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ESG Policy

POLICIES ON THE INTEGRATION OF SUSTAINABILITY RISKS IN THE INVESTMENT DECISION-MAKING PROCESS

1. Introduction
The Board of Directors of LINCE CAPITAL (the “Board of Directors”) initially approved the following policy on integrating sustainability risks into its investment decision-making process on 20/03/2023, and subsequently approved its revision on 16/05/2024. This policy is fundamental to the company’s management activities.
The Board of Directors holds direct responsibility for defining the strategies and policies to ensure compliance with the commitments and investment approach in FCRs (Risk Capital Funds) managed in accordance with ESG criteria. This Policy outlines how LINCE CAPITAL integrates these criteria into its investment strategy, in its capacity as an FCR manager.
In drafting this Policy, LINCE CAPITAL adheres to current regulatory frameworks, particularly the SFDR, including market best practices. The Policy will be reviewed periodically and whenever necessary due to company activities, or sustainability risks and impacts—both potential and actual—that could affect the assets and financial products of managed FCRs.
Furthermore, the Board of Directors must encourage and promote behavior from all employees that reflects adherence to this Policy at all times.
The criteria outlined in this Policy apply to LINCE CAPITAL when providing FCR management services.
Additionally, LINCE CAPITAL does not meet the criteria that define larger institutions as outlined in Article 4, sections 3 and 4 of the SFDR.
The Board of Directors is responsible for the management and monitoring of this Policy.


2. Internal Organizational Structure and Sustainability Policies Strategy
2.1 Governance Structure
LINCE CAPITAL, in its role as a risk capital fund management company, is authorized to administer and manage risk capital funds (“FCR”), respecting the relevant Management Regulations, laws, and applicable regulations.
As an SCR (Venture Capital Management Company), LINCE CAPITAL is responsible for administering FCRs entrusted to or established by it, representing participants and serving their exclusive interests, along with maintaining market integrity. The management company is tasked with performing all necessary acts for effective FCR management, adhering to high standards of diligence and competence, and always observing the investment policy in the respective management regulation, executing all functions permitted by law necessary for FCR operations.
If a member of the Board of Directors is unable to fulfill their duties: (i) prescribed procedures under Article 393 of the Portuguese Commercial Companies Code will be followed; and (ii) until these procedures are completed, the relevant director must take steps to delegate their powers to another person through a power of attorney, in compliance with applicable delegation conditions.
Under the direction of its Board of Directors, LINCE CAPITAL holds ultimate responsibility for executing portfolio and risk management functions, as well as the administrative functions related to Managed FCRs, in the exclusive interest of these Managed FCRs and their Participants. These functions must be performed in accordance with the founding documents of the Managed FCRs and in compliance with Portuguese laws and regulations.
Subject to the rules below, LINCE CAPITAL has the right to exercise all rights directly or indirectly associated with the assets of the Managed FCRs and, consequently, makes all investment and divestment decisions on behalf of the Managed FCRs. It is particularly responsible for the following duties for each Managed FCR:
– Portfolio management of Managed FCRs, including assets and liabilities, whereby LINCE CAPITAL may, at its sole discretion, appoint one or more Investment Advisors or other advisors to assist/advice on the management of Managed FCR portfolios;
– Risk management concerning the Managed FCR portfolio, whereby LINCE CAPITAL may, at its sole discretion, appoint one or more companies specializing in risk management to assist/advice on risk management for the Managed FCRs;
LINCE CAPITAL – SCR, S.A. – Policy on the Integration of Sustainability Risks in the Investment Decision-Making Process:
– Administration of Managed FCRs, including, among other duties: calculation of net asset value, accounting functions, and corporate administration (maintenance of shareholder records, accounting, and record-keeping, among others). LINCE CAPITAL, when lacking the necessary internal expertise, may subcontract certain services related to the administration of managed FCRs to one or more external service providers, including central administration agents and/or External Evaluators;
– Marketing and distribution of shares/units of the Managed FCRs, whereby LINCE CAPITAL may, at its sole discretion, delegate all or part of the marketing and distribution of the Managed FCRs to one or more distributors and/or placement agents.
Where permitted by law, and with sufficient justification and prior authorization from CMVM, LINCE CAPITAL is authorized to delegate, under its responsibility, part of its duties and powers referred to above to suitable entities with the necessary competencies and resources. In this case, this Manual and, where necessary, the constitutive documents of the relevant Managed FCR must be amended accordingly.
To date, the Board of Directors has not delegated any decisions related to FCR operations or management functions to any third parties.
However, the Board of Directors may engage third parties for investment advisory services.
The Company is organized into the following functional areas:
– Investment Management;
– Portfolio Management;
– Finance;
– Compliance;
– Risk Management.
 
