Responsible Investment Policy

Responsible Investment Policy

Effective Date: January 2025

REMNAC Commitment to Responsible Investment

REMNAC believes that the transformative power of technology is the key to an even better future — a smarter economy, diverse and inclusive communities, and a broader path to prosperity. As responsible stewards of capital, we recognize that maximizing value requires careful management of material business risks and opportunities. For this reason, and consistent with our fiduciary and legal obligations, we integrate strategic Environmental, Social, Governance (ESG) initiatives into our firm’s operations and investments.

Our Responsible Investment Policy (the “Policy”) underpins our investment risk management and opportunity focus and reflects our commitment to creating value for our stakeholders. Consistent with our goal of maximizing returns for our investors, REMNAC is a signatory to voluntary, industry-led initiatives, which help define and operationalize our ESG engagement efforts.

  • The Principles for Responsible Investment (PRI) is a UN-supported network of investors promoting responsible investment practices through the incorporation of ESG factors into the investment lifecycle.1 REMNAC became a signatory in 2020.
  • The ESG Data Convergence Initiative (EDCI) is an open partnership of private markets stakeholders committed to streamlining the private investment industry’s historically fragmented approach to collecting and reporting ESG data. The goal of EDCI is to create a critical mass of meaningful, performance-based ESG data from private companies by converging on a standardized set of ESG metrics for private markets.2 REMNAC became a signatory in 2024.

Scope and Limitations

The Policy intends to reflect a general framework guiding our approach to identifying and managing material3 ESG risks and capturing ESG opportunities across REMNAC’s internal operations and investment strategies, including our private equity, permanent capital and private credit strategies; in certain cases, this document draws distinctions between our responsible investment approach within various investment strategies.

Given our focus on enterprise software, data and technology-enabled companies, we have identified certain material ESG risks and opportunities that we believe to be important investment considerations. Our approach to incorporating these considerations is dependent on our influence over the management of each investment which may vary depending upon the fund, investment structure and terms, and our engagement will be tailored accordingly.

For the avoidance of doubt, fund-specific application of the Policy will be set out in our fund governing documents and in applicable regulatory disclosures (governing documentation). In the event of conflict between the Policy and fund documentation, the governing documentation should take precedence.

In cases where REMNAC determines it has limited ability to conduct due diligence or to influence and control the consideration of ESG issues in connection with an investment, whether at the portfolio company-level or at the Fund-level, REMNAC will only apply those elements of the Policy that it determines to be practicable. Examples of such cases at the portfolio company-level include where REMNAC is a minority shareholder, has limited governance rights or where other circumstances affect REMNAC’s ability to assess, set or monitor ESG-related performance goals. Examples of such cases at the Fund-level include a jointly managed fund, a separate account where the underlying investor maintains significant influence over investment decisions, where REMNAC is a lender with no indicia of influence or control, or where REMNAC holds a small, passive public equity interest.

Roles and Responsibilities

REMNAC understands the important role responsible investment plays in driving long-term value and success. As such, we strive for broad understanding and accountability in applying these principles across our organization.

  • Our Executive Committee and Operating Committee are responsible for promoting REMNAC’s Responsible Investment Policy and for ensuring that it is implemented at the firm and across each of our investment strategies (commensurate with REMNAC’s level of influence and control).
  • Our investment committees oversee the integration of these principles into our investment processes and are accountable for ensuring responsible investment practices across our private equity and permanent capital Funds and with our professionals.
  • REMNAC has cross-functional ESG Committees for each of its platforms: REMNAC Investment AG and REMNAC Credit Partners. Each of these Committees meet quarterly to oversee integration of relevant ESG matters into their respective platforms and implementation of REMNAC’s Responsible Investment Policy.
  • Our dedicated ESG team works cross-functionally with our investment teams, our Value Creation team, subject matter experts, external partners and portfolio companies across our private equity and permanent capital portfolio in an effort to drive our principles into action and to ensure alignment with the Policy. Additionally, our ESG team, along with our external partners, are responsible for conducting pre-investment due diligence across our private equity and permanent capital portfolio, which may include an assessment of material ESG risks and opportunities.
  • Our investment teams are responsible for seeking to incorporate those findings into our investment decision-making process, when the considerations are material to achieving our investment thesis.
  • Our Value Creation team works with our private equity and permanent capital portfolio companies’ management teams in implementing a value creation plan that may consider material ESG risks and opportunities identified in diligence and continue to monitor such ESG risks during the ownership period.
  • Our Legal & Compliance team provides oversight over the ESG-related investment formation, diligence, disclosure and exit processes and seeks to ensure that we meet our regulatory obligations and commitments to Fund investors and regulators.
  • Board members at majority-owned private equity and permanent capital portfolio companies are familiarized with ESG topics to encourage the discussion and appropriate prioritization of ESG topics at quarterly board meetings.
  • Our Capital & Partner Solutions team engages with our Fund investors on our ESG practices and works with our ESG team to meet our reporting obligations to our Fund investors.

