ESG Policy

INTRODUCTION

noa (“Noa”) and the funds which it advises have a mission to scout, invest in, and support technology companies transforming the built world by improving quality of life and promoting sustainable living. ESG is at the core of Noa’s ethos with a clear goal to align purpose and profit: by decarbonising the built world whilst generating attractive returns for investors.
The next few pages summarise Noa’s approach to responsible investing and Environmental, Social, and Governance (“ESG”) issues within its business operations and investment activities.  
Noa aims to set out the principles that the firm aspires to, the procedures that are currently implemented, and comprehensively outline how the firm plans to meet its ESG goals and standards.

Noa includes the following factors within our definition of ESG:

  • Environmental factors: climate change and carbon emissions; the wastage, pollution and contamination of land, air, and water; eco-efficiency; waste management; management of scarce natural resources; biodiversity; and the development of innovative technologies, products and markets e.g.
  • Social factors: social inequalities, data-protection and privacy, the treatment of employees including their pay; health and safety; labour conditions; human rights; any form of discrimination, harassment, bullying and/or victimisation; diversity and inclusion; and the treatment of all stakeholders across our entire ecosystem of companies, customers, employees, and communities.
  • Governance factors: anti-bribery and corruption measures; business ethics; accountability; transparency; conflicts of interest; whistleblowing; control mechanics; and the governance of environmental and social factors.

The ESG factors listed above and in this policy are not exhaustive: Noa will continuously work to improve, refine, and strengthen its policies as the firm expands its footprint and exposure throughout its various stages of evolution.
This ESG Policy covers all Noa funds, existing portfolio companies, new investments and Noa’s own operations. All Noa staff are required to adhere to this ESG Policy.

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NOA'S APPROACH TO ESG - OR WHAT WE LIKE TO CALL "IMPACTFUL CHANGE"

“Be the change you want to see in the world" is the principle that drives everything at Noa. Change is good, positive change is better, impactful change is Noa’s goal.  

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Our central ethos is to do well by doing good, by aligning profit with purpose, and targeting the positive transformation of the built world through increasing transparency and accountability, promoting social inclusion and strengthening communities, enabling decarbonisation, and sustainable resource utilisation.

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We work to embed the goal of impactful change into Noa’s culture and investment practice, using it as the north star to guide the firm’s evolution alongside actions now and in the future.  

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Noa recognises the integral role that ESG issues have on the success of our investments (both positive and negative). Given the scale of impact that some of our portfolio companies can have, venture capital firms like ours are uniquely positioned to enable and accelerate long lasting change in the world.

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We want the tech entrepreneurs and companies that we back to aim for impactful change and focus on creating comprehensive and inclusive value for all stakeholders, including employees, customers, suppliers, shareholders, adjacent communities, and the environment. We believe that organisations that embrace responsible, sustainable, inclusive, and transparent business practices and cultures, significantly outperform their peers, and create superior and sustainable long-term value for all stakeholders.  

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Noa does not exclusively invest in climate-positive or impact-first businesses. This is by design, as we believe that to build a better built world at-large and create long lasting

positive change, we need to be able to back companies that may not always directly target climate or social issues, but which will contribute to systematically enhancing the digital infrastructure and sophistication across underlying industries like real estate and construction. This enables dedicated ESG solutions to expand and succeed faster and importantly, system-wide.  

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Noa is committed to only investing in companies that do no significant harm to the environment, society, or governance structures. Our investment strategy prioritises businesses that adhere to high standards of ethical behavior, environmental stewardship, and social responsibility. We perform rigorous due diligence to ensure our investments align with sustainable practices and contribute positively to the broader community. By maintaining a focus on responsible investing, Noa aims to foster long-term value creation while supporting the transition to a more sustainable and equitable economy.

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We take an active stance towards our portfolio companies managing ESG issues and actively encourage and support our portfolio companies to aim for the very best ESG standards in their field.

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Noa adopts a humble approach, acknowledging the rapidly evolving nature of ESG measurement and policy impact. Consequently, we believe that policies and best practices continuously evolve over time, aligning with the size and maturity of the firm, the availability of internal resources, and utilising the most effective tools and practices as they develop.

