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ESG Policy

 

Introduction

Springcoast Capital Partners, L.P. (together with its affiliates, the “Firm”) provides investment management and advisory services to affiliated private equity funds (each, a “Fund” and together, the “Funds”). The Firm was founded with a mission to: (i) provide the highest possible risk-adjusted returns for investors (collectively, the “Investors”); (ii) create shareholder value alongside our partners and our portfolio companies (the “Portfolio Companies”); and (iii) set a standard of integrity, transparency and excellence. We believe that the quest for creating shareholder value in growth-oriented technology companies can align with broader environmental, social and governance (“ESG”) goals. For example, we believe, among other matters, that: (a) consideration of energy usage and diversification towards renewable sources of energy can help address climate change; (b) diversity in gender and race at all levels of leadership can lead to broader perspective, a more inclusive work environment, better decisions and, ultimately, a better product; and (c) paying competitive wages can help attract the best developer talent.

In light of the foregoing, the Firm has committed to considering ESG issues in making investment decisions on behalf of the Funds and intends for this policy (this “ESG Policy”) to guide its consideration of material ESG issues throughout the Funds’ investment process, consistent with and subject to any applicable fiduciary, legal, regulatory or contractual duties.

Given the Firm’s investment strategy focused on technology companies, we do not expect to invest in businesses in industries such as tobacco, fossil fuels and firearms.

For the purposes of this ESG Policy, “material” ESG issues are defined as those issues that the Firm 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, as well as environmental and social value, for that organization and its stakeholders. Examples of the types of ESG issues that the Firm may consider include, but are not limited to: data security, customer privacy, systemic risk management, diversity & inclusion, and employee engagement.

Notwithstanding anything in this ESG Policy to the contrary, the Firm does not expect to subordinate any Fund’s or Investor’s investment returns or increase any Fund’s or Investor’s investment risks as a result of (or in connection with) the consideration of any ESG factors.

 

Scope and Limitations

This ESG Policy is intended to reflect the Firm’s general framework for assessing ESG issues during investment due diligence and to guide its consideration of material ESG issues throughout the investment process. Given its investment strategy, the Firm will not have the ability to exercise control over the companies in which the Funds invest and its ability to influence the consideration of ESG issues in connection with an investment will vary depending on the investment structure and terms. To the extent that the Firm seeks to encourage a Portfolio Company’s management team to take certain ESG-related actions, there is no guarantee that such management team will act accordingly.

 

Enhancing ESG Management Acumen

To support the integration of the principles set forth in this ESG Policy, the Firm will seek to develop ESG management acumen among its investment professionals. This commitment will be supported by:

  • making this ESG Policy available to its professionals;
  • building ESG awareness among its professionals through trainings on ESG issues and their impact on the Firm’s business; and
  • using commercially reasonable efforts to remain reasonably informed about ESG developments and best practices within the private equity industry.

 

Investment Analysis and Due Diligence

Subject to the Firm’s reasonable determination based on the attendant facts and circumstances at the time, for each prospective investment advised on by the Firm, the Firm will seek to:

  • assess material ESG issues, risks and opportunities, and, as needed, perform internal diligence or engage external advisors in furtherance of the same; and
  • as part of the approval process for such investment, consider material ESG issues, risks and opportunities identified during due diligence.

 

Responsible Portfolio Company Ownership

Subject to the Firm’s reasonable determination based on the attendant facts and circumstances at the time, the Firm will seek to encourage and support Portfolio Companies in considering the interests of their various stakeholders, including customers, employees, suppliers and communities, and how they may enhance shareholder value in the long-term.

 

Accountability and Transparency

The Firm will seek to promote accountability and transparency to Investors with respect to its consideration of ESG issues in respect of the Funds. The Firm will seek to do this by:

  • disclosing this ESG Policy to Investors and prospective Investors (as required and upon request);
  • maintaining due diligence memoranda and such other documentation that reflect the implementation of this ESG Policy;
  • integrating information concerning ESG issues, Fund management activities and progress in periodic reporting and other communications internally and, from time to time, with Investors; and
  • ensuring that the approach to ESG issues is consistent with disclosures made to current and prospective Investors, and notifying current and prospective Investors if the approach to ESG issues becomes inconsistent with such disclosures.

Senior management is responsible for reviewing this ESG Policy at least every 2 years and amending, supplementing or otherwise modifying this ESG Policy as it deems appropriate, including in response to changes in industry demands and regulations.

The Firm’s senior management is responsible for the ultimate implementation of this ESG Policy and our ESG strategy.

 

This Policy was last updated in June 2023 and is subject to change as the Firm considers necessary or advisable.