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​Environmental, Social, Governance (“ESG”) Policy

  1. Introduction

As institutional investors, we have a duty to act in the best long-term interests of our beneficiaries. In this fiduciary role, we believe that environmental, social and corporate governance (ESG) issues can affect the performance of investment portfolios (to varying degrees across companies, sectors, regions, asset classes and through time).  We also recognise that applying these principles may better align investors with broader objectives of society.

Oxx has opted to comply with the UN Principles of Responsible Investing, and conducts its own activities in a manner consistent with those principles, although no group entity is a signatory.  Our policy incorporates Invest Europe / BVCA guidance.

Therefore, where consistent with our fiduciary responsibilities, we commit to the following:

  • to incorporate ESG issues into investment analysis and decision-making processes;

  • to be active owners and incorporate ESG issues into our ownership policies and practices;

  • to seek appropriate disclosure to Oxx on ESG issues by the entities in which it invests;

  • to promote acceptance and implementation of the principles within the investment industry;

  • to work together to enhance our effectiveness in implementing the principles; and

  • to report on our activities and progress towards implementing the principles.

In addition to opting to comply with the UN Principles of Responsible Investing, Oxx also commits to applying best practices to the operations of the firm in relation to environmental, social and governance issues. This includes offsetting the carbon dioxide emissions from flights taken by Oxx employees in the course of business for the firm.


2. ESG risk

Oxx is a technology investor and so ESG risk will generally be considered to be low.  Investee companies are almost always intrinsically aligned with wider environmental and social objectives.  Entrepreneurs are usually progressive on environmental and social matters.

Technology companies generally operate within an environment where worker entitlements, environmental laws, and rights based on age, race, or gender are well developed and policed, and have broad support. This is not always the case and care must be taken in assessing if a prospective investee company is in line with best practices in relation to worker diversity, inclusion and equality.

Care must also be taken where, for example, manufacturing is involved or where there may be subsidiaries or operations in less developed markets, where there may be greater ESG risks.

3. ESG issues

3.1 Environmental Issues​​

3.1.1 Material usage & recycling – what is the indirect impact of raw material manufacture required for the prospective investee company? How much of this material comes from recycled or sustainable sources?

3.1.2 Energy usage, energy savings and energy saving initiatives – what is the direct contribution to carbon emissions from the prospective investee company’s activities? Will this represent a significant constraint in a carbon-constrained world?

3.1.3 Water usage and sources – what is the direct impact on water resources of the prospective investee company’s activities? Will the business still be viable in a water-constrained world?

3.1.4 Emissions, effluents and wastes from both normal and abnormal (e.g. accident) conditions – what are the outputs of prospective investee company’s activities, and how can these be mitigated or minimised?

3.1.5 Mitigation of product and services impacts – does the prospective investee company (need to) take action to minimise the total environmental impact of its product? Could stakeholder perception of these impacts reduce the prospective investee company’s viability in the longer term?

3.1.6 Environmental protection, expenditure and investment – has the prospective investee company allowed sufficient provisions within the business model for current and future required environmental expenditure? Are provisions associated with legal compliance or a move towards best practice?

3.1.7 Compliance with environmental laws – is the prospective investee company in material compliance with relevant local, national and international environmental laws?  Could non-compliance represent a significant risk of prosecution and/or business interruption?

3.1.8 Impacts of transportation of goods, raw materials and labour force – what is the carbon footprint associated with logistics, business travel and commuting?

3.1.9 Impacts on global and local environment and biodiversity, both positive and negative – how does the prospective investee company’s activity impact on global and local environment, including flora and fauna? 

3.1.10 Implications of climate change – what could the longer term considerations be for the prospective investee company in a carbon-constrained world? Does this potentially undermine the current business model?

3.2 Social

3.2.1 Workforce profile and turnover (by number, region, contract, benefits etc.) – are statistics suggestive of a balanced work force with equal opportunities? Is this topic already well covered by the prospective investee company through compliance with relevant local legislation where it is in place (e.g. in Sweden)? Is employee retention supporting or hindering the business?

3.2.2 Health and safety compliance and performance – is the prospective investee company at risk of fines, penalties or regulatory intervention? Does the prospective investee company take appropriate steps to protect the health and safety of its employees?

