SFDR

Statutory information under Regulation (EU) 2019/2088 of 27 November 2019 on sustainability-related disclosures in the financial services sector (Sustainability Finance Disclosure Regulation – “SFDR”).

Policies on the integration of sustainability risks in the investment decisions regarding High-Tech Gründerfonds GmbH & Co. KG, High-Tech Gründerfonds II GmbH & Co. KG and for High-Tech Gründerfonds III GmbH & Co. KG (Information in accordance with Art. 3 SFDR)

This statement is the consolidated explanation of sustainability risk policies for High-Tech Gründerfonds GmbH & Co. KG, High-Tech Gründerfonds II GmbH & Co. KG and for High-Tech Gründerfonds III GmbH & Co. KG (together the “High-Tech Gründerfonds I – III”) in accordance with Art. 3 of the Disclosure Regulation.

High-Tech Gründerfonds I – III partially consider sustainability risks as part of the risk analysis in the investment decision-making process. High-Tech Gründerfonds I – III have decided to improve, to develop a systematic ESG policy, and to introduce an ESG management system. Such work is currently in progress.

Policies on the integration of sustainability risks in the investment decisions regardingg High-Tech Gründerfonds IV GmbH & Co. KG (Information in accordance with Art. 3 SFDR)

Sustainability risks as defined in the SFDR are taken into account in investment decisions concerning High-Tech Gründerfonds IV GmbH & Co. KG.

A sustainability risk is an environmental, social or governance event or condition that, if it occurs, could at entity level cause a negative material impact on the net assets, financial position and results of operations as well as the reputation of High-Tech Gründerfonds IV GmbH & Co. KG; and thus on the value of the investment. Sustainability risks can affect all known risk types, i.e. market risks, liquidity risks, counterparty risks and operational risks, and contribute as a factor to the materiality of these risk types. The review of sustainability risks is part of the due diligence process and risk management by the HTGF team.

Sustainability risks in the areas of climate and environment are divided into physical risks and transitory risks:

Physical risks include, for example, extreme weather events and their consequences (periods of heat and drought, rising temperatures, increased risk of forest fires, flooding, storms, hail, etc.) as well as long-term changes in climatic conditions (e.g. frequency of precipitation, weather instability, sea-level rise). The consideration of such physical sustainability risks is of particular relevance, for example, for investments in real estate. In the case of investments in portfolio companies, such as those made by High-Tech Gründerfonds IV GmbH & Co. KG, physical sustainability risks do not represent a relevant risk position and are therefore not explicitly examined as part of the ESG due diligence.

Transitory risks include, for example, the risks that can arise from the changeover to a low-carbon economy (and any associated increase in the price and/or shortage of fossil fuels or emission certificates). For example, political measures can lead to an increase in energy prices. In addition, changing preferences of contractual partners and social developments represent a corresponding risk for non-adapted companies. New technologies can also displace known technologies. Transitory risks can also be realised in a decline in demand for emission-intensive technologies. There is also a dependency between physical risks and transitory risks. Insofar as physical risks increase sharply, this may require an abrupt change in the economy, which in turn leads to higher transitory risks.

Furthermore, events, developments, or behaviour that are classified in the areas social and corporate governance can represent a significant sustainability risk, as far as the probability of occurrence has not been sufficiently taken into account in the valuation of an asset. An example is the payment of fines for tax evasion or unjustly received refunds.

Sustainability risks can also have a significant impact on the reputation of High-Tech Gründerfonds IV GmbH & Co. KG. On the one hand, this results from the potential for damage that sustainability risks basically implicate. On the other hand, there is potential for moral prejudice, which can result, for example, from an existing business relationship with a company which is exposed to sustainability risks on its part and does not alleviate them appropriately.

Generally, sustainability risks can have a significant impact on the economic result of an investment in High-Tech Gründerfonds IV GmbH & Co. KG. Sustainability risks can result in a reduction or even devaluation of assets. They have not yet been sufficiently investigated science-based, particularly in the area of environmental risks, or there has been a lack of the necessary data basis. As far as a sustainability risk materialises, planned payments to the investor may therefore be delayed or be lower than expected or, in the worst case, be defaulted.

Regarding the consideration of sustainability risks  in investment decisions, the HTGF team ensures that the respective risks for each portfolio company are identified and assessed separately and prior to investment. This is done using a standardised assessment form as part of the due diligence process. If a particularly high risk is identified or other warning signs (“red flags”) are discovered, the founding team is informed. If the risk cannot be eliminated or adequately alleviated, the investment opportunity in question is not pursued any longer. The investment strategy of High-Tech Gründerfonds IV GmbH & Co. KG includes criterions for exclusion with regard to the portfolio companies to be acquired. For example, the HTGF team already excludes portfolio companies that are associated with potential sustainability risks due to their business model. High-Tech Gründerfonds IV GmbH & Co. KG refers to the exclusion lists published by the European Investment Fund (EIF) and KfW Bankengruppe. The assessment is carried out in the above-mentioned standardised assessment form as part of the due diligence process.

