LUMO Fund, under the management of LUMO Labs B.V. and in compliance with the EU’s Finance Disclosure Regulation (SFDR) 2019/2088 on sustainability-related disclosures in the financial services sector, assumes its responsibility under the Regulation to publish its policy on the integration of sustainability aspects in the investment strategies and management practices.
At LUMO Labs, we aspire to ascend to the status of an Article 9 Fund, surpassing the benchmarks set for an Article 8 Fund. We consistently strive to not only promote social characteristics in our investment practices but also advocate for investments with sustainable investment objectives at their core. Hence, leveraging the Regulation’s flexibility and embracing a different approach, we position ourselves as an Article 8+ Fund reflecting our unique positioning between the two categories.
Presented below is a comprehensive overview of the pertinent sustainability-related information of the Fund.
Impact Investment Approach
At LUMO Labs, we acknowledge the transformative capabilities of emerging technologies to drive impact on a large scale. With the immense potential of such technologies in creating huge impact, we actively push for investments that replicate positive outcomes.
Impact is ingrained throughout our entire investment process. We believe that the convergence of technologies holds the key to pioneering innovation and generating impact. Moreover, awareness of the impact of our choices is key for the next level innovation and impact.
Our investments go beyond traditional financial metrics and seek to align investments with specific social goals. Starting from deal screening, we challenge the company’s impact proposition, to ensure alignment to our impact focus and look for red flags such as the IFC exclusion list.
LUMO Labs core focus lies on solutions for societal challenges within three United Nations Sustainable Development Goals (SDGs), SDG 3 (Good health and well-being, SDG 4 (Quality Education) and SDG 11 (Sustainable Cities and Communities). Such SDGs can also be supplemented by other interrelated SDGs as well.
After thorough investigation of a proposition and once an investment decision is made, we immediately start engaging and onboarding the startups in our Venture Builder Program, which includes the Impact Days. The Impact Days serve as forum where we work closely with the startups leveraging our network and expertise to support them on their impact journey and work towards a sustainable growth.
Our Venture Builder Program includes a 100-day plan. The plan includes action points such as learning topics, development plans, financial and operational planning, and impact planning. The methodologies employed for the impact planning includes refining and detailing the Theory of Change for the company, as well as alignment with the Fund and kick-starting with our designated Impact Officer to guide in the impact journey. Each startup determines its own impact mission and strategy and determines its Key Value Indicators to monitor progress through the measurement tool.
Our methodologies include structuring of key value indicators, guiding in annual and long-term impact and investment management which consists of regular internal review, annual target update of investors and updated impact communication.
Article 3 of the SFDR puts obligation on financial market participants to publish on website information about policies on the integration of sustainability risks on the investment decision-making process. Under Article 2(22) of the SFDR, “sustainability risk” is defined as an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment.
At LUMO Labs, sustainability risks are integrated into our investment processes. Our screening process involves assessing potential investments for their alignment with our social characteristics. Afterwards, we consider ESG parameters in the due diligence of the companies such as environmental concerns (climate change, hazardous waste, sustainability), social concerns (diversity, human rights, consumer protection) and corporate governance (management structure, compensation, employee relations). We require disclosure of issues in relations to any of the parameters and request the company to provide the information.
Our companies follow good governance practices as one of the fundamental pillars of their operations. Such good governance practices are seen in the legal and regulatory compliance of our portfolios and responsible business practices within the companies. Furthermore, we take great pride that above 50% of LUMO Labs portfolio companies have female founders, with four of those companies being headed by female CEOs.
We are excited that we are able to provide our SFDR disclosure. While we are currently an Article 8+ Fund, we are striving towards attaining the status of Article 9 Funds and actively working towards this goal. We will continue our efforts to consistently enhance our practices and ensure compliance with SFDR requirements in forthcoming disclosures.
If you have any questions about our SFDR disclosure, please feel free to contact us at email@example.com