APPROACH

Impact & Environmental, Social and Governance Policy

November 2020

Genesis Alternative Ventures (“Genesis”) is Southeast Asia’s leading private lender to venture and growth stage companies funded by tier-one VCs. Returns and impact are not mutually exclusive, companies that do good, do better. Genesis believes that investors that back impactful companies will reap profitable rewards: “come for the returns, stay for the impact”.

As a venture lender, Genesis is uniquely positioned to advocate for impactful corporate developments among its portfolio companies. Genesis will identify and selectively invest in companies with meaningful impact objectives, and, work closely with VC investors and entrepreneurs to identify and introduce important impact and ESG concepts into the business model of selected companies within its portfolio as they scale across Southeast Asia. 

A. Impact Commitment

Genesis will aim to foster long term impact in Southeast Asia by selectively investing in and providing value-add to portfolio companies that look to implement appropriate Sustainable Development Goals (SDGs) (Take Action for the Sustainable Development Goals).

Genesis will support such portfolio companies adopt an impact strategy and will work with companies to set appropriate goals and expectations as part of its formal investment process and shall monitor progress of implementation accordingly. 

B. Environmental, Social and Governance (ESG) commitments

  • Genesis will require portfolio companies to commit to principles of its Impact & ESG Policy.
  • Genesis will not invest in portfolio companies with business activities listed on the IFC Exclusion List (see Appendix I) or that have business engagements in IFC “Category A” risk activities (see Environmental and Social Categorization).
  • Genesis will provide investors with reasonable access to information necessary to monitor and evaluate Genesis’ compliance with ESG policies.

(i) Social and Environmental risk mitigation

  • Genesis supports and enables selected portfolio companies to develop Environmental, and Social policies and Environment and Social Management Systems, as needed using IFC’s Performance Standards as guiding principles (see Appendix II).
  • Genesis conducts, and will use best reasonable efforts to ensure that selected portfolio companies conduct, business operations in accordance with assessments of environmental, health and social legislation and risks, including efficiency in resource usage, prevention of pollution, and ensuring community health, safety and security, subject to the relevant laws and regulations in the countries where portfolio companies maintain operations.

(ii) Governance and anti-discrimination

  • Genesis follows, and will use best reasonable efforts to ensure that selected portfolio companies follow, responsible hiring and employment practices such as payment of fair wages, provide appropriate benefits, offer clean and safe working conditions and ensure prohibition of child labor, subject to the relevant laws and regulations in the countries where portfolio companies maintain operations.
  • Genesis provides, and will use best reasonable efforts to ensure that selected portfolio companies provide, equal treatment to men and women without discrimination in employment regardless of race, gender, ethnicity, religion, age, national origin, or sexual orientation, subject to the relevant laws and regulations in the countries where portfolio companies maintain operations.

Legal and ethical compliance

  • Genesis has a zero-tolerance Anti-Corruption policy (Appendix III) and requires portfolio companies to comply with Singapore’s Prevention of Corruption Act, U.S. Foreign Corrupt Practices Act, U.K Bribery Act, all International Labor Organization (ILO) conventions, UN Convention Against Corruption and the OECD Convention as sanctioned by countries where portfolio companies maintain operations.
  • Genesis will not enter into any transaction with any entity or person (i) sanctioned by the United Nations Security Council, (ii) debarred by the World Bank Group (see the World Bank Listing of Ineligible Firms and Individuals at World Bank); or (iii) subject to economic sanctions administered by the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”), Her Majesty’s Treasury in the U.K., the U.N., or the E.U., including with respect to restrictions on transactions with specially designated nationals or blocked persons designated by OFAC or with persons on any U.N., E.U. or U.K. assets freeze list, and any applicable trade or economic sanctions laws or regulations.
  • To this end, Genesis will circulate and evaluate an Anti-Corruption Questionnaire which will be self-assessed and answered by selected portfolio companies annually.
  • Genesis complies, and will use best reasonable efforts to ensure that selected portfolio companies comply with principles of applicable civil, environmental and social laws, subject to the relevant laws and regulations in the countries where portfolio companies maintain operations.
  • Genesis is, and will use best reasonable efforts to ensure that selected portfolio companies are, transparent, ethical and accountable, including adhering to the principles of good corporate governance, in all business operations, subject to the relevant laws and regulations in the countries where portfolio companies maintain operations.
  • Genesis will review ESG policies, processes and systems regularly, and provide appropriate training based on market changes.

