Sustainability

Impact

We were born as the first Venture Philanthropy reality in Italy, we were the pioneers of impact investing in Europe and among the founding members of EVPA (European Venture Philanthropy Association). We measure the social impact generated by our investees through the annual monitoring of social KPIs defined together with the management team of the portfolio companies.

How we measure

SDG

Our investment team also verifies that target companies operate within the 17 Sustainable Development Goals (SDGs) promoted by the United Nations and, in during the due diligence phase, it ranks them according to their adherence to these goals.

PRI

Our membership in the network of signatories to the UN Principles of Responsible Investment (PRI) is further evidence of our commitment to respecting and promoting the principles of responsible finance and positive social and environmental impact. Each year, we publish on our website the score of the adherence of our procedures and activities to the PRI.

ESG

Finally, we have developed a methodology for measuring ESG impact at the level of the Management Company and its investee companies, with the support and certification of a leading independent auditing firm, at all stages of analysis and investment and divestment processes.

We continually strive to promote the adoption of ESG practices at our investee companies, beginning with the appointment of an internal ESG manager in the companies and within our team.

OLTRE IMPACT SGR SUSTAINABILITY DISCLOSURE COMPLIANT TO SFDR - EU REGULATION 2019/2088

Introduction

The objective of Regulation (EU) 2019/2088 is to strengthen the protection of the final investor, by improving disclosure with respect to attention to risks related to sustainability, in order to be able to more fully assess the risk of one's investment.

Impact Investing goes one step further, since in addition to not considering investment projects that can have negative effects on the environment and people, it proactively moves to seek investment projects that can have a positive impact on people's lives, the environment, and society.

Art 3, paragraph 1 of Regulation (EU) 2019/2088

"Policies on the integration of sustainability risks in investment decision-making processes"
(Publication on the website)

By "sustainability risk" we mean an environmental, social or governance event or condition that, if it occurs, could cause a significant negative impact on the value of the investment.

Oltre Impact SGR SpA - EuVeca Manager ("Oltre Impact" or the "Management Company") takes into account the sustainability risks in the investment decision-making process, analyzing in particular the risks and opportunities associated with ESG issues relevant to the company itself, with particular reference to the sector and the context in which it operates, through a careful and in-depth assessment of its positioning in the area of sustainability.

In this regard, the Company has prepared a pre-investment ESG checklist that is used by the Management Team in order to investigate the sustainability aspects relevant to the target Company and evaluate its positioning in terms of ESG, also by means of interviews with the Target management team.

During the compilation of the pre-investment Checklist, for each ESG area subject to analysis, the Management Team performs a qualitative analysis in terms of ESG and, on the basis of this, assigns a score on a scale from "low level" to " high level ".

Following the identification of the ESG risks and opportunities that have emerged as the most relevant in terms of scoring, the members of the Investment Team in charge for the Portfolio Company prepare a corrective action plan, the so-called "ESG Action Plan" together with the management of the Portfolio Company. This ESG Action Plan is divided into a set of qualitative-quantitative objectives with related actions and will be implemented during the investment period, on the basis of a reasonable time schedule. Oltre Impact, as an Impact Investing operator, promotes products with social impact objectives, promoting investments which, in addition to respecting the principle of "do not harm", generate a positive impact for all stakeholders of the company.

Art. 4, paragraph 1 of Regulation (EU) 2019/2088

"Disclosure on the main negative effects (PAI) on sustainability"

(Publication on the website - ad hoc section "adverse sustainability impacts not considered")

Oltre Impact SGR, with reference to the provisions of Regulation (EU) 2019/2088 Art. 4 (SFDR Regulation) relating to the disclosure on sustainability in the financial services sector, adopts its own methodology for measuring social impact and undertakes to implement policies that take into account the adverse impacts (PAI) of investment decisions on sustainability factors, based on the type of financial products it intends to make available.

With reference to the due diligence policies, as regards the negative effects (PAI) identified during the investment phase (ESG pre-investment checklist and ESG Action Plan), taking due account of the size, nature and scope of the Portfolio Companies, Oltre Impact SGR compiles a post-investment ESG checklist including possible additions to the indicators for monitoring purposes. This post-investment ESG checklist aims to measure the "KPIs" or sustainability indicators to which the adverse impact indicators (PAI) of investment decisions on sustainability factors are added, in line with the schemes envisaged by the Final Report on draft Regulatory Technical Standards (hereinafter RTS) soon to be published in its final version.

To date, the aforementioned KPIs have been identified on the basis of international reporting frameworks, such as the Sustainability Accounting Standards Board Standards (SASB) published by the Sustainability Accounting Standards Board and the Global Reporting Initiative Sustainability Reporting Standards (GRI Standards) published by Global Reporting Initiative (GRI) in 2016 and subsequent developments. The KPIs include both indicators common to all the Portfolio Companies (cross-portfolio KPIs) and indicators selected on the basis of company-specific KPIs.

The Management Team of the Management Company therefore encourages and promotes the adoption of ESG practices in the Portfolio Companies in relation to the operating sector, monitors the adoption and implementation of the aforementioned ESG Action Plan and the annual collection of the reported KPIs within the post-investment Checklist.

