Introduction

Value² is committed to responsible investment practices that prioritize both financial returns and positive environmental, social, and governance (ESG) impacts. To uphold this commitment and maintain the trust of our clients, we have established these Guidelines for Managing Conflicts of Interest related to Responsible Investments. These guidelines define potential conflict scenarios and outline procedures to mitigate them, ensuring our investment decisions are made solely in the best interests of our clients and responsible investment objectives.

Identifying Conflicts of Interest

Conflicts of interest may arise when our professional judgment regarding investments could be unduly influenced by other considerations. Here are some potential areas of conflict specific to responsible investments:

• Personal Investments: Employees’ personal investments could create a conflict if they influence investment decisions for client portfolios.

Mitigating Conflicts of Interest

Value² takes a proactive approach to mitigating these potential conflicts. Here are the key elements of our strategy:

• Disclosure and Transparency:
  • We maintain a comprehensive conflicts of interest register that identifies potential conflicts and the steps taken to mitigate them.
  • We disclose all relevant information about our ESG investment processes and methodologies to clients.
  • We avoid selective disclosure of information that could benefit specific investments or relationships.
• Information Barriers:
  • We establish information barriers between portfolio managers, analysts, and sales or marketing teams to prevent personal financial interests from influencing investment decisions.
  • Employees with potential conflicts are restricted from accessing or sharing sensitive information related to specific investments.
• Independent Research and Due Diligence:
  • We rely on independent research and analysis conducted by dedicated ESG specialists for all our investment decisions.
  • External ESG ratings and data providers are used alongside internal research to ensure objectivity.
• Internal Governance:
  • Investment decisions are reviewed by a committee structure to ensure objectivity and adherence to ESG criteria.
• Employee Code of Conduct:
  • Our code of conduct outlines employee responsibilities regarding conflicts of interest, including restrictions on personal investments and gifts from issuers.
  • Employees are required to disclose any potential conflicts of interest to their supervisors.

Monitoring and Enforcement

These guidelines are subject to ongoing review and improvement. We will monitor the effectiveness of our conflict management strategies and make necessary adjustments as needed. Any violation of these guidelines will be taken seriously and may result in disciplinary action.

Conclusion

By implementing these guidelines, Value² is committed to upholding the highest ethical standards in responsible investing. We believe that transparent and objective decision-making is essential to achieving our clients’ financial goals while promoting positive environmental and social impact.

Additional Considerations

• These guidelines are a starting point and can be further customized to address specific needs and areas of focus within Value²’s responsible investment strategy.
• Consider including specific examples of potential conflicts and how they would be mitigated to further illustrate the application of these guidelines.

We are confident that these Guidelines will enable Value² to continue its leadership in responsible investments, fostering trust and delivering sustainable value for our clients.

Introduction

At Value², we recognize that responsible investment goes beyond simply selecting companies with strong ESG (environmental, social, and governance) performance. Creating a sustainable future requires collaboration with a diverse range of stakeholders who share our commitment to positive environmental and social impact. These guidelines outline our approach to engaging with key stakeholders, fostering open communication, and building strong partnerships for a more sustainable future.

Key Stakeholders

We identify several key stakeholders with whom proactive engagement is crucial for our responsible investment practices:

• Non-Governmental Organizations (NGOs): We collaborate with NGOs working on environmental, social, and governance issues. Their expertise and advocacy efforts are valuable for informing our investment decisions and engagement activities with investee companies.
• Industry Associations: Participation in industry associations allows us to promote best practices in ESG integration within specific sectors. We advocate for responsible business practices and collaborate on initiatives that drive positive change.
• Academia and Research Institutions: Collaborating with research institutions provides access to cutting-edge ESG research and data. This knowledge informs our analysis of companies, identifies emerging ESG risks and opportunities, and helps refine our investment strategies.
• Policymakers and Regulators: We engage with policymakers and regulators to advocate for robust ESG frameworks and regulations that encourage companies to adopt sustainable practices.
• Media: We maintain open communication with the media to increase public awareness about responsible investment and its positive impact. Additionally, we aim to promote transparency in our investment processes and ESG considerations.

Objectives of Engagement

Our objectives for engaging with stakeholders are:

• Information Sharing: We aim to share knowledge and expertise on responsible investment practices with stakeholders and learn from their perspectives.
• Collaboration: We collaborate with stakeholders on initiatives that promote positive environmental and social outcomes.
• Advocacy: We advocate for policies and regulations that encourage companies to adopt sustainable practices and contribute to a just transition to a low-carbon economy.
• Transparency and Accountability: We engage in open communication with stakeholders to ensure transparency in our investment approach and accountability for our actions.

Engagement Strategies

We will utilize various strategies for effective engagement with stakeholders:

• Regular Meetings and Conferences: We will participate in regular meetings and conferences with key stakeholder groups to foster dialogue and collaboration.
• Joint Research and Advocacy Projects: We will collaborate with stakeholders on research projects and advocacy initiatives related to ESG challenges and opportunities.
• Membership in Key Organizations: Membership in relevant industry associations and NGOs allows for participation in their activities and promotes responsible investment practices.
• Public Statements and Thought Leadership: We will issue public statements and contribute thought leadership pieces to raise awareness about responsible investment and its impact on key issues.