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‍NOA'S COMMITMENT TO ESG

Noa is continually working to embed ESG within its operations and across the entire investment cycle from investment screening to due diligence, ownership, and exit. Noa’s commitment to safeguarding and enhancing ESG includes:

  • Maintaining strong ESG governance within Noa’s own operations:
    Noa embeds ESG principles across the firm, ensuring that all team members are responsible for implementing and delivering against ESG practices and processes. This effort is driven by our ESG lead, who serves as the ESG and Finance Manager. Our ESG lead is responsible for the co-ordinated implementation and progression of ESG processes across firm operations, ensuring that ESG initiatives are effectively integrated into the firm's activities, while also monitoring and reporting on ESG performance and compliance. The COO is responsible for oversight and direction, ensuring that initiatives are sustainable in supporting the firm's strategic goals alongside financial & risk management.  
    Noa’s ESG Governance is delivered via its ESG Committee, which is comprised of team members from across the firm. Led by the COO, the ESG committee sets ESG and diversity policy and initiatives within the firm. This structure facilitates cross-functional collaboration to embed ESG best practices throughout the firm.    Further, the ESG committee seeks to provide all staff with resources to help them deliver the firm’s ESG commitments. This includes access to ESG training, tools, frameworks, and opportunities for professional development in ESG areas. Through this comprehensive approach, Noa aims to cultivate a culture of responsibility and sustainability that permeates every aspect of its operations.
  • Encouraging strong ESG engagement by portfolio companies:  
    Noa encourages portfolio companies, as well as the founders and CEOs we work with, to proactively engage with the ESG implications of their business activities. Our approach focuses not only on mitigating risks, but also on adding value by leveraging ESG factors to improve business practices. We aim to support our portfolio companies in adopting leading ESG practices and providing guidance where appropriate.
    As part of our agreement with portfolio companies, we include specific ESG provisions in our term sheet. Within 12 months of completing the investment, portfolio companies must implement several key measures. They are required to adopt a climate policy that includes measuring their emissions and setting actions to achieve climate-neutral operations by 2050, incorporating both reduction and offsetting strategies. Additionally, companies must establish a diversity and inclusion policy to ensure inclusivity across various dimensions, including gender, ethnicity, age, sexual orientation, disabilities, socio-economic background, and national origins. They must also develop a code of conduct that outlines ethical standards and includes a confidential whistleblowing channel for reporting unethical behaviour. Furthermore, companies are expected to evaluate and integrate ESG best practices appropriate to their stage and resources. These
  • commitments will be discussed with the board and reported annually, with Noa providing support to help meet these goals.  
    In addition to these requirements, we work with our portfolio companies to set core KPIs, allowing us to strategically monitor their progress. Our investment teams monitor and assist portfolio companies with ESG issues and ESG risks as part of their engagement, including in their capacity as board members and observers. By embedding these ESG considerations, Noa aims to foster meaningful and lasting positive change within our portfolio.
  • Embedding ESG within our investment process:
    • Pre-Investment: During the sourcing of investment opportunities, Noa works with mission aligned investor networks and accelerators with similar values and ambition towards impactful change. As part of our screening process, the Noa investment team evaluates each company’s ESG-related risks and factors (including potential issues related to diversity, environmental impact, climate change risks, ethics, anti-bribery, and corruption), and presents material findings to the Investment Committee as part of the diligence process. Where appropriate, or deemed material, Noa will undertake physical risk assessments and, where relevant, instruct external experts to perform additional ESG due diligence on potential portfolio companies. If the Investment Committee concludes that the ESG risks related to a potential investment are too great and/or cannot be appropriately mitigated in a reasonable timeframe, no investment is made.
    • Investment Exclusions: To align with core values, Noa does not invest in certain business models and sectors. This includes companies involved in the production or trade of illegal products or services, as well as those associated with tobacco, addictive substances, weapons, pesticides subject to international bans, sex work, pornography, gambling, or casinos. We also exclude investments in fossil fuels, including unconventional extraction methods like oil sands and deep-sea drilling in sensitive regions. Additionally, we do not invest in companies whose business models exacerbate social or environmental issues, have founders or senior team members with a history of unremedied harassment, discrimination, or bullying, or those who fail to comply with international standards on human rights, environmental protection, anti-corruption, or labour laws. Companies relying on exploitative tactics targeting vulnerable groups are also excluded.
