Pinnekel

I. INTRODUCTION

Pinnekel Capital Partners (“Pinnekel”) is an active private equity firm that focuses on building high-growth companies alongside athletes, entrepreneurs, and celebrities in its four areas of domain expertise: sports, consumer, hospitality, and marketing services. As a responsible investor, Pinnekel believes that environmental, social and governance (“ESG”) factors can have a material impact on the long-term risk and return of a given investment and is committed to conducting our business in a manner that is both financially sustainable and considerate of the ESG implications of our investment decisions. We seek to understand sustainability related linkages that provide long-term economic growth in the sectors and associated communities we are investing in, to create broad stakeholder value as well as shareholder value. Addressing ESG issues is an integral part of our investment risk management. We believe effective mitigation of these issues can have a material impact on value creation in our investments, enhancing returns for our stakeholders and protecting our planet.

Our Responsible Investment (“RI”) Policy is testament to our commitment to invest responsibly and to making ESG integral to the way we do business and integrating ESG into our investment processes and ownership practices.

Pinnekel believes that in being active owners of our investments through our governance and engagement approach, we will achieve greater long-term value for our investors. We will consider a relevant range of environmental, societal, and economic factors and how the deployment of our intellectual, philanthropic, operational and investment capital may either mitigate or elevate broader risks. We seek to better understand ESG issues at the time of investment, and our decision-making processes, across Pinnekel and its portfolio companies, are consistent with our guiding principles:

Integrity: We promote respect, honesty, and transparency in all our investment and business practices.
Transparency: We build trust with our stakeholders by monitoring and sharing our ESG progress.
Empowerment: We are community leaders, promoting the growth and development of our communities by supporting arts and culture.
Inclusivity: We believe in a diverse, equitable and inclusive workplace, because diversity allows Pinnekel to benefit from a range of views that are more reflective of our overall society
Sustainability: We look to continuously improve our responsible investment practices, within Pinnekel and across our portfolio, to protect our planet, our communities, and our employees.

Pinnekel aligns its ESG priorities to critical sustainable themes in economic, demographic, and social terms, enabling us to map these themes to investment and community opportunities. The United Nations (“UN”) Sustainable Development Goals (“SDGs”) provide a global framework for addressing the most urgent environmental, social, and governance challenges. Pinnekel has prioritized a manageable set of themes that align with select UN Sustainable Development Goals (“SDGs”). This is where we feel we can make the most near-term impact within our firm, across our portfolio, and in our communities. While we have prioritized this set of SDGs, we acknowledge there are many interlinkages between SDGs where we have an impact.
Our RI Policy is also guided by the UN Principles for Responsible Investment (“UNPRI”) and the Institutional Limited Partners Association (“ILPA”) Principles.

Pinnekel commits to the following UNPRI Principles:

Principle 1: We will incorporate ESG issues into investment analysis and decision-making processes.
Principle 2: We will be active owners and incorporate ESG issues into our ownership policies and practices.
Principle 3: We will seek appropriate disclosure on ESG issues by the entities in which we invest.
Principle 4: We will promote the implementation of the Principles within the investment industry.
Principle 5: We will work together to enhance our effectiveness in implementing the Principles.
Principle 6: Report on our activities and progress toward PRI-based responsible investing.

II. OVERARCHING RESPONSIBLE INVESTMENT OBJECTIVES

Our RI Policy has been adopted and refined as Pinnekel has matured as an investment manager. In support of our RI Policy, every member of the Pinnekel team will endeavor to:

Take account of ESG issues as part of the investment process, with the results forming an element of the overall analysis on investment opportunities;
Engage with our portfolio companies to promote the importance of ESG issues; ascertain the extent to which portfolio companies factor ESG risks into their business; and where necessary provide advice;
Provide ongoing training to Pinnekel investment professionals on the ESG due diligence process and the importance of factoring ESG into the overall investment approach;
Maintain ESG risk monitoring post-investment;
Follow a policy of active ownership, highlighting our interest in ESG through our routine interactions with portfolio companies; and
Keep our LPs aware of the level of ESG risks within their portfolios through ESG risk reporting.