Communication Principles

Our communication with stakeholders will be guided by the following principles:

• Transparency: We will provide clear and accurate information about our investment strategies, ESG considerations, and engagement activities.
• Respect: We will engage with stakeholders in a respectful and professional manner, acknowledging the value of diverse perspectives.
• Timeliness: We will respond to stakeholder inquiries and concerns in a timely manner.
• Accountability: We will be accountable for our actions and transparent about our progress towards achieving our responsible investment goals.

Conclusion

Value² is committed to responsible investment practices that create long-term value for our investors while contributing to a sustainable future. By actively engaging with key stakeholders, we can leverage collective knowledge, build strong partnerships, and drive positive change across the investment landscape. These guidelines provide a framework for effective stakeholder engagement, ensuring transparency and collaboration in creating a more sustainable and equitable world.

Doing the right thing has always been a core value for our company. It extends throughout our organization and is a guidepost for how we conduct our business, treat our employees, and serve our residents and our community.

While we have long focused on environmental initiatives, investing in our people, and giving back to the communities where we’re located, we are now making it a more formal part of our ESG (environmental, social and governance) communication strategy. ESG is a natural extension of our values and is not only the right thing to do for our society and the planet, but it makes good business sense as well. 

Our ESG Vision 

Is to create healthy, sustainable environments with a sense of community and connection by giving back, investing in our employees and driving long-term value for all stakeholders. 

Environmental Responsibility 

We’ve extended this philosophy throughout our portfolio whenever possible. Fundamentally, we know that a healthy, comfortable and socially responsible living environment is important. 

Social Responsibility

Being a good corporate citizen has always been a part of our DNA. Taking good care of people with whom we operate ultimately leads to exceptional quality, productivity and business success. 

Governance 

We strive for diversity among our board, considering candidates’ range of experience, thought, perspectives, and competencies as well as more traditional age and gender characteristics. We have measurable diversity improvement goals and monitoring in order to make sure that the reality is beyond our initial goals

Looking Forward

We understand that this expression of commitment to ESG is just the beginning of a continued focus on how our business can better contribute to a sustainable and thriving society while also continuing to create long-term sustainable returns for our investors and other stakeholders. 

Environmental Policies

Land & Life

Recycling Programs

Value² has a company-wide recovery and recycling program that includes the following:

✔ Paper – The company aims at reducing the use of paper to its minimum, but we understand that every now and then it is necessary (this is something which we track (e/m printing). We recycle all the paper used in the specific trash.

✔ Cardboard – The company aims at reducing the use of cardboard to its minimum, but we understand that every now and then it is necessary. We recycle all the cardboard used in the specific trash.

✔ Plastic – The company aims at reducing the use of plastic to its minimum. We have zero tolerance for disposable cutlery and dishes. There is a plastic bean in the co-working space we rent, which ensures that all plastic is recycled.

✔ Glass & metal – Every time this is being used, the Sustainable Officer of the company takes it to a special recycling bin.

✔ Composting – On a company event all the compostable will be collected and composted. During the weekly meeting of the company, composite solutions are offered.

Monitoring and Reporting Non-hazardous Waste

Value Square monitors and manage our waste production
We currently only record paper waste.

Environmental Management

Virtual office stewardship

Our company encourages good environmental stewardship in how employees manage their virtual offices

We have a written policy encouraging environmentally preferred products and practices in employee virtual offices:

Value² encourages everyone in the company to steward the environment in our office space and at home.

As part of “walking the talk” of responsible behavior we urge everyone to reduce use of materials and if used to recycle everything after use in the various possibilities we provide.

In terms of energy use, we have a reminder sign in the office space to take out of the socket all appliances which have light bulbs (our office space has automatic timers for electricity and water.
Our company shares resources with employees regarding environmental stewardship in home offices – We sent info for energy efficiency when working remotely

We have a policy in place for the safe disposal of e-waste and other hazardous materials purchased for employee home offices
Everyone working remotely is urged to bring disposable E-waste to the office in order to be collected once a week (including batteries).

Policy brief & purpose

Our professional code of ethics policy aims to give our employees guidelines on our business ethics and stance on various controversial matters. We trust you to use your better judgment, but we want to provide you with a concrete guide you can fall back on if you’re unsure about how you should act (e.g. in cases of conflict of interest). We will also use this policy to outline the consequences of violating our business code of ethics.

Scope

This policy applies to everyone we employ or have business relations with. This includes individual people such as employees, interns, volunteers, but also business entities, such as vendors, enterprise customers or venture capital companies.

Note that our code of ethics is slightly different than our code of conduct (appears in full in the Employee Handbook). Code of conduct may include elements such as dress code and social media use, whilst our code of professional ethics refers to legally or morally charged issues. Still, these two codes do overlap.

Policy elements

What is meant by the code of professional ethics?

