Responsible Investing Policy

Responsible Investing Policy

  • Our Responsible Investing (“RI”) policy is in place to ensure responsible and appropriate business practices in each part of the investment cycle, as well as at Frog Capital itself.
  • We view RI as both a responsibility to society, as well as an opportunity for value creation & protection for our investors and our portfolio companies. Good RI practice within Frog Capital, consideration of risk and opportunity screening pre-investment, and portfolio-wide engagement post-investment, enhances value and as a result drives higher returns for investors.
  • RI is integrated into our decision-making and investment strategy. Frog Capital is committed to creating value for its investors and see the focus on RI as aligned with this objective.
  • Our strategy avoids contentious industries, and is focused on primary investments for scaling businesses, which leads to job creation.
  • Through our formal board roles within our portfolio companies, we work to ensure that RI principles are adhered to and practical implementation is continually assessed against best practice.
  • All our companies should have a mission that has a meaningful purpose for society, as this investment thesis underpins sustainable value creation.
  • Our minimum standard, supported by the UN Global Compact principles, is that the business proposition of the potential investment can have no significant negative environmental and social impact and the executive team is willing to engage in constructive conversations on RI development.
  • We keep our RI, anti-bribery & corruption, and anti-money laundering policies up to date. We seek continual improvement by reviewing these policies’ effectiveness and implementation on a biennial basis.
  • At the firm level, our values, culture, governance processes and measurements are genuine, robust and continually improving from RI, ESG, equality and diversity perspectives.

Policy application

Pre-investment policy implementation

  • Frog Capital is building and managing a portfolio of companies that reflects our values and creates value for our investors. We seek to implement this policy pre-investment by ensuring that RI-related risks and opportunities are considered as part of our evaluation of the potential returns of any prospective investment.
  • We do so by integrating relevant RI factors in our due diligence metrics, such as assessing the portfolio company’s regulatory compliance, and understanding the background and reputation of current company principals and the beneficial owners.
  • We do not invest in any company that fails to meet the required environmental or social standards. We will not back a management team that does not recognise the importance of proper governance.

Post-investment policy implementation

  • Where appropriate, we monitor financial and non-financial performance for our underlying investments. We set clear expectations for our portfolio companies with regards to our RI policy and support our portfolio companies by providing guidance and tools to help them meet our expectations.
  • The board of directors and senior management of each portfolio company are responsible for achieving its business objectives. We actively encourage the management teams of each portfolio company to identify and manage any issues and integrate them amongst their business objectives.
  • We have a fourfold approach to integrating RI factors into our businesses.
    1. We determine the long-term industry goal and the industry’s license to grow.
    2. We determine the key material themes relevant to the industry and to the company, making sure we address only relevant topics.
    3. We determine a set of performance indicators appropriate for the size and maturity of the business and strive to make them as quantifiable as possible to promote accountability and objective progress measurement.
    4. Using these performance indicators, we engage with company management to discuss which improvement projects should be on the agenda for the short, mid, and long term.

UN Sustainable Development Goals

Every year since 2017, we have formally reviewed the portfolio company’s Investment theme against UNSDGs and their approach to business against ESG criteria.

Frog companies making a strong impact

Frog is not an impact investor. Our priority, first and foremost, is generating a repeatable, higher return than buyout, with less volatility than typical VCs. Nonetheless, Frog’s portfolio of innovative software companies clearly has meaningful investment themes as supported by analysis against the UNSDGs.

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