Atomico (UK) Partners LLP (“Atomico”) and the funds which it advises have a mission to build the world’s most prosperous, sustainable, diverse, inclusive and mission-driven technology ecosystem in Europe.
This document (the “ESG Policy”) sets out Atomico’s approach to investing responsibly and to the management of Environmental, Social and Governance (“ESG”) issues within our business operations and our investment activities. We aim to set out the principles that the firm aspires to and the procedures that Atomico has implemented in order to meet our ESG goals and standards.
As of the date of this ESG Policy, Atomico currently includes the following factors within our definition of ESG:
- Environmental factors: the pollution and contamination of land, air and water, and related legal and regulatory compliance; eco-efficiency; waste management; management of scarce natural resources; climate change impacts; biodiversity; and the development of new technologies, products and markets e.g. ‘green’ / sustainable products and services.
- Social factors: the treatment of employees including their pay; health and safety; labour conditions; human rights; any form of discrimination, harassment or victimization; diversity and inclusion, supply chain management; and the treatment of all stakeholders including customers and communities.
- Governance factors: anti-bribery and corruption measures; business ethics; accountability; transparency; conflicts of interest; whistle-blowing; control mechanics; and the governance of environmental and social factors.
The ESG factors listed above are not exhaustive and Atomico will continue to re-visit, refine and add to the list.
This ESG Policy covers all Atomico funds, existing portfolio companies, new investments and Atomico’s own operations. All Atomico staff are required to adhere to this ESG Policy.
Atomico’s Approach to ESG
Atomico firmly believes that great companies can come from anywhere and that entrepreneurs are the gamechangers for a better world. Our purpose is to invest in companies that return profits but also create returns for society.
ESG is at the core of Atomico’s investment philosophy, purpose and values. We recognise the integral role that ESG issues have on the success of our investments (both positive and negative) and we also recognise that, given the wide-reaching impact that some of our portfolio companies can have, venture capital firms such as ourselves are in a unique position to bring lasting change in the world. We want the businesses we invest in to be genuinely focussed on doing well for all stakeholders including their own employees, customers, suppliers, shareholders, the environment and the wider world at large. We firmly believe that responsible business practices help generate superior long-term performance.
For Atomico, ESG is not just a screening process. The partners and investment teams at Atomico take an active interest in how our portfolio companies manage ESG issues and actively encourage, support and stretch our portfolio companies to strive for the very best ESG standards.
Atomico’s Commitment to ESG
ESG is firmly embedded within Atomico’s operations and across the entire investment cycle from investment screening to due diligence, ownership and exit. Atomico’s commitment to safeguarding and enhancing ESG includes:
- Maintaining strong ESG governance within Atomico’s own operations: Atomico has established an ESG and Diversity Task Force comprising of team members drawn from our Investment, People, IR, Finance and Legal teams. The Task Force reports to the firm’s ExCom which has overall responsibility for implementing this ESG Policy. Atomico provides staff with specific training and resources to help them fulfil the firm’s ESG commitments.
- Encouraging strong ESG engagement by portfolio companies: Atomico strongly encourages portfolio companies and the founders and CEOs we work with to actively engage with the ESG implications of their business activities. Our approach is not only about mitigating risks, but also about adding value by using ESG factors to improve business practices. Where possible and appropriate, we will work with our portfolio companies to develop a toolkit to provide additional support on implementing best practices. We also partner with our portfolio companies on ESG related term sheet clauses. The term sheet requirements may, depending on each portfolio company, include board representation, appointment, voting, audit, fraud, reporting and financial reporting. Central to our investment process is also the introduction and implementation of a strong governance and management structure for each of the portfolio companies. Since 2020, Atomico requires its new portfolio companies, where we lead an investment round, to design and implement a Diversity & Inclusion Policy within three months and a Diversity & Inclusion strategy within 6 months of Atomico’s investment. Going forward, we also plan to have our investment teams monitor and help portfolio companies with ESG issues and ESG risks as part of their engagement (including in their capacity as board members).
- Embedding ESG within our investment process:
- Pre-Investment: As part of our screening process, Atomico’s investment teams will regularly assess a company’s ESG-related risks and related factors (including potential issues related to diversity, environmental impact, climate change, ethics, anti-bribery and corruption). Our investment teams will also work with the firm’s legal team to review ESG risks and present material findings to the firm’s Investment Committee. Where appropriate or deemed necessary, Atomico will also instruct external experts to perform additional ESG due diligence on potential portfolio companies. If the Investment Committee concludes that the ESG risks related to a potential investment are too great and/or cannot be appropriately mitigated in a reasonable timeframe, no investment is made. In instances where Atomico leads an investment round, a member of the Growth Acceleration Team (“GAT”) and a member of the investment team will conduct a conscious scaling workshop (described further below) with each new portfolio company as part of final due diligence. This helps to develop the thinking of senior management team members on sustainability and the potential impact of their business activities.
