Climate Change Data

Environmental Metrics

Environmental Challenges

• Venture Capital Trust status risk
• Investment valuation and liquidity risk
• Internal control risk
• Economic risk
• Operational risk

Mitigation Strategies

• Continual monitoring of compliance with VCT regulations by the Investment Adviser, periodic reports from Philip Hare & Associates LLP
• In-house due diligence on all investments, engagement of independent third-party providers for larger or complex investments, portfolio diversification
• Policy setting, regular performance reviews, enforcement of contractual obligations, monitoring progress and compliance
• Adopting a suitable investment style for the business cycle, diversifying exposure to geographic end markets
• Regular review of third-party supplier performance at management meetings, Director review of Investment Adviser performance at Board meetings

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

Environmental Challenges

• Maintaining VCT status.
• Investment valuation and liquidity risk.
• Internal control risk.
• Economic risk (recession, interest rate movements).
• Operational risk (failure of Investment Adviser's systems).

Mitigation Strategies

• Investment Adviser continually monitors compliance with VCT regulations; engaged Philip Hare & Associates LLP for periodic compliance reports.
• Diversification of portfolio across industries and companies at varying stages of development; in-house due diligence on all investments.
• Policy setting, regular performance reviews, enforcement of contractual obligations, and monitoring progress and compliance.
• Suitable investment style for the business cycle; diversification of exposure to underlying sectors and end markets.
• Regular review of third-party supplier performance at management meetings; Directors review Investment Adviser performance at Board meetings.

Supply Chain Management

Climate-Related Risks & Opportunities

Environmental Metrics

ESG Focus Areas

• Sustainability
• Environmental, Social, and Governance (ESG)

Environmental Achievements

• Using recycled paper stocks
• Encouraging shareholders to move to digital-only communications and electronic payment of dividends

Social Achievements

• Supporting portfolio companies in their ESG journey
• Not disclosed

Governance Achievements

• Introduced a Management Engagement Committee and a Remuneration & Nomination Committee

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic caused disruption to portfolio companies with physical sites
• International travel shutdown greatly affected Secret Food Tours and HotelMap

Mitigation Strategies

• Many companies were able to trade through the pandemic using click-and-collect and online ordering/delivery partners
• Secret Food Tours and HotelMap are now trading again without requiring financial support

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Carbon Footprint
• Carbon Neutrality

Environmental Achievements

• The Investment Manager assessed its own carbon footprint from 2019 to 2021. Historic and future emissions will be offset to make both the Investment Manager and the Company carbon neutral.
• Using recycled paper stocks and encouraging shareholders to move to digital-only communications, electronic payment of dividends and online applications.

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• COVID-19 impact on portfolio companies, particularly in the design sector and those with physical sites.
• Sourced Market and Player Layer placed into administration.
• Alexa Chung conducting an orderly wind-down of its business.

Mitigation Strategies

• Many portfolio companies adapted their business models during the pandemic.
• Follow-on investments totaling £26.9 million in 21 portfolio companies to support their growth.
• Monitoring the current macro-economic environment, political issues caused by the Russian invasion of Ukraine and rising inflationary pressures in the UK.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• COAT Paints (environmentally-friendly paint)

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Environmental performance
• Social performance
• Governance
• Diversity and inclusion
• Responsible investment

Environmental Achievements

• Seven portfolio companies are registered B Corps, meeting standards of social and environmental performance, transparency, and accountability.

Social Achievements

• Bloobloom's 'Pair for Pair' program donates the cost of a pair of glasses for each pair purchased to Vision for a Nation.
• My Expert Midwife develops products addressing women's needs during pregnancy, childbirth, and recovery.
• Ro&Zo focuses on quality and value of garments.

Governance Achievements

• Adopted ESG responsible investment policy in 2022.
• Became a member of ESG_VC in 2022.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions impacting some portfolio companies.
• Stitch & Story going into liquidation.
• Loss on investment in Second Home.
• Obstacles in implementing growth strategies for several portfolio companies resulting in valuation decline.

Mitigation Strategies

• Investment Manager focuses on helping portfolio companies grow and address challenges.
• Portfolio companies continually evolve strategies to overcome challenges and take advantage of new opportunities.
• Hands-on portfolio management, monitoring businesses monthly.

Supply Chain Management

Responsible Procurement

• Ethical standards in selecting factories for Bloobloom.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: ESG_VC framework

Sustainable Products & Innovation

• Coat Paints (Climate Positive Certified)
• Rubies in the Rubble (sustainable condiments)
• Dropless (eco-friendly car cleaning solution)

Awards & Recognition

• Lyma - King’s Award for Innovation

Environmental Metrics

ESG Focus Areas

• B Corp companies
• Female entrepreneurship
• ESG reporting

Environmental Achievements

• Eight portfolio companies are registered B Corps, meeting standards of social and environmental performance, transparency, and accountability.

Social Achievements

• Investment Manager became a signatory of the Investing in Women Code, supporting female entrepreneurship. 37% of portfolio companies have at least one female founder.

Governance Achievements

• Appointment of Chris Allner, a new Non-Executive Director with extensive VCT experience, to improve Board performance and succession plans.

Climate Goals & Targets

Environmental Challenges

• Challenging market conditions impacting portfolio companies' ability to raise funds. Kat Maconie and Kinteract went into administration.
• Some portfolio companies faced challenges hindering growth strategies, resulting in valuation declines (Dropless, Eave, Bella Freud, Heist, Chucs Restaurants, JustWears, Thriva, and Rubies in the Rubble).

Mitigation Strategies

• Developed a critical new deal evaluation process and focused on existing portfolio companies.
• Closely worked with challenged companies on strategies to improve financial resilience (e.g., Dropless pivot to accident repair, Eave's focus on distribution partners, Bella Freud's management team improvements).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: ESG_VC framework

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed