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Sustainability-related disclosures

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Summary
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No Sustainable Investment Objective
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Environmental or Social Characteristics of the Fund
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Investment Strategy
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Proportion of Investments
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Monitoring of Environmental or Social Characteristics
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Methodologies for environmental or social characteristics
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Data Sources and Processing
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Limitations to Methodologies and Data
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Due Diligence
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Engagament policies
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Designated Reference Benchmark
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Restricted investments

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Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector (the "SFDR") requires fund managers such as Sandwater AS ("Sandwater" or "we") to publish and maintain certain sustainability-related disclosures on their websites, in relation to both the managers themselves and the funds they manage. Such disclosures are set out below for Sandwater and its funds under management.Entity-level disclosuresDate of publication: 1.1.2023
Last updated: 15.6.2025
Entity name: Sandwater AS
Legal entity identifier: N/ASustainability risksSFDR Article 3 requires fund managers such as Sandwater to publish on their websites information about their policies on the integration of sustainability risks in their investment decision-making process.We integrate sustainability risks in all our investment strategies in line with our Impact & ESG Investment and Risk Policy.Sustainability risks are environmental, social or governance events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of the investment (as defined in the SFDR).As stated in our ESG Investment and Risk Policy, we integrate certain ESG risk factors in all our investment decisions. More specifically, ESG risk factors are part of our investment analysis and screening process.Within our portfolios we also actively seek opportunities to mitigate identified sustainability risks to reduce the vulnerabilities and improve the potential of portfolio companies. This helps lowering both the risks of the portfolio companies and the risks relating to our investments. If we consider the ESG risks to be too high, or we conclude that the companies are not willing to address any underlying ESG risks, we will elect to not make new or further investments in such companies.No consideration of principal adverse impacts under SFDR article 4Sandwater does at this time not consider adverse impacts of its investment decisions on sustainability factors, i.e., environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters.Although Sandwater by applying its ESG Investment and Risk Policy observes impacts on sustainability by its portfolio companies, Sandwater has currently chosen not to consider adverse impacts of our investment decisions on sustainability factors in the manner set out in article 4 of the SFDR. The reason for this is that Sandwater deems that the administrative and financial burden associated with having to collect, compile, review and report on the necessary data, including of sufficient quality and level of detail, to disclose under point (a) of article 4(1) of SFDR, is disproportionate to the potential benefits of such reporting. Sandwater will therefore not be issuing a principal adverse impact statement under article 4 of the SFDR. Sandwater has not set a future date for when it intends to consider principal adverse impacts of its investment decisions, but will regularly review its position.Remuneration policiesSandwater's remuneration policy aims to promote sound and effective risk management. Sustainability risks are a part of the overall risk assessment, and are therefore included in the risk references in our guidelines. In particular, sustainability risks are included in the following principles forming the basis for awarding remuneration:The remuneration policy shall promote sound and effective risk management, including in relation to sustainability risks, and be in line with the investment strategies risk-tolerance and long term objectives of Sandwater and the funds under management.Remuneration shall not encourage excessive risk taking with respect to sustainability risks.When assessing performance in relation to variable remuneration, current and future risk, including sustainability risks, for Sandwater and for the funds under management must be taken into account.The effect that the remuneration scheme may have on conflicts of interest in relation to the integration of sustainability risk, including in relation to activities that involve greenwashing, incorrect presentation of investment strategies or other incorrect marketing, is considered.

Product-level disclosuresSandwater Fund I ASDate of publication: 1.1.2023
Last updated: 22.5.2025
Product name: Sandwater Fund I AS
Legal entity identifier: N/ASandwater is the alternative investment fund manager for the alternative investment fund Sandwater Fund I AS (the "Fund"). Sandwater is of the view that the Fund promotes, among other characteristics, a combination of environmental and social characteristics, and that the Fund is therefore covered by article 8 of the SFDR. Sandwater is therefore required to include a sustainability-related product disclosure section on its website, pursuant to article 10 of the SFDR. The below paragraphs provide the information required under article 10(1) (a) and (b) and accompanying detailed rules.Sandwater Fund I documents are available here:Anex IIAnex IV

