Micro Venture Capital – Responsible Investment Policy
1. Introduction
This policy outlines our perspective on responsible investing and the approach we take to ensure consideration of Environmental, Social and Governance factors (“ESG”) as part of all our investment and portfolio management activities.
The policy is not intended to be prescriptive, but to provide a principled, consistent approach to ESG integration within all investments based on our investor requirements and industry best practice, in alignment with Micro VC’s purpose and responsible investment beliefs.
2.Our purpose and benefits.
At Micro Venture Capital (hereinafter “Micro VC”) we are driven by our dual purpose - to deliver returns to our investors and make a meaningful contribution to the environment and the communities in which we operate. Our approach to responsible investment is underpinned by our responsible investment beliefs:
• We believe in being responsible global citizens and we are committed to making a positive ESG contribution through our work.
•As influential shareholders, we believe we have a unique opportunity to magnify our contributions through our investee companies, who collectively have a large employee base and operational footprint.
• We strive to generate positive outcomes because we believe it is the right thing to do and because our stakeholders (especially our employees, LPs and investee companies) will increasingly hold us accountable for the outcomes of our activities.
• We believe that continuing to operate as a high-quality investment firm requires continuously optimizing all areas of our business, which includes our approaches to assessing and creating positive ESG outcomes.
The consideration of ESG factors in all areas of our business helps us ensure we operate in a way that is true to our beliefs, while contributing to the long-term financial performance of our portfolio by appropriately integrating ESG risks and opportunities.
3.Scope
This policy applies to all existing investments, new investing decisions and activities across all asset types, industries and geographies in which we invest. We aim to adopt this approach consistently across all our investments; however, we note that in situations where we do not have direct board representation or we are a minority shareholder, our ability to influence outcomes of all types may be lower.
4.Our principles
Our responsible investment approach is guided by the following principles:
• Integrated approach: We will explicitly integrate consideration of ESG risks and opportunities in screening, due diligence and monitoring of investments.
• Active ownership: We will incorporate ESG considerations into our ownership policies and practices, including working with our investee companies to enhance their social and environmental outcomes and to create financial, reputational and competitive advantage.
• ESG priorities: We priorities ESG risks and opportunities specific to each company and industry, however for all our portfolio companies we focus on the following issues at a minimum: decarbonization, employee health & safety, employee engagement, diversity, community engagement, ethical supply chains and cybersecurity. We will add to or amend this list as necessary over time.
• Transparency: We will regularly report on our ESG performance to key stakeholders, including disclosing ESG-related metrics and outcomes.
5. Integration
Micro VC integrates consideration of ESG risks and opportunities into all stages of the investment lifecycle. In applying this approach, we strive to be principled but also pragmatic, taking into account corporate performance, industry norms, regulatory requirements and other factors as relevant.
5.1 Screening
During the initial opportunity screening phase, we:
• negatively screen against Micro VC’s exclusion list, to determine whether or not the investment can be pursued,
• screen for industry-specific ESG risks and opportunities using the Sustainability Accounting Standards Board (SASB) framework and
• consider across all sectors the potential impact of climate change, the risk of child labor practices and modern slavery in the supply chain and the recognition of Indigenous Peoples rights.
These risks and opportunities are taken into consideration when deciding whether to pursue an investment or not and to priorities due diligence activities should we proceed.
Micro VC has committed not to invest in:
1. Businesses which engage in activities that are illegal under applicable local laws or banned by global conventions, which include but are not limited to human rights abuses, labour rights violations, illegal logging and other illegal environmental activities.
2. Businesses which contribute to, facilitate or are involved with unethical behaviors, which include but are not limited to animal cruelty/animal testing for non-pharmaceutical activities and activities causing significant and unrepaired environmental damage or harm to the communities in which they operate.
3. Businesses with the principal purpose of OR which derive more than 25% of consolidated revenue from the following activities: producing or selling tobacco, mining, production or transportation of fossil fuels, gambling and producing or selling pornography, producing or selling of arms or weaponry, in particular any controversial weapons as referred to in international treaties and conventions, United Nations principles and national legislation.
5.2 Due Diligence
During the due diligence phase, we will assess the key ESG risks and opportunities identified in the screening phase, through documentation review, management meetings and use of specialized external advisors on key issues where relevant. Micro VC has developed a proprietary due diligence checklist which is employed by deal teams for each opportunity.
During due diligence we engage with management and other stakeholders on ESG risks and opportunities to assess:
• Alignment with Micro VC on the importance of ESG matters.
• Relative sophistication of the organization with respect to awareness and management of these matters.
