1. Policy Overview

WE BACK BOLD ENTREPRENEURS TO BUILD REGIONAL CHAMPIONS AND ECOSYSTEMS FOR A BRIGHTER TOMORROW.

Rigel Capital is a fund that aims to create a positive impact by supporting entrepreneurs and building a digital ecosystem in India and Southeast Asia. Our founding partners have a proven track record of scaling businesses most efficiently and sustainably to create global innovative companies. In our investment principles and fund management, we highly value the environmental and social impact of our investments.

This ESG policy describes our approach toward ESG. It includes our strategy, ESG themes, core activities in our investment process, and enablers to implementing ESG. The scope of this policy covers both our fund operations and our portfolio companies. This ESG policy is communicated and well understood by our general partners, investment team, investors, founders and management of portfolio companies, and other stakeholders.

2. Rigel ESG Strategy

Our ESG strategy is developed based on 3 main tenets:

  1. Internal operations: We lead by example to implement ESG. Since the inception of our fund, we want to ensure that we have our own house in order before promoting ESG in our portfolio companies.
  2. Investment process: We assess companies based on their potentialimpact, ESG risks, and contribution to our impact themes. Our assessment tool is developed based on international standards such as IFC environmental and social performance standards and OECD guidelines and tailored to suit our needs.
  3. Portfolio management: We create ecosystems to scale environmental and social impact. We will support our portfolio companies with a framework to create and measure impact throughout the companies’ growth stages.

2.1. Governance & Implementation

Rigel ESG committee exercises oversight of our ESG policy, and our founding partner, Sebastian Togelang, has the overall responsibility to implement the policy and implementation. He will be supported by the rest of the investment team and our ESG advisor. Our investment team will be trained to implement our ESG policy in the investment process and support our portfolio companies. We will also liaise closely with our legal advisor to ensure compliance with local and international regulations. The implementation of our ESG policy will be regularly monitored during strategic review meetings and disclosed in our annual report.

2.2. Rigel Diversity Statement

At Rigel, we are committed to value diversity and inclusion as one of the main important principles. We provide equal opportunity in employment and investment opportunities and will not unlawfully discriminate a person on the base of including, but not limited to: race, religion, age, sex, gender indentity, sexual orentiation, and nationality.

3. Rigel Impact Themes

Aligned with our investment themes, we have identified 5 key impact themes that we will focus our investments and resources on. The themes are selected based on the industry sector that we are investing in and the UN Sustainable Development goals. We also reviewed the importance of these themes to our stakeholders in the market that we are operating in and the potential impact of our investments, details of the rationale can be found in our materiality assessment.

  1. Climate Action (SDG 7. Affordable and clean energy & 13. Climate action)
    Our activities:
    • Empowering the adoption of electric vehicles towards decarbonization of logistics and transportation.
    • Incentivize clean renewable energy production and usage across India and Southeast Asia.
  2. Inclusion (SDG 8. Decent work and economic growth & 10. Reduced inequalities)
    Our activities:
    • Providing the unbanked population with affordable and inclusive financial infrastructure.
    • Empowering small businesses to grow sustainably.
    • Create a fairer and more equal labor market for underrepresented parts of society.
    • Enable more female participants within the workforce
  3. Responsible consumption (SDG 2. Zero hunger & 12. Responsible consumption and production)
    Our activities:
    • Reducing inefficiency and waste in the “farm to fork” value chain.
    • Scaling more sustainable production methods and promoting conscious consumption.
  4. Education innovation (SDG 4. Quality education & 10. Reduced inequalities)
    Our activities:
    • Providing access to high quality education through digital solutions and innovative learning.
  5. Health & wellbeing (SDG 3. Good health & wellbeing)
    Our activities:
    • Scaling healthcare infrastructure to reduce the burden of the legacy system and provide access to more communities.

4. ESG in Investment Process and Portfolio Management

We believe that identifying and assessing ESG risks and impact potential in the investment process will lead to a better investment process. We follow the Principles for Responsible Investment (www.unpri.org) instituted by the United Nations (the “UN”) as a guide.
We also believe as part of our portfolio management; we can support our portfolio companies to create impact.

