About Shift4Good
Shift4Good SAS is a French independent Management Company co-founded by four experienced
investment professionals with strong expertise in impact investing in Europe, and in the rest of the world,
– referring to Israel, Asia, and the US. The Founders who share a common interest in sustainability decided
to leverage their expertise and extensive network to launch Shift4Good Fund 1, an impact venture capital
fund focused on sustainable mobility and circular economy.
The Founders are conscious and concerned that the world population cannot continue living, producing,
consuming the way it has been doing for the last few decades. Humanity’s social and environmental
matters have reached a tipping point.
The Team strongly believes that the time to shift is now. Directing substantial amounts of private capital
to the most promising entrepreneurs is an effective way to achieve the UN Global Goals by 2030 and help
save our planet. The Fund will only invest in companies whose mission involves positive environmental
impact.
Best standards compliance
Shift4Good is an Impact Fund in line with Article 9 of the Sustainable Finance Disclosure Regulation (SFDR) (see periodic disclosure document here).
It incorporates best-in-class Good Governance standards into its investment strategy:
- Assessment of sound management structures, employee relations, remuneration and tax;
- Requirement to assess the fund’s portfolio against principle of “do no significant harm” by
considering Principle Adverse Sustainability Impacts (PASIs); - Requirement for the fund’s portfolio companies to incorporate consideration of the minimum social
safeguards specified in Taxomony Regulation (Regulation EU) 2020/852; - Mandatory template on the alignment of the portfolio with the EU Taxonomy (see Annex III of Draft
Regulatory Technical Standards).
In addition to complying with the obligations of Article 9 of the SFDR, the Management Company is already
committed to complying with the standards and recommendations, on a voluntary basis, of organizations
such as France Invest.
The impact process of the Management Company is largely inspired by the recommendations of the
Impact Commission of France Invest in terms of intentionality, additionality and measurability.
It is specified that the above measures and process may be adapted and modified by the Management
Company in order to take into account regulatory changes and the publication of future standards.
Shift4Good is aligned with international guidelines and frameworks on impact investing: the IFC’s
Operating Principles for Impact Management1
, recommendations from the Global Impact Investing
Network2 and from the Impact Management project.
Impact Policy
Impact Investment process
As part of the Fund’s investment strategy, Shift4Good team will perform an Impact investment process
fully integrated in the financial due diligence of an investment opportunity. The Impact methodology of
S4G has therefore been designed to:
- Enable the screening and scoring of investment opportunities based on impact criteria;
- Formalize S4G and the entrepreneur’s commitment to impact-related objectives (which are
included in the deal legal documentation); - Maximize the positive impact of portfolio companies during the holding period and demonstrate
progress to relevant stakeholders (including LPs); and - Ensure the sustainability of the portfolio companies’ impact post-exit.
During the Impact investment process, S4G team is supported by the Impact Committee, composed of
three independent members in charge of validating the impact objectives of the portfolio and of each
portfolio company.
To this end, the Impact Committee determines 2 impact KPIs for each company and will be in charge of
monitoring those throughout the duration of the investment, in order to supervise the achievement of
the impact objectives.
ESG policy
Human resources
➢ Continuous training on sustainability (e.g. the entire Management Team has taken a training
course on the circular economy with Delft); and
➢ Mindset in line with that of S4G required from each new recruit;
➢ Continuing education on sustainability;
➢ Gender & diversity targets in internal staff;
➢ Gender & diversity targets of staff in portfolio companies;
➢ Fair and transparent wage policy;
➢ An Impact Carried representing 50% of the carried interest; and
➢ A transparent governance as a key value.
Carbon offset
➢ Carbon offset when traveling through a partnership;
➢ Reducing travel wherever possible. The Management Team always tries to conduct initial
introductory meetings with its investment opportunities via video conference. In addition,employees are asked, when they can afford it, to use low-carbon transportation methods in their
business travel;
➢ Holding the 1st Investment Committees by video conference (only Financial Managers present in
the same country will be required to meet);
➢ Paper printing is limited to what is strictly necessary and only for administrative papers or those
requiring external use. In addition, employees are asked to use recycled paper (business cards,
envelopes, etc.) whenever possible; and
Communication & Learning
➢ Workshops about sustainability for portfolio companies: the S4G experts’ community is a great
resource for education and best practice implementation;
➢ Workshops about sustainability with the Fund’s LPs and the ecosystem: the S4G experts’
community is a great resource for education and learning; and
➢ Membership in professional associations to standardize and improve the impact investing market.
An Impact carried interest
The remuneration of the investment team is linked to the achievement of impact objectives: 50% of the
carried interest is based on the impact performance of the portfolio companies These objectives will have
been determined by the Impact Committee to ensure transparency and objectivity.
Thus, S4G investment team is deeply incentivize to achieve not only financial results but also impact
objectives.
ANNEXE III
Template pre-contractual disclosure for the financial products referred to in Article 9, paragraphs 1 to
4a, of Regulation (EU) 2019/2088 and Article 5, first paragraph, of Regulation (EU) 2020/852
What is the sustainable investment objective of this financial product?
The sustainable investment objective of this financial product is to lower the adverse
environmental impact of the mobility industry. The financial product does not use a reference
benchmark, it reports annually on 20 criteria set out in the EU Regulatory Standard Authority.
In addition, it specifies no fewer than 2 criteria per portfolio company ( which may differ from
the 20 criteria mentioned in the EU Regulatory Technical Standards) on which it reports
annually. These various criteria are referred to as the “criteria”.
