Disclosure pursuant to Regulation (EU) 2019/2088 (SFDR)

As part of corporate governance, KfW Capital's managing directors monitor and promote the sustainability strategy and internal and external communication in order to implement ESG in all processes.

At the operational level, sustainability is integrated into KfW Capital's processes and structures through the following structure:

Sustainability management is responsible for implementing and further developing the sustainability strategy, processes, and documentation. In addition, they regularly review the appropriateness of criteria, processes, and sustainability knowledge. ESG criteria are evaluated by sustainability management as part of every fund review. KfW Capital's sustainability officer also has a permanent seat on the Investment Committee and ensures that sustainability criteria are taken into account in investments.

In addition to sustainability management, investment management and risk management are also involved in reviewing ESG criteria and are responsible for ensuring that these issues are appropriately taken into account by fund management. Risk management also oversees the overall risk strategy and produces a risk-oriented ESG score for each investment.

In the investment process, KfW Capital uses the following criteria to take sustainability risks into account as part of its due diligence for its own investments, investments in its capacity as a financial portfolio manager, and in its capacity as an investment advisor:

• Negative screening and minimum criteria: KfW Capital applies an exclusion list of activities and sectors. The exclusion list is an extended version of the KfW Banking Group's exclusion list. KfW Capital also requires VC funds to have a qualified sustainability policy (or equivalent) and to comply with the disclosure requirements of the SFDR.
• ESG management capabilities: KfW Capital's ESG due diligence focuses on the ESG management capabilities of VC funds, i.e., whether VC funds have a sufficient ESG strategy and manage the corresponding processes correctly. As part of the review, VC funds must complete a standardized questionnaire. In addition to reviewing all available sustainability-related documents, the results of the ESG due diligence questionnaire are validated in a face-to-face interview.
• ESG heat map: The ESG heat map enables KfW Capital and the VC funds to identify and evaluate material ESG criteria for the respective investment strategy.
• Action plan: If the VC fund does not yet meet all requirements at the time of due diligence, conditions will be imposed that must be fulfilled either before or shortly after signing.

KfW Capital monitors and controls sustainability risks relating to its own investments and investments made by KfW Capital in its capacity as financial portfolio manager as follows:

In addition to regular and needs-based exchanges, the agreed conditions and their implementation are monitored in particular after the contract has been signed. ESG data is collected once a year in the portfolio. This covers the fund management level, the VC fund level, and the portfolio company level. The findings from the reporting are used for internal monitoring and are also incorporated into the annual update of the ESG risk profile.

The monitoring and control of sustainability risks for investments made as a result of an investment recommendation by KfW Capital as investment advisor is the responsibility of the capital management company.

Article 4 SFDR provides a framework for creating transparency regarding the adverse sustainability impacts of investment decisions at the company level.

The SFDR requires KfW Capital to make a “comply or explain” decision on whether the most significant adverse impacts (“PAI”) are taken into account in its investment decisions with regard to sustainability factors. KfW Capital has decided not to take this regulation into account, either in general or in relation to funds. KfW Capital will regularly review its decision not to take into account the adverse impacts of investment decisions on sustainability factors.

KfW Capital has carefully reviewed the requirements of the PAI regime in Article 4 SFDR and the technical regulatory standards from Commission Delegated Regulation (EU) 2022/1288 of April 6, 2022 (the “PAI regime”). KfW Capital supports the policy objectives of the PAI regime to improve transparency for customers, investors, and the market. Nevertheless, KfW Capital does not currently consider it possible to comply with all reporting requirements of the PAI regime. In the venture capital asset class in particular, the availability and quality of data for PAI indicators remains low. This is also reflected in the annual ESG data collection of VC funds and their portfolio companies. KfW Capital is continuously monitoring future developments and will review its decision in 2027.

Notwithstanding the decision not to take sustainability impacts into account, KfW Capital has implemented ESG-related initiatives and guidelines, as summarized above.