SFDR

Sustainability-related disclosures pursuant to Regulation (EU) 2019/2088 (“SFDR”)

Date of publication: August 31st 2023

I. Sustainability risks (Art. 3)

TF H IV Technologiefonds Hessen GmbH & Co. KG (“TFH IV”, LEI: 391200VUTIBPQFHVKG43) considers sustainability risks as part of its investment decision-making process. Sustainability risks are environmental, social or governance events or conditions, the occurrence of which could have an actual or potential material adverse effect on the value of the investment. TFH IV considers and assesses sustainability risks during its due diligence process prior to any investment. Such assessment is being conducted by using a checklist. The results of such assessment are taken into account when the investment decision is being taken. However, TFH IV remains free in its decision to refrain from investing or to invest despite sustainability risks, in which case TFH IV can also apply measures to reduce or mitigate any sustainability risks. At all times, TFH IV will apply the principle of proportionality taking due account of the strategic relevance of an investment as well as its transactional context.

II. No consideration of adverse impacts of investment decisions on sustainability factors (Art. 4)

TFH IV does not consider any adverse impacts of its investment decisions on sustainability factors and, hence, does not use the sustainability indicators listed in Annex I of the Delegated Regulation (EU) 2022/1288 (as amended from time to time, “RTS”) to identify and assess potential adverse impacts. Sustainability factors are environmental, social and employee concerns, respect for human rights and the fight against corruption and bribery.

Given that the SFDR, the Regulation (EU) 2020/852 (“EU Taxonomy”) and the accompanying RTS are relatively new legislative acts, there is very little or no practical experience or practice with regard to the application of their respective provisions. Therefore, substantial legal uncertainties would remain when applying those provisions to the investment strategy pursued by TFH IV. Moreover, the burden associated with considering adverse impacts on sustainability factors by using sustainability indicators is disproportionate in light of the very limited relevance that such impacts could have in the context of TFH IV’s investment strategy: TFH IV pursues an active venture capital strategy and invests in young start-ups in the digital economy in Hessen (Germany). As a result, TFH IV’s investment decisions will hardly ever have an impact on sustainability factors. Furthermore, TFH IV will only hold minority interests in its portfolio companies. Such minority interests are, however, generally not sufficient to encourage the portfolio companies to collect and report the relevant data to TFH IV. Thus, it is currently not foreseeable for TFH IV whether the information for the identification and assessment of principal adverse impacts can be obtained regularly and in full from all of the respective portfolio companies.

If and to the extent that the legal uncertainties will be resolved and a practicable market and administrative practice will evolve in this regard, TFH IV will re-evaluate considering principal adverse impacts of its investment decisions in due course. In the meantime, TFH IV remains free in its decision to use part of the sustainable indicators listed in Annex I of the RTS and/or an own set of indicators.

III. Remuneration disclosures (Art. 5)

As a registered alternative investment fund manager within the meaning of section 2 (4) of the German Investment Code (Kapitalanlagegesetzbuch, “KAGB”), TFH IV does not have and does not need to have a remuneration guideline or policy in accordance with the requirements of the KAGB.

IV. Sustainability-related disclosures for TF H IV Technologiefonds Hessen GmbH & Co. KG (Art. 10, 8)

Financial product: TF H IV Technologiefonds Hessen GmbH & Co. KG (the “Fund”)

LEI: 391200VUTIBPQFHVKG43

Summary

The Fund considers certain environmental and/or social characteristics as part of its investment decisions and monitoring processes but does not seek to make sustainable investments as defined in the SFDR. The consideration of environmental and/or social characteristics is carried out both before and after an investment. For this purpose, information is initially and regularly obtained from the portfolio companies by means of qualitative queries. The Fund incorporates inclusion (positive screening) as well as exclusion (negative screening) aspects during the decision-making process. Thereby the Fund considers several ESG themes to be the key to responsible investing.

No sustainable investment objective

The Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.

Environmental or social characteristics of the financial product

The Fund promotes environmental and/or social characteristics by implementing certain investment exclusions and by considering certain ESG criteria during the decision-making process (see section ‘Investment strategy’).

Investment strategy

The purpose of the Fund is to build, hold and manage a portfolio of investments in companies in Hessen (Germany), in particular technology-oriented small and medium-sized enterprises, taking into account sustainability criteria.

The portfolio companies will primarily be small and medium-sized enterprises with a sustainable business model and growth potential in the seed, start-up and growth phase, in particular with a focus on technology. Geographically, the Fund will invest in portfolio companies that have their reigstered office and/or place of management in Hessen or which intend to establish or expand branches or subsidiaries in Hessen or to develop significant business activities in Hessen or to relocate their registered office from outside Hessen to Hessen or to spark relevant growth or innovation impulses in Hessen or for companies located in Hessen through their activities or know-how transfer. The portfolio companies should have the potential to further develop their regional connection into a significant business commitment in Hessen.

