Triple Point Venture VCT Venture shares | ESG

An important aspect of Triple Point’s approach to ESG and sustainable business is the adoption of the Principles for Responsible Investment (‘PRI’), which we signed up to in 2019. The PRI principles are designed to guide and demonstrate best practice ESG integration, and to promote alignment between the objectives of investors and wider society. The principles, which are voluntary, are intended to be actionable and measurable. As a firm we have the following results: 

In support of our commitment to ESG and sustainable business, Triple Point has designed and implemented ESG integration policies across our investment strategies. The purpose of each policy is to identify, monitor and manage ESG issues to minimise the risk of Triple Point investing in ways that could undermine ESG principles. Such investing risks harm to wider stakeholders, undermining, and potentially reducing, the financial objectives of our investments. These policies are in addition to Triple Point’s Responsible Investment Guide, which outlines key responsible investment positions adopted by Triple Point Group.

The Triple Point Responsible Investment Guide and the Triple Point Venture ESG Integration Policy are both available online. Visit the Sustainability Approach section of Triple Point's website: https://www.triplepoint.co.uk/approach-to-sustainability/116/

In accordance with the Responsible Investment Guide adopted by Triple Point Venture VCT Plc (TPV), there are a range of exclusions and exposure limits applicable. The table highlights the approach regarding exposure to specific activities/sectors where engagement is not considered effective and which conflict with Triple Point’s purpose. It reflects a willingness to accept some indirect exposure to problematic sectors, acknowledging their interconnected nature with a wide range of services which remain essential to the economy. 

To illustrate: a venture may develop a solution which is purchased by a range of customers, some of who may primarily be, for example, gambling platforms. If more than 50% of the Venture’s revenue relies on gambling platform customers, with no plan to pivot, the Venture would not be an acceptable investment. 

Full details, including definitions for the activity/sectors, are contained in the Triple Point Responsible Investment Guide. 

i. Exclusion does not apply where a company is clearly and actively driving positive change in the sector and demonstrates adherence to a best practice responsible animal testing policy . A case-by-case approach is adopted. 

ii. This exclusion covers projects associated with mining thermal coal, as well as in coal-fired power generation, as defined by the Science-Based Targets Initiative guidance.

Triple Point Venture VCT Plc (TPV) allocates funds towards new investments in businesses which  i) have the potential for high growth, and/or ii) are cash flow generative businesses with a high quality customer base, or pathway to one. All investment must provide the potential for a strong, positive, risk-adjusted return to investors. All investments will be made with the intention of growing and developing the revenues and profitability of the target businesses. TPV focuses on providing funding to unquoted companies at an early stage in their lifecycle to help them grow and scale. TPV typically makes initial investments of between £50,000 and £2million and may make further follow-on investments into existing portfolio companies. TPV intends to build a portfolio of predominantly unquoted companies with significant growth potential across a diversified range of sectors, actively solving the problems and challenges faced by more established businesses. The Responsible Investment approach applied requires consideration of human rights, climate change, biodiversity and good governance. The team undertake research to analyse different trends in markets and products, to help see where new emerging opportunities are likely to arise. This includes recognising the potential presented by companies who seek to solve for challenges linked to wider social and environmental themes. All assessment and action is proportionate to the start-up nature of the enterprises, with a belief that embedding ESG foundations while a company is small can bring long-term benefits. The team understands that these issues may well come to bear during the lifetime of the investment, or at exit, so considers them before investing. Both the Responsible Investment Guide and the ESG Integration Policy for the Triple Point Venture VCT Plc should be referred to for full details. 

The investment manager’s specialist sustainability team works to ensure the activities of Triple Point Venture VCT Plc meet the agreed sustainability and responsible investment standards. In turn, this team encourages and supports the Ventures team to work with enterprises that understand how sustainability issues apply now, or in the future, to the success of their business, and show evidence of relevant action/planned action. Support is also given to encourage extended data collection and to increase sustainability awareness with a view to helping achieve improved long-term outcomes for the companies and, in turn, the shareholders of the Company.  

We have conducted a careful review of our investment processes to enable the implementation of practical, proportionate and material ESG integration. There are two key elements to our approach:

1. Management (Culture, Capacity & Governance) – this refers to the allocation of appropriate resourcing, training and senior support to ESG integration. It demonstrates Triple Point’s actions have integrity aligned with the strategic position of the company and oversight from senior management. Examples of which include:
   1. Training across our investment team on ESG
   2. Training of our Investment Committee on ESG
   3. Providing greater transparency on our approach to ESG
2. Investment (Process & Reporting) – this refers to action taken in the investment process to assess and improve ESG factors affecting the target asset, how these might affect an investment decision and how we capture decisions and changes to ESG factors during our asset ownership. Examples of which include:
   1. Formal reviews by the team of ESG trends and topics at a micro, macro and sector level to feed into origination process
   2. ESG due diligence process with results included in IC papers
   3. Sharing areas of weakness, with constructive guidance, on how to progress so company awareness on a range of ESG issues develops with ownership