Summary

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This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment. The Fund promotes the environmental and social characteristics of complying with certain exclusion criteria, aiming for positive impact and assessment of negative externalities, and investing in Impact Driven Enterprises (as defined below). The Fund invests in scale-up companies, focusing on the themes "Resource efficiency", "Energy transition", "Human health and wellbeing" and "Impact enablers", and Sandwater applies the Fund's Impact and ESG Investment and Risk Policy in its management of the Fund. The assessment of good governance practices is part of the investment analysis, in which Sandwater assesses selected governance-related matters, such as management structures,employee relations, remuneration of staff and tax compliance.The minimum proportion of the investments of the Fund used to meet the environmental and social characteristics it promotes is 90%. Sandwater monitors the Fund's adherence to the ESG Investment and Risk Policy in its investments (measured by the share of investments assessed in accordance with the ESG Investment and Risk Policy); the Fund's adherence to its exclusion criteria (measured by the share of investments in activities on the Fund's exclusion list); and portfolio companies' attainment of the Impact KPIs set for the company. Each of the E/S characteristics will be measured by way of defined sustainability indicators.Information relevant to determine and measure the attainment of each of the E/S characteristics promoted by the Fund will as a main rule be obtained directly from potential and existing portfolio companies.As part of the due diligence process, Sandwater will assess both the impact opportunity, ESG risk and negative externalities associated with the investments.The Fund will have a minority ownership share in underlying portfolio companies, and Sandwater will support portfolio companies by actively contributing and providing available expertise and network, including in relation to ESG and impact-related topics.
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No Sustainable Investment Objective

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The Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or Social Characteristics of the Fund

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Sandwater manages the Fund in accordance with the Fund's Impact and ESG Investment and Risk Policy, which sets out binding elements that apply in the investment process and enable Sandwater to consider, integrate and manage both impact and environmental, social and governance (ESG) factors in its investment management activities on behalf of the Fund. Furthermore, Sandwater has entered into side letters with certain investors regarding, inter alia, sustainability-related aspects of the management of the Fund.Sandwater's implementation of the Impact and ESG Investment and Risk Policy and its adherence to side letters entail that the Fund promotes both environmental and social characteristics.Exclusion criteria: First, Sandwater applies an exclusion mechanism in its management of the Fund, ensuring that the Fund will not invest in companies conducting or associated with certain activities. Exclusion lists are set out both in the Impact and ESG Investment and Risk Policy, the Investment Mandate and in side letters.Positive impact and assessment of negative externalities: Second, Sandwater performs an impact and ESG investment analysis and screening process assessing selected ESG indicators in terms of both positive impact and negative externalities of investments, as well as considering the sustainability risks associated with investments.The Impact and ESG Investment and Risk Policy sets out four thematic categories of impact when assessing the positive impact opportunity associated with a potential investment. These categories are:Resource efficiency, which includes:Sustainable food systems;Preservation of water resources and marine ecosystems; andInnovations in materials production and recycling.Energy transition, which includes:Clean energy generation, storage and infrastructure;Energy efficiency; andCarbon capture, utilization and storage.Human health, which includes:Health technology;Improving healthcare systems & delivery; andHealth and safety in the workplace.Impact enablers, which includes:Climate measurement and finance; andSupply chain and data transparency.The potential or actual positive impact of the Fund's investments will be measured by indicators (Impact KPIs) deemed suitable for each portfolio company considering the thematic category of which the company is part and the activities of the company.The potential or actual negative externalities of the Fund's investments will be assessed and, where relevant, measured, using environmental, social, and governance-related indicators, as further detailed below.Impact Driven Enterprises: Third, 50% of the Fund's investments will be in Impact Driven Enterprises, defined as a portfolio company which:
  1. has a purpose to achieve environmental and/or social impact by providing entrepreneurial solutions to an environmental and/or social issue based on a market-bases scalable approach;
  1. has business models which enable it to develop self-sustainable business models making them able to access over time capital from return-seeking investors who hold and sell an interest in them in a way comparable to the venture capital model;
  1. in the frame of their environmental and/or social purpose, defines their environmental and/or social impact objectives and specifies associated metrics for directing operations and monitoring their impact;
  1. intends to use its own business growth to advance their pre-defined environmental and/or social targets; and
  1. is managed in an accountable and transparent way, taking into account the interests of employees, customers and other stakeholders affected by their business activities.

