HPE Growth Fund III C.V. (the Fund) promotes environmental and social characteristics but does not have sustainable investment as its objective. Specifically, the Fund promotes:
1. Carbon footprint management and decarbonization: This includes supporting portfolio companies in implementing decarbonization initiatives, conducting carbon footprint assessments, creating decarbonization roadmaps, and setting measurable key performance indicators (KPIs) to reduce emissions.
2. Employee engagement and well-being: This includes promoting a highly engaged workforce through employee feedback systems, well-being programs, and engagement initiatives, all tracked via KPIs and addressed at the board level to ensure continuous improvement.
These characteristics are central to our investment approach and are monitored throughout the investment lifecycle. Additional environmental and social themes may be identified and addressed post-investment, tailored to each portfolio company’s needs.
As per the Fund’s investment strategy, the Fund invests in early to mid-growth-stage digital technology companies across Europe, targeting scalable, capital-efficient business models with a proven product-market fit. Key sectors include Software (e.g., e-commerce enablement, ClimateTech), FinTech (e.g., payments infrastructure, RegTech), and Digital Health (e.g., telemedicine, connected health). For this Fund, HPE Growth aims to have a minimum share of investments promoting environmental and social characteristics of 80%.
To ensure alignment with its environmental and social responsibilities, the Fund applies strict investment exclusions and binding criteria. It excludes companies involved in sectors such as weapons, tobacco, alcohol, and fossil fuels, and restricts investments in firms associated with human rights violations or unlawful activities. Binding elements include an Environmental, Social, and Governance (ESG) materiality and industry assessment initiated within the first 100 days post-investment, a successful ESG due diligence outcome (where no immediate red flags were identified), and adherence to good governance principles.
Additionally, sustainability is integrated throughout the investment process, beginning with an initial ESG screening in the early stages of assessing an investment opportunity. This high-level assessment identifies potential ESG red flags and aligns the company with the Fund’s environmental and social characteristics, determining the scope for further due diligence. Later, an ESG questionnaire evaluates key risks and opportunities, addressing material topics such as governance, carbon footprint management, and employee engagement. Based on the outcomes, ESG is included in the 100-day plan for each portfolio company. After investment, a materiality assessment is conducted and a baseline ESG performance is set. Additionally, ESG targets and KPIs are set. Ongoing monitoring ensures portfolio companies actively engage in initiatives aligned with the Fund’s goals.
HPE Growth tracks environmental and social characteristics through key metrics such as carbon footprint and employee engagement via annual ESG assessments. Data for monitoring is primarily sourced from portfolio companies through our ESG reporting platform and supplemented by direct interactions and engagement calls. A tailored approach, based on a post-investment materiality assessment, ensures that the sustainability indicators and methodologies used are relevant to each company's unique context. Key methodologies include carbon footprint analyses, GHG emissions measurement, and the development of decarbonization roadmaps. Employee engagement is tracked through surveys, turnover and sickness rates, and well-being initiatives. Additionally, Principal Adverse Impact (PAI) indicators such as GHG emissions, turnover, and sickness rates are monitored annually, in line with Sustainable Finance Disclosure Regulation (SFDR) requirements. If significant adverse impacts are identified, HPE Growth works with portfolio companies to mitigate them.
More detailed information on HPE Growth Fund III C.V. can be read below in sections b-l.
