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:

  1. 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;
  2. 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;
  3. 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;
  4. 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;
  5. Information Access: Rights to access relevant E&S information in Portfolio Companies;
  6. 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.

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.

APPENDIX 2 - E&S DECLARATION

LAUNCHub Fund II Coöperatief U.A. (the "Fund")

Company name: Company address: Reg. number: Country of registration: Representative: hereinafter referred to as the "Company" The representative of the Company hereby expressly and unconditionally represents, warrants and undertakes to the Fund on behalf of the Company as of the Effective date below that:

  1. The Company and/or any of its affiliates has not, does not and shall not perform any of the following activities, any and each of them considered to be a violation of the Environmental and Social (“E&S”) requirements and regulations: 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.
  2. The Company and/or any of its affiliates has not, does not and shall not breach any legislative requirements or regulations, including any E&S requirements or regulations, imposed by the legislation, applicable in the country of registration of the Company and the countries of registration of any Company affiliates;
  3. At any moment following the Effective Date, the Company shall provide upon requirement by the Fund with additional information, documentation and cooperation in order to verify or elaborate the statements in this declaration. The fund should have access to E&S information and the right to conduct site visits. The Company is aware and accepts that it shall be re-evaluated by the Fund against the list of excluded activities under par. 1 and its E&S compliance in general with regard to every follow-on investment made by the Fund;
  4. In the event that the Company and/or any of its affiliates starts performing or is in any way involved in any of the activities listed in par. 1 and/or in any activities which may be considered a breach of legislative requirements or regulations as described in par. 2, the Company shall immediately: a. Inform the Fund and provide all relevant details and relevant documentation on the performed activities as may be required by the Fund; b. Develop a strategy and E&S action plan to the satisfaction of the Fund for mitigation of the risks involved – which closes the gaps against the E&S requirements over a reasonable timeframe that may involve termination of any activities listed in par. 1 and/or in any activities which may be considered a breach of legislative requirements or regulations as described in par. 2; c. Execute without any delay such a strategy and E&S action plan and perform all required legal and factual actions to the effect that any and all violations of the applicable law shall be terminated.
  5. In the event the Company has not provided truthful information under par. 1 or 2 or the Company fails to comply with its obligations under par. 3 or 4, the Fund shall be entitled to terminate any contractual obligations with the Company and receive the amount of its investment as liquidated damages, compensation and/or a default payment, whichever is executable under the applicable law.
  6. This declaration has been duly executed and constitutes a legal, valid and binding statement of the Company. All actions necessary to authorize the execution and delivery by the Company of this declaration have been taken and are in accordance with applicable laws. Any consent or approval required for the execution and delivery hereof, as well as the performance by the Company of any statement or undertaking referred hereto, has been granted, and does not, and will not contravene or constitute a default under applicable laws or under any statutory document of the Company, or under any other agreement to which the Company is a party.
  7. The Company shall identify and hold harmless the Fund and its Fund manager against any claims and damages arising out of, based upon or resulting from a misrepresentation or a breach of any representation or warranty contained herein and any and all actions, suits, proceedings, claims, liabilities, demands, assessments, judgements, costs and expenses including attorneys’ fees related to any of the foregoing or such indemnification.
  8. Post Investment
  • Within 12 months following the Closing, the Company is required to adopt a Environmental, Social, and Governance (ESG) policy.
  • For the annual ESG reports, the Company is encouraged to use the ESGVC Framework as a guideline, ensuring consistency and relevance in reporting. LANCHub Ventures is committed to supporting the Company’s efforts wherever possible.
  • The Company should aim for ongoing enhancement of its ESG practices. This entails critically evaluating areas for growth identified in its annual ESG reports and taking action to address them.

Submission Timeline for Reports:

  • The first annual ESG report must be submitted to investors no later than 12 months after the initial investment.
  • Subsequent reports and E&S declaration should be submitted no more than 90 days following the close of each fiscal year.
  • This reporting ensures that the Company remains committed to its ESG goals by adopting relevant policies, regularly reporting on its efforts, and striving for continuous improvement in alignment with the ESGVC Framework.

NOW, THEREFORE, in consideration of the foregoing recitals, representations and warranties, the Company executes this declaration on the Effective Date:

City, Country: Effective Date: Company name: Name of representative: Position: Signature: