How to Position Your (Climate) Tech Startup for Article 9 VC Funds

If you're building a climate tech startup in Europe, chances are you've already heard of Article 9 funds — the so-called "dark green" funds governed by the EU Sustainable Finance Disclosure Regulation (SFDR). These funds don't just want sustainability claims, they require measurable sustainability outcomes. To be eligible for this kind of funding, your startup must show regulatory alignment, particularly around the do no significant harm (DNSH) principle, robust sustainable investment reporting, and concrete climate impact metrics.

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As Climentum Capital put it in their primer, "Article 9 funds are the most suitable instrument to effectively address climate change while generating exceptional returns." Planet A Ventures adds that SFDR has been "a rollercoaster", but also a needed foundation for building trust between funds, founders, and LPs. This guide brings together what both funds have learned in practice, along with anonymised founder insights.

And the timing matters. As 60 European investors under the #UnitedforImpact initiative have recently urged, the EU must step up its ambition to provide clarity and priority for impact investing. Including better SFDR definitions, streamlined SME disclosures, and a new category for products with measurable positive outcomes.

1. Quantify Impact Like You Mean It

Article 9 funds are required to align their primary investment objective with at least one of the six environmental objectives of the European Union, such as climate change mitigation, adaptation, circularity, or biodiversity. At Climentum, for example, portfolio companies must:

• Deliver at least 50% lower carbon emissions compared to the incumbent
• Show potential to avoid >100,000 tCO₂e by 2032
• Aim for >100 MtCO₂e at full scale by 2050

✔️ Use models like Project FRAME to estimate avoided emissions
✔️ Anchor your claims in LCA principles, even if directional
✔️ Build out your impact logic to pass Article 9 fund due diligence

Avoided emissions must be modelled against a business-as-usual baseline and benchmarked to global climate pathways. Think in systems, not just per-unit benefits.

Planet A stresses that impact KPIs must be investor-grade, auditable, and regularly updated. Even in a fast-changing tech stack.

2. Get DNSH Right Early On

The DNSH principle ("Do No Significant Harm") is non-negotiable. Article 9 funds must demonstrate that portfolio companies do not harm other environmental objectives, such as biodiversity, air, water, land, or marine ecosystems. Climentum applies specific DNSH thresholds and expects portfolio companies to remain within them.

How to prepare:

• Fill in an ESG questionnaire for companies that flags risks like resource extraction, water usage, or poor labour conditions
• Document how you mitigate each DNSH issue in a one-pager
• Embed DNSH into your design and supply chain choices early

For more, see Reporting21's breakdown of DNSH vs impact funds.

Planet A recommends integrating DNSH from the first tech sprint, not bolting it on after the pitch deck.

As a generalist fund, Project A’s approach to ESG is intentionally founder-friendly. They frame early ESG not as a burden but as a “thought-provoking conversation about long- and short-term value creation.” Treat DNSH the same way. It’s not about passing a test, but showing you’re thinking holistically about harm and trade-offs.

3. Align with the EU Taxonomy - But Don't Stress Too Early

Although taxonomy regulation and SFDR are separate, Article 9 funds often guide their portfolios toward future alignment with the taxonomy.

Climentum's approach: "SFDR feeds into the Taxonomy. Article 9 funds that invest in early-stage companies can help them achieve Taxonomy Alignment when relevant."

Startups can:

• Map their business to the taxonomy categories for climate mitigation
• Flag gaps to be closed over time (e.g. via LCA, third-party screening)
• See alignment as a journey, not a prerequisite

🧭 Explore more taxonomy guidance at the official European Union website.

Planet A notes that while many early-stage startups aren't fully Taxonomy-aligned yet, tracking towards it helps build credibility and prepare for scale-up financing.

4. Build Governance Fit for Scrutiny

The governance bar simply is higher for Article 9-aligned startups. You'll need to show:

• A person responsible for climate governance indicators
• Clear policies to avoid harm (e.g. via an exclusions policy or whistleblower protection)
• Willingness to report on ESG progress

Climentum's "Good Governance Policy" includes standards around transparency, compliance, and ethical practices. Even early-stage founders should reflect this in team structure, incentives, and reporting.

Planet A points to evolving expectations: from founder-led ESG policies at Seed to formalised ESG tracking tools at Series A.

