Espiria Hållbar Framtid - Impact Report

This report sets out the Principal Adverse Impact (“PAI”) indicators according to the EU’s Sustainable Finance Disclosure Regulation (“SFDR”). It then highlights the key metrics the portfolio management team uses to assess the impact of the fund’s investee companies on the surrounding world.

• The fund’s greenhouse gas (GHG) emissions intensity is 48% below the benchmarks. We do not invest in fossil fuel companies and would typically not invest in companies with a GHG intensity considerably higher than their peers.
• The fund’s exposure to negative biodiversity impacts and hazardous waste is very low and below the benchmark. We would not invest in high-risk companies to ensure alignment with the Sustainable Development Goals (SDGs). As TNFD Early Adopters and participants in Nature Action 100, we contribute to global investor efforts to address nature and biodiversity loss.
• Due to lack of data on gender pay gap in emerging markets, we focus on board gender diversity. Our portfolio is well above global averages and the comparable benchmark’s. It remains a topic on which we often engage with our holdings. Read our article on Women in the boardroom.
• As a Financial Sector Deforestation Action (FSDA) member, we map deforestation risks in our portfolio and engage with high risk companies on deforestation issues.

Carbon intensity versus benchmark

Data coverage has been increasing dramatically in the last few years, in part due to regulation (particularly in India), though also engagement efforts from investors like ourselves; for example, we actively participate in the CDP Non-Disclosure Campaign to improve climate-related data including climate data, targeting all our holdings in the fund which do not report to CDP. See the case study published by CDP.

SDG Impact

• We assess SDG impact using a proprietary tool, which is explained in detail in a PRI case study and featured as a best practice responsible investment example for China.
• East Capital SDG VCA (value chain analysis) combines revenue exposure and SASB mapping to identify the two most material SDGs for a company’s value chain. The tool gives a score of -100 to 100, based on current impact and 3-5 year outlook. Impact is assessed based on materiality, intentionality, additionality and criticality.
• We currently assess that 73% of the fund has a strong positive impact on one or more SDGs. Because we require a score of above 25 (“weak positive impact”) to be included in the portfolio, 100% of our companies have a net positive impact on one SDG.

Case studies

SDG 7: Affordable and Clean Energy / SDG 9: Industry,
Innovation & Infrastructure

AFRY contributes to SDG 9 by improving connectivity and infrastructure through projects that promote innovation and industrial growth. The company also supports SDG 7 by advancing energy efficiency and developing sustainable energy solutions. Its continued focus on infrastructure and clean energy projects underlines AFRY’s commitment to sustainable development.

SDG 3: Good Health & Well-Being / SDG 13: Climate Action

BioArctic advances SDG 3 through its focus on diseasemodifying treatments for neurodegenerative diseases, including Leqembi, the first FDA-approved Alzheimer’s drug
that slows disease progression. Under SDG 13, BioArctic maintains 100% renewable electricity and aims for SBTi validation by 2026 and net-zero emissions by 2050, reflecting strong climate governance within its operations.

SDG 3: Good Health & Well-Being / SDG 12: Responsible
Consumption and Production

Essity supports SDG 3 by improving access to hygiene and health products, particularly in emerging markets and for special-needs populations. It also contributes to SDG 12 through sustainable production, with 78% of its packaging from renewable or recycled materials and 64% waste recovery. Essity targets 85% renewable or recycled packaging by 2025.

SDG 4: Quality Education / SDG 10: Reduced Inequalities

Coursera contributes to SDG 4 by expanding access to quality online education, reaching 92 million learners and 189 million enrollments worldwide. It also advances SDG 10 by offering affordable education to diverse populations, reducing global inequalities in access to learning and employment opportunities.

SDG 7: Affordable and Clean Energy /SDG 13: Climate Action

Vestas Wind Systems contributes to SDG 7 through its 177 GW of installed wind capacity across 36 countries, significantly expanding renewable energy generation. Under SDG 13, Vestas aims for carbon neutrality in Scopes 1–2 and a 45% reduction in Scope 3 emissions per MWh by 2030. Its efforts in low-emission materials and circularity strengthen its role in the global energy transition.

Stewardship

• During H1 2025, we voted at 33 meetings (70%) of the 47 shareholder meetings where we were able to vote; in 11 meetings (21%) we voted against some items.
• In line with our stewardship principles and convictions, we voted against items such as proposals to allow virtual-only shareholder meetings, share buyback plans due to elevated leverage, and share issuance proposals without pre-emptive rights.

Engagement 

Deepening our understanding of Taiwan's regulatory and business environment, with a focus on energy transition

During our four-day trip to Taipei and the Hsinchu Science Park in early April, we met with a broad range of stakeholders, including corporates (some of whom are in our portfolio), government officials, diplomats, think tanks, regulators, as well as asset owners and fellow asset managers. The main topics covered were climate goals, green finance, technological innovation, geopolitics and trade. 

Other engagements

Contemporary Amperex Technology Co. Ltd (CATL) > Board composition
and corporate governance
We engaged with CATL to discuss board composition, diversity, and governance practices in the context of China’s evolving sustainability disclosure standards. Follow-up correspondence with the investor relations team and participation in Asia Corporate Governance Association dialogues focused on improving board refreshment and aligning oversight with long-term sustainability strategy.