First, let’s define professional ethics: they are a set of principles that guide the behavior of people in a business context. They are essential to maintaining the legality of business and a healthy workplace.

So what is a code of ethics? Our code of ethics definition refers to the standards that apply to a specific setting – in this case, our own organization.

What is the purpose of a professional code of ethics?

Having our business ethics in writing doesn’t mean that we don’t trust our employees. We strive to hire ethical people who have their own personal standards, so we expect that a written code won’t be necessary most of the time.

But, it can still be helpful. You may find yourself in a situation where you’re not sure how you should act. Life is full of grey areas where right and wrong aren’t so apparent. Some professional ethics also correspond to laws that you absolutely must know to do your job properly, so we will mention them in our code of ethics.

Additionally, every organization makes bad hires every once in a while. We also can’t predict how people are going to behave. When an employee behaves, or intends to behave, in a way that’s against our professional ethics, or applicable laws, we will have clear guidelines on what disciplinary actions we will consider.

For these reasons, we advise you to read this document carefully and consult with your manager or management, if you have doubts or questions.

The components of our code of professional ethics:

We base our business code of ethics on common principles of ethics:

• Respect for others. Treat people as you want to be treated.
• Integrity and honesty. Tell the truth and avoid any wrongdoing to the best of your ability.
• Justice. Make sure you’re objective and fair and don’t disadvantage others.
• Lawfulness. Know and follow the law – always.
• Competence and accountability. Work hard and be responsible for your work.
• Solidarity and Teamwork. Collaborate and ask for help and show solidarity to your colleagues.
• Reliability. We entrust our employees to complete their tasks in the given time independently. 

Here’s a more detailed overview of our code:

Respect for others

It’s mandatory to respect everyone you interact with. Be kind, polite and understanding. You must respect others’ personal space, opinions and privacy. Any kind of violence is strictly prohibited and will result in immediate assessment (which can lead to the termination of the contract). You’re also not allowed to harass or victimize others. More about the topic is covered in the Harassment and Violence section of Workplace Policies in the Employee Handbook.

What constitutes harassment or victimization? To answer this, we have a policy on harassment and a more specific policy on sexual harassment you can take a look at in the Workplace Policies sections of the Employee Handbook. In our company we value sincerity and transparency and sharing opinions, but all these must be expressed in a constructive and a sensitive approach. 

If someone, be it customer, colleague or stakeholder, is offensive, demeaning or threatening toward you or someone you know, report them immediately to the management or your manager. You can also report rudeness and dismissiveness if they become excessive or frequent. If it is possible we also encourage you to try and engage with the person in order to resolve the issue together.

Integrity and Honesty

First, always keep in mind our organization’s mission. We all work together to achieve specific outcomes. Your behavior should contribute to our goals, whether financial or organizational.

Be honest and transparent when you act in ways that impact other people (e.g. taking strategic decisions or deciding on layoffs). We don’t tolerate malicious, deceitful or petty conduct. Lies and cheating are huge red flags and, if you’re discovered, you may face progressive discipline or immediate termination depending on the damage you did. You can read about the process in Progressive Discipline and Termination under Employee Resignation and Termination section in the Employee Handbook.

Stealing from the company or other people is illegal. If you’re caught, you will face repercussions depending on the severity of your actions. For example, if you steal office supplies, you may receive a reprimand or demotion (at a minimum), while if you steal money or data (e.g. engaging in fraud or embezzlement), you will get fired and face legal consequences. The decision is at management’s discretion on a case-by-case basis.

Mistakes are natural and happen to us all. If you make a mistake in your work, we expect you to report and be transparent about it, and not try to cover it up.

Conflict of Interest

Conflict of interest may occur whenever your interest in a particular subject leads you to actions, activities or relationships that undermine our company. This includes situations like using your position’s authority for your own personal gain or exploiting company resources to support a personal money-making business. Even when you seemingly act to the company’s advantage, you may actually disadvantage it. For example, if an employee uses dubious methods to get competitor intel and raise their sales record, their action will have a positive impact on the company’s revenue, but it will put us at a legal risk and promote unhealthy business practices.

If it turns out you have created a conflict of interest for yourself, you will be reassessed, and your contract may be terminated as a result. If the conflict of interest was involuntary (e.g. buying stocks from a company without knowing they’re a competitor), we will take actions to rectify the situation. If you repeat the offence, your contract may be terminated.

For a detailed look at the subject, you can turn to the Conflict of Interest under the Code of Conduct section in our Employee Handbook.

Justice

Don’t act in a way that exploits others, their hard work or their mistakes. Give everyone equal opportunity and speak up when someone else doesn’t.

Be objective when making decisions that can impact other people, including when you’re deciding to hire, promote or fire someone. Be sure that you can justify any decision with written records or examples..

Also, don’t discriminate against people with protected characteristics, as this is forbidden by law, and detailed fully in Equal Opportunity Employment under the Employment Basics section in our Employee Handbook. If you suspect you may have an unconscious bias that influences your decisions, ask for help from management or colleagues.