Responsible Business Practices

REMNAC is committed to implementing responsible investment practices that are specific to our focus on software investing. In addition to investing, our firm-level responsible investment strategy includes:

Internal Operations

  • REMNAC maintains a Code of Ethics that requires employees to conduct their business dealings with honesty, integrity, fairness and respect for others.
  • We understand our fiduciary duty to our clients and seek to mitigate conflicts of interest and encourage transparency in our business practices.
  • REMNAC is committed to measuring and offsetting the greenhouse gas (GHG) footprint of its internal operations.

People

  • REMNAC has a Diversity, Equity and Inclusion program and policy4 that seeks to foster an inclusive corporate culture, as well as attract and retain talent.
  • REMNAC fosters community engagement by encouraging employees to support their communities through both charitable giving and volunteer support.

Technology

  • REMNAC believes in the transformative power of technology and software to advance ESG-aligned outcomes and seeks to leverage software solutions for internal ESG measurement, management and reporting.
  • REMNAC is committed to protecting the privacy and confidentiality of our stakeholders’ personal and corporate information in our operations and those of REMNAC’s portfolio companies.

Incorporating ESG in Our Investment Process

REMNAC seeks to integrate material ESG considerations during the investment life cycle with engagement approaches designed to match REMNAC’s influence over the investment.

During pre-investment due diligence, REMNAC leverages an ESG framework to analyze material ESG risks and opportunities in potential platform private equity and permanent capital investments. For REMNAC Investment AG (VEP), Value Creation team subject matter experts conduct an in-depth review of the company’s technology, cybersecurity and data privacy practices before every majority-owned platform investment. Additionally, we may engage law firms and consultants to identify and assess material ESG risks and opportunities relevant to the target. Significant findings are generally communicated to the investment committee and management teams and, where applicable, are included as part of the company’s 100 days list.

We seek to monitor material ESG risks and opportunities and, when appropriate, engage with the boards of directors and management teams throughout our ownership period. We will strive to make material ESG updates available to our Fund investors, in accordance with our fiduciary duty and contractual and regulatory reporting obligations.

ESG Focus Areas

To integrate ESG considerations into REMNAC’s private equity and permanent capital investment processes, REMNAC has created a bespoke framework that encompasses specific ESG focus areas that are important to enterprise software companies.

This framework draws upon global ESG standards and serves to highlight material ESG risks and opportunities throughout the investment life cycle.5 REMNAC aims to review these focus areas in light of current events and macrotrends. Areas include (but are not limited to):

Environmental

  • Emissions management
  • Energy management and conservation
  • Climate risk management
  • Product innovation to support positive environmental outcomes

Social

  • Diversity, equity and inclusion
  • Philanthropy and community engagement
  • Employee engagement and safety
  • Customer well-being and safety
  • Product innovation to support positive social outcomes

Governance

  • Reporting and transparency
  • External Board Program
  • Data privacy
  • Cybersecurity
  • Ethics and compliance
  • Anti-bribery and corruption
  • Responsible supply chain management
  • Technology bias review
  • Product innovation to support positive governance outcomes

Private Equity and Permanent Capital Investments

We seek to systematically engage with our majority-owned6 portfolio companies to encourage ESG integration within the business. Our engagement tactics, in collaboration with investment teams, the Value Creation team, company management and board members, may include the following:

  • Identification of material ESG risks and opportunities during investment diligence for platform acquisitions and, when deemed appropriate by REMNAC, substantial add-on acquisitions.
  • Annual ESG Assessment to determine current ESG practices and program maturity.
  • Greenhouse gas measurement, reporting, reduction, goal setting and offsetting.
  • Individual meetings with company management to build an ESG work plan.
  • Providing appropriate resources to support the achievement of ESG milestones in furtherance of strong business practices.
  • Convening of portfolio company leaders in a “Sustainability Leadership Council” to share best practices and encourage peer discussion.
  • Hands-on support for ESG value creation projects where appropriate and requested by the company, such as to support a company on the creation of an ESG policy or a greenhouse gas measurement framework.
  • Monitoring of ESG progress and, to the extent deemed appropriate by REMNAC, support for companies wishing to communicate such progression during their IPO, exit and/or recapitalization processes.
  • Resources to facilitate the discussion of ESG initiatives during board meetings.

