What Is Environmental, Social, and Governance (ESG) Investing?

1

Introduction

Flashpoint has a mission to bring back some of the capital, value, and best practices that we know ourselves and help people to develop. Flashpoint focuses on international companies founded by entrepreneurs originating from Emerging Europe, mainly due to Flashpoint’s cultural proximity to the region. We want to provide capital, expertise and value to our portfolio companies to advance their missions and goals.

2

Purpose

This document (“ESG Policy Statement”) formalizes Flashpoint’s longstanding commitment to responsible business practices in the areas of:

○ Environmental Stewardship

○ Social Responsibility

○ Governance, Ethics & Compliance.

It also memorializes our commitment to practice responsible investment by integrating Environmental, Social and Governance (“ESG”) considerations into our investment decision and management processes. By embedding ESG into our operations and investment decisions, we create value for our business by driving innovation, expanding our value proposition, deepening relationships with our stakeholders, attracting and retaining top talents, as well as reducing costs.

We continuously monitor ESG legal requirements, including those applicable under European Union laws and regulations, as well as follow good practices and market standards that allow us to be fully ESG compliant.

3

Policy scope

This ESG Policy Statement applies to Flashpoint Venture Capital Group Ltd. and its affiliates (“Flashpoint”).

4

Introduction

Flashpoint’s approach to ESG is comprised of three main pillars:

Own sustainable operations at Flashpoint.

Ensuring that Flashpoint’s investments are into companies which are responsible from an ESG point of view.

Assisting Flashpoint’s portfolio companies with their ESG and sustainability, in particular in relation to increasing standards of corporate governance.

The ESG scope listed above is not exhaustive and Flashpoint will continue to re-visit, refine, and add to the list

5

Flashpoint’s Commitment to ESG

Our understanding of ESG is broad, therefore controls and measures aiming to manage ESG will be implemented on a step-by-step basis. As a modern company, we procure many services and products from external suppliers. When selecting business partners, we rely on companies with a strong market position and good reputation.

Not only energy efficiency or waste management are important to us. Flashpoint cares about people and communities. We strictly adhere to regulations related to health and safety, data protection and privacy, diversity, human rights as well as labor standards.

For us, governance factors are not just about the company’s values, standards, board composition or share structure. Flashpoint has zero tolerance for exploitation, circumvention of laws, bribery and corruption and other detrimental and/or illegal practices. We also prioritize matters such as transparency, proper reporting as well as legal and regulatory compliance (including sanctions). We unconditionally demand the same from all our stakeholders.

When making investment decisions, Flashpoint pays attention to sustainability. We aim to invest in software companies and emerging new technologies. As a result, Flashpoint does not directly support companies that pollute the environment in traditional ways, such as using fossil fuels or similar hazard-polluting raw materials to run their core business.

5.1

Maintaining strong ESG governance within Flashpoint’s own operations.

At Flashpoint, we’re built on the principles of clear and transparent governance. It’s important within building this transparent, corporate structure to make sure that all the people who work inside Flashpoint understand how they can grow and how they should act so that the organization can meet its ESG goals and requirements. We want to provide a sort of social elevator for the local people to become part of a large international organization. We are building an open-ended partnership.

Moreover, we believe that good corporate governance is essential for financially sound companies. We support our portfolio companies at various stages of their life cycles to implement good governance spanning board governance to controls. Specifically, we prioritize an experienced, active and engaged boards of directors with the skill to proper oversight, direct management and encouragement of protocols to enhance transparency and good governance. Therefore, members of Flashpoint’s investment team hold various positions in the corporate bodies of the companies we have invested in.

5.2

Embedding ESG within our investment process.

Pre-Investment: As part of our screening process and due diligence, different ESG-related risks and factors are assessed (with particular focus on effectiveness and corporate governance issues). ESG-related factors are included in our Target Investment Criteria Analysis (“TICA”), which is used to comprehensively analyze entities before making investment decisions. A part of TICA covering ESG compliance is subject to review and approval by the compliance officer. Flashpoint aims to find and invest in the best and most ambitious founders from a diverse set of demographics, backgrounds, and experiences to maximise fund performance. Flashpoint’s evaluation process is impartial and structurally designed to ensure we evaluate opportunities from a diverse perspective and identify biases and blind spots.

Our Stop List

Flashpoint does not invest in such areas as:

○ Gambling

○ SBD Products

○ Tobacco

○ Fossil Fuels

○ Anything with excessive energy usage
(e.g. crypto mining)

Positive ESG Impact (as well as avoidance of ESG risk) is seen as a relevant decision-making criteria. The consideration of possible ESG impacts is part of our investment assessment process. Flashpoint takes into account social factors, namely: environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.

By definition, most companies which we are considering for investment have a large technology component, which generally carries an efficiency element and hence a positive ESG impact. We avoid investment opportunities which carry a tangible negative ESG impact, however these cases are rare.

