Sustainability-Related Disclosures
Regulation (EU) 2019/2088, known as the Sustainable Finance Disclosure Regulation (“SFDR”), was adopted on 27 November 2019 and deals with sustainability-related disclosure in the financial services sector. The Regulation aims to improve transparency between financial market participants (“FMPs”) on how they integrate sustainability risks in their investment decisions, consider potential adverse impacts, promote certain environmental or social characteristics, or aim to achieve sustainable investment objectives.
PureTerra Ventures is a venture capital fund that provides commercialisation and growth capital to proven disruptive water technologies. Our international team is made up of a unique mix of entrepreneurial, financial, technical, and commercial expertise. We understand what it takes to quickly scale companies and leverage our diverse backgrounds to add maximum value to your company. The fund is categorised under Article 9 SFDR and has sustainable investment as its objective. Through our investments, we thus seek to achieve three distinct sustainable investment objectives:
Conservation of the water supply
Climate change mitigation and adaptation
Growth of the water capital market
As such, PureTerra solely selects sustainable investments. The Fund is managed according to the investment strategy and process detailed on this webpage. No other investments are managed by PureTerra Ventures.
Our approach to impact investing
We select investments that fit our proprietary Water Impact Framework and deliver outcomes that positively impact – at least – one of our three sustainable investment objectives.
Methodology
We assess, measure and monitor the environmental impact of our investments through our proprietary Water Impact Framework, as well as providing commercialization and growth capital to businesses. This Framework was developed following the norms and guidance of the Impact Management Project. This is the basis for how PureTerra sets impact metrics for its investee companies and measures the impact. PureTerra supports companies along the way to ensure that they meet both their specific impact targets and the Fund's wider impact targets.
Whilst providing commercial and technical advice to investee companies, PureTerra is also committed to developing good governance practices, in line with its ESG Policy. This means that PureTerra’s work is always guided by a series of Principles, namely:
We incorporated ESG issues into our investment analysis and decision-making processes.
We are active owners and incorporate ESG issues into our ownership policies and practices.
We seek appropriate disclosure on ESG issues by the entities in which we invest.
We promote acceptance and implementation of the Principles within the investment industry.
We work together to enhance our effectiveness in implementing the Principles.
We report on our activities and progress towards implementing the Principles.
Screening
The first stage in selecting an investee company is to put them through a comprehensive process in which we review their impact thesis and both their financial growth and environmental potential pre-deal. This ensures that PureTerra only invests in companies that it believes best align with its sustainable objective, whilst also endeavouring to make financial returns for investors.
Measure
Using the Water Impact Framework, we set company impact targets and actively support our investee companies in achieving them. We monitor this periodically. Our remuneration is dependent on us achieving our objectives.
Monitor
The pre-investment due diligence and risk assessment process will point to improvement opportunities post-investment, which are formalized in an action plan and actively monitored. We are highly involved in the commercialisation efforts of our portfolio companies. Portfolio companies’ impact targets are given numerical values, which are compiled and regularly reviewed. As stated above, although each company is given its own targets, these all contribute to the Fund's overall sustainable objective.
Sustainability risk assessment [“Article 3 SFDR”]
Alongside the sustainable investment objectives we aim to achieve, our investment beliefs also include a view on responsible investing. To this end, we have developed a PureTerra ESG Policy which details our own core objectives and commitments in the areas of Environmental, Social and Governance (“ESG”) issues, as well as how we expect our investee companies to manage their ESG risks in a considered way. We formalize these expectations in the term sheets we issue and the side letters we request our investee companies to sign next to the main investment agreement.
Throughout our pre-investment phase (selection and due diligence) and our post-investment phase (investment plan and monitoring) we have developed standards and processes applicable to ourselves and our investee companies. These are detailed in our proprietary PureTerraVentures ESG Investment Manual.
This risk assessment is carried out by the investment director in charge of putting together the investment proposal. He or she may decide to bring in independent ESG experts when necessary.
For each potential risk identified, the investment director provides a rating [low to high], an explanation, and suggested mitigants. The conclusions are then challenged by the Investment Committee. After an investment is made, one of our General Partners will serve on the Board of the investee company and be responsible for the continuous dialogue regarding ESG risks.
Statement on principal adverse impacts of investment decisions on sustainability factors [“Article 4 SFDR”]
PureTerra endeavours to consider Principal Adverse Impacts (PAIs) in its investment decisions, but given the size, nature, and scale of both the Fund and its investee companies, it is difficult to obtain all of the data needed to complete a full PAI statement. Furthermore, the due diligence in ensuring that portfolio companies Do No Significant Harm is limited by data constraints, as set out below. PureTerra actively works with portfolio companies to ensure that they provide all of the data necessary, but this is an ongoing process. Although our above process on screening for potential ESG risks aligns with the requirements under Recital 17 SFDR [“the precautionary principle’] this assessment of potential investee companies does not (yet) include a full pre-deal or periodic review of all indicators for adverse impacts provided in Tables 1, 2 and 3 of Annex 1 SFDR.
We believe that at present this is not possible, as we invest exclusively in small and early stage companies, which do not always have the capacity to report quantitively on all numerical PAI indicators (e.g. GHG emissions, hazardous or radioactive waste) or develop and implement fit-for-purpose policies on other indicators (e.g. human rights, water management). However, both last year and this year we have issued a questionnaire to our portfolio companies, asking them to report back their last year performance on all 14 mandatory Principal Adverse Impact (“PAI”) indicators under Annex 1 Table 1, together with 1 environmental indicator of Table 2 and 1 social indicator of Table 3.