As the regulatory framework is still being defined with regard to the technical aspects, Oltre Impact SGR is adopting a gradual alignment approach to the SFDR Regulation, in order to integrate the indicators of the adverse impacts (PAI) of investment decisions on sustainability, in line with the schemes envisaged by the RTS.

Art. 10, paragraph 1 of Regulation (EU) 2019/2088

"Transparency on the promotion of environmental or social characteristics and of sustainable investments"

(Publication on the website - ad hoc section "Information relating to sustainability")

According to the provisions of EU Regulation 2088/2019 (hereinafter the "Regulation" or "SFDR") regarding financial products referred to in art. 9 of the same, "Oltre III" (the first Fund established and managed by Oltre Impact SGR) is an EuVeca closed-end Impact capital fund, reserved for qualified investors, specialized in impact investing to support the development and growth of SMEs and innovative startups. The Fund's objective is to invest in sectors where there are social needs: healthcare, education, job placement, environment, services that improve the quality of life.

Oltre III is a reserved fund, focused on the services sector, in particular healthcare, education, well-being, tourism and agriculture, where important opportunities exist as well as significant demand from consumers. In general, the services sector presents less risk compared to start-ups of product companies, because the delivery models can be modified based on the level of development of the company, also in terms of sustainability, by intervening on the KPIs of an environmental, social and governance nature. Oltre III, therefore, is a product with low volatility compared to the Impact Capital sector and with an attractive risk/return ratio.

Oltre III aims to proactively align the sustainability objectives of its subsidiaries with its framework for measuring the impact created each year and its evolution over time.

During the due diligence phase of an investment in a Social SME, the Management Company establishes ex ante the social impact objectives (“SIG” or “Social Impact Goals”), concurrently with the business plan of the target company. When completing the investment, for the purpose of continuous monitoring, these SIGs, in addition to the sustainability indicators, are periodically provided by the portfolio company.

To date, as there is no market index to use as a benchmark for calculating the overall social impact related to the sustainability of the Fund, the Management Company has developed its own methodological framework aimed at assessing the progress of the social performance of the entire portfolio.

The Management Company undertakes to measure the progress of the sustainability indicators and the achievement of the SIGs of the entire Portfolio Companies of the Fund, according to its own methodology, the Overall Social Impact Multiple calculated for each Social SME. The Fund's Social Impact Multiple is the weighted average of all the Social Impact Multiples per investment, taking into account the weighting assigned to each Social Impact Multiple. As an element of further commitment to achieve social impact, the Carried Interest of the aggregate Fund will be linked, at 70%, to the achievement of a Social Impact Multiple of the minimum Fund. With reference to the SFDR Regulation and the schemes provided for by the RTS, since the latter are still being defined, the Management Company will adopt a gradual approach of aligning both its methodological framework and disclosure information, following the schemes provided by the RTS.

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OLTRE II SICAF SPA SUSTAINABILITY DISCLOSURE COMPLIANT TO SFDR - EU REGULATION 2019/2088

Introduction

"Policies on the integration of sustainability risks in investment decision-making processes"

(Publication on the website)

By "sustainability risk" we mean an environmental, social or governance event or condition that, should it occur, could cause a significant negative impact to the value of the investment.

Oltre II Sicaf EuVeca SpA ("Oltre II" or the "SICAF"), an Impact Investing operator that promotes products with social impact objectives, investments that, in addition to respecting the principle of not causing harm ("do not harm”), generate a positive impact for all the company's stakeholders. The SICAF invests in companies operating in the sectors of healthcare, agriculture, sport, tourism, education, always maintaining an important focus on the world of services to the individual. All the companies invested in Oltre II make the most of new technologies that are however placed to service its social objective.

The SICAF adopts its own social impact measurement methodology in its investment process, in order to establish and monitor the social impact objectives relating to the Target companies over time.

However, it should be noted that the SICAF has practically completed both the Investment Period (deadline 22 April 2021) and the Subscription Period and is starting to manage the portfolio companies, with a view to their planned exit in the coming years. Therefore, on the basis of these considerations, the SICAF will not proceed with the integration of ESG risks within the investment process with reference to the Regulation (EU) 2019/2088 relating to the disclosure on policies for integrating sustainability risks in the decision-making processes relating to investments.

Art. 4, paragraph 1 of Regulation (EU) 2019/2088

"Disclosure on the main negative effects (PAI) for sustainability"

(Publication on the website - ad hoc section "adverse sustainability impacts not considered")

Oltre II, with reference to the provisions of Regulation (EU) 2019/2088 Art. 4 relating to disclosure on sustainability in the financial services sector, does not take into account the adverse impacts (PAI) of investment decisions on sustainability factors in the sense provided for by art. 4, paragraph 1. However, the SICAF adopts its own methodology for measuring social impact in its investment process, in order to establish and monitor over time the social impact objectives relative to the Target companies.

It should be noted that the SICAF has practically completed both the Investment Period (deadline 22 April 2021) and the Subscription Period and is starting to manage the portfolio companies with the view of their planned exit in the coming years. On the basis of these considerations, the SICAF will not proceed to consider the adverse impacts, in the sense provided for by the Regulation (EU) 2019/2088 and related document "Regulatory Technical Standard" (or also "RTS"), containing the technical regulatory standards, which are inter alia still awaiting final approval by the European Parliament.

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