Investment Strategy

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The investment strategy used to meet the environmental and social characteristics promoted by the financial productThe Fund invests in scale-up companies, predominantly at the Series A-stage. Investeecompanies should have clear commercial traction, a unique and proven technology/product/service, an established organization and other professional investorsonboard. The Fund has a thematic approach, focusing on the themes "Resource efficiency", "Energy transition", "Human health and wellbeing" and "Impact enablers", as further explained in the Impact and ESG Investment and Risk Policy.The investment strategy includes:
  1. the application of the Impact and ESG Investment and Risk Policy of the Fund, which includes exclusion criteria, the methodology for tracking positive impact through the use of Impact KPIs and the assessment of negative externalities caused by investee companies;
  1. the application of the exclusion criteria set out in the Investment Mandate pertaining; and
  1. the commitment set out in the Investment Mandate to invest 50% of the total commitments of the Fund, calculated on the basis of amounts investible after deduction of all relevant costs and holdings in cash and cash equivalents, in Impact Driven Enterprises, as defined above.
The policy to assess good governance practices of the investee companiesThe assessment of good governance practices is part of the investment analysis, in which Sandwater assesses selected governance-related matters, such as management structures,employee relations, remuneration of staff and tax compliance.To that end, Sandwater will apply indicators such as the investee companies' compliance with international standards and conventions (i.e., the OECD Guidelines for Multinational Enterprisesand the UN Guiding Principles on Business and Human Rights), accurate reporting to markets and the public, taxation and accounting practices, and respect of shareholder rights.

Proportion of Investments

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The Fund mainly makes direct investments, but may also invest in companies indirectly through other funds. The Fund intends to use all of the direct investments to meet the environmental and social characteristics it promotes, as further described above. The indirect investments are envisioned to make up a maximum 10% of the Fund's investments. Accordingly, the minimum proportion of the investments of the Fund used to meet the environmental or social characteristics it promotes is 90%.

Monitoring of Environmental or Social Characteristics

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The environmental and social characteristics promoted by the Fund and the sustainability indicators used to measure the attainment of each of those environmental or social characteristics are monitored throughout the lifecycle of the Fund by way of Sandwater's monitoring of:
  • the Fund's adherence to the ESG Investment and Risk Policy in its investments, measured by the share of investments assessed in accordance with the ESG Investment and Risk Policy;
  • the Fund's adherence to its exclusion criteria, measured by the share of investments in activities on the Fund's exclusion list;
  • portfolio companies' attainment of the Impact KPIs set for the company.
  • Portfolio companies’ submissions of Sandwater’s annual Impact & ESG Questionnaire which are reviewed by Sandwater