3.2.3 Diversity of staff and equal opportunities (pay relative to gender, age and ethnic origin) – is this in line with recognised best practice and relevant local legislation where it is in place (e.g. in Sweden), taking into account the prospective investee company’s stage of maturity?

3.2.4 Non-discrimination – is there sufficient evidence that employees are treated fairly and equally? Is there any litigation underway or pending which could have a significant adverse impact on the prospective investee company (financial or otherwise)?

3.2.5 Wages relative to local norm – how well is the workforce remunerated relative to accepted (including legal) local standards?

3.2.6 Employee relations – is there a history of general disputes between the management and staff over e.g. pay, or working conditions and practices?

3.2.7 Security practices – are personnel in high risk areas provided with sufficient security and protection? Are security personnel sufficiently trained in understanding human rights of employees or others?

3.2.8 Human rights conformance and awareness – does the prospective investee company ensure that human rights of its employees are considered and protected?

3.2.9 Child labour rates, and measures to combat this; forced and compulsory labour rates, and measures to combat this – does the prospective investee company meet legal requirements or best practice in this area? Is there a risk of reputational damage or litigation which could impact the prospective investee company?

3.2.10 Obligations under local laws/regulations, based on number of violations and actions taken – is the prospective investee company considerate of local law obligations? Is there a risk of reputational damage associated with previous or current activities? Could there be significant market opportunities to improve this reputation?

3.3 Corporate Governance

3.3.1 Structure and functioning of the board of directors and management team – how is the composition of the board determined?  Are there any independent directors?  Are regular board meetings held and are these fully minuted? 

3.3.2 Corruption-related incidents, anti-corruption policies and actions taken – does the prospective investee company take a firm stance on anti-corruption, and have there been any incidents which could result in penalties or negative publicity? 

3.3.3 Overall business compliance with relevant laws and regulations – are there risks associated with fines or regulatory intervention? Has the prospective investee company allowed sufficient contingency within the business model for reasonably foreseeable legal requirements?

3.3.4 Financial controls, reporting and accounting – are the accounting records fully up to date and compliant and prepared in keeping with internationally recognised accounting standards?

3.3.5 Cyber security - does the board have sufficient awareness of the risks to their information systems from cyber-crime? Does the company have in place sufficient systems and procedures to safeguard the security, integrity and confidentiality of information held?

3.3.6 Anti-competitive behaviour – is there a risk of penalties, legal intervention or reputational damage?

3.3.7 Public policy positions, e.g. lobbying and political donations – could any of these public positions result in positive or negative reputational impact?

3.3.8 Overall business integrity – has any senior manager or board member been, or is, under investigation by law enforcement or regulatory authorities?  Are there any other key concerns?

4. Prohibited Investments

In line with general principles Oxx will not invest in companies that:

  • are associated with material and / or systemic violations of the laws, rules or regulations laid down by the national authorities in the markets in which such enterprises operate;

  • which contribute to or is responsible for material and / or systemic violations of the human rights that are specified by the UN Declaration of Human Rights or labour rights as specified by the UN / International Labour Organisation, e.g. forced labour, child labour or other form of child exploitation;

  • the core business of which is engaged in activities resulting in material and / or systemic breaches of internationally recognised conventions, protocols or norms;

  • are associated with material and / or systemic corruption;

  • are domiciled in a country subject to trade embargoes imposed by the UN or the EU;

  • are involved in the manufacturing, production, distribution or sale of weapons and firearms;  

  • is involved in the production, distribution, marketing or sale of tobacco, unless at a retail level and as an incidental and minor activity;

  • are involved in prostitution, the sex industry or the production, distribution or sale of pornography, unless at a retail level and as an incidental or minor activity;

  • are involved in usury;

  • are involved in gambling, unless as an incidental or minor activity.

5. Oxx ESG process

Oxx applies a process to both its ESG initial due diligence and ongoing monitoring of investments. 

For investee companies, Oxx expects team members to consider whether there is anything about the company’s strategy or business model that is inherently inimical to good ESG practices.  This includes anticipating potential ESG-related risks that may arise in future stages of growth.  Usually, such concerns would be prejudicial to a positive investment decision.

Investment managers are expected explicitly to consider and report on ESG factors in all investment recommendations presented to the investment committee of any fund managed by a group company, both for initial, follow-on investments and on-going monitoring.