When exercising authority, be fair. Don’t show favoritism toward specific employees and be transparent when you decide to praise or reward an employee. You’re also obliged to follow our employment of relatives policy (detailed in the Code of Conduct section of the Employee Handbook), which forbids you from having a reporting relationship with a relative.

If you need to discipline an employee, be sure to have prepared a case that you can present to management. You must not retaliate against employees or applicants (such as in cases when they’ve filed complaints, or request any leave, etc.) as this is considered an offence as described in Harassment and Violence under the Workplace Policies section in our Employee Handbook.

Be just toward customers or vendors, too. If you think our company was in the wrong in a specific instance, don’t try to cover it up or accuse the other side. Discuss with your manager to find solutions that can benefit both sides.

Lawfulness

You are obliged to follow all laws which apply to our organization. Depending on your role and profession, there might be various laws you need to observe. For example, accountants and medical professionals have their own legal restrictions and they must be fully aware of them.

When you’re preparing contracts, clauses, disclaimers or online copy that may be governed by law (such as consent forms), please ask for verification from [our legal counsel] before finalizing anything.

You’re also covered by our confidentiality and data protection policy (detailed under the Workplace Policies section in our Employee Handbook). You must not expose, disclose or endanger information of customers, employees, stakeholders or our business. Always follow our cybersecurity policy, too (detailed under the Code of Conduct section in our Employee Handbook).

Following laws regarding fraud, bribery, corruption and any kind of assault is a given. You are also obliged to follow laws on child labor and avoid doing business with unlawful organizations.

If you’re not sure what the law is in a specific instance, don’t hesitate to ask management for legal counsel.

Competence and accountability

We all need to put a healthy amount of effort in our work. Not just because we’re all responsible for the organization’s success, but also because slacking off affects our colleagues. Incomplete or slow working might hinder other people’s work or cause them to shoulder the burden themselves. This comes in direct conflict with our respect and integrity principles.

We also expect you to take up opportunities for learning and development, either on-the-job or via educational material or training. If you are unsure how you can achieve this, have an open discussion with your manager.

Also, take responsibility for your actions. We all make mistakes or need to make tough decisions and it’s important we own up to them. Failing to be accountable on a regular basis or in important situations (e.g. a crucial mistake in our financial records) will result in reassessment (and result in contract termination). If you take responsibility and come up with ways to fix your mistakes where possible, you will be in a far better position.

Teamwork

Working well with others is a virtue and a given. You will certainly get to work autonomously and be focused on your own projects and responsibilities. But, you should also be ready to collaborate with and help others, as well as to show solidarity with your fellows.

Be generous with your expertise and knowledge. Be open to learning and evolving. If days go by without you consulting or brainstorming with anyone, you are missing out on opportunities for excellence. Instead, work with others and don’t hesitate to ask for help when you need it.

Reliability 

We entrust our employees to complete their tasks in the given time independently. We understand that modern life may require flexibility for working hours. Remote working is given as long as participation in the meeting is not jeopardized. On some given days presence in the office will be required.

For a further read on the subject please turn to Attendance under the Employment Basics section, and also Work From Home under the Benefits and Perks section of our Employee Handbook.

Introduction

Value² recognizes the interconnectedness between environmental, social, and governance (ESG) issues and the political sphere. However, we also understand the importance of maintaining political neutrality when acting in the best interests of our investors. These guidelines outline our principles and practices for political engagement, ensuring that our actions are aligned with our responsible investment philosophy and do not compromise our fiduciary duty to our clients.

Principles of Political Engagement

• ESG Focus: Our political engagement, when deemed necessary, will primarily focus on advocating for policies that promote strong ESG principles and sustainable business practices.
• Non-Partisanship: We will avoid endorsing specific political candidates or parties. Our focus is on advocating for policies, not personalities.
• Transparency and Disclosure: We will be transparent about our political engagement activities, disclosing the issues we support and the rationale behind our actions.

Types of Political Engagement

Our political engagement may take several forms:

• Public Policy Advocacy: We may engage with policymakers, regulatory bodies, and industry associations to advocate for policies that promote responsible business practices, environmental sustainability, and social well-being. This may involve submitting comments on proposed regulations, participating in public hearings, or sponsoring research projects.
• Membership in Industry Associations: We may join industry associations that promote responsible business practices and provide a platform for advocating for positive ESG reforms. We will actively participate in these associations while maintaining our independence and focus on ESG issues.

Decision-Making Framework

The decision to engage in any political activity will be made after careful consideration of the following factors:

• Alignment with ESG Objectives: The engagement activity must be aligned with our commitment to promoting strong ESG performance.
• Effectiveness: We will assess the potential effectiveness of our engagement and prioritize activities with the greatest likelihood of achieving positive outcomes.
• Resource Allocation: We will allocate resources for political engagement strategically, ensuring they are used effectively.

Prohibited Activities

We will not engage in the following political activities:

• Financial contributions to political campaigns or parties.
• Direct lobbying of elected officials for partisan interests.
• Public statements that endorse specific political candidates or parties.