What sustainability indicators are used to measure the attainment of the sustainable investment objective of this financial product?
For each portfolio company of the fund, an impact business plan is defined at the investment
phase. This impact business plan defines yearly targets over the projected investment period
on at least two KPIs (Key Performance Indicators) which are typically taken from the list at
https://iris.thegiin.org/matrics.
These KPIs will be independently audited or measured annually and reviewed by the impact
committee of the fund ( which is independent from the managers of the fund ).
How do sustainable investments not cause significant harm to any environmental or social sustainable investment objective?
How has the indicators for adverse impacts on sustainability factors been taken into
account?
Such indicators are taken into account in the impact of due diligence which is conducted
prior to investment. The fund has devised a questionnaire which takes into accounts the
major impact framework ( UN, SDG’s, Future-Fit Business, UN Global Compact Principles,
OECD MNE Guidelines, GRI Standards, and IR IIC ). This questionnaire is split in 19
questions which allows the fund to give an “impact” rating to the potential investee company,
where a minimum score must be reached for an investment to be considered. In addition an
“impact” due diligence is conducted, which is broader in score than the impact questionnaire.
How are the sustainable investments aligned with the OECD Guidelines for Multinational
Enterprises and UN Guiding Principles on Business and Human Rights?
The following fund’s strategic impact objective:
- Actively address the environmental risks and impact associated with its operations and
supply chain, - Ensure safe, healthy and fair working conditions for people directly and indirectly involved in
the business, - Not to compromise on business ethics,
- Market products and services that are safe for people and the environment, and
- Communicate transparently about be positive and negative impacts of its products, services,
and activities,
Encompass OECD Guidelines for Multinational Enterprises III, IV, V, VI, VII, VIII, IX, X, and
XI. And the fund’s strategic impact objectives 3 and 4 are aligned with the UN Guiding
Principles on Business and Human Rights.
Does this financial product consider principal adverse impacts on sustainability factors?
YES, Such indicators are taken into account in the impact due diligence which is conducted prior
to investment. The fund has devised a questionnaire which takes into accounts the major
impact framework (UN SDGs, Future-Fit Business, UN Global Compact Principles, OECD
MNE Guidelines, GRI Standards, and IR IIC). This questionnaire is split in 19 questions
which allws the fund to give an “impact” rating to the potential investee company, where a
minimum score must be reached for an investment to be considered. In addition, an “impact”
due diligence is conducted, which is broader in scope than the impact questionnaire.
Post investment, these indicators are reported with an independent review process. In the
list of Criteria
What investment strategy does this financial product follow?
What are the binding elements of the investment strategy used to select the
investments to attain the sustainable investment objective?
The fund has chosen to invest only in two sectors which are sustainable in nature: smart
mobility with an impact agenda, as well as circular economy.
This choice is contractually binding on the fund.
What is the policy to assess good governance practices of the investee companies?
Our policy stars at investment, when the investee company answers a detailed questionnaire
which allows Shift4Good to assess the governance practices at the time of investment.
Consequently, the investee companies are assessed independently on thier impact results
annually, such independent reviews to include governance in the fund’s investee companies.
WHAT IS THE ASSET ALLOCATION AND THE MINIMUM SHARE OF SUSTAINABLE
INVESTMENTS?
How does the use of derivatives attain the sustainable investment objective?
To what minimum extent are sustainable investments with an environmental objective aligned with the EU Taxonomy?
The fund invests in companies active in sustainable mobility activities and the economy. The
compliance of the investments with the taxonomy will be subject to an independent third
party (g-advisory-eu, founded by sustainable expert Guillaume Krepper), or such
independent third party as the fund sees fit.
The taxonomy alignment of investments will typically be measured by turnover, since will
invest mainly in mid to low-capital-expenditure-intensive companies, with high turnover
progression being one of the key investment metrics.
The fund does not foresee that it will invest in investments with sovereign exposures.
What is the minimum share of investments in transitional and enabling activities?
The fund does not have specific sub-targets for transitional and enabling activities.
For the sake of clarity, transitional activities are activities for which low-carbon alternatives
are not yet available and that have greenhouse gas emission levels that correspond to the
best performance in the sector or industry. While enabling activities directly enable other
activities to make a substantial contribution to one or more of the climate change objectives.
These two types of activities form part of the fund’s sustainable activities
What is the minimum share of sustainable investment with an environmental objective that are not aligned with the EU taxonomy?
The fund does not have specific sub-targets for transitional and enabling activities.
For the sake of clarity, transitional activities are activities for which low-carbon alternatives
are not yet available and that have greenhouse gas emission levels that correspond to the
best performance in the sector or industry. While enabling activities directly enable other
activities to make a substantial contribution to one or more of the climate change objectives.
These two types of activities form part of the fund’s sustainable activities
What is the minimum share of sustainable investments with a social objective?
WHAT INVESTMENTS ARE INCLUDED UNDER “# 2 NOT SUSTANABLE”, WHAT IS THEIR PURPOSE AND ARE THERE ANY MINIMUM ENVIRONMENTAL OR SOCIAL SAFEGUARDS?
Is a specific index designated as a reference benchmark to meet the sustainable investment objective?
The fund does not benchmark against a specific index. Rather, each investee company is assessed on one or more impact KPIs, for which an impact business plan is agreed upon and validated by an independent impact committee.
How does the reference benchmark take into account sustainability factors in a way that is continuously aligned with the sustainable investment objective?
N/A
How is the aligned of the investment strategy with the methodology of the index ensured on a continuous basis?
N/A
How does the designated index differ from a relevant broad market index?
N/A