    • Methodologies for environmental or social characteristics

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    Sandwater will measure how each of the social and environmental characteristics promoted by the Fund are met by applying the following indicators:Exclusion criteria: Attainment of the exclusion criteria will be measured by the share of investments in activities on exclusion lists applicable to the Fund.Positive impact: To track the impact contribution of the Fund's portfolio, one or more company-specific KPIs ("Impact KPIs") are defined for each investment. The Impact KPIs are the quantifiable link between a potential investee company’s activities and outputs, and thematic categories of impact described above. Examples of Impact KPIs for each of the thematic categories are listed below:Resource efficiencyTons of waste avoided or reduced;Area farmed regeneratively; andTons CO2e reduced.Energy transitionRenewable energy generated;Renewable energy storage capacity installed; andCO2e reduced.Human health and wellbeingLives improved; andHealth spend reduced.Impact enablersCO2e under management; andGreen finance unlocked.Impact KPIs and associated methodologies will be co-developed with the investee company, and targets are defined for each Impact KPI. Progress on the Impact KPIs are collected on a quarterly basis and used to engage in discussion with the portfolio companies. Based on the portfolio company’s performance on the Impact KPIs, the Fund provides resources and a progress plan specific to its industry, size and maturity.Negative externalities: Negative externalities caused by the Fund's investments will be assessed and, when deemed relevant based on, inter alia, the presumed negative impact of the investment, be quantitatively measured using both environmental, social and governance-related indicators. The indicators include:Environmental indicators:GHG emissions (Scope 1, 2, 3 and total);Activities negatively affecting biodiversity sensitive areas;Emissions to water; andHazardous waste.Social and governance indicators:Unadjusted gender pay gap;Board gender diversity;Violations of UN Global Compact principles and OECD Guidelines for Multinational Enterprises;Lack of processes and compliance mechanisms to monitor compliance with UN Global Compact principles and OECD Guidelines for Multinational Enterprises;Lack of anti-corruption and anti-bribery policies; andExposure to controversial weapons.ESG indicators are collected on an annual basis. As with the Impact KPIs, the results on the ESG indicators are used to engage in discussion with the portfolio companies, and Sandwater will provide resources and a progress plan specific to the portfolio company's industry, size and maturity based on its performance on the ESG indicators.Sandwater will as part of the due diligence process assess whether a potential investee company poses a risk of causing material adverse impacts to the environment and/or society based on the above indicators, and, if investment is made in the company, regularly update this assessment throughout the ownership period. Prior to investment, Sandwater will work to ensure the investee company management's commitment to monitor and report on a regular basis on indicators deemed relevant, and to take mitigating actions where material adverse impacts are identified.Impact Driven Enterprises: Attainment of the share of Impact Driven Enterprises in the Fund'sportfolio will be measured by the share of the portfolio consisting of companies which, in Sandwater's overall assessment, meets the criteria for such investments as defined above.

    Data Sources and Processing

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    The Data Sources Used to Attain Each of the Environmental / Social CharacteristicsInformation relevant to determine and measure the attainment of each of the E/S characteristics promoted by the Fund will as a main rule be obtained directly from potential and existing portfolio companies, including by way of an Impact and ESG Questionnaire that potential portfolio company's fill out as part of Sandwater's due diligence process. The data is processed by Sandwater as part of the ESG analysis and screening process and ongoing monitoring of the portfolio.Measures Taken to Ensure Data QualitySandwater seeks to ensure data quality by assessing the data provided by (potential) portfolio companies in the context of information available through other sources and Sandwater’s knowledge of the company and industry. Where quantitative data is collected from portfolio companies, Sandwater uses, to the extent feasible, internationally recognized frameworks such as the Greenhouse Gas Protocol to ensure quality.How is Data ProcessedData collected from portfolio companies is stored in Sandwater’s internal systems and external platforms. Impact KPIs are reported quarterly and assessed towards annual targets – the company’s progress towards these Impact KPI targets are both used for internal discussion and for reporting to Sandwater’s LPs. ESG Questionnaires are completed annually and the information stored both internally and with Sandwater’s external ESG reporting provider, Apiday. Results are used for discussions with the portfolio companies and other stakeholders to inform near-term priorities and action plans.The Proportion of Data EstimatedEstimations will be used in situations where it is not possible or unduly burdensome to obtain observable data. there is no maximum proportion of data that may be estimated.Such estimations will be based on Sandwater's experience with similar companies, and will aim to reflect the actual situation as closely as possible.

    Limitations to Methodologies and Data

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    The methodologies described in the sections above rely on data collection from portfolio companies, in the form of both documents and conversations with management, directors and staff. Such information may be flawed or incomplete due to, e.g., limited access to data, dishonesty or withholding of information among management, directors or staff at the companies assessed or insufficient knowledge and/or experience in relation to the data collected among team members in Sandwater and/or the companies. Observable data will in most cases not be verified by external third party sources. Data may also not be available across all indicators for all portfolio companies and Sandwater has limited ability to influence this data availability and hence may rely on estimations and assessments based on its understanding of the portfolio company situation and context. Estimations, while they will be based on Sandwater's experience with similar companies and will aim to reflect the actual situation as closely as possible, are by definition a source of data that suffers from limitations in accuracy.Sandwater will regularly review the methodologies and data used to assess the attainment of the E/S characteristics being promoted to ensure the most up-to-date approach possible. When severe limitations are identified, actions will be taken immediately to overcome them. Accordingly, the limitations described above do not affect how the environmental and social characteristics promoted by the Fund are met.

