ESG Policy

As a venture capital firm committed to contributing to a sustainable future, we partner with entrepreneurs who are pioneering transformative concepts that can dramatically improve the way we live in. Our belief is that the enterprises of the future must be financial successes while also acting as trailblazers for positive change. This document outlines our Environmental, Social, and Governance (ESG) policy, reflecting our commitment to these principles.

1. Exclusion Criteria

To ensure our investments align with our values. We do not invest in companies engaged in the following activities (See Appendix 1 for Full List)

Production or trade of products or services deemed illegal under host country laws, regulations, or international conventions and agreements.
Involvement in the production of fossil fuels, including unconventional extraction methods such as oil sands and deep-sea drilling in particularly sensitive areas.
Production or trade in tobacco, weapons/munition, pesticides/herbicides (subject to international phase-outs/bans), sex work, pornography, gambling, or casinos, including companies deriving more than five percent of total sales from these products.

Additionally, we exclude companies whose:

Founders or senior team members have been involved in harassment, discrimination, or bullying.
Compliance with country of operation legislation regarding human rights, the environment, anti-corruption, or labor laws is lacking.
Products, services, or business models exploit certain demographics or at-risk groups.

2. Sourcing and Pipeline Management

We are committed to maintain an accessible and inclusive application process.
Our communications, both on our website and in written forms, are crafted to be accessible and gender-inclusive.

3. ESG Standards in Investment

E&S Requirement Declaration (See Appendix 2)*: Prior to any investment, we collect Environmental and Social (E&S) information from potential portfolio companies. This step is crucial to ensure we do not inadvertently support businesses contributing to environmental destruction, and to verify that these companies comply with ESG regulations in their respective countries and are not part of industries we avoid.
ESGVC Reporting Template: LAUNCHub is a data-driven VC firm and therefore we’ve chosen to collaborates with ESGVC to help us benchmark our and our portfolio companies’ ESG progress over time. We encourage founders to measure, track and improve their ESG related efforts and we commit to work with them and help them implement their own policies and best practices like the ESGVC Framework.*

4. Empowering Diversity and Inclusion

Balanced Team: We care about working in a diverse team and providing an inclusive working environment.
Support for Female Founders: We support female entrepreneurs, with several companies in our portfolio founded and led by women.

5. Operationalizing ESG Internally

Our ESG principles extend to our internal operations, applying the same considerations and standards to ourselves as we do to our portfolio companies.

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*The ESGVC framework is designed to provide a structured and transparent way for companies to benchmark and track their progress in various ESG aspects. It focuses on a wide range of indicators, from environmental stewardship and social impact to governance and ethical business practices. The framework encourages companies to adopt sustainable practices, improve their impact on society, and govern themselves with integrity and transparency.

*The E&S requirement declarations will include as minimum:

Excluded Activities and Excluded Sectors: A list of Excluded Sectors and Excluded Activities as well as warranties, that the Portfolio Companies and/or any of their affiliates shall not engage in Excluded Activities and shall not operate in Excluded Sectors;
A declared consent by the Portfolio Companies that they shall be re-evaluated against the list of Excluded Activates with every follow-on investment made by the Fund as a minimum;
Compliance with the respective E&S legislation: Representations and warranties by the Portfolio Companies that they shall not breach any E&S Requirements or regulations and that all breaches of E&S Requirements and laws have been and shall be disclosed to the Fund;
E&S Action Plan: Remedies and steps, in case of any noncompliance with the Fund E&S Policy, that will close the gaps against the E&S Requirements over a reasonable timeframe but in any case without delay;
Information Access: Rights to access relevant E&S information in Portfolio Companies;
Noncompliance consequences: an entitlement of the Fund to withdraw from any Portfolio Company, in the event that the Portfolio Company has not provided truthful information to the Fund in regard to the above listed E&S Requirement and/or has failed to implement the E&S Action Plan.

The Fund is committed to keeping the ESG Policy up to date by undertaking regular reviews and involving relevant employees in the review of such Policy.

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APPENDIX 1 - List of Excluded Activities and Sectors

The Portfolio Company and/or any of its affiliates has not, does not and shall not perform any of the following activities (Excluded Activities) and shall operate in any of the following sectors (Excluded Sectors):

a. Production or trade in any product or activity deemed illegal under host country laws or regulations or international conventions and agreements, or subject to international bans, such as pharmaceuticals, pesticides/herbicides, ozone depleting substances, PCBs, wildlife or products regulated under the Convention on International Trade in Endangered Species (CITES) of Wild Fauna and Flora; b. Production or trade in weapons and munitions; c. Production or trade in alcoholic beverages (excluding beer and wine); d. Production or trade in tobacco; e. Gambling, casinos and equivalent enterprises; f. Production or trade in radioactive materials. This does not apply to the purchase of medical equipment, quality control (measurement) equipment and any equipment where the radioactive source is trivial and/or adequately shielded; g. Production or trade in unbonded asbestos fibers. This does not apply to purchase and use of bonded asbestos cement sheeting where the asbestos content is less than 20%; h. Drift net fishing in the marine environment using nets in excess of 2.5 km in length; i. Production or activities involving harmful or exploitative forms of forced labor/harmful child labor, where forced labor means all work or service, not voluntarily performed, that is extracted from an individual under threat of force or penalty and harmful child labor means the employment of children that is economically exploitive, or is likely to be hazardous to, or to interfere with, the child’s education, or to be

harmful to the child’s health, or physical, mental, spiritual, moral, or social development; j. Commercial logging operations for use in primary tropical moist forest; k. Production or trade in wood or other forestry products other than from sustainably managed forests; l. Production, trade, storage, or transport of significant volumes of hazardous chemicals, or commercial scale usage of hazardous chemicals. Hazardous chemicals include gasoline, kerosene, and other petroleum products; m. Production or activities that impinge on the lands owned, or claimed under adjudication, by Indigenous Peoples (as defined in Standard 7 of the Performance Standards of the International Finance Corporation of the World Bank Group), without full documented consent of such peoples.

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APPENDIX 2 - E&S DECLARATION

New Policy: February 2024