Ongoing Review and Reporting

These guidelines will be subject to ongoing review to ensure they remain relevant and effective in the evolving political landscape. We will periodically report to our investors on our political engagement activities, providing transparency and accountability in this critical area.

Conclusion

Value² is committed to responsible investment practices that contribute to a more sustainable future. These guidelines ensure that our political engagement activities are conducted in a way that is aligned with our ESG priorities, protects the interests of our investors, and upholds our commitment to non-partisanship. By advocating for sound public policies and collaborating with policymakers, we can create an environment that promotes responsible business practices and long-term value creation.

Introduction

Value² recognizes climate change as a critical global challenge with significant financial and societal implications. We are committed to playing a leading role in the transition to a net-zero emissions economy by 2050. This Climate Change Strategy outlines our comprehensive approach to integrating climate considerations into our investment decisions, promoting decarbonization across our portfolio companies, and supporting a just transition for all stakeholders.

Alignment with the Net Zero Scenario

Our Climate Change Strategy aligns with the ambitious goals of the Net Zero Scenario outlined by the International Energy Agency (IEA). This scenario requires a rapid and dramatic reduction in greenhouse gas (GHG) emissions across all sectors, achieving net-zero by 2050.expand_more

Investment Process Integration

Climate change is an important factor throughout our investment process:

• Investment Strategy: We prioritize sectors and companies that are actively transitioning to a low-carbon economy and are well-positioned to thrive in a net-zero future. 
• Research and Analysis: We employ robust climate risk assessment methodologies to evaluate the potential impact of climate change on companies’ financial performance and long-term viability. This includes assessing physical risks from extreme weather events and transition risks arising from policy changes and technological advancements.
• Portfolio Construction: We consider a company’s carbon footprint, decarbonization strategy, and climate risk management practices when constructing portfolios. We may overweight holdings in companies leading the transition to net-zero and underweight or divest from holdings with high carbon footprints and inadequate transition plans.exclamation We also strive to align our portfolio with the goals of the Paris Agreement.
• Portfolio Monitoring: We continuously monitor the climate performance of our portfolio companies, tracking their progress towards decarbonization and adjusting holdings as needed.

Engagement Activities

We actively engage with investee companies to promote decarbonization efforts:

• Collaboration with Climate Initiatives: We collaborate with climate initiatives such as the Climate Action 100+ and the Net-Zero Asset Owner Alliance to push for systemic change and accelerate the transition to a net-zero economy.

Portfolio Decarbonization Pathways

We will work with portfolio companies to develop clear decarbonization pathways aligned with the Net Zero Scenario. This may include:

• Investment in Renewable Energy: We support companies that are investing in renewable energy sources such as solar, wind, and geothermal energy.
• Energy Efficiency Initiatives: We encourage companies to implement energy efficiency measures to reduce their overall energy consumption and carbon footprint.
• Innovation in Sustainable Technologies: We support companies developing and deploying innovative technologies that enable the transition to a net-zero economy, such as carbon capture, utilization, and storage (CCUS) technologies.
• Circular Economy Practices: We encourage companies to adopt circular economy principles that reduce waste, extend product lifespans, and promote resource efficiency.

Just Transition Considerations

We recognize the need for a just transition to a net-zero economy that minimizes the negative impacts on workers and communities. We will support companies that are:

• Investing in Workforce Development: Equipping workers with the skills and training needed to thrive in a net-zero economy.
• Supporting Communities: Providing assistance to communities disproportionately impacted by climate change and the transition to a low-carbon economy.
• Promoting Inclusive Growth: Creating opportunities for all stakeholders to benefit from the transition to a net-zero future.

Governance Framework

Our commitment to climate action is supported by a robust governance framework:

• Climate Change Committee: A dedicated committee oversees the implementation of this strategy, advising on climate risk integration and decarbonization efforts.
• ESG Data and Analytics: We invest in resources and expertise to access and analyze climate data, ensuring informed investment decisions.exclamation
• Performance Measurement and Reporting: We track and measure the climate performance of our portfolio and report on our progress towards achieving net-zero emissions by 2050.

Conclusion

Value² is committed to being a leader in the fight against climate change. By implementing this Climate Change Strategy, aligning with the Net Zero Scenario, and actively engaging with our portfolio companies, we will contribute to building a more sustainable and resilient future for all. We believe that this approach will create long-term value for our investors while driving the transition to a net-zero emissions economy.

Value²: Climate Change Strategy – Achieving Net Zero by 2050 Aligned with the One Earth Climate Model

Introduction

At Value², we recognize climate change as the most pressing global challenge of our time. Its far-reaching consequences threaten financial markets, economic stability, and the future of life on our planet. We are committed to responsible investment practices that contribute to a sustainable future and believe the One Earth Climate Model (OECM) provides a clear roadmap for achieving net-zero emissions by 2050. This Climate Change Strategy outlines our comprehensive approach to integrating climate considerations into our investment decisions, promoting ambitious decarbonization across our portfolio companies, and supporting a just transition for all stakeholders.