The results of this questionnaire are available upon request.
| Adverse sustainability indicator | Metric | 2023 | Explanation | |
|---|---|---|---|---|
|
Greenhouse gas emissions |
1. GHG emissions |
Scope 1 GHG emissions (metric tons) |
11.6 |
Based on 4 (out of 10) companies in the Fund |
|
|
|
Scope 2 GHG emissions (metric tons) |
4.2 |
Based on 4 (out of 10) companies in the Fund |
|
|
|
Scope 3 GHG emissions (metric tons) |
22.5 |
Based on 4 (out of 10) companies in the Fund |
|
|
|
Total GHG emissions (metric tons) |
38.4 |
Equity stake per companytimes their total reported GHG emissions. |
|
|
2. Carbon footprint |
Carbon footprint (metric tons per 1 million Euro invested) |
1.3 |
Equity stake per company times their total reported GHG emissions. Divided by the Fund value. |
|
|
3. GHG intensity of investee companies |
GHG intensity of investee companies (metric tons per 1 million Euro invested) |
42.5 |
Provides the equity-stake-adjusted GHG intensity of 1 EUR million revenue of the company.
|
|
|
4. Exposure to companies active in the fossil fuel sector |
Share of investments in companies active in the fossil fuel sector |
0% |
Based on 8 (out of 10) companies in the Fund |
|
|
5. Share of non-renewable energy consumption and production |
Share of non-renewable energy consumption and non-renewable energy production of investee companies from non-renewable energy sources compared to renewable energy sources, expressed as a percentage of total energy sources |
29.8% |
Based on 5 (out of 10) companies in the Fund.
|
|
|
6. Energy consumption intensity per high impact climate sector |
Energy consumption in MWh per million EUR of revenue of investee companies, per high impact climate sector |
107.6 |
Based on 2 (out of 10) companies in the Fund |
|
Biodiversity |
7. Activities negatively affecting biodiversity-sensitive areas |
Share of investments in investee companies with sites/operations located in or near to biodiversity-sensitive areas where activities of those investee companies negatively affect those areas |
0% |
Based on a survey in which 8 (out of 10) companies in the Fund responded
|
|
Water |
8. Emissions to water |
Tonnes of emissions to water generated by investee companies per million EUR invested, expressed as a weighted average |
0.0 |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
9. Investments in companies without water management policies |
Share of investments in investee companies without water management policies |
93% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
Waste |
10. Hazardous waste and radioactive waste ratio |
Tonnes of hazardous waste and radioactive waste generated by investee companies per million EUR invested, expressed as a weighted average |
0.03 |
Based on a survey in which 8 (out of 10) companies in the Fund responded
|
|
Social and employee matters |
11. Violations of UN Global Compact principles and Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises |
Share of investments in investee companies that have been involved in violations of the UNGC principles or OECD Guidelines for Multinational Enterprises |
0% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
12. Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises |
Share of investments in investee companies without policies to monitor compliance with the UNGC principles or OECD Guidelines for Multinational Enterprises |
93% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
|
or grievance /complaints handling mechanisms to address violations of the UNGC principles or OECD Guidelines for Multinational Enterprises |
100% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
13. Unadjusted gender pay gap |
Average unadjusted gender pay gap of investee companies |
25.1% |
Based on a survey in which 6 (out of 10) companies in the Fund responded
|
|
|
14. Lack of a human rights policy |
Share of investments in entities without a human rights policy |
37.4% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
15. Board gender diversity |
Average ratio of female to male board members in investee companies, expressed as a percentage of all board members |
20.1% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
|
|
16. Exposure to controversial weapons (anti-personnel mines, cluster munitions, chemical weapons and biological weapons) |
Share of investments in investee companies involved in the manufacture or selling of controversial weapons |
0% |
Based on a survey in which 8 (out of 10) companies in the Fund responded |
The results point to several things:
Our overall response rate of 80 percent is equal to last year. Our portfolio increased in 2023 from 6 to 10 companies at the end of the year, so it required significant onboarding on ESG/Impact matters. GHG emission and energy data are most challenging, with a relatively low response rate.
Based on the reported data, we have no investments in the fossil fuel or controversial weapons sectors, or investments which negatively impact biodiversity-sensitive areas or have been involved in violations of UNGC principles or OECD Guidelines for Multinational Enterprises.
Based on the data and companies’ qualifying statements, most will opt for renewable energy when given the opportunity – and where it is available – but several are locked-in to tenant arrangements.
The majority of our investee companies don’t have formal water management or human rights policies in place, nor formal policies to monitor UNGC compliance or associated grievance mechanisms.
The unadjusted gender pay gap in our portfolio decreased with 25.1% in 2023 (34.9% in 2022), but still appears above long-time averages measured in the U.S. (18%), the European Union (12.7%) or the Netherlands (13.5%)[5]. Board gender diversity was also better in 2023 (20.1%) compared to 2022 (17%) but still seems below long-term reported trends in mature markets and companies[6]. However, reported data is based on take home pay and does not include equity or options, which is a standard component within start- and scale-ups.
Measuring emissions across all Scopes remains challenging for our investee companies. Reported data does not seem complete and especially value chain emissions through Scope 3 are a big challenge.
In 2024 and the first half year of 2025, we took the following actions:
Finalized the impact metrics and theory of change for each portfolio company;
Validated the impact metrics and targets with the LP Advisory Committee;
Created our first water impact report.
We intend to work across the remainder of 2025 and the first half of 2026 on three actions:
Revise our ESG and Responsible Investment policies
Assist our portfolio companies with low-barrier methods that help them simplify GHG emission measurement;
Publish our water impact report.
Integration of sustainability goals within our remuneration policies [“Article 5 SFDR”]
All Partners are shareholders in the Fund and their compensation is tied to its financial and sustainable investment performance. Our carried interest is specifically tied to the impact targets of the portfolio companies.
This statement was published on 30 June 2025.