2.2. Roles and Responsibilities of the ESG Function
LINCE CAPITAL has designated the Board of Directors as responsible for implementing policies on the integration of sustainability risks in LINCE CAPITAL’s investment decision-making process and ESG criteria. Specifically, the Board of Directors of LINCE CAPITAL is tasked with:
i. Defining and implementing LINCE CAPITAL’s strategy regarding the integration of sustainability risks in investment decision-making;
ii. Monitoring compliance with this Policy;
iii. Establishing concrete procedures in line with this Policy;
iv. Monitoring the implications of LINCE CAPITAL’s activities on sustainability risk integration in the investment decision-making process;
v. Collecting and disseminating ESG-related information;
vi. Promoting best practices and fostering an internal culture aligned with ESG criteria.
 
3. Scope of Application
LINCE CAPITAL considers that sustainability risk integration in investment decision-making is crucial to its operations, and the content of this Policy is part of its fiduciary duties towards investors and participants, as outlined in Point 1.1 above. Consequently, LINCE CAPITAL intends to apply ESG criteria in future investment decisions to identify risks and investment opportunities, creating long-term value for its investors and participants.
LINCE CAPITAL acknowledges that weighing sustainable investment criteria aligns with its values and mission. Without prejudice to ESG criteria applied to individual investments of Managed FCRs, this Policy establishes the main ESG guidelines in LINCE CAPITAL’s activities.
 
4. General Principles
In its operations, LINCE CAPITAL adheres to the following general principles:
– Commitment: Sustainable investment criteria represent a commitment and a public commitment assumed by LINCE CAPITAL;
– Adaptability: LINCE CAPITAL applies ESG Criteria in line with each Managed FCR’s characteristics, as outlined in the corresponding constitutive and contractual documents, considering specific FCR management issues that SFDR does not fully address;
– Proportionality: LINCE CAPITAL considers sustainability risks in investment decision-making according to the nature, scale, and complexity of its activities;
– Honesty and Integrity: LINCE CAPITAL recognizes that ESG information must be true, clear, and objective, avoiding greenwashing. The approach to sustainability in investment decision-making is conducted with honesty and integrity;
– Timeliness and Consistency: LINCE CAPITAL commits to keeping this Policy and its compliance information updated, ensuring commercial communications do not contradict information disclosed under this Policy;
– Policy Disclosure: The Policy is available to all LINCE CAPITAL employees and social body members and published on LINCE CAPITAL’s website.
 
5. Development of Sustainability Risk Integration Strategy in Investment Decision-Making
5.1. Due Diligence on Adverse Impacts of Investment Decisions on Sustainability Factors
LINCE CAPITAL does not meet the criteria of larger institutions as defined in Article 4, paragraphs 3 and 4 of the SFDR.
While LINCE CAPITAL exercises due professional diligence in evaluating investment decisions, it does not consider the adverse impacts of investment decisions on sustainability factors in the decision-making process. This position is based on the following:
– Lack of available information: Given the type of investments made by managed Funds, the level of publicly available ESG information, particularly the indicators listed in Annex I of Commission Delegated Regulation (EU) 2022/1288 of 6 April 2022, is insufficient for fully considering adverse sustainability impacts in investment decisions based on this information.
Additionally, the current legal landscape remains fragmented and underdeveloped on this issue, with unresolved interpretative issues and a lack of similar standards outside the EU, making comparison and adequate consideration of adverse impacts difficult.
Therefore, LINCE CAPITAL believes there are insufficient public information sources that contain sufficiently comprehensive, rigorous, and comparable elements or clear and uniform criteria necessary to consider the adverse sustainability impacts of its investment decisions.
– Cost rationality: In the absence of unified, reliable, and comparable public information, access to ESG information requires external sources, entailing high and disproportionate costs. Therefore, LINCE CAPITAL considers the costs excessive and unjustified for considering the adverse impacts of investment decisions on sustainability factors in its decision-making process.
– Founding documents: The constitutive documents of the Managed FCRs do not impose any duty of care or due diligence on the adverse impacts of investment decisions on sustainability factors in the decision-making process. Therefore, LINCE CAPITAL considers that participants do not expect consideration of the adverse impacts of investment decisions on sustainability factors in its decision-making process.
 
5.3. Promotion of Environmental or Social Characteristics and Sustainable Investments
LINCE CAPITAL does not provide management services to FCRs that promote, among others, environmental or social characteristics (products under Article 8 of the SFDR) or pursue sustainable investment objectives (products under Article 9 of the SFDR).
Should LINCE CAPITAL offer management services for FCRs that promote these characteristics, information indicated in Articles 8 to 10 of the SFDR will be provided in both pre-contractual information and on the website.
Furthermore, although it does not consider KPIs (Key Performance Indicators) with explicit sustainable investment objectives, LINCE CAPITAL considers sustainability in investment decisions on a case-by-case basis.
 
6. Policy Review
The Board of Directors must review the Policy at least once a year and prepare annual reports when applicable[1].
 
EFFECTIVE DATE: 16/05/2024

[1] Should LINCE CAPITAL provide management services to FCRs that promote, among others, environmental or social characteristics (products as defined under Article 8 of the SFDR) or that aim for sustainable investments (products referred to under Article 9 of the SFDR).