• Suitability of business plans and risk management frameworks to manage ESG risks and opportunities.
Investment decisions incorporate findings from ESG due diligence. We then work with management to ensure the investment business plan suitably addresses ESG risk management and opportunities.
5.3 Portfolio management
Micro VC is an active investor and with all business improvement initiatives, we work closely with management to:
• ESG integration: Support the integration of ESG considerations (including the implementation of ESG value creation initiatives) into the investee company’s business strategy, planning and KPIs.
• Direct engagement: Regular dialogue with management to influence their practices in line with Micro VC’s ESG priorities.
• Regular monitoring: Establish regular reporting of ESG metrics by the investee company at least annually. At a minimum we will require reporting on our ESG priorities (see below) and where required, updates on issues identified as being material during the due diligence phase.
• Respond to breaches: Where serious breaches of ESG standards have been identified, Micro VC prefers engagement over exclusion, working with the entity to improve ongoing performance where appropriate. Micro VC reserves the option to divest an investment for the most egregious sustained activities where the entity is unwilling or unable to change its practices.
Where Micro VC is not as actively involved in operations of the investee company (e.g. a VC investment where we are not represented on the board), we will still endeavor to use our influence to manage and monitor ESG contributions throughout the ownership period, however our ability to influence activities may be lower by virtue of not being the largest shareholder.
5.4 Exit readiness
During the exit readiness phase, we will ensure the investee companies have the support and resources required to undergo a sale process. We will incorporate ESG considerations in the positioning of the investee company, including highlighting the value creation opportunities that have been implemented and future opportunities to be realized. Material ESG issues which require ongoing monitoring or further improvement will be recorded in sale documentation to support the ongoing management and improvement of ESG issues.
We will also assess the buyer’s ESG credentials in order to help ensure good stewardship going forward.
6. ESG priorities
While Micro VC considers all material ESG factors in our approach to responsible investment, we will focus on seven common factors across all our investments. We have identified relevant metrics for each focus area which will be tracked and monitored for all of our portfolio investments at least annually and reported to our investors as relevant.
Micro VC’s ESG priorities:
Our purpose and goal for each of the ESG priorities is set out below:
• Decarbonization: To support the global transition to a low carbon economy, we are committed to achieving Net Zero by 2050 across our portfolio.
• Health & safety: To provide a safe and secure workplace for all employees, we are committed to ensuring high health and safety standards across our portfolio.
• Employee engagement: To develop workplaces where our people are inspired, paid fairly and recognized for their contribution, we are committed to facilitating regular workforce engagement to uplift employee experience and wellbeing.
• Diversity & inclusion: To provide fair and equal opportunities for all individuals, we are committed to promoting a diverse workforce, with consideration given to female representation and other underrepresented groups.
• Community engagement: To contribute to the development of local communities, we are committed to supporting community development and charitable causes.
• Ethical supply chains: To support ethical and transparent supply chains, we are committed to having zero tolerance towards modern slavery and child labour in our supply chains and to transitioning to environmentally responsible practices along the value chain.
• Cybersecurity & data privacy: To uphold the trust of our stakeholders, we are committed to protecting and safeguarding their data and information by maintaining best-practice cybersecurity and information management systems and processes.
7. Roles and responsibilities
Our commitment to ESG starts at the top of our organization and flows down to everyone in Micro VC and our investee companies.
• Micro VC Board: The directors of Micro VC assume ultimate responsibility for Micro VC’s investment approach including practices with respect to ESG.
• Investment Committee: Responsible for approving any decision to invest in companies and monitoring performance over time. This group has responsibility for ensuring appropriate ESG considerations are factored into investment decisions and company business plans.
• ESG Working Group: Selected individuals from our team who meet regularly to discuss relevant ESG matters as they arise and provide support to investment teams with respect to ESG matters and incorporating ESG into due diligence and investment decisions. The ESG Working Group is also responsible for the continuous improvement of Micro VC’s responsible investment approach and Responsible Investment Policy.
• Investee Companies: The board of directors of each investee company are responsible for defining ESG policy and priorities for each company and company management are responsible for implementing ESG initiatives and transparently reporting the company’s performance to the Board and shareholders including Micro VC.
8. Disclosure and Reporting
Micro VC is committed to transparency and we will regularly report to our investors and stakeholders on our performance and progress against our ESG priorities as set out above Micro VC will publicly disclose our Responsible Investment policy on our website.
9. Review
The Micro VC Board of Directors, being the owner of this policy, will review the policy on an annual basis and make amendments as appropriate.
Policy updated: February 2026
Next due date for review: February 2027