ESG Policy

‌Purpose

Eir Ventures is committed to promoting environmental, social, and governance (ESG) principles in its investment decisions and across its portfolio companies. Eir Ventures aims to deliver long-term value to investors while contributing positively to society and the environment, in alignment with the UN principles of responsible investment (UN-PRI) and the requirements of Regulation (EU) 2019/2088 (SFDR).

‌Scope

This ESG policy applies to all investment activities, the management company and the portfolio companies of Eir Ventures, covering the entire investment lifecycle from due diligence to ownership and exit. It includes Eir Ventures’ approach to environmental and social risk management, governance practices, and stakeholder engagement.

Eir Ventures is committed to promoting the following environmental, social, and governance characteristics in line with Article 8 of Regulation (EU) 2019/2088 (SFDR):

‌Contribution to Sustainable Development Goals (SDGs):

Eir Ventures supports SDG 3 (Good Health and Well-being), SDG 9 (Industry, Innovation, and Infrastructure), SDG 8: (Decent Work and Economic Growth) and SDG 17 (Partnerships for the Goals) by targeting portfolio companies within the life sciences field that provide products or services enhancing human health or advancing scientific processes.

Example of KPI:

KPI: Share of investments contributing to specific SDGs (Health, Industry Innovation, and Partnerships).
Goal: 100% of portfolio companies contribute to at least one of these SDGs.

‌Environmental Characteristics‌

Environmental awareness and practice:

Eir Ventures promotes an appropriate level of environmental awareness and practices among portfolio companies, ensuring compliance with current environmental laws to minimize adverse effects.

Example of KPI:

KPI: Number of violations of environmental regulations.
Goal: 0 reported environmental violations among portfolio companies annually.

Focus areas include:

Energy efficiency: Promoting the efficient use of energy in operations.
Sound resource management: Encouraging responsible management of natural resources across portfolio companies.
Reducing greenhouse gas emissions: Supporting portfolio companies in reducing carbon footprints and preventing pollution.

‌Ethical conduct in Life Sciences (Environment-related):

Eir Ventures refrains from investing in activities that:

Cause significant harm to the environment, including activities that do not align with the principles of the Paris Agreement or involve the degradation, conversion, or destruction of critical habitats.
Are prohibited by national or international legislation, particularly in relation to the protection of biodiversity, cultural heritage, or the release of genetically modified organisms (GMOs)

‌Social Characteristics

‌Eir Ventures refrains from investing in activities included on the Eir Ventures Exclusion List, which prohibits investments that:

Limit individual rights or freedoms, violate human rights, or involve harmful or exploitative labor practices, such as forced labor or child labor, as defined by the International Labour Organizationʼs Fundamental Labour Conventions.
Are ethically or morally controversial, such as reproductive cloning and non-essential scientific experimentation on live animals, including gene editing.

‌Compliance with Labor Laws and Workplace Safety:

Eir Ventures emphasizes strict compliance with labor laws, encouraging portfolio companies to provide competitive remuneration, safe working conditions, and healthy workplaces.
Eir Ventures supports initiatives that enhance employee well-being and adherence to local labor standards.

Example of KPI:

KPI: Compliance with Eir Ventures code of conduct including labor laws, workplace safety, and employee remuneration.
Goal: 100% of portfolio companies comply with Eir Ventures’ Code of Conduct

‌Diversity and Inclusion:

Eir Ventures promotes diversity by encouraging equal opportunities for all employees, regardless of gender, age, ethnicity, religion, disability, or sexual orientation.

Example of KPIs:

KPI: Minority gender in Eir Venturesʼ investment team
Goal: >30%
KPI: Share of minority gender founder, chairperson and/or CEO in whole portfolio
Goal: >30%

‌Ethical Conduct in Life Sciences (Social-related):

Eir Ventures promotes the ethical experimentation and production of medical products by investing exclusively in highly regulated markets.