The Fund does not invest in portfolio companies that are active in any of the following sectors or that directly or indirectly control another company that is active in any of the following sectors, and will ensure that the pportfolio companies comply with these investment restrictions throughout the entire holding period:

• Weapons industry (with the exception of the police, the armed forces and the excluisive supply for NATO countries) and arms trade;
• Gambling;
• Tobacco industry;
• Human cloning;
• Trade in GMOs (genetically modified organisms) or research and development related to GMOs;
• Construction and operation of coal-fired power plants, including activities in the upstram or downstream thermal coal value chain;
• Activities that pose significant risks to the environment (e.g., uranium mining);
• Pornography, prostitution and similar industries;
• Oil or gas extraction by fracking or from oil shale and oil sand or by artic drilling;
• Mountaintop removal mining;
• Trade in connection with endangered animal or plant species according to the CITES (Convention on International Trade in Endangered Species) list;
• Regardles of the industry: companies that violate UN Global Compact, UN Guiding Principals on Business and Human Rights, ILO Core Labor Standards or other internationally recognized human and labor rights principles;
• Nuclear energie; as well as
• Agricultural commodities.

Moreover, the Fund does only invest in portfolio companies that meet the minimum requirements set forth by the Fund with regard to its ESG criteria. When identifying suitable investment opportunities, the Fund takes into consideration the following ESG criteria:

• No poverty (impact on poverty, e.g. through donations or contributing to sustainable and inclusive economic growth);
• Zero hunger (impact on hunger, e.g. by limiting food waste, agricultural innovation, or supporting local farmers in development countries);
• Good health and well-being (protection and improvement of customer health and safety; impact on safety and health of other stakeholders, e.g. employees of suppliers; other means of ensuring healthy lives and promoting the well-being for all at all ages);
• Quality education (promotion of inclusive, equally accessible education of high quality);
• Gender equality (high diversity among management and employees, and equal wages for men and women; supporting and promoting self-determination of girls and women);
• Clean water and sanitation (impact of water consumption and effluence on environment; other means of safeguarding clean and accessible water for all);
• Affordable and clean energy (energy efficient products/solutions and/or use of renewable energy; improving access to affordable and clean energy or increasing energy efficiency);
• Decent work and economic growth (contributing to incremental sustainable economic growth and availability of human work/quality jobs and/or full productive employment);
• Industry, innovation und infrastructure (infrastructure investments or other significant positive local economic impact; supporting innovation and/or advancing industrialization);
• Reduced inequalities (social impact on local communities; reduction of inequalities between countries);
• Sustainably cities and communities (impact on biking, pedestrian or public traffic (infrastructure) as a substitute for other road traffic; increase of inclusiveness, security, resistance and sustainability of cities and communities);
• Responsible consumption and production (use of renewable or recycled materials, or recycling of products and/or packaging; support and stabilization of responsible consumption and production patterns);
• Climate action (reduction of emissions of greenhouse gas, ozone-depleting substances, nitric oxides and/or sulphuric oxides; taking other immediate action to stop global warming or limiting its impact);
• Life below water and on land (compliant waste management, no hazardous waste, and impact on environment; impact on biodiversity and interference with protected areas or species; conservation and sustainable use of natural resources and ecosystems);
• Peace, justice and strong institutions (support of peaceful and inclusive societies and of building effective, accountable institutions on all levels); as well as
• Partnerships for the goals (revitalize the global partnership for sustainable developments).

The Fund’s investment strategy is continuously implemented as part of the investment process: Each investment opportunity will be reviewed as part of the due diligence process in light of the Fund’s investment strategy, in particular with regard to the investment exclusions as well as the ESG criteria. After an investment, i.e., during the holding period, the Fund will regularly monitor its portfolio companies and support them when and where deemed relevant.

Good governance practices are assessed through a checklist as part of every due diligence process prior to any investment made by the Fund. Such practices include, in particular, sound management structures, employee relations, remuneration of staff and tax compliance within the portfolio companies. Moreover, the Fund will conduct regular monitoring of the good governance practices in its portfolio companies during the holding period. If the Fund becomes aware of severe governance issues, it will investigate them and work with all parties involved to find an appropriate solution.

Proportion of investments

The Fund will invest fully in line with its investment strategy and investment restrictions, i.e., will only make investments which are aligned with its environmental and/or social characteristics. The Fund does not make and does not intend to make sustainable investments within the meaning of Art. 2 no. 17 SFDR or environmentally sustainable investments within the meaning of Art. 3 EU Taxonomy; hence, no portion of its investments will be aligned with the EU Taxonomy.

