Sustainability Policy

Introduction

This policy sets out Atomico’s approach to sustainability which incorporates both responsible investment and the management of Environmental, Social and Governance (“ESG”) issues within our business operations, our investment activities and our portfolio. We set out the principles that the firm follows and the procedures we have implemented in order to deliver on our sustainability objectives. 

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 victimisation; 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 revisit, refine and add to the list. 

This Sustainability Policy covers all Atomico funds, existing portfolio companies, new investments and Atomico’s own operations. All Atomico staff are required to adhere to this policy.

Atomico’s Approach to Sustainability

ESG is at the core of Atomico’s sustainability strategy, investment philosophy, mission and values, integrated under the banner of Conscious Scaling. We recognise the integral role that ESG factors can have on both the success of our own firm and the companies we partner with. 

We want both Atomico and the businesses we invest in to be genuinely focused 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. 

ESG within Atomico’s Operations

ESG is firmly embedded within Atomico’s operations:

  • Considering our environmental footprint: Atomico takes accountability for its climate impact via measurement, reduction and removal. We measure our scope 1,2 & 3 GHG emissions (including our 3.15 financed emissions) annually through a third party verifier. We have initiatives in place to reduce our emissions such as 100% adoption of renewable energy, sustainable procurement, waste management and sustainable business travel. Atomico has implemented an internal carbon fee on its emissions which it donates each year to verified environmental projects focused on durable carbon removal, nature restoration and protection, and decarbonization. 

  • Promoting diversity, equity and inclusion in the workplace: 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 equity. See our Diversity, Equity and Inclusion policy for more information on the initiatives we have in place 

  • Adoption of ESG standards and frameworks: Atomico is a UNPRI signatory and commits to their guidelines in relation to responsible investment practices. In addition, Atomico aligns its ESG activities with the following frameworks and standards

    • Principal Adverse Impacts (PAI’s)

    • ESG Data Convergence Initiative (EDCI)

    • ESG_VC Framework

  • European Union Sustainable Finance Disclosure Regulation 2019/2088 (“SFDR”): Atomico’s latest funds, Atomico Venture VI ScSp & Atomico Growth VI ScSp are aligned with Article 8 under SFDR - promoting environmental and social characteristics

  • Maintaining strong ESG governance: Our Management Committee has overall responsibility for implementing this Sustainability Policy. Atomico provides employees with specific training and resources to help them fulfil the firm’s sustainability targets, commitments and objectives. 

  • 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 Sustainability 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.

  • Engaging with our limited partners: Atomico is transparent with our limited partners in the Atomico funds regarding ESG matters. Atomico proactively includes ESG information in our quarterly reports and provides updates on ESG issues and programmes at our annual Investor Summit and at our advisory board meetings. Atomico reports on the progress of its ESG initiatives through its Annual Conscious Scaling report which is publicly available on our website. Furthermore, Atomico collaborates with its limited partners on ESG through specific side letters where appropriate.

  • Engaging with community stakeholders: Atomico actively engages with stakeholders in the ecosystem on championing Sustainability within the tech industry. These activities include:

ESG within Atomico’s Investments

ESG is firmly embedded across the entire investment cycle from investment screening to due diligence, ownership and exit:

  • Exclusion list: Atomico has an exclusion list which  in addition to excluding a number of industries & sectors such as weapons, fossil fuels, real estate, alcohol, tobacco and pornography, also ensures we do not invest in companies that;

  • Have contributed to a systematic denial of basic human rights

  • Show a pattern of engaging in child labour or forced labour

  • Demonstrate a pattern of non-compliance with environmental regulations

  • ESG related term sheet clauses: Our ESG term sheet clauses for rounds we lead cover:

  • Ensuring a DEI policy and ESG policy within 3 months post-close

  • Implementing a DEI strategy within 6 months post-close

  • Measuring emissions within 12 months post-close

  • Appointing a member of the management team responsible for ESG

  • Diversity in our portfolio: 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. Atomico also engages with the wider ecosystem on DEI 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. For more information on our initiatives, see our Diversity, Equity and Inclusion policy

  • Pre-investment screening: As part of our screening process, Atomico’s investment teams 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) and present their findings to our Investment Committee at preliminary investment review.

  • Pre-investment ESG due diligence: Once a potential investment reaches confirmatory due diligence, our Sustainability team run a robust ESG due diligence process with the portfolio company where by we ask the founder to complete a detailed ESG questionnaire designed to identify potential ESG issues, risks and opportunities material to the company, and the existing business processes the company has in place to address them. The Sustainability team then follow up with an in person (where possible) conversation with the founder to discuss the companies understanding of the risks & issues identified and their long term approach to ESG. The output of the questionnaire & conversation with the founder is presented to the firm's Investment Committee at final investment review. 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. 

  • Post-close Conscious Scaling: Conscious scaling refers to the programme of initiatives and tools we have developed to help the companies we partner with integrate ESG best practise into their business operations. Our Conscious Scaling roadmap helps companies understand what initiatives they should have in place when it comes to ESG according to their size and stage, and helps them identify what initiatives they should look to introduce next. Post-close, we hold a workshop with each new investment to take them through the roadmap and help them identify and prioritise where to focus their efforts over the next 6-12 months. Atomico also provides portfolio companies with access to materials and policy templates, plus a network of sustainability experts & specialist consultancies for them to access.

  • Monitoring and engagement: Atomico annually surveys its entire active portfolio on ESG KPI’s and metrics so we can track and monitor their ESG performance. This helps us to identify companies that may need our help and support. The partners and investment teams at Atomico take an active interest in how our portfolio companies manage ESG issues and in their capacity as board members actively encourage, support and stretch our portfolio companies to strive for the very best ESG standards.

  • ESG support at exit: As an early stage investor, Atomico is limited in its ability to dictate the route and timing of a portfolio companies potential exit. However we seek to collaborate with potential interested parties in sharing information on ESG (where appropriate) and support our portfolio companies with their ESG initiatives in readiness for the transition.

Principal Adverse Impact Statement 

Atomico is not required to and does not take into account the principal adverse impacts (PAI’s) of its investment decisions on sustainability factors as set out under the European Union Sustainable Finance Disclosure Regulation 2019/2088 (“SFDR”) 

Atomico has chosen to adopt a best effort approach to assessing the main negative impacts of its investments, selecting the most relevant indicators proposed by the Disclosure Regulation alongside other sustainability indicators it feels relevant and appropriate to the size and stage of its underlying investments. 

Approval

This policy has been approved by the firm’s Management Committee.