‌Governance characteristics‌

Governance and ethical business practices:

Eir Ventures advocates for strong governance structures, promoting policies that align the interests of investors, owners, management, and employees.
Promotion of Sound Governance Structures and Ethical Business Practices: Eir Ventures actively advocates for the establishment of sound governance structures within its portfolio companies, encouraging the implementation of effective corporate governance practices.

Example of KPI:

KPI: Share of portfolio companies with an ESG policy in place
Goal: 100%
KPI: Share of portfolio companies with Business ethics policies (Anti-fraud, Anti-bribery, Anti- money laundering, Anti-corruption)
Goal: 100%

‌Remuneration and ESG Alignment

Eir Ventures aligns its remuneration practices with its commitment to sustainability and long-term value creation. The Remuneration Policy integrates environmental, social, and governance (ESG) factors into decision-making and risk management. The policy ensures employees consider ESG risks alongside financial risks, promoting sound risk management and long-term value.
Performance-based remuneration encourages employees to meet both financial and non- financial targets, including managing sustainability risks, promoting governance, and supporting ethical practices.
Employee performance is assessed based on both financial results and adherence to ESG principles, ensuring alignment with Eir Venturesʼs sustainable investment goals.

‌Alignment with investor reporting guidelines:

Eir Ventures endorses and supports investor reporting guidelines based on the following three guiding principles:

Alignment of interest between Limited Partners (LPs) and Eir Ventures
Governance in terms of team composition, investment strategy, and fiduciary duty.
Transparency in terms of financial, risk management, operational, portfolio, and transactional information regarding fund investments.

‌Ethical conduct in Life Sciences (Governance-related):

Eir Ventures refrains from investing in activities included on the Eir Ventures Exclusion List, which prohibits investments in industries that engage in unethical business practices, such as corruption or non-compliance with international governance standards.

‌Integration of ESG in investment decisions

ESG factors are integrated into the investment decision-making process and in line with the UN-PRI. Eir Ventures’s due diligence process includes:

Screening and exclusions: Eir Ventures applies an exclusion list, avoiding investments in sectors or activities that violate human rights, cause severe environmental harm, or engage in unethical practices such as forced labor and human trafficking.
ESG due diligence: ESG due diligence is carried out through data collection, management interviews, and the application of an ESG checklist to assess the sustainability risks of potential investments. These assessments guide investment decisions and help identify opportunities to improve ESG performance.
Sustainability risk management: Eir Ventures applies a sustainability risk policy to identify and mitigate ESG risks across its portfolio. ESG risks are managed alongside traditional financial risks and are monitored throughout the investment lifecycle to ensure alignment with Eir Venturesʼs ESG goals.
Follow-on investments: ESG progress is reassessed for follow-on investments, ensuring that portfolio companies continue to enhance their sustainability practices.

‌Monitoring and active ownership

Eir Ventures engages actively with portfolio companies to promote ESG improvements through:

Annual ESG reporting: Portfolio companies are required to answer an annual ESG questionair, which include key performance indicators (KPIs) in line with SFDR and LP requests that track their progress in meeting environmental, social, and governance objectives described above.
Board engagement: Eir Ventures plays an active role in shaping the ESG practices of portfolio companies through board meetings in the portfolio companies where Eir Ventures holds a board seat, providing guidance on sustainability issues and encouraging responsible business conduct.
ESG support platform: Eir Ventures provides an ESG platform through a third party for portfolio companies, offering resources such as ESG information, assistance with developing policies, and tools for measuring key metrics like greenhouse gas emissions. This platform supports companies in improving their sustainability practices and aligning with best ESG standards

‌Transparency and reporting

Eir Ventures is committed to transparency in its ESG strategy, providing pre-contractual disclosures, website updates, regular reports to investors and annually report to UN-principles for responsible investments.

‌Conclusion

Eir Ventures is dedicated to integrating ESG principles across its investment activities to promote sustainable growth, generate long-term value for its investors, and contribute positively to society and the environment. Eir Ventures will continue to evolve its ESG practices in line with regulatory requirements and industry best practices, ensuring transparency and accountability in all aspects of its operations.