6. Guidance on due diligence

When conducting due diligence and monitoring, we should consider both current practices of the company that offend ESG principles, and how this may change in the future.  We will also need to consider where the company is in its life-cycle when reviewing ESG - the ESG factors which affect an early stage company will be different to a larger growth company.

We will also distinguish between issues that are inherent to the company’s activity / business model, or so deeply ingrained in the controlling management / founders that there is effectively no solution and issues that can be resolved or mitigated in a timely way at some future point in the company’s development.  Where issues can be resolved, we need to formulate an approach as to how to fix them, and either ensure this is concluded prior to our investment, or is implemented after our investment.

We should not completely disregard past problems that have been fixed as these may need monitoring for reoccurrence.

We should also weigh costs against benefits, especially where these are inextricable.  For instance: most companies will have some carbon emissions.  But even where the benefits outweigh the costs (which they usually do), workable ways of reducing those (ESG) costs further should still be considered.

In both the initial and ongoing assessments and reporting, we should consider if any potential risk or negative impact has beenidentified, and, if so, what has / is been done to resolve or mitigate this.

In summary, we should distinguish between:

  • current practices of the company that offend ESG principles, and 

  • how this might change after the Company has scaled (if not already at scale).  Consider the position with sales at $100m.  What about $1bn?

And distinguish between:

  • issues that are inherent to the Company’s activity / business model, or so deeply ingrained in the controlling management / founders that there is effectively no solution, and

  • issues that can be resolved or mitigated in a timely way at some future point in the company’s development.

Problems in the first category clearly give rise to the question whether to invest at all.

7. Oxx carbon offsetting policy

For each flight taken by Oxx employees in the course of business for the firm an estimate will be made of the carbon dioxide emissions resulting from that flight using

At the end of each calendar year the total amount of carbon dioxide required to be offset will be calculated and each Oxx employee will select offsetting projects from to offset their share of the carbon dioxide emissions.

8. Review of ESG policy and procedures.

ESG policy and procedures will be reviewed on an annual basis. 


Updated: August 2021

Sustainable Finance Disclosure Regulation (SFDR)


The statement is based on the requirements as set out in Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability‐related disclosures in the financial services sector (SFDR) specifically relating to the integration of sustainability risks.


Oxx supports the regulatory drive to transparency of the financial sector to its environmental, social and governance (“ESG”) obligations.

As a part of its investment process for potential fund investments, Oxx includes the consideration of relevant environmental, social and governance factors. Clear investment criteria exclude companies with negative environmental and social impacts. Further, Oxx seeks to promote good governance and healthy organisations, and this includes ensuring that its portfolio companies have a sustainable investment thesis and appropriate social and environmental practices.

Notwithstanding the above, and although ESG and sustainability risk is important to Oxx, the current fund, Oxx II (Oxx II LP and Oxx II AB, together the “Fund”), was not launched as a vehicle to promote environmental or social characteristics (an “Article 8 product” under the SFDR), nor is it classified as a product that has sustainable investments as its objective (an “Article 9 product” under the SFDR). Oxx will consider classifying future funds as Article 8 funds.

Oxx has taken the view that the investments to be made by the Fund are not likely to be affected by sustainability risks and that those risks are not relevant in the context of the Fund’s policy. Investors should note that it is very difficult to assess with any reasonable certainty whether there exists any sustainability risk on the investments and/or the risk of occurrence of any such risk or its likely outcome.


Article 4 of the SFDR requires fund managers to make a clear statement as to whether or not they consider the “principal adverse impacts” of investment decisions on sustainability factors. While ESG matters are formally included within its investment due diligence, Oxx does not consider the adverse impacts of investment decisions on sustainability factors in the manner prescribed by Article 4 of the SFDR because there is not sufficient and satisfactory data available to allow Oxx to adequately assess the potential adverse impact of its investment decisions on sustainability factors. Oxx will continue to evaluate the requirements and information available for assessing such effects in the future.

Oxx’s compensation to employees is determined on the basis of an annual evaluation of both financial and non-financial criteria. The non-financial criteria include adherence to Oxx’s policies and processes, including Oxx’s ESG policy. Oxx’s  compensation structure does not encourage excessive risk taking with respect to sustainability risks.


Updated: November 2022
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