BYD Co. Ltd > Climate, biodiversity, and human rights due diligence
Several engagements were held with BYD addressing climate change, biodiversity, and supply-chain-related human rights practices. Discussions and written communication Our dialogue centered on the company’s environmental transparency, labour standards and sourcing policies. These exchanges were part of coordinated investor efforts around AGM-related statements and climate disclosure improvement.

Danone > Sustainability approach and practices
We contacted Danone to better understand updates to its sustainability governance and environmental performance. The dialogue included exchanges regarding the company’s ESG reporting structure, strategic focus on health-oriented product lines, and alignment with
global sustainability frameworks.

Essity > Biodiversity and circular production
As part of the Nature Action 100 initiative, we engaged with Essity to discuss its approach to biodiversity, packaging materials, and circular production. Written correspondence focused on how the company manages resource use and integrates nature-related risks and opportunities into its broader sustainability strategy.

Taiwan Semiconductor (TSMC) > Climate and net-zero transition
Within the Net Zero Engagement Initiative, we met with TSMC to discuss its decarbonisation roadmap and TCFD-aligned reporting. The dialogue covered targets for Scope 1–3 emissions, renewable energy sourcing, and long-term plans to support Taiwan’s upcoming carbon
pricing framework.

AFRY > Executive incentives and governance alignment
We engaged with AFRY’s board regarding its incentive structure to ensure consistency with long-term sustainability and shareholder objectives. Discussions covered the link between remuneration and ESG performance metrics, as well as the company’s broader governance practices.

National Assembly of Korea > Corporate law and governance reform
In coordination with investor groups, we provided feedback on amendments to Korea’s Commercial Act related to shareholder rights and board accountability. The engagement aimed to promote governance reforms that strengthen transparency and minority shareholder protections. We also engaged with proxy advisor ISS to support the introduction of cumulative voting rules in Korea. ISS welcomed our feedback and will consider it in their policy review.

Paris-Aligned Benchmark (PAB) exclusion criteria

Implementation: As of 2025, we have implemented the EU Paris-Aligned Benchmark (PAB) exclusion criteria for funds with sustainability-related terms in their names. This ensures that our strategies meet the highest regulatory standards for sustainable investing

The criteria include the exclusions of companies:
• Controversial weapons
• Tobacco cultivation and production
• UNGC / OECD guideline violators

Companies with
• ≥1% of revenues from coal & lignite
• ≥10% of revenues from oil fuels
• ≥50% of revenues from gaseous fuels
• ≥50% of revenues from power generation with a GHG intensity of >100 g CO₂e/kWh

Compliance: We confirm that the fund is fully compliant with the PAB exclusion criteria. This strengthens our sustainable investment approach and provides additional assurance to clients that our strategies align with Europe’s most ambitious standards.

Example: Engagement with BYD
In mid-2024, we initiated a collaborative engagement with other shareholders and the Asia Corporate Governance Association (ACGA) regarding BYD's involvement in e-cigarettes, an issue identified under the new PAB exclusion criteria. The dialogue led to the company confirming that it had disinvested from this business. This successful engagement highlights our commitment to sustainable investing, demonstrates our ability to adapt to evolving standards, and shows how we can use our role as investors to drive positive change within companies. 

In addition, we started an engagement with BYD following news, at the end of 2024, that subcontractors for the construction of their new mega factory in Brazil were found to have forced labour conditions for their staff. We are monitoring this issue closely, requesting more transparency and oversight, alongside other shareholders, in a dialogue which is still ongoing. Based on our materiality assessment, we do not consider this controversy to represent a risk that could jeopardise BYD’s license to operate. However, we continue to follow the situation to ensure the company remains compliant with point 3 of the PAB criteria (UNGC/OECD guidelines).

Sustainable Investment Definition

• ESG analysis at East Capital is done by the Portfolio Managers and Analysts who cover the companies using robust proprietary tools, such as East Capital ESG scorecard and East Capital SDG VCA, and reviewed by the ESG team.
• We classify “sustainable investment" using 3 binding elements that leverage the results of these proprietary tools. These elements are outlined below.
• As of 30 June 2025 we assess that 99% of the fund is classified as sustainable. 
• The remainder of the “not sustainable” investments (1% of the NAV) was represented by cash, which the Investment Manager maintains for liquidity reasons.
  
  

1. Sector based and norms-based screening
   I. Companies with >5% of their revenues from fossil fuels, weapons, tobacco, gambling, pornography and alcohol;
   II. We also use a third-party provider to check for breaches of UN Global Compact.

2. SDG VCA tool of at least 25
   I. This ensures companies have a net positive impact on the SDGs.

3. Company is classified as sustainable as per our “three step test”

   I. Contribution to E and/or S	>60% score in E&S section of ESG scorecard.
   II. No significant harm to E or S	No red flags related to E&S issues and compliance in screening.
   III. Good governance practices	>60% in G section of ESG scorecard and no more than 2 red flags related to G.

¹ iShares MSCI ACWI ETF. No specific index has been designated as a reference benchmark for the purpose of attaining environmental or social objectives.

² We do not report data for the benchmark because this is an absolute measure that is related to the size of the fund, i.e. owning 1% of a company with 100 tonnes of Scope 1 emissions would result in 1 tonne of Scope 1 emissions attributable to the fund.

³ While coverage by the data provider is below 100%, our investment and screening processes imply full portfolio coverage on this parameter.