III. ESG INTEGRATION

Pinnekel recognizes its duty to act in the best interests of its stakeholders, including our clients, investments, and shareholders. We recognize the potential role that ESG plays in affecting the performance of our investments. Pinnekel will incorporate ESG considerations into our investment decision making processes and practices through the following measures:

Undertake its investments and activities in line with applicable international standards and industry best practices;
Actively screening each investment opportunity against our RI Policy and commitments, including Exclusion Lists and those of our LPs;
Meet the requirements of national legislation in the countries in which we operate;
Foster safe working conditions for all Pinnekel employees and adhere to local country health and safety laws (as an absolute minimum);
Foster value-driven ethical behavior and good governance practices, informed by respect for human rights;
Strive for equal opportunity, equitable economic empowerment, and diversity;
Implement climate change mitigation measures at Pinnekel offices and portfolio companies as far as reasonably possible;
Ensure that Pinnekel is not involved in financing any criminal activity, including terrorist financing, money laundering and anti-competitive behavior such as bribery;
Maintain a whistleblowing mechanism to facilitate the reporting of any criminal activities that come to its attention during the course of business to relevant authorities;
Evaluating potential investment opportunities to identify potential ESG risks, impacts and opportunities;
Sensitizing our investment management team on ESG requirements and the importance/significance of ESG risks, impacts and opportunities for potential investments;
Amending or rejecting potential investment opportunities in the event that significant ESG risks or fatal flaws are identified;
Conducting due diligence assessments commensurate with the complexity of potential ESG risks, impacts and opportunities associated with potential investment opportunities; and
Ensuring that priority ESG items are highlighted in investment committee documentation.

IV. ACTIVE OWNERSHIP AND ENGAGEMENT

We practice active ownership and engagement throughout the investment process including onboarding, portfolio management and exit through the following measures:

Requesting a seat on each portfolio company’s Board of Directors and advocating for ESG items as an agenda item;
Active engagement and participation with each portfolio company’s Board of Directors;
Monitoring compliance with ESG requirements and advocating for implementation of identified action/management items;
Encouraging portfolio companies to provide appropriate and regular training to their staff on ESG policies and procedures;
Monitoring and reporting on portfolio company’s ESG performance and compliance with government requirements and the requirements of the applicable IFC Performance Standards relevant to the portfolio companies, as well as federal, state, and local labor legislation; and
Identifying potential ESG issues requiring attention prior to divestment.

V. PUBLIC DISCLOSURE

We are committed to maintaining our policies, procedures, and activities in line with applicable legislation and reporting standards. Reporting and disclosure will be supported through the following measures:

Ensuring our Responsible Investment Policy is available on our website;
Aligning with applicable laws and international frameworks in countries where we operate with regard to ESG disclosures and reporting; and
Reporting annually on aspects pertaining to our RI Policy and performance through submissions to the UNPRI and ILPA, which in turn publish transparency reports on their website.

VI. POLICY MANAGEMENT

To support the implementation of this RI Policy, Pinnekel will:

Allocate resources necessary for the implementation of this RI Policy and the policies, procedures and practices which support this RI Policy;
Communicate any specific ESG related issues during the regular Portfolio Monitoring Team meeting, with dedicated ESG reporting across the entire portfolio to be held periodically, but not less than annually;
Distribute and discuss the importance of this RI Policy and the policies, procedures and practices which support this RI Policy with our employees and portfolio companies (as relevant); and
Discuss the importance of this RI Policy with our existing portfolio companies and all potential future portfolio companies and encourage our portfolio companies to operate in a manner that is consistent with UNPRI and ILPA requirements.

VII. PINNEKEL'S RI POLICY MONITORING AND EVALUATION

To continually improve our own RI and ESG performance, we will:

Integrate RI throughout our investment processes and practices and into our daily business processes; and
Adopt a monitoring framework for key ESG metrics which will assist us with reviewing our policy for its adequacy and effectiveness including the policies and procedures that support this Policy.

VIII. RELATED DOCUMENTS

Our RI Policy is supported by a number of other policies and procedures which provide additional guidance on aspects relating to responsible investing. This RI Policy should be read in conjunction with the following policies and procedures:

Investment strategy; and
Environmental and Social Management System (“ESMS”).

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