Basic Policy on Sustainability

1. Background and Purpose
Our company promotes initiatives that consider environmental, social, and governance (ESG) factors in fund management. To achieve a sustainable environment, society, and economy, we have established a basic policy on sustainability, which we share as a concept and promotion policy with a diverse range of stakeholders, including our employees, investors, investees, local communities, and governments.

2. Specific Initiatives for Sustainability

(1) Commitment to Sustainability and Cultivating Culture
We actively grasp trends and good practices in sustainability initiatives, including ESG responses and impact management, both domestically and internationally, and share and permeate the significance of sustainability initiatives among fund members. We work together with ESG experts to encourage the initial ESG efforts of our investees, and also collaborate with law firms and other specialists on compliance and human rights issues.

(2) Selection of LP Investors
We invite impact-oriented investors by conducting positive checks along with negative checks that confirm there are no significant ESG risks or affiliations with antisocial forces.

(3) Sustainable Investment Activities
In the process of investment execution and post-investment growth support, we consider ESG issues, establish corresponding policies, and actively engage in dialogue with investees to promote sustainability management and support growth.

(a) Due Diligence Phase
During Due Diligence process, we check for both positive and negative impacts (including significant ESG risks) based on the organizational evaluation of the investment candidate, through management interviews and checklists. If issues are identified, we will discuss feasible mitigation measures with the management. Additionally, pursuing people’s well-being, our fund aims to create a “vibrant colorful society, where diversity is recognized and choices are made based on individuals’ value” and thus we pay attention to and evaluate the promotion of diverse work styles among employees of potential investees. Proactive measures taken to create positive impacts will be given plus points.
However, if the management recognizes significant ESG risks but has not taken or plans to take measures to address them, we will forego the investment.
・Implementing negative screening
・Developing mitigation measures and evaluating their feasibility

(b) Post-Investment Growth Support Phase
Depending on the business growth stage and needs of the investee, we encourage “sustainability management” and provide growth support.
・Supporting the establishment of governance systems
・Supporting human resource recruitment and organizational building
・Identifying ESG materiality (implemented according to the business growth stage and needs of the investee)
・Supporting the verbalization, information disclosure, and execution system construction of “sustainability management”
・Introducing ESG and impact-oriented investors
・Compliance training

(c) Reporting to LP Investors
・While managing the progress of positive impacts, we also monitor the status of impact risks and ESG risks and report to LP investors.

(4) Creating a Fulfilling Workplace

We respect the human rights and diverse values of individuals, assume various work styles, and maintain a workplace that considers mental and physical health and allows for job satisfaction and self-realization.
・Respecting individual rights and values
・Establishing employment environments and personnel/evaluation systems based on diverse work styles
・Supporting talent development and self-improvement

Enacted on March 15, 2024
Japanese version supersedes English Translation.