Droia was ingrained from the start by a mission to save patient lives. As a dedicated life science investor, we put a strong emphasis on our responsibilities towards society, including those relating to environmental, social and governance (ESG) matters. We strongly believe that by doing good for patients, we will ultimately do well for all our stakeholders. We observe the UN Sustainable Development Goals (SDGs) as a guideline for our investments.
ESG Disclosures
In life sciences, SDG Goals 3 (“Good Health and Well-Being”) and 9 (“Industry, Innovation and Infrastructure”) are obvious and ubiquitous. However, as we continuously endeavor to build companies for the future, we also hold our investments to the highest standards regarding the other relevant SDG goals, in particular Goals 4 (“Quality Education”), 5 (“Gender Equality”), and 8 (“Decent Work and Economic Growth”). By investing in and supporting drug development companies, and thereby stimulating and fostering innovation and groundbreaking scientific research, we are actively contributing to achieving the UN Health SDG and a sustainable future.
Rather than being just a topic in our investment process, ESG is fully integrated in the way we assess investments and govern our companies. In the markets where we operate, we believe ESG is more and more a hard requirement for success, and we will not tolerate any mishaps which could undermine the future value of our investments.
We invest in young companies with small, highly educated teams working in labs and offices. They focus on R&D, and only rarely encompass any production activities. As such, traditional environmental ESG factors are of lesser impact on our portfolio. Social and governance ESG factors are all the more important in these high stakes, high pressure environments, and as such feature prominently in our investment decisions and company builds.
Focus on innovation, safe and ethical drug development, equality and diversity, and effective corporate governance are our main attention points when assessing ESG factors of biotech companies. Highly innovative companies are more likely to positively contribute to the UN Health SDG. Safety and ethical conduct, in the labs and hospitals, are key in every stage of the drug development process for biotech companies to become successful. Full equality and enriching diversity within teams and boards contribute to attracting and retaining the best people as well as fostering innovative insights. The quality of corporate governance is crucial in these fast-growing companies with ever evolving teams, collaborators, management, board members, investor syndicates and industry partners.
As a consequence, we shall only invest in innovative companies with high ethical standards and transparent and sound governance, and will monitor and steer portfolio companies in the right directions during our discussions with management and boards.
While working to the highest ESG standards in everything we do and duly considering the impact of investment decisions on sustainability factors, Droia is currently not a compliant financial market participant (FMP) within the meaning of article 4 of the Regulation (EU) no. 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (SFDR). While well intended, we believe that the SFDR prescriptions currently do not adequately capture the relevant ESG factors for R&D oriented biotech companies and are not practically implementable for young companies who do not employ extensive compliance departments. We intend to opt in as a compliant FMP when there is a clear and practical framework established that better responds to our ESG goals as outlined above.