The second pillar of our ESG strategy, the B Corp certification, helps us safeguard our mission and adopt market best practice.
Daphni obtained a B corp score of 105.8. The minimum score required to be certified and maintain certification is 80.
We are proud to have achieved B Corp certification in September 2022, with a score of 105.8, well above the required threshold of 80. This result is a testament to our efforts over several years to implement consistent and effective practices to establish a genuine ESG requirement over the long term. 2023 was a year of consolidation and resilience, as we continued to apply the policies defined and formalised in previous years.
2024 will be the year of strengthening, as we will carry out a self-assessment against the B Corp standards, the old ones, but also taking into account the new ones, freshly released and not live yet. We will go one step further with the aim of improving our score in the recertification process in 2025.
BUILD DA CITY FOR GOOD, more than a mantra
Since our creation in 2015, we like to say that we invest in founders willing to BUILD DA CITY FOR GOOD. At that time, we were already strongly convinced that entrepreneurs were part of the ones who could tackle some of the century’s biggest issues and have a strong impact on the society, the environment, the next generation and the world as a whole!
Let’s remind you of our investment thesis! But first be aware that for us an investment strategy is more than defining the perimeter of a playground or the rules of investments. It’s a philosophy that we follow to build a better world. We invest in “Tech for good” start-ups with a European DNA and the ambition to conquer global markets.
To do so, we are supported by the daphnipolis, a highly experienced community of over 300 entrepreneurs, executives, academics, artists and experts who interact with daphni’s portfolio entrepreneurs and our entire team through our proprietary digital platform. This digital tool ensures complete transparency, increases our efficiency and allows us to involve our community members in all stages of our value chain (sourcing, selection, coaching, co-investment, portfolio support)
Today, with €500M+ under management we are proud to see that this sacred mantra BUILD DA CITY FOR GOOD leads us pretty well toward our goal when you look at our portfolio: Back Market (refurbishment), Geev (circular economy), Hubcycle (upcycling), Goshaba (inclusion), Comet and Witco (future of work), Blablacar (sharing economy), Typlogy and Agua Blanca (responsible consumption)… A track record built up over the last 7 years, which further legitimizes our action in ESG.
One business case illustrating our Tech For Good strategy
Our investment in Back Market is a great example of our strategy in the ESG space and our broad and solid track record built during the 7 last years related to it. Back Market allows customers to buy quality secured, refurbished electronic products. The company connects quality secured refurbishers and customers via a marketplace streamlining market relationships and increasing trust. The service enables refurbishers to do what they do best, instead of wasting time on selling off stock. It also improves refurbishers sourcing capabilities. This, simultaneously as the company facilitates the process of making sustainable purchasing decisions for customers by making use of existing electronics, without compromising on quality.
We are very proud to have been in 2017, the first VC to invest in the company and support the evangelization of the second-hand market. It sounds natural now, but at the time of our investment this market and usage were not popular and attractive. Being the category leader in the world of refurbished electronic devices, Back Market business has an amazing positive climate impact. Its value proposition leverages the specific European DNA around awareness of climate issues, circular economy supporters and new usages builders. Our thesis is to promote and support competitive advantage of Europe to create worldwide category leaders.
The Back Market business and raison d’être fits perfectly with our strategy: new usage, tech for good, huge market, global business. 6 years after our first investment, Back Market surfs on an exponential growth, supported by several rounds of fundraising with prestigious investors (including Goldman Sachs and General Atlantics) and became the second biggest French unicorn in value.
More generally, our action of building da city for good is naturally also a driver and a concern inside our organization and we are going to tell you more about it. Building on daphni’s actions and commitments, we strengthen our impact through our investments.
OUR ACTIONS INSIDE OUR ORGANIZATION TO BUILD DA CITY FOR GOOD
1. Our duty: to make sure that our action is coherent with our strategy
Collaboration & solidarity are essentials for a sustainable and inclusive world. That’s why in 2019, the non-profit Leaders For Climate Action (LFCA) has convinced us and 50+ European VC funds to add a “sustainability clause” to our term sheets. This obliges portfolio companies to improve on sustainability metrics, such as measuring and reducing their carbon footprint. We also shared their vision saying that unilateral action is insufficient given the scale of the climate challenge.We need to gather people from all over the world to share knowledge, collaborate on initiatives, and empower others! This is our mindset since day 1 at daphni, community & support from others is key to be stronger, smarter, more powerful and more efficient!