The HTGF team is convinced that the sustainability risks will not have a material adverse impact on the portfolio due to the investment process as well as due to the risk diversification. However, despite the inclusion and consideration of sustainability risks in the investment processes, it can explicitly not be excluded that sustainability risks which materialise nevertheless, will affect the value of the portfolio and thus the return of High-Tech Gründerfonds IV GmbH & Co. KG may be impacted.

Statement on the principal adverse impacts of investment decisions on sustainability factors concerning High-Tech Gründerfonds GmbH & Co. KG, High-Tech Gründerfonds II GmbH & Co. KG, High-Tech Gründerfonds III GmbH & Co. KG and for High-Tech Gründerfonds IV GmbH & Co. KG (Information in accordance with Art. 4 SFDR)

This statement is the consolidated explanationon principal adverse impacts of investment decisions on sustainability factors for High-Tech Gründerfonds GmbH & Co. KG, High-Tech Gründerfonds II GmbH & Co. KG, High-Tech Gründerfonds III GmbH & Co. KG and for High-Tech Gründerfonds IV GmbH & Co. KG (together the “High-Tech Gründerfonds”) in accordance with Art. 4 SFDR.

In accordance with Art. 4 SFDR, High-Tech Gründerfonds, in their capacity as fund managers, are obliged to provide information on the consideration of principal adverse impacts of investment decisions on sustainability factors, i.e. adverse impacts in particular on environmental, social and employee matters, respect for human rights, anti-corruption and anti-bribery matters (so-called “Principal Adverse Impacts” / “PAI”).

Consideration of PAI is largely dependent on the availability of relevant information on the market. In the area of start-up financing, the data required for this is often not available to a sufficient extent and in the required quality. Nevertheless, High-Tech Gründerfonds take into account the impact of investments on some of the sustainability factors and exclude some investments that would affect environmental, social, ethical or governance factors. The nature and extent of the consideration is related to the specifics of the venture capital business (investments in start-ups). High-Tech Gründerfonds applies the principle of proportionality.

Due to the legislative procedures that have not yet been completed at the current time, there is still a large number of unresolved detailed questions with regard to the specific requirements for measuring and reporting PAI. Therefore, High-Tech Gründerfonds does currently not yet systematically consider PAI in accordance with the legal requirements of the SFDR and its implementing provisions, but will instead await further legal developments. Corresponding processes in line with the legal requirements will therefore only be implemented at a later date, if deemed necessary. After the internal decision on the ESG policy and the ESG management system, High-Tech Gründerfonds will publish further information  regarding policies on the identification and prioritisation of principal adverse sustainability impacts and indicators as well as measures taken or planned in this regard.

In this context, High-Tech Gründerfonds will review possible compliance with codes for responsible investment and internationally recognised standards, as well as the degree of compliance with the objectives of the Paris Agreement, if applicable.

Information on the inclusion of sustainability risks in the remuneration policy concerning High-Tech Gründerfonds GmbH & Co. KG, High-Tech Gründerfonds II GmbH & Co. KG and for High-Tech Gründerfonds III GmbH & Co. KG (together the “High-Tech Gründerfonds I – III”) in accordance with Art. 5 SFDR

The remuneration policy of High-Tech Gründerfonds I – III is consistent with the inclusion of sustainability risks from the environmental, social and corporate governance areas. Thbecause reason is that High-Tech Gründerfonds only cooperates with public and private investors that meet high standards in terms of social criteria and good corporate governance, moreover, it only invests in such start-ups. In addition, High-Tech Gründerfonds also invest specifically in start-ups that pursue an environmentally friendly business model or even directly combat environmental pollution (for example, traceless materials GmbH). The sales of High-Tech Gründerfonds, from which in turn the remuneration is paid, are generated in compliance with this sustainability-related investment strategy, which is why the remuneration policy is already consistent with the inclusion of sustainability risks from the areas of environment, social affairs and corporate governance.

Information on the inclusion of sustainability risks in the remuneration policy concerning High-Tech Gründerfonds IV GmbH & Co. KG in accordance with Art. 5 of the Disclosure Regulation

The requirements of Section 37 of the German Capital Investment Code (KAGB) for the maintenance of a specific remuneration policy do not apply to High-Tech Gründerfonds IV GmbH & Co. KG. Accordingly, no sustainability risks pursuant to the legal requirements of Section 37 KAGB are taken into account in connection with remuneration.