Sustainability risks are considered in investment selection, during the due diligence phase, as well as in ongoing management of portfolio companies, as set out in our ESG Policy. This is a priority for DFF because sustainability factors are likely to affect the long-term value of our portfolio companies, and thereby the value of our investments. Sustainability risk is defined by Article 2(22) of the Regulation as "an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of an investment".
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Sustainability risks include, but are not limited to:
- Environmental risks such as natural disasters affecting portfolio companies’ ability to operate;
- Social risks such as non-compliance with working conditions laws and regulations by a portfolio company; and
- Governance risks such as inadequate management or oversight of portfolio companies.

DFF does not consider the principal adverse impacts of investment decisions on sustainability factors to the extent that is required by Article 4(1) of the Regulation. Given the obligations contained in the Regulation (including the technical methodologies and data capture requirements this would reasonably entail) compliance is not assured among the different portfolio companies that DFF invests in. Nevertheless, with ongoing monitoring of our portfolio we aim to identify and limit potential adverse sustainability impacts on a best-efforts basis.

DFF is not required to have, and does not currently have, a remuneration policy. The requirement of SFDR Article 5 therefore does not apply. That being said, we aim to implement fair remuneration principles which are structured in a way that promotes effective risk management, discourages excessive risk-taking, and avoids potential conflicts of interest.

Each of the Funds is a financial product within the meaning of Article 6 of the Regulation. The Funds do not promote environmental or social characteristics within the meaning of Article 8, and do not have sustainable investment as their objective within the meaning of Article 9. Sustainability risks are integrated into the Funds' investment decisions as described under Article 3 above. Given the Funds' diversified portfolios of early-stage companies, DFF expects sustainability risks to have a limited impact on the returns of each Fund as a whole, although an individual portfolio company may be materially affected. The investments underlying the Funds do not take into account the EU criteria for environmentally sustainable economic activities.