Sustainable Finance Disclosure Regulation (SFDR)

Last updateD

JULY 2025

This statement is provided in accordance with the Sustainable Finance Disclosure Regulation (“SFDR”), Regulation (EU) 2019/2088 of the European Parliament and of the Council. It outlines how J12 Ventures AB and its affiliated entities (“J12”) integrate sustainability risks into the investment process.

1. Integration of Sustainability Risks (Article 6 SFDR)

J12 incorporates the assessment of sustainability risks into its investment decision-making process. Sustainability risks are defined under SFDR as environmental, social, or governance (“ESG”) events or conditions that, if they occur, could cause a material adverse impact on the value of an investment.

These risks are considered and evaluated during the initial screening and due diligence of prospective investments, using a standardised internal ESG reference framework. Where material risks are identified, the J12 investment lead engages with the founding team to assess potential mitigations or structural responses.

J12 retains the full discretion to proceed or decline an investment based on the outcome of the sustainability risk assessment. Alternatively, in cases where investment proceeds despite the presence of such risks, J12 may work constructively with the company to monitor, reduce, and remediate identified risk over time.

J12 believes that integrating ESG factors aligns with its fiduciary duty and enhances long-term value creation. ESG criteria are used as indicators of both potential operational risk and executional excellence.

2. Principal Adverse Impacts (PAI) Statement (Article 4 SFDR)

J12 does not currently consider the principal adverse impacts (“PAIs”) of investment decisions on sustainability factors as defined in Article 4(1)(a) of SFDR. Given J12 pursues a venture capital investment strategy, focused on early-stage technology companies, J12 often lacks access to standardised, comparable, and reliable data necessary to assess PAIs in accordance with the Regulatory Technical Standards (“RTS”).

Nonetheless, should any PAIs be identified during the investment process, these will be assessed case by case. J12 may refrain from investment should the outcome be materially negative.

J12 continues to actively monitor the evolving regulatory landscape and may reassess its position on PAI disclosures as industry practices, data availability, and regulatory clarity improve.

3. Product Classification (Article 8 SFDR)

J12 does not state a clear target objective relation to sustainability for the overall funds under management nor does it market any of its funds as Article 9 (“sustainable investment”) products. However, J12 takes into account environmental and/or social characteristics in its investment process and therefore considers its activities aligned with Article 8 SFDR (“light green”) classification.

While none of the funds under management are structured with a binding sustainability objective, ESG considerations form part of the standard due diligence and investment methodology.

4. ESG Screening and Exclusion Policy

J12 applies an explicit exclusion framework and will not invest in companies directly or indirectly involved in the following sectors,

Alcohol
Tobacco
Weapons or arms manufacturing
Commercial gambling
Pornography
Fossil fuel exploration or production
Companies found to be in material breach of international human rights or labour conventions

All potential investments undergo a qualitative ESG screening, due diligence, and are evaluated prior to investment decision with reference to the following areas,

Environmental impact on air, land, water, ecosystems, human health
Emissions reduction and pollution mitigation
Resource use and waste management
Human rights protections and consumer welfare
Labor conditions and fair treatment
Corporate governance, transparency, and risk management
Legal compliance and ethical business conduct

Particular attention is paid to potential unethical or harmful behaviour towards users or employees, governance imbalances, and compliance to regulation and laws

5. Ongoing Monitoring and Stewardship

J12 regularly monitors ESG performance across its portfolio. ESG topics may be integrated into ongoing company reporting, and constructive engagement initiated if concerns arise.

If issues are identified related to ESG, including signs of inappropriate development or potential PAIs, J12 may take one or more of the following actions,

Request clarification or supporting information
Recommend operational changes or improved disclosure practices
Monitor the development and response over time through follow-up engagements with the portfolio company,
In cases of significant ESG breach, require prompt remediation by the portfolio company

J12 may implement tailored ESG metrics or integrate adapted ESG questions into the regular reporting processes to ensure continuous accountability and promote proactive steps towards improvement,

6. ESG Engagement Strategies

J12 may adopt one or several of the following strategies depending on the nature and maturity of the portfolio company,

Positive Selection: actively prioritising and selecting companies that outperform peers on material ESG dimensions
Engagement: maintaining active dialogue with portfolio companies to ensure ESG improvements over time
Exclusion: avoiding investments in certain sectors or business models with inherently structurally high ESG risks
Governance Participation: exercising influence through board representation or shareholder voting rights (where applicable) to promote responsible governance

The list of strategies are not prescriptive but adapted to specific context, maturity, and operational realities of each company. At present, J12 does not use a generalised quantitative metric to score ESG characteristics at the point of investment.

7. Forward Outlook

J12 acknowledges that SFDR and its accompanying Regulatory Technical Standards remain evolving frameworks with areas of legal uncertainty and the administrative practice continues to develop, particularly in the context of early-stage venture capital.

J12 commits to,

Actively monitor regulatory updates, industry guidance, and data availability
Review ESG policies, processes, and sustainability disclosures as relevant standards mature
Reassessing its position on PAI, product classification, and reporting frameworks as data quality improves accordingly

J12 does not encourage excessive risk-taking by its funds or their underlying portfolio companies. In the event of serious ESG breaches, J12 will require immediate rectification by the portfolio company.