Alignment with the One Earth Climate Model

Our Climate Change Strategy aligns with the ambitious goals of the One Earth Climate Model (OECM) developed by the University of Technology Sydney, the German Aerospace Centre, and the University of Melbourne. Unlike other models that rely on unproven technologies like carbon capture and storage (CCS), the OECM focuses on achieving net-zero emissions by 2050 through a rapid transition to renewable energy sources and energy efficiency improvements across all sectors of the global economy.

Investment Process Integration

Climate change is an important consideration throughout our entire investment process:

• Investment Strategy: We prioritize sectors and companies that are actively transitioning to a low-carbon economy and are well-positioned to thrive in a net-zero future outlined by the OECM. This includes renewable energy companies, energy efficiency solution providers, sustainable infrastructure developers, and companies in sectors like transportation and manufacturing demonstrating a strong commitment to decarbonization.
• Research and Analysis: We employ robust climate risk assessment methodologies that go beyond traditional financial analysis. We utilize the OECM as a framework for understanding the potential impact of climate change on different sectors and individual companies. This includes assessing physical risks from extreme weather events, transition risks arising from policy changes and technological advancements, and the opportunities presented by the low-carbon economy. Furthermore, we rely on a combination of internal expertise, external climate data providers, and research from reputable NGOs specializing in climate solutions.
• Portfolio Construction: We consider a company’s carbon footprint, decarbonization strategy alignment, and climate risk management practices when constructing portfolios. We may overweight holdings in companies leading the transition to net-zero and underweight or divest from holdings with high carbon footprints and inadequate transition plans. This ensures our portfolios are not only financially sound but also contribute to achieving the OECM’s ambitious goals. Additionally, we strive to align our portfolio with the objectives of the Paris Agreement.
• Portfolio Monitoring: We continuously monitor the climate performance of our portfolio companies, tracking their progress towards decarbonization through metrics aligned with the OECM. This involves ongoing analysis of their renewable energy adoption, energy efficiency improvements, and overall carbon footprint reduction efforts. We will adjust holdings as needed based on progress and new information.

Engagement Activities

We believe active engagement with investee companies is crucial for achieving the goals of the OECM. Our engagement activities will focus on:

• Collaboration with Climate Initiatives: We will collaborate with initiatives such as the Climate Action 100+ and the Net-Zero Asset Owner Alliance to push for systemic change and accelerate the transition to a net-zero economy as envisioned by the OECM. This involves collective engagement with companies, policymakers, and industry leaders to create an enabling environment for ambitious decarbonization efforts.

Sector-Specific Decarbonization Strategies

The OECM outlines a detailed decarbonization pathway for various sectors. We will work with portfolio companies in these sectors to support their transition efforts:

• Energy Sector: We will prioritize companies transitioning away from fossil fuels, which are fossil free.
• Transportation Sector: We will favor companies developing electric vehicles (EVs), clean energy infrastructure for EVs, and sustainable public transportation systems. 
• Building and Construction Sector (Continued): We will prioritize companies that utilize sustainable construction materials, implement energy-efficient building design principles, and offer retrofitting solutions for existing buildings.
• Manufacturing Sector: We will support companies that are adopting clean production technologies, optimizing resource use, and implementing circular economy principles to extend product lifespans and reduce waste.

Just Transition Considerations

A just transition to a net-zero economy is critical. We recognize the potential for job losses and economic disruption in certain sectors heavily reliant on fossil fuels. Our approach will consider the following:

• Workforce Development: We look to see in companies support initiatives that equip workers with the skills and training needed to thrive in a low-carbon economy. This may involve funding educational programs, retraining initiatives, and apprenticeship opportunities within clean energy and sustainable technology sectors.
• Community Support: We will advocate for policies and programs that provide assistance to communities disproportionately impacted by climate change and the transition to a net-zero economy. This may include investments in renewable energy infrastructure in vulnerable regions and support for local economies transitioning away from fossil fuels.
• Inclusive Growth: We will promote policies and investment strategies that ensure a just transition benefits all stakeholders. This includes creating opportunities for local communities to participate in the green economy and ensuring a fair distribution of the economic benefits of decarbonization.

Governance Framework

Our commitment to achieving the goals of the OECM is supported by a robust governance framework:

• ESG Data and Analytics: We will invest in resources and expertise to access and analyze cutting-edge climate data and utilize advanced analytics tools to assess the alignment of companies with the goals. This ensures informed investment decisions that contribute to achieving the net-zero target by 2050.
• Performance Measurement and Reporting: We will track and measure the climate performance of our portfolio using metrics aligned with the OECM. This includes tracking the carbon footprint of our portfolio companies, their progress towards renewable energy adoption and energy efficiency improvements, and their overall contribution to achieving net-zero emissions.

Conclusion

Value² is committed to being a leader in the fight against climate change. By implementing this Climate Change Strategy, aligning with the ambitious goals of the One Earth Climate Model, and actively engaging with our portfolio companies, we will contribute to building a more sustainable and resilient future for all. We believe that this approach will create long-term value for our investors while driving a just transition to a net-zero emissions economy by 2050.