We want the businesses we invest in to be genuinely focused on doing well for all stakeholders including their own employees, customers, suppliers, shareholders, the environment and the wider world at large. We firmly believe that responsible business practices help generate superior long-term performance.

Post-Closing: Flashpoint’s Communications Department routinely engages with portfolio companies to offer support to help them refine their own ESG approach.

Monitoring and Encouraging Continuous Improvement: As part of the firm’s mission to partner with game changers and to help founders build category-winners, Flashpoint’s investment team will also actively help founders to identify and respond to opportunities to further improve their ESG engagement on an on-going basis. Flashpoint will also provide portfolio companies with access to training, materials and access to the other founders through the firm’s Learning Academy.

5.3

Encouraging strong ESG engagement by portfolio companies.

Flashpoint strongly encourages portfolio companies, founders and boards of directors we work with to actively engage with the ESG implications of their business activities. Our approach is not only about mitigating risks, but also about adding value by using ESG factors to improve business practices. Central to our investment process is also the introduction and implementation of a strong governance and management structure for each of the portfolio companies. Going forward, we also plan to have our investment teams monitor and help portfolio companies with ESG issues and ESG risks as part of their engagement (including in their capacity as board members).

Positive ESG Impact (as well as avoidance of ESG risk) is seen as a relevant decision-making criteria. The consideration of possible ESG impacts is part of our investment assessment process. Flashpoint takes into account social factors, namely: environmental, social and employee matters, respect for human rights, anti‐corruption and anti‐bribery matters.

By definition, most companies which we are considering for investment have a large technology component, which generally carries an efficiency element and hence a positive ESG impact. We avoid investment opportunities which carry a tangible negative ESG impact, however these cases are rare.

We want the businesses we invest in to be genuinely focused on doing well for all stakeholders including their own employees, customers, suppliers, shareholders, the environment and the wider world at large. We firmly believe that responsible business practices help generate superior long-term performance.

Examples of Responsible Investments

Flashpoint invested 30% of its capital in themes that change the world for the better, this includes investments into:

○ e-learning

○ telemedicine

○ online job platforms

Post-Closing: Flashpoint’s Communications Department routinely engages with portfolio companies to offer support to help them refine their own ESG approach.

Monitoring and Encouraging Continuous Improvement: As part of the firm’s mission to partner with game changers and to help founders build category-winners, Flashpoint’s investment team will also actively help founders to identify and respond to opportunities to further improve their ESG engagement on an on-going basis. Flashpoint will also provide portfolio companies with access to training, materials and access to the other founders through the firm’s Learning Academy.

5.4

Engaging with our limited partners on ESG issues.

Flashpoint aims to have broad transparency on ESG topics with the Limited Partners of the Flashpoint funds. To this end, Flashpoint proactively includes ESG information in our quarterly reports to our limited partners and provides updates on ESG issues and programmes at our annual Investor Day. ESG related materials prepared by the Communications Department are subject to prior approval of the compliance officer.

5.5

Promoting diversity, equity and inclusion (“DEI”) in the workplace.

DEI is embedded at the core of our organization across all our levels. Flashpoint’s goal is to be a leading and top performing European technology investment platform that contributes meaningfully to a better future. Flashpoint is an equal opportunities employer and we respect the diversity of our people. Our employees come from different countries and cultures, have different educational backgrounds and experience in international organizations, which allows us to benefit from good practices and experience spread around the world in different industries and organizations. Flashpoint creates equal opportunities for every person, notwithstanding the gender nor origin.

Our aim is to attract, motivate, develop and retain a diverse and talented group of people while also providing a working environment that promotes both inclusion and equality. We have an inclusive culture and practice open sharing of information, transparent decision making and provide an accessible environment for all. Twice a year, we run employee surveys to help us identify areas for improvement, track employees’ progress and act on change. Flashpoint diversity initiatives are applicable also to the ongoing development of a work environment built on the premise of gender and diversity equity that encourages and enforces respectful communication and cooperation between all employees.

6

Integrating sustainable development within our remuneration framework.

Remuneration for Flashpoint’s staff is based on a by-annual appraisal process which considers a variety of factors but includes the extent to which staff members promote the firm’s guiding principles and adhere to the firm’s internal regulations, like policies and procedures. A significant portion of overall remuneration for senior staff members is also linked to the long-term performance of the Flashpoint funds which encourages employees to make decisions aimed at long-term, sustainable growth of the investment portfolio.

7

Sharing blog posts on ESG importance.

From time to time Flashpoint publishes ESG related articles on its blog. Our aim is to increase stakeholders’ awareness and encourage readers to consider ESG management within their own operations.

ESG Statement

Flashpoint has a mission to bring back some of the capital, value, and best practices that we know ourselves and help people to develop.

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