From a D&I standpoint Atomico aims to find and invest in the best and most ambitious founders from a diverse set of demographics, backgrounds, and experiences to maximise fund performance. Atomico’s evaluation process is impartial and structurally designed to ensure we evaluate opportunities from a diverse perspective and identify biases and blind spots.
- Post-Closing: Shortly following the completion of each investment, Atomico will seek to support portfolio companies with improving their ESG performance. Atomico’s GAT will also routinely engage with portfolio companies to offer support to help them meet this task and refine their own ESG approach.
- Monitoring and Encouraging Continuous Improvement: As part of the firm’s mission to partner with gamechangers and to help founders build category-winners, Atomico’s investment team will also actively help founders to identify and respond to opportunities to further improve their ESG engagement on an on-going basis. Atomico also provides portfolio companies with access to training, materials and access to other founders through the firm’s Learning Academy.
- Engaging with our limited partners on ESG issues: Atomico aims to have broad transparency on ESG topics with the limited partners in the Atomico funds. To this end, Atomico proactively includes ESG information in our quarterly reports to our limited partners and provides updates on ESG issues and programmes at our annual Investor Summit and at our advisory board meetings.
- Engaging with wider stakeholders: Atomico actively engages with stakeholders and publicly reports its ESG activities. Atomico is a UNPRI signatory and commits to their guidelines in relation to responsible investment practices. In 2020, these reports and activities included:
- Publicly launched Atomico’s Conscious Scaling Programme, which is a framework for dialogue between founders and investors/the board focused on identifying and mitigating long-term risks associated with the business model or technology’s impact on society, the environment, and all stakeholders. Atomico engages its portfolio companies in the conscious scaling programme as part of our investment due diligence phase
- Partnering with SEO Alternative Investment to create an internship programme focussed on minorities
- Sponsoring Level20 to provide mentors and mentees with the aim of promoting diversity within the VC industry
- Introducing the Diversity and Inclusion Guidebook to support the efforts of companies in this field
- Sharing a a blog post stating our commitment to diversity and inclusion
- Partnering with YSYS and ColorinTech
- Launching the Access Access Atomico Office Hours Programme to match Atomico team members with Europe’s most talented and ambitious tech founders from underrepresented communities
- Considering our environmental footprint: Atomico is conscious about the environmental impact of our day-to-day operations. As a UNPRI signatory we also commit to their guidelines in relation to climate change. The firm measures its own carbon footprint and participates in a carbon offsetting programme. In 2020, Atomico received Carbon Positive certification and will aim to maintain this certification.
- Promoting diversity, inclusion and equality in the workplace: Diversity and Inclusion is embedded at the core of our organisation across all of our levers. Atomico’s goal is to be a leading and top performing European technology investment platform that contributes meaningfully to a better future. Atomico is an equal opportunities employer and we respect the diversity of our people. Our aim is to attract, motivate, develop and retain a diverse and talented group of people while also providing a working environment that promotes both inclusion and equality. As part of the firm’s commitment to diversity, Atomico has developed and published our own Diversity and Inclusion initiatives and also established targets to ensure that the firm’s hiring pipeline is adequately designed to encourage the hiring and retention of underrepresented groups within the venture capital industry. We have an inclusive culture and practice open sharing of information, transparent decision making and provide an accessible environment for all. We run monthly engagement surveys using Peakon to help us identify areas for improvement, and act on change. We have also instituted a set of best-in-class benefits to support new parents on our team, including equal maternity, paternity and adoption leave, flexible working policies and emergency childcare.
Atomico also engages with the wider ecosystem on D&I and supports underrepresented members and relevant investors in the European tech community, focused particularly on discovering the best underrepresented founder talent and supporting them to reach Series A stage, at which point Atomico is in a position to invest.
- Integrating ESG within our remuneration framework: Remuneration for Atomico’s staff is based on an annual appraisal process which considers a variety of factors but includes the extent to which staff members promote the firm’s guiding principles and adhere to the firm’s policies (including this ESG Policy). A significant portion of overall remuneration for senior staff members is also linked to the long-term performance of the Atomico funds. We consider this approach, which aligns the interest of staff members with those of our limited partners, to be appropriate to promote a culture of reducing long-term ESG risks within our portfolio and creating long term value and financial performance for our funds and other stakeholders.
Principal Adverse Impact Statement
Atomico does not currently consider the principal adverse impacts of its investment decisions on sustainability factors as set out under the European Union Sustainable Finance Disclosure Regulation 2019/2088 (“SFDR”) as the relevant supplemental framework and required information to assess such impacts have not been finalized yet. When the finalised Regulatory Technical Standards, supplementing the SFDR, are published and the rules are made sufficiently clear, Atomico intends to comply with the relevant requirements by developing processes to gather information on the sustainability impact of its portfolio companies and by undertaking a full principal adverse impact assessment.
This ESG policy has been approved by the Atomico Diversity and ESG Task Force and the firm’s Executive Committee.