    Due Diligence

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    Due diligence is an integral part of Sandwater's investment process for the Fund. As part of the due diligence process, Sandwater will assess both the impact opportunity, ESG risk and negative externalities associated with the investments.Impact opportunity assessment: This assessment follows several steps. The first step of impact opportunity assessment is to map the investment case against one of the impact themes described above. The second step is to articulate the theory of change of the investment, i.e., how an investment in scaling the company’s product/service will further the Fund's overarching impact creation objectives – quantifiable through the definition of company-specific Impact KPI(s).Impact KPI(s), along with measurement methodology, are formalized as part of the due diligence process, and the Fund's investment will be conditional on commitment from the company to regularly report on the metrics.ESG assessment: During the due diligence process, companies fill out Sandwater's Impact and ESG Questionnaire, designed to shed light on the company’s maturity with regard to ESG risk awareness and management, as well as to serve as a “red flag report” on likely material negative externalities across the ESG indicators described above. The results from the Questionnaire help inform Sandwater's investment decision.

    Engagament policies

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    The Fund will have a minority ownership share in underlying portfolio companies, and Sandwater will support portfolio companies by actively contributing and providing available expertise and network.Prior to investment, Sandwater will work to ensure the investee company management's commitment to monitor and report on a regular basis on the Impact KPI and ESG indicators deemed relevant, and to take mitigating actions where material adverse impacts are identified.After investments, Sandwater will promote ESG-related factors both through exercising its ownership rights and through dialogue with the management teams of the Fund's portfolio companies. Sandwater will focus on influencing and improving the behavior in the underlying portfolio companies, and may engage with portfolio companies to:encourage increased focus on ESG factors, including the implementation of ESG policies and practices in the portfolio companies;influence the portfolio companies to reduce adverse impact on ESG factors;increase understanding and integration of ESG related risks in the portfolio companies; and/orimprove ESG disclosures and reporting from the portfolio companies.
    We seek opportunities to improve identified sustainability risks to reduce the vulnerabilities and improve the potential of our portfolio companies.
    - Katherine Mellis, Sandwater

    Designated Reference Benchmark

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    No reference benchmark has been designated for the purpose of attaining the environmental or social characteristics promoted by the Fund.

