Our Responsible Investment Policy relies on the three following strategic pillars:
- Added value: Jolt Capital targets companies generating efficiency gains and improvement of business processes through technology, not through the exploitation of natural or human resources.
- Exemplary governance: we ensure that none of our operations carry a risk of corruption and that all can operate with complete integrity.
- Risk management: Jolt Capital actively refuses to invest in ESG-sensitive sectors and products (weapons, tobacco, illicit drugs, gaming, gambling, pornography, prostitution, non-ethical genetic development, environmentally controversial sectors).
JOLT CAPITAL'S POSITIVE SCREENING APPROACH
Jolt Capital is committed to investing in companies generating efficiency gains and improvement of business processes through technology, not through the exploitation of natural or human resources. To ensure the effective delivery of this value creation for society, Jolt Capital has decided to develop a positive screening approach which will enable the proactive selection of companies with an impactful technology (which means a technology able to improve directly or indirectly climate change, resource use, ethical data use, human skills and wellbeing).
JOLT CAPITAL'S ESG INTEGRATION THROUGHOUT THE INVESTMENT CYCLE
During all key stages of the investment process, from pre-investment to exit, ESG considerations are integrated into decision-making and ownership processes.
Jolt Capital addresses ESG as early as its screening for investment opportunities process. Moreover, as a responsible investor, Jolt Capital actively refuses to invest in ESG-sensitive sectors and products.
Prior to investment, Jolt Capital systematically conducts a thorough ESG due diligence covering the target company’s compliance with major ESG regulations as well as maturity and performance on key ESG issues for its sector. This results in an ESG roadmap with specific targets and KPIs. This ESG roadmap is explicitly referenced in the Shareholders Agreement.
While we are committed to a materiality-based approach and therefore focus on issues of high relevance for each company, given its business model and geographic footprint, we systematically assess the following:
- Climate & GHG emissions: Exposure to physical and transition-related climate risks and opportunities. Our scope of analysis indeed covers both the company’s direct environmental impacts, as well as indirect impacts linked to its value chain.
- Governance: We systematically require that an active Board of Directors – including independent members selected based on their industry expertise – be in place.
- Circularity: For hardware companies, we also interrogate product lifecycle impact, from raw materials to waste and disposal.
- Data use: For software companies, when relevant, we also closely assess issues around data use, including security, privacy, and ethical considerations.
We request our portfolio companies:
- to use all commercially reasonable efforts to conduct their activities in accordance with the Environmental, Social and Governance principles and best practices (including developing sustainable products and services, respecting human rights, encouraging diversity, managing with transparency, …).
- to provide us, upon request and at least once per year, a report on the environmental, social and governance performance of the company and its subsidiaries. We ask our portfolio companies to report key ESG indicators annually.
- to promptly notify us of any event likely to create a material breach of the most commonly accepted ESG criteria and/or the social and environmental laws and regulations in the company’s countries of activity (such notification including an overview of the nature of the relevant event; the material impacts or potential material impacts arising from the relevant event; and any measures taken or planned to be taken to address the identified material impacts arising from, or prevent recurrence of, the relevant event).
Concerning the environmental impact of our portfolio companies, we progressively raise the consciousness of their management on this specific matter and ask them to develop the relevant KPIs they should be reporting to us; in any case, we ask companies to inform us without delay of any incident having a material environmental impact. Particular attention is paid to climate-related issues: companies are required to provide all indicators necessary to the assessment of our portfolio carbon footprint and the analysis of climate-related risks and opportunities.
Upon disinvestment of a portfolio company, Jolt Capital intends to:
- highlighting the Company’s ESG maturity and potential future upsides, either through an ESG-specific memo and/or and ESG Vendor Due Diligence, as appropriate.
- ensuring management continuity at the time of the exit in order to help the company to preserve its mission and the entrepreneurial spirit of the management teams.
JOLT CAPITAL’S ESG INTEGRATION AT A GLANCE
Our approach as a responsible investor is materialized by our commitment to the United Nations’ Principles for Responsible Investment, the largest global reporting instrument on responsible investment. Jolt Capital became a UNPRI signatory in November 2020.
In 2020, Jolt Capital was awarded the French “Relance” label for its Jolt IV fund. This label aims at directing the savings of French households towards investment vehicles sustainably investing in French small and medium enterprises (SMEs). Appendix 4 of this Policy lays out key elements put in place to ensure alignment with the ESG requirements of this label, including the use of an ESG scoring system for portfolio companies.