Some generalist VCs - like Project A - already include ESG governance expectations in their term sheets, including commitments to the UN Global Compact (UNGC) and light-touch onboarding checklists, but there is still a gap to an Article 9 fund, as they detail in their own ESG report:

If you’ve raised from such funds, you’re already familiar with the baseline. Article 9 funds simply take this to the next level: from checklist to compliance system, from intent to auditable execution.

See also: Why startup governance can be your moat.

Compare: Article 8 vs. Article 9 ESG Onboarding

Not all ESG expectations are created equal. If you’ve previously raised from Article 8 (“light green”) funds or generalist VCs with ESG policies (like Project A), you’ve likely encountered early signals like ESG clauses or onboarding templates. Article 9 funds, however, raise the bar, especially when it comes to regulatory alignment and proof of impact.

Takeaway: If you’ve onboarded with an Article 8 fund or generalist VC like Project A, you’re already halfway there — but Article 9 funding requires earlier documentation, stronger alignment with EU sustainability goals, and scalable governance structures.

What’s Next for Article 9?

As the SFDR framework evolves, Article 9 funds are poised to grow significantly — but challenges remain. Regulatory crackdowns on greenwashing, combined with stronger investor demand for accountability, will likely shift capital away from vague ESG claims and toward measurable impact.

Key Trends to Watch:

• Stricter enforcement: ESMA’s 2024 fund name rules are pushing out non-compliant “ESG” funds — freeing capital for Article 9 strategies that meet higher standards.
• SFDR 2.0 incoming: Proposed reforms aim to transform Article 8/9 into clearer labels with binding criteria and better alignment with EU Taxonomy and CSRD.
• Investor preferences: LPs are increasingly favouring funds with traceable SDG contributions — with Article 9 AUM already topping €300B and expected to double by 2030.

Remaining Challenges:

• Startup compliance costs: Lifecycle assessments, audits, and governance systems are still costly and complex to build early.
• Thematic misfits: Some Article 9 strategies still misalign with SDG logic, creating friction in performance and reporting.

Outlook:

By 2030, Article 9 is projected to represent 25–30% of EU ESG fund AUM (up from 12% in 2023) driven by regulatory clarity and investor appetite for impact transparency.

For startups: Aligning early with Article 9 not only opens doors to committed capital, it also future-proofs your company as SFDR, CSRD, and EU Taxonomy begin to harmonise into a single, powerful market signal.

5. Create Investor-Grade Documentation

By the time you approach an Article 9 fund, you should have:

📌 Bonus: Some funds like Climentum run dual carry models — where financial returns are tied to impact targets (e.g. 1 MtCO₂e/year avoided at portfolio level). Your documentation directly affects fundraising success.

Planet A shares that having these basics in place up front can reduce due diligence friction and build LP confidence earlier.

Even simple ESG policies — like the ESG clause requested in Project A’s term sheets — are a good starting point. The key difference with Article 9 funds is the need to link governance and emissions claims into your core metrics and funding narrative.

6. Know the Stages of SFDR Alignment

Expectations evolve with your stage:

For more: Fundraising advice for climate tech startups.

Conclusion: Align with Ambition, Not Just Regulation

Climentum rightly notes: "Funds will largely behave as their numbers imply." Planet A adds that Article 9 pushes everyone to raise the bar, even if it still feels like a moving target.

And recently, with the #UnitedforImpact coalition calling for clearer definitions, better SME treatment under SFDR, and a new impact investing category altogether — it's clear that founders who act early will have a head start.

Article 9 may feel like a compliance burden. But done right, it sharpens strategy, improves governance, and strengthens your startup's odds of success. The key is clarity: on impact, on harm, on execution. As more generalist VCs like Project A raise their ESG expectations, and as coalitions like #UnitedforImpact push for clearer impact investing standards, aligning early with Article 9 principles puts you ahead of the curve — not behind it.

📌 Dive deeper into our CBAM explainer to see how other EU legislation connects to startup compliance.

Need expert guidance on Article 9 alignment?

Positioning your startup for Article 9 VC funding doesn’t have to be overwhelming — but it does require structure, focus, and a bit of translation between your impact vision and what investors need to see on paper.

I help climate tech founders navigate that process: from avoided emissions modelling to investor-grade ESG documentation, from DNSH mapping to scalable governance. Whether you're pre-Seed or gearing up for a Series A with SFDR-aligned funds, I can help you get it right early.

Let’s talk about how to make your climate impact investable — without the bureaucracy getting in the way of your momentum.