Additional Considerations

• Engaging with policymakers and regulatory bodies to advocate for policies that support the goals of the OECM and accelerate the transition to a low-carbon economy.
• Supporting the development and deployment of innovative technologies needed to achieve net-zero emissions, such as carbon capture, utilization, and storage (CCUS) technologies, while recognizing their limitations in the OECM’s primary focus.
• Partnering with NGOs and research institutions specializing in climate solutions to leverage collective knowledge and expertise in achieving ambitious decarbonization goals.

By implementing these strategies, Value² can become a driving force in achieving the ambitious goals of the OECM and contribute to a sustainable future for our planet.

February 2024

SFDR Report for Value² – The Responsible Investment House

Introduction: This comprehensive SFDR report has been meticulously prepared to fulfill the highest standards of transparency and disclosure as mandated by the Sustainable Finance Disclosure Regulation (SFDR). Value² – The Responsible Investment House proudly presents its commitment to responsible and sustainable investing, showcasing the integration of environmental, social, and governance (ESG) factors into its investment practices. This report is based on information available up to February 1, 2024.

Company Overview: Value² – The Responsible Investment House is a distinguished investment management firm with a steadfast focus on responsible and sustainable investing. Our organization is unwavering in its dedication to integrating financial success with societal and environmental betterment. Our investment decisions are underpinned by a comprehensive analysis of ESG factors, which underscores our commitment to driving positive change.

SFDR Requirements and Tasks:

1. 1. Entity-Level Disclosure:
      • Approach to Sustainability Integration: At Value², sustainability risks and factors are seamlessly integrated into our investment process. Our approach involves rigorous research, data-driven analysis, and collaboration across our teams. ESG considerations are not only a priority but a fundamental aspect of our investment strategy.
      • ESG Integration in Investment Process: ESG factors are embedded in every stage of our investment process, from asset selection and portfolio construction to ongoing monitoring. Our proprietary ESG assessment framework allows us to evaluate potential investments based on their ESG performance, alignment with sustainability goals, and long-term viability.
      • Commitment to Sustainability: Value² is wholeheartedly committed to promoting responsible investing principles. We view sustainability as integral to long-term financial success and are dedicated to addressing global challenges through our investment decisions.
   2. Product-Level Disclosures:
      • Categorization and Objectives: We have categorized our investment products in line with SFDR’s Article 8, and Article 9. These categories reflect varying degrees of sustainability focus and alignment with environmental and social objectives.
      • Product Sustainability Objectives: Each investment product has ESG and sustainability objectives, ranging from addressing the SDG’s (Article 9) to promoting sustainable business practices in industries (Article 8). These objectives guide our investment strategies and contribute to the achievement of broader ESG goals.
      • Environmental and Social Characteristics: Our investment products exhibit environmental or social characteristics that reinforce their sustainability focus. These characteristics are communicated to investors to foster informed decision-making.
   3. Adverse Sustainability Impact Statement:
      • Assessment and Disclosure: Value² diligently assesses potential adverse impacts of our investment decisions on sustainability factors. Our comprehensive framework evaluates key sustainability indicators such as carbon emissions, water usage, and human rights implications.
      • Principal Adverse Impacts: Through constant analysis, we can identify potential adverse impacts within our portfolios. This allows us to monitor and report on these and work diligently to minimize and mitigate when needed.
   4. Remuneration Policies:
      • Alignment with Sustainability: Our remuneration policies are thoughtfully aligned with sustainability integration. Key performance indicators include ESG criteria, ensuring that our investment professionals are incentivized to drive positive ESG outcomes alongside financial success.
   5. Periodic Reporting:
      • ESG Reports: Value² is committed to delivering comprehensive monthly ESG reports to our investors. These reports detail our progress in integrating ESG factors, achieving sustainability objectives, and managing adverse impacts. We believe that regular and transparent reporting enhances accountability and fosters investor trust.

• Investment Approach:

• Methodology and Analysis: Our investment approach involves a multi-dimensional analysis that incorporates both quantitative and qualitative data. We leverage a combination of third-party ESG ratings, industry-specific sustainability metrics, and internal research to evaluate companies’ performance across ESG categories. We assess factors such as carbon emissions, labor practices, board diversity, and supply chain management. Our proprietary ESG scoring system assigns weights to different factors based on their materiality to each industry.

• Risk and Opportunity Evaluation: Sustainability risks and opportunities are evaluated through a systematic process. For instance, when considering investments in the energy sector, we assess the potential impact of regulatory changes on carbon pricing and renewable energy adoption. We also evaluate the long-term viability of companies by analyzing their ability to adapt to changing consumer preferences and regulatory environments.

