Sustainability-Related Disclosures

Art. 3 SFDR — Sustainability risk policies statement

Blue Forest addresses sustainability risks in its investment decision-making process insofar as relevant. “Sustainability risk” means an environmental, social or governance event or condition that, if it occurs, could cause an actual or a potential material negative impact on the value of the investment. During the due diligence on potential investments, Blue Forest conducts a careful analysis of the investment’s exposure to environmental, social, and governance risks that could impact its value.

When identifying a sustainability risk during the due diligence on potential investments, Blue Forest decides in light of the specific situation taking due account of the proportionality principle whether it gives up on the investment or proceeds with the investment alongside appropriate measures to mitigate the relevant sustainability risk. Blue Forest regularly reviews its policies to ensure that they address new and emerging risks as well as investors’ concerns.

Art. 4 SFDR — No consideration of principal adverse impacts

Blue Forest does not consider principal adverse impacts of investment decisions on sustainability factors. “Sustainability factors” mean environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters. Blue Forest does not use sustainability indicators.

The standardized catalog of Key Performance Indicators (KPIs) provided by Annex I of the regulatory technical standards (RTS) issued under the SFDR is not tailored to the specific needs of the investment strategy of Blue Forest.

In many instances, data will be insufficient for analyzing PAI, and on occasions where data is obtainable, it tends to offer little in terms of comparability and fails to provide additional insights for Blue Forest. Therefore, collecting data on PAI will not only increase the administrative burden and costs but also fail to provide a new perspective for Blue Forest.

Blue Forest is open to considering PAI in the future if it becomes evident that doing so would significantly enhance the ability of Blue Forest to identify and mitigate possible adverse impacts of the investments while maintaining operational efficiency and cost-effectiveness.

Art. 5 SFDR — Remuneration Disclosure

As a registered alternative investment fund manager within the meaning of the KAGB, Blue Forest does not have, and does not need to have, a remuneration guideline or policy in accordance with the requirements of the KAGB. Sustainability risks are not considered with respect to the determination of remuneration.

Art. 10 SFDR — Sustainability-related information about financial products that promote environmental or social characteristics

Blue Forest Management GmbH (“Blue Forest”) is the alternative investment fund manager of Blue Forest TAIGA GmbH & Co. KG (“Blue Forest TAIGA”), within the meaning of the German Investment Code (Kapitalanlagegesetzbuch, KAGB) and as such publishes the following information in light of the consideration of sustainability-related aspects in accordance with the SFDR.

Summary

This financial product promotes environmental or social characteristics but does not have as its objective a sustainable investment. The promoted characteristics are investment restrictions. 100 % of the investments will be in line with its investment strategy and investment restrictions.

No reference benchmark has been designated to attain the environmental or social characteristics promoted by the financial product.

Zusammenfassung

No sustainable investment objective

This financial product promotes environmental or social characteristics but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

The promoted characteristics of this product are investment restrictions:

Blue Forest TAIGA shall not invest, guarantee, or otherwise provide financial or other support, directly or indirectly, to companies or other entities:

1. whose business activity consists of an illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to the Partnership or the relevant company or entity, including without limitation, human cloning for reproduction purposes); or
2. which substantially focus on:
   • production of and trade in tobacco and distilled alcoholic beverages;
   • production of and trade in weapons and ammunition of any kind, it being understood that this restriction does not apply to the extent such activities are part of or accessory to explicit European Union policies;
   • any activities related to controversial weapons (e.g. anti-personnel mines, cluster munitions, chemical weapons and biological weapons);
   • casinos and equivalent enterprises;
   • production or trade of pornographic material or business activities related to prostitution; or
   • the research, development or technical applications relating to electronic data programs or solutions, which aim specifically at supporting any activity referred to under items (i.) to (v.) above and/or internet gambling and/or online casinos.

Investment strategy

Blue Forest TAIGA intends to seek long-term capital appreciation through equity and quasi-equity investments in early-stage technology companies with a focus on deep tech across different industries, primarily in Europe and selectively in Asia and North America.

Policy to assess good governance practices of the investee companies

As part of the due diligence and ongoing investment management, the investment team will review whether a potential investee company has good governance practices in place. This might include using ESG (environmental, social, and governance) criteria to evaluate companies’ performance in areas such as labor practices, human rights, and corporate governance, conducting due diligence on investee companies to assess their management structures, employee relations, and tax compliance, engaging with investee companies to encourage improvements in governance practices if necessary. The intensity of the assessment is carried out in accordance with the principle of proportionality. Where the manager sees higher risks of a non-compliance, they will intensify the audit.

Proportion of investments

Blue Forest TAIGA will invest fully in line with its investment strategy and investment restrictions. Blue Forest TAIGA will not invest a portion of its capital in any other asset class.

Monitoring of environmental or social characteristics

The investment team of Blue Forest TAIGA will initially and continuously monitor whether the investment restrictions are abided by and whether the investment falls within the investment policies. Blue Forest TAIGA will not make any investment in the excluded sectors unless previously approved by the advisory committee. Therefore, the achievement of the promoted ESG aspects — no investment within the excluded sectors — can be tracked in a simple way.

Data sources and processing

Blue Forest TAIGA receives data provided by the portfolio companies as part of the due diligence process and at regular intervals after the investment. Where necessary or beneficial, Blue Forest TAIGA also makes use of publicly available data. Data processing is exclusively internal and DSGVO compliant. Estimates of data are not made.

Limitations to methodologies and data

Blue Forest is partly reliant on the information provided by portfolio companies during the due diligence process. Moreover, in the post-investment phase, Blue Forest is reliant on the company’s reported data. In both cases, complete data may not always be available due to the nature of the investments. The information is verified only if and to the extent misrepresentations are suspected. Since Blue Forest TAIGA’s investments are made for a multi-year investment period, Blue Forest places a high priority on establishing a trusting working relationship with the portfolio companies to ensure that data is submitted reliably and completely and that the above restrictions are met.

Due Diligence

Blue Forest considers the promoted ESG aspects when sourcing new portfolio companies for Blue Forest TAIGA and during the due diligence on targeted portfolio companies. The due diligence is performed by obtaining all information relevant to Blue Forest TAIGA using a due diligence questionnaire, which is then reviewed internally. If necessary, further specific information is also obtained from the potential portfolio companies, should this still be necessary after the detailed questioning. The due diligence process is not externally monitored.

Engagement policies

Blue Forest TAIGA invests in the portfolio companies for a period of several years. Therefore, Blue Forest makes it a priority to establish and maintain a trusting working relationship with the portfolio companies in order to continuously comply with the investment restrictions. Blue Forest thus also intends to establish or strengthen the consideration of sustainability risks at the portfolio level. Blue Forest is in constant dialogue with the portfolio companies, but as a venture capitalist without majority ownership, the influence Blue Forest can exert on the portfolio companies is limited.