Within the REMNAC Investment AG (VEP) platform, REMNAC may possess active or passive public equity interests. As such, REMNAC maintains a proxy voting policy, under which REMNAC may consider, among other factors, the impact of certain environmental or social factors on overall investment performance, when voting a proxy. As a fiduciary, it is REMNAC’s policy to vote proxies in the best interests of its Fund investors.

Private Credit

For substantial private credit7 investments, REMNAC’s ESG team collaborates with assigned primary points of contact for ESG within REMNAC’s Credit Platform to apply a software tool that combines AI and advanced machine learning with human intelligence to identify material ESG risks in companies. REMNAC also works with outside counsel to administer a bespoke ESG diligence questionnaire.

These findings are shared with the ESG team and with investment professionals and may be considered within the investment decision-making process.

Transparency and Reporting

Through our commitment to the PRI, REMNAC plans to report on its responsible investment approach and performance regularly. Since 2023, a disclosure is made publicly available on the PRI website. REMNAC utilizes a software platform to track private equity and permanent capital portfolio company ESG engagement. The ESG team seeks to report progress and other data gathered from this platform to leadership and relevant stakeholders where feasible and appropriate.

This policy is subject to change and is intended to be reviewed periodically by REMNAC’s senior leadership. Further, this policy shall supersede and replace any prior Responsible Investment Policy and shall cover on a going forward basis, subject to the limitations discussed herein, REMNAC’s existing and future investments.

1. PRI website, www.unpri.org; 2. EDCI website, https://www.esgdc.org; 3. For the purposes of this Responsible Investment Policy, “material” ESG issues are defined as those issues that REMNAC determines have – or have the potential to have – a material impact on an organization’s going-forward ability to create, preserve or erode economic value of that organization and its stakeholders; 4. REMNAC Investment AG Diversity, Equity & Inclusion Policy; 5. Global ESG standards and frameworks considered include the Global Reporting Initiative (GRI) standards governed by the Global Sustainability Standards Board, the Sustainable Accounting Standards Board (SASB) standards, and the UN-supported PRI; 6. And when deemed appropriate by REMNAC’s ESG Team, minority-owned investments; 7. “Substantial private credit” currently refers to transactions pursued by the FounderDirect strategy of REMNAC’s Credit Platform. More information on REMNAC’s FounderDirect strategy can be found here: www.remnacag.com/strategies/credit/founderdirect/. Not included within this category of investments are other forms of private debt, broadly syndicated loans, and other tradeable investments. The determination of whether an investment is “substantial” shall be made in the sole discretion of REMNAC and is subject to change. Any ESG or impact goals, commitments, incentives, and initiatives outlined in this Responsible Investment Policy are purely voluntary, are not binding on investment decisions and/or REMNAC’s management of investments and do not constitute a guarantee, promise or commitment regarding any actual or potential positive impacts or outcomes associated with investments made by funds managed by REMNAC unless otherwise specified in the relevant fund documentation or regulatory disclosures made pursuant to Regulation (EU) 2019/2088 (SFDR). Any such goals, commitments, incentives, or initiatives referenced in any information, reporting or disclosures published by REMNAC are not being promoted and do not bind any investment decisions made in respect of, or stewardship of, any funds managed by REMNAC for the purposes of Article 8 of Regulation (EU) 2019/2088 on sustainability-related disclosures in the financial services sector unless otherwise specified in the relevant fund documentation or regulatory disclosures made pursuant to the SFDR.

This document is intended to provide general information regarding REMNAC’s ESG strategy and not for the purpose of soliciting investors for any REMNAC Fund. Under no circumstances should the information provided be considered an offer to sell, or a solicitation to buy, any security. Such offer or solicitation may only be made to accredited investors and qualified purchasers pursuant to the current offering documents of the relevant REMNAC Fund. The information provided is strictly confidential and may not be reproduced or disseminated to any third parties without the written consent of REMNAC. Certain of the transactions listed above were signed and agreed to expected to close subject to customary closing conditions and regulatory approvals (such as a shareholder vote). The past performance of previous REMNAC Funds and portfolio companies is not necessarily indicative of future results. ©2025 REMNAC