• Product Categorization:

• List of Investment Products: Our investment product range includes: The Global Equity Fund, The NA Impact Fund, Ayalon Value² Mutual Fund, Managed Portfolio and IRA.
• Categorization Rationale: Both the Global Equity Fund and The NA Impact Fund are categorized as Article 9 products due to their primary objective of addressing the SDG’s through maintaining a very high minimum of companies deriving revenues from products and services contributing towards their realization. The Ayalon Value² Mutual Fund, Managed Portfolios and IRA all fall under Article 8 as it promotes companies with robust ESG performance, best in class, across various sectors.

• Sustainability Objectives

• All our products are 100% Fossil free and as such aim to battle climate change. Moreover, our companies are assessed in regards to their commitment, ability and performance to transitioning to a low carbon economy. It is no wonder then, that our carbon footprint, in all our products, are substantially lower than our related benchmark.

• Adverse Impact Assessment

• Assessment Methodology: Our adverse impact assessment methodology involves analyzing various indicators related to sustainability, including carbon emissions, water consumption, waste generation, and human rights violations. We evaluate the potential negative consequences of our investment decisions on these indicators using quantitative data and qualitative assessments. Furthermore, we evaluate 24/7, the controversies our holdings are involved in, and we withdraw when needed

• Data and Reporting: Our assessment identified that certain investments within our portfolio have a potential adverse impact on carbon emissions due to the nature of their operations. We are in the process of enhancing our carbon footprint measurement and reporting capabilities. Our ESG reports will include detailed information on the carbon intensity of our investments, our strategies to reduce carbon emissions, and our progress in mitigating adverse impacts over time.

Conclusion: Value² – The Responsible Investment House stands resolute in its commitment to transparency, accountability, and responsible investing. This comprehensive SFDR report represents our unwavering dedication to integrating ESG factors into our investment practices, fostering sustainable growth, and contributing to a better world. Our efforts not only reflect compliance with SFDR but also our belief that financial success is inseparable from positive societal and environmental impact.

Our Commitment: 

Value² strives to change the financial system that will  serve the  well being of  all society, by creating  a  responsible and sustainable environmental and social ecosystem 

Our Vision: 

To provide a professional and responsible investment instrument, to share our knowledge,  to provide excellent services to investors, and be a key player in creating the Responsible Investment industry in Israel.  

Our Mission: 

To put an impact and returns hand in hand and provide a vast number of Responsible Investments financial products in order to address the different needs of all type of investors.

Our Corporate Investment Philosophy:

Environmental, Social, and Governance (ESG) factors have been a core element of our research process and play a key role in investment decisions across our actively managed investment strategies. In “good” companies with sustainable business models at reasonable valuations could enhance performance results over time. This approach to investing continues to be a core focus of our firm today.

We integrate ESG analysis into its investment process by focusing on companies with sustainable business models and evaluating ESG-related risks as part of our proprietary research recommendations used throughout the firm. Environmental assessment categories typically include climate change, natural resource use, waste management, and environmental opportunities. Social assessment categories typically include human capital, product safety, and social opportunities. Governance assessment categories typically include corporate governance, business ethics, and government and public policy.

We make sure that our selected companies are focusing on the Sustainable Development Goals set by the United Nations. We analyze the revenues triggered by the sustainable goods and services contributing to the achievement of the 17 SDG Goals. 

Formally adopted by 193 countries, the 17 United Nations Sustainable Development Goals (SDGs) recognize that ending poverty and other deprivations must go hand-in-hand with strategies that improve health and education, reduce inequality, and spur economic growth – all while tackling climate change and working to preserve our oceans and forests

Why Ethical Marketing

We believe that all marketing efforts should provide genuine value to the target audience in order to earn their attention and their trust. Our strategies are based on a foundational belief that marketing should be honest and that marketers should not take advantage of anyone’s personal data. This policy statement lays out the ethical marketing practices we follow and the commitments we have made to ensure that our client work meets or exceeds the highest ethical standards of our industry.

We Commit to Honesty in Marketing

As ethical marketers, we commit to absolute honesty in our marketing for our own campaigns and for customers and partner-driven projects.

We pledge to:

• Never use dishonest marketing tactics for our own or client marketing campaigns, including:
  • False advertising: exaggerating values and benefits of products and services
  • Fake or overly doctored reviews and testimonials
  • Inflated analytics or results when creating messaging for partners or within your advertising
• Never “cherry-pick” specific data points to use in marketing and communications that are not representative of a client’s overall impact.
• Only use words that are realistic descriptors of the products, services, or impact we are promoting.

Ongoing Project-Based Reflections

It is easy to claim that our efforts are honest, however, it takes discipline, rigor, and at times internal conflict to ensure honesty in marketing. We ask ourselves the following questions during campaign strategy and execution:

• Are we clearly communicating our product or service’s value without exaggerating or misleading our key audiences?
• Are we using language that honestly communicates the features and benefits of our products and services?
• Are we accurately quoting our customers, partners, and team when we share reviews or testimonials?
• Is our use of data and examples honest and accurate when promoting our features, benefits, or the impact of our products and services?

Questions and Feedback

We always strive to do the right thing for our clients and adhering to these ethical practices is part of that work. If you have questions or feedback to share that will help us do better, we encourage you to reach out and let us know.