The manager of the Seraphim Space Investment Trust PLC (LSE:SSIT) has developed a proprietary tool that will form part of a new responsible investment policy to review potential space technology portfolio companies for exposure to climate, sustainability and social impact risks.
Seraphim Space Manager LLP worked with environmental, social and governance (ESG) experts Sancroft to develop a proprietary tool, which it said it would use as part of its investment criteria, adding to its existing ESG considerations that were “already stringent”.
The tool could also lead to further work with portfolio companies to help them reach net zero and achieve the UN's sustainable development goals (SDG) at a quicker speed, it said.
Seraphim said will also be launching training for companies in the SSIT portfolio on key ESG themes in the coming month.
The new ESG framework will ensure all investments “not only limit any negative impacts from their operations but also support next generation ESG-related processes and practices that can be realised, championed and implemented to help new and existing portfolio companies, as well as the overall space sector, reach net-zero before government targets”.
Mark Boggett, the manager’s chief executive, said: “Our industry-leading responsible investment policy is fully embedded into our investment process and will act as a rigorous due diligence process before the completion of every investment and set a new global framework for the spacetech industry to follow.”
He added that ensuring that all spacetech companies are addressing and advancing the UN’s SDGs to reach targets at a quicker speed would provide transparency and confidence for current and future investors as well as for clients and other stakeholders.
“Furthermore, it reinforces how Seraphim Space Investment Trust’s portfolio is playing a fundamental role in providing solutions to a lot of the planets most pressing ESG problems."
The SSIT portfolio includes companies such as Spire Global, which uses its constellation of microsatellites to gather comprehensive weather data to predict environmental change and also provide maritime tracking services; Satellite Vu, which is engaged in reducing energy waste from buildings; Astroscale, which helps removes debris in orbit; and LeoLabs, which uses a network of radars to track every piece of debris down to 2cm up to 1,000km away in orbit.
As such, Seraphim stressed that space tech can play a key role in helping combat and mitigate climate change.
Trisha Taneja, global head of ESG advisory at Deutsche Bank, the trust’s financial adviser, said: “Space technology has a vital role to play in enabling a sustainable future, and SSIT’s portfolio companies address a range of sustainability challenges.”
She said the new responsible investment policy demonstrates the focus that Seraphim Space places on this "important topic”.
How the tool works
Under the new innovative responsible investment policy, Seraphim said each prospective portfolio company is taken through a due diligence process and reviewed against a series of mitigation strategies to understand any potential ESG risks and advise on how these can be monitored effectively and reduced immediately or over time.
The manager said the tool also helps to identify gaps where Seraphim Space can assist portfolio companies in developing new enhanced processes to reach their ESG objectives in their own operations and throughout their value and supply chains.
It will also help Seraphim Space to identify companies with the greatest potential business sustainability by incorporating the following three criteria:
1. Climate action: Working to minimise each portfolio company’s environmental impact and implement advanced net-zero solutions through strategic analysis of how the company can reduce emissions.
2. Promoting diversity and inclusion: Generate a policy framework that helps increase inclusion and diversity in each company's workplace through the policy of continued investment in the best talent, regardless of background, and commitment to continuous professional development.
3. Good governance: Implementing and maintaining suitable internal processes, procedures and standards supported by training to ensure the maintenance of suitably high standards of conduct and sufficient expertise in the deployment of companies’ policies.
“The policy framework will ensure all SSIT’s investments are aligned and mapped against the UN’s SDGs and fundamentally support their delivery and commitment to the targets of each of the 17 goals,” the manager said.