    Restricted investments

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    The Fund shall not invest, guarantee or otherwise provide financial or other support, directly or indirectly, to companies or other entities:whose business activity consists of an illegal economic activity (i.e. any production, trade or other activity, which is illegal under the laws or regulations applicable to the Fund or the relevant company or entity, including without limitation, human cloning for reproduction purposes; or
  • which substantially focus on:
  • the production of and trade in tobacco and distilled alcoholic beverages and related products;
  • the financing of the production of or trade in weapons and ammunition of any kind, it being understood that this restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies;
  • casinos and equivalent enterprises;
  • the research, development or technical applications relating to electronic data programs or solutions, which aim specifically at:
    • supporting any activity referred to under items (i) to (iv) above;internet gambling and online casinos; orpornography,or are intended to enable to illegally:enter into electronic data networks; ordownload electronic data;
    1. fossil fuel-based energy production and related activities, as follows:
    1. Coal mining, processing, transport and storage;
    1. Oil exploration & production, refining, transport, distribution and storage;
    1. Natural gas exploration & production, liquefaction, regasification, transport, distribution and storage;
    1. Electric power generation exceeding the Emissions Performance Standard (i.e. 250 grams of CO2e per kWh of electricity), applicable to fossil fuel-fired power and cogeneration plants, geothermal and hydropower plants with large reservoirs.
    (vi) energy-intensive and/or high CO2-emitting industries, as follows:
    1. Manufacture of organic and other inorganic basic chemicals (NACE 20.13)
    1. Manufacture of other organic basic chemicals (NACE 20.14)
    1. Manufacture of fertilisers and nitrogen compounds (NACE 20.15)
    1. Manufacture of plastics in primary forms (NACE 20.16)
    1. Manufacture of cement (NACE 23.51)
    1. Manufacture of basic iron and steel and of ferro-alloys (NACE 24.10)
    1. Manufacture of tubes, pipes, hollow profiles and related fittings, of steel (NACE 24.20)
    1. Manufacture of other products of first processing of steel( NACE 24.30, incl. 24.31-24.34)
    1. Aluminium production (NACE 24.42)
    1. Manufacture of conventionally-fuelled aircraft and related machinery (sub-activity of NACE 30.30)
    1. Conventionally-fuelled air transport and, airports and service activities incidental to conventionally-fuelled air transportation (sub-activities of NACE 51.10, 51.21and 52.23).
    Notwithstanding the above, investments in sectors mentioned in section (vi) items a) – k) included, shall be allowed if the Investment Manager confirms that the specific final recipient transaction either (i) qualifies as environmentally sustainable investments as defined in the “EU taxonomy for sustainable activities” (Regulation (EU) 2020/852, as amended from time to time) as supplemented by the technical criteria established under the “EU Taxonomy Delegated Acts” (Commission delegated Regulations (EU) supplementing Regulation (EU) 2020/852 or upcoming Taxonomy Delegated Acts, as amended from time to time, respectively), or (ii) is eligible under EIF’s Climate Action & Environmental Sustainability (CA&ES) objectives in accordance with the latest criteria as published in the EIF’s website[1] as of the date of this Letter or any further version published after such date.In addition, when providing support to the financing of the research, development or technical applications relating to (i) human cloning for research or therapeutic purposes or (ii) genetically modified organisms ("GMOs"), the Investment Manager shall ensure the appropriate control of legal, regulatory and ethical issues linked to such human cloning for research or therapeutic purposes and/or GMOs.Further, the Fund shall not, under any circumstances, either alone or in cooperation with or through any associate or co-investment vehicle, make any investment that, at the time of the Fund's investment:
  • is in a jurisdiction listed as a low tax jurisdiction pursuant to the Norwegian Tax Authorities regulation of 22.11.1999 no. 1160 section 10-63-2 as updated from time to time;
  • is in a jurisdiction or territories which appear on the List of Unco-operative Tax Havens issued by OECD (see www.oecd.org/tax/transparency) or any successor, substitute or similar list(s) of jurisdictions or territories who do not meet the OECD’s current minimum criteria for transparency and information exchange for tax purposes;
  • directly or indirectly, in a company that is located in or has a substantial part of its revenue in a jurisdiction which is subject to comprehensive sanctions by the EU, UN or the United States;
  • in a company where either the company itself or any of its affiliates (directly or indirectly), or any of its directors, shareholders or key management are subject to sanctions by EU, UN or the United States;
  • in a company which will lead the Fund to become subject to sanctions by EU, UN or the United States; or
  • in a company that is directly or indirectly active or otherwise involved in, or expects to be active or otherwise involved in any of the following:
    1. the production of and/or trade in fossil fuels without carbon capture and use or storage (or other similar emission mitigation) to mitigate substantially all carbon emissions from such activity;
    1. the manufacture, sale, distribution and/or marketing of weapons, artillery or ammunition of any kind;
    1. serious or systematic violations of fundamental human rights (such as murder, torture, deprivation of liberty, forces labour, illegal child labour and other forms of child exploitation, and the rights of individuals in situations of war or military conflict);
  • the manufacture, sale, distribution and/or marketing of pornographic products;
  • the manufacture, sale, distribution and/or marketing of (i) tobacco, including other products categorised as tobacco by the relevant authorities or (ii) hard spirits;
  • the operation of casinos or other gambling facilities;
  • the manufacture, sale, distribution and/or marketing of cannabis unless such manufacturing, production and/or trade is solely is for medical use; or
  • the research, development or technical applications relating to electronic data programs or solutions, which aim specifically at supporting any activity referred to under (i) to (vii) above or are intended to enable illegal (i) access to electronic data networks or (ii) downloading of electronic data.