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Oxx Limited ("Oxx) Sustainability Policy
Oxx’s sustainability policy covers the policies that enhance the sustainability of our firm and the companies we invest in. We have adopted a sustainability framework built around “ESG” and a comprehensive set of Environmental, Social and Governance factors.
Environment – monitoring and reducing the environmental impact of Oxx’s operations and those of our portfolio companies.
Social – implementing practices promoting diversity and inclusivity at Oxx and advocating for equivalent ones at our portfolio companies, as well as promoting practices that cultivate attractive team cultures and working environments.
Governance – holding Oxx and portfolio companies to high governance standards, following all regulatory and compliance standards, and promoting best practices around data privacy and security.
By incorporating ESG into the core of our investment process and fund operations, we
Are able to better assess the risks and value creation opportunities that could affect the performance of the Oxx portfolio and lead to better returns.
Can attract and retain talented employees.
Contribute to building a strong, self-sustaining and diverse European SaaS industry and community.
1.1 Execution and Implementation
Oxx has selected a set of principles to guide its ESG work:
Wherever possible, ESG practices are woven into existing processes;
Distributed responsibility with central accountability. Oxx expects all team members to proactively contribute.
Oxx strives to lead by example with respect to internal operations and team culture;
Both initial state and progress matter. Oxx will support companies in their ESG progression.
The full Oxx team discusses ESG considerations two times per year to review progress and discuss priorities for the coming period. Oxx’s Sustainability Committee (comprised of Oxx’s Sustainability Lead, one General Partner, and one Operating Partner) is responsible to set the annual strategy.
Each Oxx team member is thereafter responsible to implement relevant priorities. In order to ensure team members are equipped to do so, Oxx provides the team with regular training on ESG-related topics.
1.2 Third party standards and memberships
Oxx supports several leading ESG initiatives.
1.2.1 Diversity VC Standard
Oxx is a member of Diversity VC. Oxx is accredited with the Diversity VC Standard Level II, and we target maintaining the most stringent level of accreditation offered. Through our involvement with the Diversity VC standard, we are also active contributors to the FutureVC initiative.
Oxx is a member of the VentureESG initiative and community, a group of over 150 global venture capital funds driving the industry towards more consideration of ESG principles. Oxx was closely involved in crafting the VentureESG due diligence standard.
1.2.3 UN Sustainable Development Goals
Oxx has chosen to follow the 17 principle UN SDG framework when assessing the possible positive sustainability impact a potential investee company may have.
1.2.4 UN Principles of Responsible Investment
Oxx aligns its investment approach to the UN PRI, although Oxx is not a signatory to the UN PRI.
2. ESG in the Oxx Investment Process
Oxx sees supporting building a more diverse European SaaS community as a key way to strengthen our core mission to contribute to the success of the European SaaS industry. To support this, the investment team proactively undertakes specific outreach initiatives to increase the share of companies with diverse teams Oxx meets with. In addition, the Oxx team tracks the demographic mix (gender and ethnicity) of all company management teams and CEOs we meet. At regular intervals, the team reviews the results to validate we run an unbiased deal evaluation process.
In addition, Oxx analyses the sustainable impacts of all companies it vets in depth, tracking associated UN SDG goal(s).
2.2 Prohibited investments
Oxx maintains a list of company activities it will not invest in and has documented these in legally binding commitments to its investors. The investment team proactively screens against any such companies in deal flow.
2.3 Due diligence
Oxx considers ESG an integrated part of the due diligence process alongside commercial, technical, financial, legal and leadership due diligence. The deal team is accountable for explicitly considering and documenting ESG matters in all investment recommendations presented to the investment committee of any fund managed by a group company for initial investments.
During initial diligence, the Oxx team gathers input on the management team’s philosophy towards ESG and seeks to identify ESG gaps that would prevent Oxx from proceeding with an investment.
If and where we discover current company practices that do not meet sound ESG principles, we assess the materiality of such concerns, distinguishing between fundamental and fixable issues. The former are inherent to the company’s activity / business model or so deeply ingrained in the controlling management / founders that there is effectively no remedy available. The latter are issues that can be resolved or mitigated in a timely way at some future point in the company’s development. Where a matter is deemed fixable, we need to agree with management a plan for addressing the issues ahead of executing our investment.
During continued diligence, each prospective investee company completes Oxx’s ESG Due Diligence Questionnaire. This additionally provides information to:
benchmark a company’s current status with respect to ESG topics; and
identify particular areas where a company already shines or areas where there is room for improvement.
The results of this assessment are discussed with the investee company and the actionable outcomes of this discussion are incorporated at board level.
3. Portfolio support
Each Oxx board representative is responsible for working directly with the respective portfolio companies they support. This includes both monitoring ESG developments and providing support on relevant ESG topics.
This starts during the portfolio company onboarding phase, during which the board representative(s) incorporate recommendations that stem from the ESG due diligence that results in company ESG priorities.
Portfolio companies are responsible for progressing their sustainability agendas, with Oxx sharing best practices and resources. Oxx board representatives are responsible to be alert to the potential impact of any changes in company strategy upon ESG risks, as well as for identifying and advocating a company takes advantage of potential ESG opportunities. This includes anticipating and incorporating ESG considerations into the exit planning process.
4. Portfolio monitoring
Oxx assembles portfolio company ESG data on an annual basis to measure portfolio ESG progress.
5. ESG within Oxx
Oxx annually estimates its carbon emissions and offsets these via “gold standard” carbon offsetting projects. As a firm, we expect individuals to seek out opportunities and implement actions to further reduce Oxx’s environmental footprint through for example consciously reducing travel.
5.2 Diversity & Inclusion and Working Environment
Oxx is committed to cultivating an environment where colleagues from all backgrounds feel they belong in the firm, industry and ecosystem. This is formally led by an appointed Diversity Champion at General Partner level. This Diversity Champion is responsible for ensuring the Oxx team recruits a diverse team and shapes and advocates for an inclusive team environment.
Oxx has the goal to achieve gender parity across its full team.
As regards its investment team, Oxx’s strategy is to cultivate talent from within. Oxx realises this by hiring talented individuals early in their investment careers, developing them and progressing them and thus, in time, building the next generation of partners from within. Across the investment team as a whole the goal of achieving gender parity is a long term one. However, as a step towards it, Oxx has set an interim target to achieve gender parity within its non-founding-partner investment team by 2025.
Oxx works to achieve these goals through recruiting and retaining a diverse team.
5.3 Oxx policies and processes related to governance
Oxx is committed to proper governance principles and routines in all of its decision-making bodies (Investment Committee, Supervisory Board, portfolio company boards).
6. Reporting and policy review
Oxx publishes an annual ESG report for its LPs.
The Oxx sustainability policy was initially adopted in March 2021 and is reviewed on an annual basis. The current version of the policy was updated and readopted in March 2023.
UPDATED: MARCH 2023
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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