Appendix I

IFC Exclusion List

Genesis Fund I will not invest in the following activities:

  • Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCBs, wildlife or products regulated under the Convention on International Trade in Endangered Species (CITES) of Wide Fauna and Flora.
  • Production or trade in weapons and munitions.
  • Production or trade in alcoholic beverages (excluding beer and wine).
  • Production or trade in tobacco.
  • Gambling, casinos and equivalent enterprises.
  • Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where IFC considers the radioactive source to be trivial and/or adequately shielded.
  • Production or trade in unbonded asbestos fibers. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%.
    Drift net fishing in the marine environment using nets in excess of 2.5 km in length.
  • Production or activities involving harmful or exploitative forms of forced labor/harmful child labor.

Except when engaged in microfinance activities as specified below*, the following exclusions will be applied:

  • Commercial logging operations for use in primary tropical moist forest.
  • Production/trade in wood/other forestry products other than sustainably managed forests.

*When investing in microfinance activities, the following items will be excluded:

  • Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals. Hazardous chemicals include gasoline, kerosene, and other petroleum products.
  • Production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples (as defined in Standard 7 of the Performance Standards), without full documented consent of such peoples.

Appendix II

IFC Performance Standards on Environmental and Social Sustainability

IFC’s Performance Standards provide guidance on how to identify risks and impacts, and are designed to help avoid, mitigate, and manage risks and impacts as a way of doing business in a sustainable way.

Performance Standard 1: Assessment and Management of Environmental and Social Risks and Impacts

Performance Standard 2: Labor and Working Conditions

Performance Standard 3: Resource Efficiency and Pollution Prevention

Performance Standard 4: Community Health, Safety, and Security

Performance Standard 5: Land Acquisition and Involuntary Resettlement

Performance Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources

Performance Standard 7: Indigenous Peoples

Performance Standard 8: Cultural Heritage


Appendix III

Genesis Alternative Ventures Anti-Corruption Policies & Processes

We Have Zero Tolerance for Corruption

We Seek to Uncover Corruption Activity During Due Diligence

Prior to investing in a company, we will:

  • Perform general reference checks on the founders to confirm that we believe that they have strong moral ethics and a strong commitment to anti-corruption practices.
  • Ask founders to disclose any known corrupt activities associated with their company.

We Require Portfolio Companies to Commit to Anti-Corruption Culture & Practices

Genesis’ agreements with selected portfolio companies will include an anti-corruption policy as well as procedures that require:

  • Compliance with local and international anti-corruption, and anti-money laundering laws; 
  • Institutionalizing anti-corruption policies, practices and trainings;
  • Adopting global best practices for governance and operations (depending on circumstances eg stage of development).

We Monitor Portfolio Companies for Anti-Corruption Compliance

On an annual basis, we will formally survey selected portfolio company and ask them to self-attest their compliance to our anti-corruption policy.

As part of such reviews, we will seek to confirm that such portfolio companies are in compliance with applicable laws; have adopted policies and procedures reasonably designed to ensure such compliance; are refraining from paying, offering, promising, authorizing, or accepting, directly or indirectly any bribes, kickbacks, payoffs, or any other transfers of anything of value for an improper purpose.

All allegations of corruption will be taken seriously. For any allegations believed to have merit, Genesis will take reasonable necessary steps to investigate the allegation (including potentially engaging professional third parties to assist with such investigation), and based on the outcome, Genesis will promptly determine appropriate actions to take.

We Require Strategic Service Providers & Partners to Commit to Anti-Corruption

For all strategic service providers and partners, we will use best reasonable efforts to include the anti-corruption policy in such agreement.

We Proactively Educate our Staff and Portfolio Companies on our Anti-Corruption Policies & Processes

A document containing Genesis’s ESG policies is required reading during our employee onboarding process. When we make material revisions to the ESG policy document, we will notify all staff and require them to read any revisions. Genesis’ ESG policies are referenced in our Employee Manual and various contracting documents.

Portfolio Companies are required to read this document as part of the onboarding process and are encouraged to incorporate into their own Anti-Corruption policies and procedures.