Monitoring of environmental or social characteristics

The Fund has an increased awareness of the impact of environmental and social characteristics on risk management and thus on the value potential of investments. Accordingly, the Fund undertakes to monitor (compliance with) its environmental and/or social characteristics on an ongoing basis. Prior to making an investment, the Fund assesses the attainment of its environmental and/or social characteristics with respect to every (potential) portfolio company. During the holding period, the Fund uses the sustainability indicator ‘No investments in the area of investment exclusions’ as well as ESG key performance indicators defined for each portfolio company individually and collects respective data at portfolio company level to monitor the ongoing compliance with its environmental and/or social characteristics. External monitoring mechanisms are not in place.

Methodologies for environmental or social characteristics

The Fund applies qualitative assessments with respect to its environmental and/or social characteristics. The Fund conducts an initial assessment of the environmental and/or social characteristics promoted in the course of its due diligence process. Through this checklist, the investment exclusions, good governance practices as well as the ESG criteria are identified and evaluated. Based on the results of such assessment, the Fund identifies whether the environmental and/or social characteristics promoted by the Fund are met before making an investment. During the holding period, the so conducted assessment forms the basis to measure and monitor if the characteristics are continuously being met. By using the sustainability indicator ‘No investments in the area of investment exclusions’, the Fund assesses and ensures the portfolio companies’ ongoing compliance with its investment exclusions throughout the holding period. Further, ESG targets and appropriate ESG key performance indicators will be defined for each portfolio company individually within the first 6 months after the Fund’s investment was made, on which the portfolio companies are required to report regularly. Hence, the Fund measures and evaluates the attainment of its environmental and/or social characteristics on an ongoing basis.

Data sources and processing

In order to attain each of the environmental and/or social characteristics promoted by the Fund, a checklist is completed by the (potential) portfolio companies in cooperation with the Fund in the course of the due diligence process conducted prior to each investment. Moreover, during the holding period, the portfolio companies provide the Fund with regular reports regarding the sustainability indicator as well as the defined ESG key performance indicators. Hence, data is obtained exclusively from the (potential) portfolio companies. Further, purely qualitative statements of an environmental or social nature or relating to good governance are requested from the (potential) portfolio companies and then taken into account in the investment decision-making and monitoring processes. An internal or external review or verification of the data obtained will be carried out if misrepresentations are suspected.

Limitations to methodologies and data

The data collected exclusively from the (potential) portfolio companies is internally or externally verified only if and to the extent misrepresentations are suspected. Thus, it cannot be ruled out completely that false information may remain undetected in certain cases. Further limitations, in particular with regard to the accuracy of the data and reliability of the data sources used, are currently not foreseeable. As the Fund’s investments are made for a period of several years, the Fund considers it a priority to establish and maintain a trustful working relationship with its portfolio companies in order to ensure data quality and compliance with the environmental and/or social characteristics promoted by the Fund.

Due diligence

In order to attain the aforementioned environmental and/or social characteristics, the Fund carefully selects its portfolio companies during the investment decision-making process. The Fund conducts a due diligence on each (potential) portfolio company. As part of this due diligence, the Fund carefully reviews how a (potential) investment relates to the environmental and/or social characteristics promoted by the Fund. The Fund incorporates inclusion (positive screening with respect to its ESG criteria) and exclusion (negative screening with respect to its investment exclusions) as well as good governance aspects during the decision-making process. This assessment is conducted by using a checklist. An internal or external review or verification of the information obtained will only be carried out if misrepresentations are suspected.

Engagement policies

The Fund will, as part of its environmental and social investment strategy, use the following measures to engage with its portfolio companies – while taking into account the individual circumstances of each company – in order to attain its environmental and/or social characteristics:

• Contractual target agreements with its portfolio companies (the portfolio companies will be required to advance ESG-related topics within the term sheets or the investment agreements).
• ESG workshops within the first six months after an investment was made by the Fund together with an external provider specialized in sustainability consulting, unless such workshop has already been held at the portfolio company;
• Development of a transparent ESG strategy/roadmap and definition of suitable ESG key performance indicators; as well as
• Exercise of (minority) shareholder rights in portfolio companies.

The Fund will regularly review and, as necessary, adjust its engagement policy. Further, the Fund will respond with individual measures when becoming aware of ESG-related incidents or controversies at portfolio company level.

Designated reference benchmark

No index has been designated as a reference benchmark to meet the environmental or social characteristics promoted by the Fund.

Date: 2023/10/17