Kvanted Fund I Ky

Updated: 27.6.2025

1. Summary

Kvanted Fund I Ky (“the Fund”) is classified as an Article 8 fund under the Sustainable Finance Disclosure Regulation (EU 2019/2088) (“SFDR”). The Fund promotes, among other, environmental and/or social

characteristics (E/S characteristics).

The Fund will invest in, manage, and divest from early and growth stage industrial technology companies

and industrial spin-offs.

As an active owner, the Fund aims to promote E/S characteristics by contributing positively to selected

Sustainable Development Goals (SDGs) across its portfolio. The Fund has identified two key sustainability

areas, sustainable economic growth and climate change, where its investee companies can have the most

significant impact.

The Fund closely monitors its portfolio through, for instance, active board participation, ensuring

compliance with good governance practices and policies, including Kvanted Code of Conduct, as well as

international standards on human rights, labor laws, anti-corruption, and anti-bribery. The sustainability

initiatives and progress towards the set targets are reviewed by the board of each portfolio company

annually, as relevant.

2. ‘No Sustainable Investment Objective’

The Fund promotes E/S characteristics but does not have sustainable investment as its objective.

3. Investment Strategy

The Fund will make, manage and dispose of investments primarily in early and growth stage industrial

technology companies and industrial spin-offs. The Fund may also make investments in other funds that

have primarily a similar strategy to the Fund. The Fund seeks to be a (co-)lead investor in pre-seed, seed

and Series A funding rounds.

Being an active owner, the Fund seeks to promote E/S characteristics through positive contributions

towards selected SDGs across the portfolio. By way of characterization through the SDGs, the Fund has

identified two key sustainability characteristics, each with associated themes of importance, where the

investee companies may have the most impact. The characteristics and their respective themes the Fund

will seek to promote are as follows:

SDG 8: Decent Work and Economic Growth (social characteristic)

• Health & safety

• Diversity & inclusion

SDG 13: Climate Action (environmental characteristic)

• Climate change mitigation and adaptation

The Fund seeks to promote E/S characteristics by incorporating sustainability considerations into its

investment process. This includes assessing companies’ performance under the selected themes during

sourcing and due diligence, as well as, supporting sustainable long-term value creation during the holding

period. Additionally, the investee companies are expected to continuously adhere to good governance

practices and policies, including the Fund’s Code of Conduct.

4. Alignment with environmental and social characteristics

At least 70% of the Fund’s investments will be aligned with the selected E/S characteristics. While the

proportion of investments aligned with these E/S characteristics may exceed 70%, up to 30% of the

investments may not be aligned with either or both E/S characteristics. This may occur, for instance, if one

or both E/S characteristics are not applicable or measurable for a specific investee company. It may also

happen if the Fund invests in another fund that does not fully promote the same E/S characteristics across

all its investments (the Fund may make a limited number of such investments in other funds).

The Fund’s investments are neither expected nor required to qualify as sustainable investments. The Fund’s

investments are not made with a sustainable investment objective. Instead, they seek only to promote E/S

characteristics in line with the Fund’s commitments. Additionally, the Fund does not consider the EU criteria

for environmentally sustainable activities or the principal adverse impacts on sustainability factors. As such,

the “do no significant harm” principle is not applied. None of the investments made to date are aligned with

the EU taxonomy.

5. Monitoring Environmental and Social Characteristics

The Fund uses active ownership to advance the selected E/S characteristics in its investee companies. This

includes actively discussing and seeking to capture sustainability opportunities, mitigating potential risks,

and addressing identified gaps in collaboration with company management and through board

involvement. To monitor the development of these selected themes and measure the Fund's sustainability,

the following KPIs are used for annual monitoring:

• Carbon Footprint: The total amount of greenhouse gas emissions (including carbon dioxide and

methane) generated by the companies.

• LTA (Lost Time Accidents): The number of accidents that result in lost work time.

• LTIF (Lost Time Incident Frequency): The frequency of incidents that result in lost work time.

• Average Ratio of Female to Male Board Members: The percentage of female board members

compared to male board members in investee companies.

The investee companies are monitored for violations of international standards and norms related to human

rights, labour law, anti-corruption, and anti-bribery. If violations are detected, the Fund engages with the

portfolio company to improve and/or correct their relevant processes and procedures.

The investee companies' sustainability matters are assessed annually, with the findings reported to both

investors and the board of directors. This assessment is conducted by the Fund, which evaluates the

companies' sustainability performance in relation to their maturity and the team’s expectations. Additionally,

ongoing engagement with the boards of the investee companies helps manage sustainability risks and

capitalize on opportunities post-investment.

6. Methodologies

The investee companies’ development and the Fund performance in E/S characteristics are measured by

the selected sustainability indicators explained in section 5.

7

. Data Sources and Processing

The Fund collects the data on the E/S characteristics annually from its’ investee companies. The Fund’s

analysis and reporting of the E/S characteristics is primarily based on this information gathered from

investee companies.

8. Limitations to Methodologies and Data

Given the Fund's focus on early-stage companies, the methodologies and data used have certain

limitations. Early-stage startups often have limited resources, which restricts their ability to conduct external

verification, adding inherent uncertainty to the estimated data. Oftentimes there are also gaps in the

historical data. Despite these challenges, the Fund believes that its measurements are directionally accurate

and sufficient to ensure that the investee companies will meet their environmental and social goals. To

overcome the limitations of current measurement methodologies, the Fund is dedicated to continually

refining and enhancing its processes by adopting new standards, data sources, and improved

methodologies as they become available.

9. Due Diligence

The E/S characteristics are considered as part of the sustainability due diligence for each investment, as

relevant. The Fund aims to identify the most material risks, issues and opportunities for value creation in

each investee company. During the holding period, sustainability priorities are discussed with the

management and the board of the investee companies to improve potential gaps discovered in the due

diligence, as applicable.

The Fund incorporates E/S characteristics into its investment sourcing and due diligence processes. The

investment team identifies the most material risks, issues, and opportunities during evaluation. In line with

the Fund’s exclusion criteria, no investments are made in companies operating in industries that are

considered to have adverse social impacts, such as tobacco, gambling, adult entertainment, and arms.

Similarly, investments are avoided in industries associated with significant environmental harm, including

coal mining and fossil fuel-based energy production.

10. Engagement Policies

Kvanted Oy, the General Partner of Kvanted Fund 1 Ky, oversees the Fund’s sustainability strategy. Kvanted

Oy’s Board of Directors is also regularly informed about developments in ongoing sustainability initiatives.

The Fund promotes its selected E/S characteristics through active ownership, which includes holding a

board or observer seat in its investee companies.

The Fund closely monitors its investee companies through, for instance, active board participation, ensuring

compliance with good governance practices and policies, including Kvanted Code of Conduct, as well as

international standards on human rights, labor law, anti-corruption, and anti-bribery. If violations are

detected, the portfolio company is engaged to improve and/or correct the relevant processes and

procedures.

Additionally, the Fund collaborates with investee companies to better understand and quantify their

sustainability impact, including aspects beyond the SFDR reporting commitments made by the Fund.

Kvanted Fund I Ky 4

Bulevardi 2-4 A

00120 Helsinki

www.kvanted.com