    • Post-Closing: Following the completion of each investment, Noa seeks to support portfolio companies in enhancing their ESG practices. We provide ongoing access to knowledge resources and networking opportunities with other founders. Our approach includes continuous monitoring and reporting, focusing on the implementation and progress of ESG processes, which is essential as early-stage businesses scale.
  • Engaging with our limited partners on ESG issues:  
    Noa aims to have broad transparency on ESG topics with the limited partners. To this end, Noa includes ESG updates within our quarterly reports to our limited partners and provide updates on ESG issues and programmes at our annual general meeting. As part of that, we will look to leverage our data science resources to create a matrix of impactful KPIs, both internal and external to our portfolio companies in order to track progress, cumulative impact, and benchmarking.
  • Engaging with wider stakeholders:  
    Noa seeks to engage with ecosystem stakeholders. Noa is a UNPRI signatory in commitment to responsible investment practices. Noa is a member of VentureESG
    – a community-based initiative from VCs for VCs to push the industry forward on good ESG. Further, team members are actively part of groups such as ImpactVC –a community of VCs accelerating impact within Venture - and the UK Green Building Council – a member network committed to transforming the sustainability of the built environment, in response to the climate and nature crises.
  • Considering Noa’s environmental footprint:  
    Noa is dedicated to minimizing the environmental impact of our operations. We calculate our greenhouse gas (GHG) emissions annually and are developing strategies to reduce them. Our commitment includes achieving net zero emissions across Scope 1-3 by 2030, excluding category 15, and reaching net zero across all Scope 1-3, including category 15, by 2050.  In 2022, Noa entered a carbon offsetting program to address both current and historic emissions, covering all emissions since our formal launch in 2020. We will report our GHG emissions and reduction strategies in our first sustainability report scheduled for publication in Q4 2024. This report will detail our efforts, set targets and reflect our ongoing commitment to sustainable practice.
  • Promoting diversity, equity, and inclusion within Noa’s team:  
    Our objective is to attract, motivate, develop, and retain a diverse and talented team, while fostering a working environment that promotes inclusion, equity and opportunities. We cultivate an inclusive culture, encourage open information sharing, transparent decision-making, and provide an accessible environment for all. This is underpinned relevant policies such as our DEI policy. Additionally, we are committed to implementing leading benefits to support new parents on our team, including equal maternity, paternity, and adoption leave, as well as flexible working policies.
  • Embedding regulation:
    Noa's Fund II (A/O Built Technologies II SCSp) aligns with the EU Sustainable Finance Disclosure Regulation (SFDR), ensuring adherence to sustainable investment principles. We are dedicated to meeting SFDR requirements and evaluating similar regulations from other authorities. We firmly believe in responsible investing, seeing it as both morally right and good for business. Our commitment to this goal is evident in our pursuit of environmental, social, and governance initiatives that offer clear business benefits.

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PRINCIPLE ADVERSE IMPACT STATEMENT

Noa has considered and continues to consider ESG factors, including material risks, as part of the investment process. However, we do not currently elect to formally assess the adverse impacts of investment decisions on sustainability factors or disclose these under SFDR 8. We have mindfully chosen not to do so at present, believing that our policies and procedures are substantively appropriate, proportional, and tailored to our investment strategy. Furthermore, there is currently insufficient data available from target companies/investments, and the available data often lacks sufficient quality, making it impossible to measure in a systematic and consistent manner for meaningful and compliant SFDR reporting. Given the nature of the asset class (early-stage investments in built world technology), no material adverse impacts of these investments are expected.

Noa will continue to closely monitor regulatory developments concerning SFDR and other ESG regulations, as well as the development of available data, and adjust this position accordingly.

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ESG Policy Version 5,  August 2024. Formally approved by the Noa ESG Committee.