We are committed to sustainability: we strive to apply our commitment both externally as an integrated element of our investment process as well as internally, by building and operating a sustainable business practice. We believe that the consideration of ESG factors can positively affect the performance of our investment portfolio. We anticipate ESG playing an increasingly instrumental role in future financing rounds of early stage companies with more and more larger venture capital and growth capital funds driving this trend. We believe that our ESG Policy forms an essential element of support for our portfolio companies by promoting the introduction and implementation of ESG principles in the respective organization with positive impact on the individual company as well as the broader community, while preparing the individual companies and founder teams for future financing rounds and investor requirements. As part of our value creating strategy, we define our ESG commitment as follows:

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Atlantic Food Labs Manager GmbH (“we”, “us” or “AFL”) is the alternative investment fund manager of Atlantic Food Labs Fund I GmbH & Co. KG and FoodLabs Fund III GmbH & Co. KG (the “Funds”), both German limited partnerships investing in portfolio companies with business models and products that shape the future of food and sustainability, or tackle food-related health & sustainability challenges systematically, exploring opportunities across the most challenging areas of the food value chain (from agriculture to waste and post-consumption) and leveraging technology.

We aim to create value for investors and portfolio companies, and we are aware of our responsibility towards both society and nature to contribute to a more sustainable world. We have adopted this ESG policy (“ESG Policy”), which we believe offers significant benefits to our investors and our portfolio companies.

Our ESG commitment respects the principle of proportionality, i.e. taking due account of size, nature and scale of our activities, types of funds and stages of our portfolio companies as well as the respective transactional context. To this end, we shall work closely with our portfolio companies on a case-by-case basis, as appropriate to the company’s individual situation.

The information presented herein is in its entirety subject to and qualified by the terms of the limited partnership agreements of the Funds.

We commit to adhere to this ESG Policy with regard to our own organization as well as the funds we manage. As seed and early stage investor, the influence we have on portfolio companies through shareholdings of our Funds, including influence on sustainability matters, is typically limited. However, we shall apply our best efforts to encourage our portfolio companies to agree with our ESG Policy, and to commit to pursuing its ESG values (“ESG Values”).

We aim to promote sustainable practices throughout our organization, our Funds and our portfolio companies. For this purpose, we commit to the following ESG Values which shall serve as guidelines for a continuous and dynamic evolution towards sustainable business practices creating and taking advantage of ESG related value creation opportunities. 

1. Environmental

• Encouraging environmental consciousness and protection of the natural environment with a commitment to the reduction and balancing of carbon emissions (climate change mitigation) 
• Promoting a responsible use of resources (e.g. water, energy, natural resources)
• Promoting the transition to a circular economy to contribute to the avoidance of waste, recycling and environmental pollution
• Promoting healthy ecosystems and sustainable land use.

2. Social

• Promoting diversity and equal opportunities at all levels of the business
• Zero tolerance against any form of discrimination
• Positively addressing customer interests and concerns (e.g. around health, safety, privacy issues)
• Respecting employees' and contractors’ rights to fair and decent working conditions (e.g. fair compensation, working hours and employee rights, health and safety at the workplace)

3. Governance

• Promoting high standards of business ethics and acting with integrity 
• Positively engaging with stakeholders in line with all applicable local and international laws and regulations and standards (e.g. tax honesty, anti-corruption measures) 
• Encouraging transparency and commitment to monitoring and reporting on ESG progress within the organization

While our ESG Values serve as overriding principles which we aim to achieve through all our actions, we also identified certain ESG motivated investment exclusions which we consider prior to each investment. This dedicated exclusion list contains i.a. the following:

• No investments in tobacco and distilled alcoholic beverages
• No investments in weapons or ammunition of any kind
• No investments in casinos or equivalent enterprises
• No investments in pornography

Further, FoodLabs Fund III GmbH & Co. KG does not invest in a catalogue of fossil fuel-based energy production and related activities as well as energy-intensive and/or high CO2-emitting industries (as defined in the limited partnership agreement).

We consider our ESG Values an integral part of each phase of the investment and value creation process. Therefore, we incorporate our ESG Values as appropriate both into the pre-investment phase as well as the post-investment phase. We do not expect all of the ESG Values to be demonstrated at the point of our initial investment into a portfolio company, but we are looking for a positive commitment of our founder teams to implement these over the lifetime of the investment. 

Pre-Investment

In the pre-investment phase, we take into account our ESG Values. Investments which are incompatible with our ESG Values are ineligible for further due diligence. Only for investments which are in line with our ESG Values we will proceed to the due diligence phase. We identify and evaluate potential ESG related value creation opportunities and issues, if any, before making an investment decision based upon a dedicated ESG-checklist. 

If ESG issues are identified, we evaluate their potential financial impact. Such sustainability risks may be environmental, social or governance events or conditions that, if they occur, could cause an actual or a potential material negative impact on the value of the investment. Such sustainability risks are taken into account within the risk categories operational risk, strategic risk, reputational risk by way of identifying, mitigating or offsetting such risks early and effectively. 

Our CFO, Bastian Stöhr, who is responsible for all ESG related issues, is part of the due diligence and monitors compliance with the aforementioned process, ensuring that ESG-related issues are adequately considered prior to each investment. Moreover, we currently strive to build up and maintain adequate resources to deal with all relevant ESG-related topics.

Ownership

During the post-investment phase, information on ESG related value creation opportunities and issues, if any, will be collected and evaluated as part of our annual review via a questionnaire which we provide every year to our portfolio companies. This enables us to identify ESG related value creation opportunities and issues, if any, early and encourage and support actions for improvement. To this end, where agreed, we aim to conduct regular trainings where portfolio companies will be offered coaching on how to realize ESG related value creating opportunities and resolve issues, if any. Such trainings will be conducted in all cases in which we detect material ESG issues.

In addition to the routine questionnaire-based reporting described above, we apply best efforts to integrate in the shareholders agreement or other corporate documents an obligation of our portfolio companies to conduct an incident driven reporting in written form, if they become aware of any issue presenting a material risk for the realization of the ESG Values.

We are committed to fully embracing and developing ESG within our own operations. We do this by focusing on: 

• Minimising our environmental impact through our ongoing ambition to reduce emissions.
• Maintaining the highest levels of governance and ethical integrity in our daily operations.
• Embracing inclusion and diversity in our workplace through our continued investment in the best talent, regardless of background, and commitment to continuous professional development.
• Implementing and maintaining suitable internal processes, procedures and standards supported by training to ensure the maintenance of adequately high standards of conduct and sufficient expertise in the deployment of this ESG Policy.

Our team consists of experienced professionals who are committed to and collectively responsible for our adherence to this ESG Policy in all relevant investment decisions and monitoring procedures. Where additional expertise is needed, the team will employ external resources.

Our affiliate AFL Investments GmbH & Co. KG (previously: Atlantic Food Labs GmbH), became a signatory to the UN PRI on 29 November 2019 as an Investment Manager; we are committed to the following six principles as framework across all our investment activities:

1. We will incorporate ESG issues into investment analysis and decision-making processes.
2. We will be active owners and incorporate ESG issues into our ownership policies and practices.
3. We will seek appropriate disclosure on ESG issues by the entities in which we invest.
4. We will promote acceptance and implementation of the Principles within the investment industry.
5. We will work together to enhance our effectiveness in implementing the Principles.
6. We will each report on our activities and progress towards implementing the Principles.