With the ambition of becoming one of Europe’s leading impact investors, Norselab continues to strengthen its impact approach. Guided by the UN Sustainable Development Goals (SDGs), Norselab backs net positive companies with capital and competence to ignite radical change in global industries. In Norselab’s hot-off-the-press Meaningfulness Report, they present the impact performance of its funds and portfolio companies in 2021.
Download Norselab's Meaningfulness Report at the bottom of this article.
Meaningfulness: working towards net positive impact
2021 saw the close of Norselab’s first impact fund in the venture space, Meaningful Equity I, at USD 70M. It’s the largest first-time venture fund ever raised out of Norway. The portfolio of Meaningful Equity I consists of 16 fast-growing companies across powerful impact themes such as circularity, energy and resource efficiency, and sustainable food systems. The fund has received backing from impact investment heavyweights Capricorn Investment Group and the Norwegian government’s investment arm, Investinor.
While our world faces daunting challenges, there is also an unprecedented opportunity to do right by our planet and its living creatures while building successful businesses. Impact native companies are key players in leveraging the opportunities and creating a more sustainable future one customer at a time. Norselab’s approach is to concentrate its investments where it matters the most. “Meaningfulness” is the expression of Norselab’s philosophy, strategies, and frameworks to bring the world towards net positive:
- To us, the most meaningful way of contributing to a sustainable future is to back companies with a product-driven net positive impact, that target resource-intensive industries, and where the impact potential is the greatest, shares Erik Syvertsen, Chief Executive Officer at Norselab.
Rethink sustainable investing
A handful of industries drive some of the most significant issues humanity and the planet face. And while all humans need food, clean water, shelter, energy, and ways to move around, the way these basic needs are provided for today is profoundly unsustainable at a system level.
That’s why sustainable investing needs to be redefined, according to Norselab. The state of the world requires bolder ambitions than current regulations. Investors must start delivering impactfully on the SDGs by backing net positive companies.
- We need to grow a whole new generation of companies that help drive the big shift in our economies; companies with products that are inherently good for our world, says Maria de Perlinghi, Partner at Norselab in charge of impact, adding that:
- The ESGs and the regulatory developments in the EU are not enough. The state of our world requires us to be bolder. If we want to reverse the damage inflicted on our planet, marginal improvements will not do. We need radical change, and we need it now. We already have the framework we need to understand the actions required to create a meaningful future for all: the Sustainable Development Goals. To us, the SDGs define what sustainability means, not ESG ratings alone.
How Norselab measures meaningfulness
While there is no single approach to sustainability, Norselab aims to build a top-of-the-range approach to sustainable investments. With the globally recognized UN’s Sustainable Development Goals as a guiding framework for sustainability, Norselab looks mainly at how a company’s products and services contribute to achieving the targets.
To ensure integrity in measuring impact, Norselab also applies three additional lenses when assessing companies; The Upright Project Net Impact Quantification for a third party party point of view on impact, screening against EU regulations such as the EU Taxonomy, and assessment of a company’s operational sustainability performance, such as governance and emissions factors.
Key performance highlights from 2021 of Norselab’s first fund, Meaningful Equity I, include:
- The fund is 100% SDG aligned, targeting 12 of the goals, and has an overall 50% EU Taxonomy climate adaptation or mitigation eligibility
- The 16 portfolio companies in the fund target 13 different industries and have more than 50 registered patents
- 150+ new jobs were created through the growth of the portfolio companies
The Upright model quantifies the positive and negative impacts of a company’s products and services across four dimensions: environment, health, knowledge, and society. The impacts of the Norselab portfolio show a +39% net impact, with a +78% net impact mapped to the Sustainable Development Goals using this model.
Upping their impact approach
Norselab released its very first Meaningfulness report in 2020. Since then, Norselab has fine-tuned its approach to sustainability. The newly published Meaningfulness report documents the actions taken on the promises Norselab made in its 2020 report. It shows that several improvements to measure meaningfulness have been introduced to further integrate sustainability:
- The investment process now includes a first version of an impact assessment framework. Additionally, through the introduction of a Product Governance Committee, the Partner in charge of impact has in practice been given veto power over investments that do not fit with the fund's impact mandate.
- Norselab partnered with The Upright Project for net impact modeling of companies in due diligence as well as annual modeling of Norselab’s portfolio companies.
- Norselab’s sustainability team has been strengthened with a formal Norselab Partner in charge of impact and the hiring of two experienced sustainability professionals.
With this report, Norselab hopes to inspire more investors to do good through impact investing, and to help drive the big shift needed in our economies to deliver a more sustainable future.
Explore Norselab's Meaningfulness Report:
Download the report