4.1. Asses ESG risks and impact potential

At the first stage of our investment process, we will evaluate if the entrepreneurs are receptive to developing a positive ESG footprint and the companies’ potential impact and ESG risks. However, it will not be a limiting factor of a go/ no go decision, as we believe in working together with entrepreneurs to create positive impacts and avoid negative impact in the long run.

  1. Minimum requirements & initial screening
    • We follow the IFC exclusion lists as a minimum requirement for our investment. Any companies that are active in any business activities listed in the IFC exclusion list will not be considered in our investment evaluation, including:
      1. Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCB's, wildlife or products regulated under CITES.
      2. Production or trade in weapons and munitions.
      3. Production or trade in alcoholic beverages (excluding beer and wine).
      4. Production or trade in tobacco.
      5. Gambling, casinos and equivalent enterprises.
      6. Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where IFC considers the radioactive source to be trivial and/or adequately shielded.
      7. Production or trade in unbonded asbestos fibers. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.
      8. Drift net fishing in the marine environment using nets in excess of 2.5 km. in length.
    • During the interview with the entrepreneur’s, we will ask several ESG related questions (1. Rigel ESG questionnaire) to evaluate the entrepreneurs’ vision to create impact and mitigate foreseeable risks.
  2. Due diligence
    • Our investment team, supported by our ESG advisor, will conduct a formal due diligence (2. Rigel ESG DD) aligned with the application of the UN PRI and IFC environmental and social performance standards.
    • The due diligence process will focus on the Rigel impact themes and additional topics including:
      1. Investing in a company that is directly engaged in activities resulting in severe and/or systematic breaches of recognized conventions, norms or protocols regarding environment protection.
      2. Investing in a company that is associated with material and/or systematic corruption.
      3. Investing in a company that deliberately and repeatedly violates the law of the national authorities in the markets where the company operates.
      4. Investing in a company that is domiciled in countries subject to trade embargos imposed by the UN or the European Union.
    • Results of the due diligence will be included in the investment memo.

4.2. Create impact

We expect commitment from the entrepreneurs to integrate ESG in their companies, in the form of a formal agreement. To support our portfolio companies in creating impact, we provide a framework to set goals and objectives on the impact themes that are most relevant for each company.

  1. Term sheet & shareholder agreement
    • We will include ESG clauses in the term sheet & shareholder agreement as part of our standard contract process (3. Rigel ESG clauses).
    • The clause will cover topics such as commitment to adhere to Rigel ESG policy and setting up the company’s own ESG policy and Diversity & Inclusion commitment.
  2. Value creation
    • We use the OKR approach (4. Rigel ESG OKR) to help our portfolio companies set their ESG goals, plan initiatives, and monitor progress.
    • Each company can define its goals based on the most relevant topic from Rigel’s 5 impact themes.

4.3. Measure and communicate

We will support our portfolio companies to measure their materialized and expected impact, while also measuring the impact of our fund investments allocation. To provide transparency to our investors and stakeholders, we will also communicate our ESG performance regularly

  1. Measure impact
    • We provide an impact measurement framework that follows the Impact Management project (IMP) as a guide (5. Rigel ESG Impact measurement).
    • As our investments will focus on early-stage companies, we encourage our portfolio companies to start with a basic assessment and enhance their impact evaluation when the company is growing and more data is available.
  2. Communicate
    • We will monitor and discuss the ESG strategy implementation in the regular review meetings with our partners and investment team.
    • We will also include ESG topics in our reporting to our LP.

5. ESG Enablers

Aligned with our mission to create an ecosystem for growth, we will support our portfolio companies with enablers such as ESG experts, tools, and technologies to implement ESG in their company.

5.1. ESG Experts

We are building a team of internal ESG experts with experience on specific topics and industries that can help and support our portfolio companies. To enhance collaboration and knowledge sharing, we will have workshops and training on implementing ESG and scaling impact.

5.2. Tools & Technologies

As we invest in various types of companies, we will not enforce standardized frameworks or topics. We rather provide the tools (6. ESG Tools & Technologies) that can be tailored to the needs of each of our portfolio companies.

Valid as of June 2022. We’ll formally review this policy and update if there is a significant change in relevant legislation or business need. We are continually looking to adapt and improve how we include ESG considerations in our investment decision making process.

investor.relations@rigelcapital.com
© 2024 RIGEL CAPITAL. All Rights Reserved.
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