Our goal is to optimize all the topics that influence your long-term success.

We certainly don’t want to overburden young startups with lengthy ESG assessments and reporting. The key goal of our approach is to optimize all the topics that influence your long-term success. This ranges from creating an inclusive culture to attract and retain the best talent, to reducing your CO2 emissions, water usage and waste production along your entire value chain, to living up to certain values through solid processes and policies. With every company we invest in, we conduct lean and efficient ESG workshops and assessments to help set the right course for long-term success.

These are the key elements, based on existing frameworks and standards:

1. Materiality Analysis: Know your material environmental, social, and governance topics

2. ESG Management: Manage your ESG risks and material issues well from the start

3. ESG Reporting: Report on and communicate the key issues to your investors, so that they know how you are handling them

Last but not least, we encourage you to ask your investor(s) about their ESG policies and hold them accountable as well.

Impact for funds

We invest in purpose-driven fund managers dedicated to positive social and environmental impact.

When evaluating funds, we consider the following aspects:

A clear USP and Impact Framework

What kind of unique positive change does the fund want to achieve and how? Does it have a clear impact framework in place, ideally based on a Theory of Change? See template here.

Solid impact management

How does the fund assess and manage “impact”: How is (social/environmental) “impact” integrated in the investment process, in their decision making, and portfolio management?

Compensation tied to impact

How is compensation, especially carried interest, tied to impact objectives and KPIs?

Integration of impact in contracts

Is the fund “walking the talk”? Are impact considerations, i.e. impact management, integrated in contracts and agreements? If yes, we ask for their impact clause which is integrated in the term sheet and/or shareholder agreement. See template here.

SFDR Classification

We highly support and welcome greater transparency and better standards in sustainability-related disclosures for the industry. Under the Sustainable Finance Disclosure Regulation (SFDR), funds are classified according to their contribution to environmental and social objectives as well as their ESG management practices. We want to invest in funds who meet the requirements of SFDR Art. 9: This means they are investing in companies which 1) contribute to an environmental or social objective, 2) do not harm environmental or social objectives, and 3) follow good governance practices. If the fund has a very good reason to classify as SFDR Art. 8, an impact side letter would be implemented.

ESG for funds

Making sustainable business practices mainstream for all VCs - that is our goal.

Same as with our startup investments, we do not want to overburden funds with ESG reporting requirements. We believe that managing environmental, social and governance criteria will fundamentally increase future positive financial performance of a company - therefore increasing return, and decreasing risk. This is why we ask all funds to have the following in place:

Climate Impact Management

We’d like to specifically highlight climate impact, usually one aspect under “E” of “ESG”. While a fund itself has a rather small CO2 footprint (team travel being the biggest driver), the portfolio is the critical part to look at. This is why we ask all funds to measure, manage, and help to reduce their portfolio companies’ climate impact.

Diversity, Equity, and Inclusion

The VC scene still today is still far too homogeneous. To foster and accelerate sustainable innovation, we need a much more diverse environment, in which a multitude of ideas and entrepreneurs can thrive. This is why we put a special emphasis on DEI.

‍

Here, we look at a fund’s DEI and non-discrimination approach, which should detail how diversity, equity and inclusion matters are approached in their own team and in investment decisions. Ideally, they have a 1) policy, 2) objectives, and 3) activities/initiatives to reach their objectives in place. Further, we’d like to know what the percentage of women is in their 1) team, 2) at partner level, and 3) in the investment committee.

ESG Integration in Contracts

Is the fund “walking the talk”? Are ESG considerations, i.e. ESG management, integrated in contracts and agreements? If yes, we ask for the ESG clause as part of the term sheet and/or shareholder agreement. Please also see our template here.

Solid ESG Management

An ESG framework for integrating ESG considerations in the investment process, in decision making, and portfolio management.

More Details

For a more detailed approach on sustainability in Venture Capital, please also have a look at the Sustainability Playbooks and VentureESG.