FIRSTPICK investment fund’s ESG Policy

About FIRSTPICK

FIRSTPICK is a pre-accelerator, accelerator, and Venture Capital fund investing in tech companies across the Baltics. Unlike a regular venture fund, FIRSTPICK actively supports founders from the idea to the growth stage. The team is backed by the leading Baltic tech community members from various industries that provide early market access, impactful partnerships, and deep expertise for the portfolio.

FIRSTPICK capital consists of private investors and the founding team’s funds, together with an investment from the Lithuanian state-financed INVEGA fund, which is part of the Accelerator 2 program, funded by the Innovation Promotion Fund.

Current Portfolio

14

Employees

8

Size of the fund

20M EUR

Context

On January 1, 2023, the SFDR entered its Level 2 phase. The SFDR is an EU regulation that sets out environmental, social, and governance disclosure requirements for financial market participants active within the European Union. This directly affects asset managers with more than 500 employees, as reporting on Principle Adverse Indicators (PAI) is now mandatory. 

Investment firms like FIRSTPICK are not required to report on PAI, but funds receive questions and guidelines for developing ESG risk policies from their investors. You can learn more about the topic in a previous blog EU Taxonomy and the startup ecosystem: NFDR, SFDR, and CSRD explained. 

Challenge

FIRSTPICK reached out to get a better understanding of the regulatory requirements and the best practices. After an in-depth discovery session and a better understanding of their playing field, we agreed on my involvement in crafting the ESG Policy and Due Diligence Checklist. The goal was to create the new policy based on the LPs requirements, SFDR guidelines, industry best practices, and what’s realistic to be implemented for a fund this size. 

Solution

Together with the internal ESG lead, Jone Vaituleviciute, we reviewed the various approaches industry-leading VC firms take. We developed an understanding of what kind of approach to ESG topics would be relevant and manageable to FIRSTPICK. As the fund invests in startups that are part of their accelerator program (early stage) and does follow-up rounds (seed stage), the Policy was developed with proportionality in mind. For investments in early-stage companies, FIRSTPICK considers the positive impact on Sustainable Development Goals. And for seed-stage companies, FIRSTPICK requires additional information on specific metrics that are most relevant to tech companies. 

Result

FIRSTPICK has rolled out the new ESG policy internally and planning the onboarding for their current and future portfolio companies. The policy is published on their website here and includes the necessary information to comply with SFDR. The team now has a straightforward process for tracking their ESG priorities and reporting to their LPs. 

Customer testimonial

“Through collaboration with Kristine, we've gained valuable knowledge and understood the implications of SFDR regulation and ESG and what it means in the FIRSTPICK case. Moving forward, we're committed to continuing to educate ourselves and incorporating these values into every aspect of the investment process.”

Jone Vaituleviciute, Partner at FIRSTPICK