Our commitment to act against global warming doesn’t stop there. On top of be a signatory of the UN-PRI, we have undertaken to become a member of the Climate Act since the launch in 2021, a collective of +300 companies committed to measure, share and reduce their carbon footprints.
More and more companies are taking part in this movement, and we are glad to see that it also extends in the French Tech120 and Next40 rankings. Jean-Noel Barrot announced it a few weeks ago: “The 120 startups that will be selected for Next 120/40 will have to commit to doing their scope 1, 2 and 3 carbon footprint by 2023.“
2. A mission-driven company to affirm our beliefs
As mutants, we cannot be in a stationary mode and we need to always question ourselves about what we can do better. In 2020, we decided to become accountable for our statements in front of everyone, not only our clients.
The first step was to become a mission-driven company (“société à mission” in french), and that’s what we did in 2021. To remind you, a mission-driven company is when commercial companies set one or more social or environmental objectives.
This status is specific to French companies, and in order to obtain it, they must:
- define their purpose (“raison d’être” in french) to express their societal mission
- modify their statutes by integrating their purpose as well as the social and environmental objectives they have set themselves to follow
- establish a Mission Monitoring Committee
In September 2022, 628 companies were designated as mission-driven companies, and we are part of them!
Then, with the objective to become a mission-driven company, we had to establish daphni’s purpose in our statutes, and here is how we defined it:
“Aware of our responsibility towards future generations, the Company’s purpose is to focus its commitments and investments on fostering a better and more sustainable world, accelerated by technology. In order to achieve its mission, and as part of its work, the Company pursues the following social and environmental goals:
- To provide financial means and assistance to the companies we support, in order to actively participate in the transition towards a more sustainable world.
- To apply the environmental and social standards that guide our purpose to ourselves first.
- To communicate and share with our stakeholders and communities the ethical, social and environmental values that drive us.
As part of this approach, the Company is committed to considering the social, societal and environmental consequences of its decisions on all the Company’s stakeholders, and the consequences of its decisions on the environment.”
3. Proud of our Mission Monitoring Committee and its trust
To challenge us, to recommend best practices, to be better and better in our mission, to monitor our commitments, we are supported by a Mission Monitoring Committee of five members with very different profiles
Get ready for the presentation, they all have an impressive background:
4. Our public annual ESG report to present our modest contribution to build a better world
To summarize all of this information about our ESG actions, purpose and investment methodology in daphni, we published some months ago the first Annual ESG report 2021.
If you want to know more about our dedications, our mantra “Build da city for Good”, our “Tech for good” investment approach and a lot more, the report is published on our website and available here
5.Gratitude of B Corp to encourage us to always do better
Here we are, the final and most important part: the B-Corp certification!
As a reminder, the B Corp certification(also known as B Corporation certification or B Lab certification) awards companies that meet environmental and social requirements, along with governance and public accountability criteria. The name is an abbreviation of “Benefit Corporation”, which refers to a company that has a on the world while being profitable.
To obtain this certification, each company has to answer a set of questions, whose number evolves (262 questions for us), divided in 6 sub-categories covering all the stakeholders of the management company:
- Governance of the management company
- Employee well-being
- The company’s actions in the communities in which it operates
- The company’s consideration for the environment
- The relationship between the management company and its holdings
- Sensitive information, and possible exclusion criteria
After having passed this assessment in May 2021 and entered the verification phase in February 2022, daphni received the validation of the B-Corp certification in September!
daphni obtained a score of 105.8. The minimum score required to be certified and maintain certification is 80.
We are very proud to be part of the 200+ French companies and 4000+ >companies worldwide. In October, the milestone of 1000 European companies was reached! This certification is in line with our Build da city for good identity and mission that we have followed since the creation of daphni. The label lasts 3 years and the standards are always evolving to become more and more exigent. To keep this certification, efforts continue and it’s a long-term work.
THIS IS ONLY THE BEGINNING
If we implement all these actions and if we question ourselves on CSR subjects, it’s because we understand that it’s a necessary part in the current environment.
By initiating an ESG approach in all our actions, we want to accelerate the change required internally as well as by supporting role model startups that through their innovation change the world. We are only a small link in the chain but convinced that it is all together that we will make it happen.
