SFDR.

This statement is provided in accordance with the Sustainable Finance Disclosure Regulation (“SFDR”), Regulation (EU) 2019/2088 of the European Parliament and of the Council. It outlines how INCEPTION FUND and its affiliates integrate sustainability risks into the investment process.

Integration of Sustainability Risks

INCEPTION FUND incorporates the assessment of sustainability risks into its investment decision-making process. Sustainability risks are defined under SFDR as environmental, social, or governance (“ESG”) events or conditions that, if they occur, could cause a material adverse impact on the value of an investment.

These risks are considered and evaluated during the initial screening and due diligence of prospective investments, using a standardized internal ESG reference framework. Where material risks are identified, the INCEPTION FUND investment team assess potential mitigations or structural responses.

INCEPTION FUND retains the full discretion to proceed or decline an investment based on the outcome of the sustainability risk assessment. Alternatively, in cases where investment proceeds despite the presence of such risks, Inception Fund may work constructively with the company to monitor, reduce, and remediate identified risk over time.

INCEPTION FUND believes that integrating ESG factors aligns with its fiduciary duty and enhances long-term value creation. ESG criteria are used as indicators of both potential operational risk and executional excellence. 

Product Classification

INCEPTION FUND does not state a clear target objective relation to sustainability for the overall funds under management nor does it market any of its funds as Article 9 (“sustainable investment”) products. However, Inception Seed Opportunity I AB takes into account environmental and/or social characteristics in its investment process and is therefore considered as an Article 8 SFDR (“light green”) Fund.

 

Principal Adverse Impacts (PAI) Statement

Inception Seed Opportunity I AB prioritizes consideration of adverse sustainability impacts, with a strong social focus. Key indicators include human capital, diversity, and governance. Where material adverse impacts are identified, mitigation actions are taken via active engagement and exclusion policies.

 

ESG Screening and Exclusion Policy

INCEPTION FUND applies an explicit exclusion framework and will not invest in companies directly or indirectly involved in the following sectors or activities,

  • Alcohol

  • Tobacco

  • Weapons

  • Development or production of nuclear weapon programs

  • Coal, oil and gas exploration or production

  • Gambling

  • Pornography

  • Investment to achieve the reduction of greenhouse gas emissions from activities listed in Annex I to Directive 2003/87/EC

  • Investment in airport infrastructure unless related to environmental protection or accompanied by investment necessary to mitigate or reduce its negative environmental impact

 

Do No Significant Harm (DNSH)

INCEPTION FUND avoids investments that cause significant environmental or social harm by applying exclusion criteria and screening during due diligence to ensure alignment with our social objectives. A complete list of prohibited investments is presented in schedule 1.1.

 

Ongoing Monitoring and Engagement

Inception Seed Opportunity I AB regularly monitors ESG performance across its portfolio. The Fund tracks social performance through board experience, team diversity, and founder impact. These indicators are monitored during initial due diligence and ongoing portfolio reviews and quarterly portfolio company reporting.

If issues are identified related to ESG, including signs of inappropriate development or potential PAIs, Inception Fund may take one or more of the following actions,

  • Request clarification or supporting information

  • Recommend operational changes or improved disclosure practices

  • Monitor the development and response over time through follow-up engagements with the portfolio company,

  • In cases of significant ESG breach, require prompt remediation by the portfolio company

We support our portfolio companies through active board engagement and strategic guidance to strengthen governance and social outcomes.

 

Limitations

As an early-stage VC, public ESG data is often limited. We emphasize transparency about these limitations and strive to improve data collection over time.

Forward Outlook

INCEPTION FUND acknowledges that SFDR and its accompanying Regulatory Technical Standards remain evolving frameworks with areas of legal uncertainty and the administrative practice continues to develop, particularly in the context of early-stage venture capital.

INCEPTION FUND commits to,

  • Actively monitor regulatory updates, industry guidance, and data availability

  • Review ESG policies, processes, and sustainability disclosures as relevant standards mature

  • Reassessing its position on product classification, and reporting frameworks as data quality improves accordingly

INCEPTION FUND does not encourage excessive risk-taking by its funds or their underlying portfolio companies. In the event of serious ESG breaches, INCEPTION FUND will require immediate rectification by the portfolio company.