Vision

At Vive, investing goes beyond financial responsibility. Vive approaches its sustainability policy from the perspective of both managing risk through sustainable business practices and making positive contributions to a more sustainable world:

1. Sustainability Risks (Outside-in): Vive analyzes sustainability risks that may affect investment performance, such as environmental issues, social risks and governance challenges. These are referred to briefly as ESG factors: Environment, Social and Governance. We integrate these risks into our investment process to make informed decisions that enhance the robustness of our portfolios.
2. Sustainability Impact (Inside-out): Vive assesses the impact of its investments to limit negative impact and contribute to positive impact on sustainability goals. This enables our fund selection to pursue a more sustainable world. We test this on the basis of the criteria in the Sustainable Finance Disclosure Regulation (SFDR). This is European legislation that thus provides an independent assessment framework.

This approach enables us not only to achieve financial returns, but also to contribute to a better world. By managing sustainability risks with ESG integration and optimizing the impact of investments, we strengthen our risk-return ratio, support our long-term goals and contribute to a more sustainable world.

Application of SRI

Our approach to SRI combines financial objectives with sustainability goals aimed at a balanced risk-return ratio. This policy is based on three core principles:

1. Exclusion Policy: Vive invests only in funds that actively exclude investments based on a structured exclusion policy.
2. Best-in-Class Selection: Vive invests only in funds that excel on sustainability within their asset class and mandate based on ESG performance and promote ESG goals or make positive impact in line with SFDR criteria.
3. Voting Rights and Engagement: Vive only invests in funds that actively exercise their voting rights and have a clear engagement strategy to drive improvements in sustainability issues.

SFDR Classification at Fund Selection.

Vive implements both ESG risk measures and SFDR criteria in its investment process so that we both manage sustainability risks and achieve positive impact. We review ESG ratings and we choose the funds with the highest scores within their category. Investment funds with an MSCI ESG rating lower than BBB are excluded. In addition, we select funds that meet at least SFDR Article 8 criteria, with a strong preference for Article 9 funds.

For government bonds, the SFDR criteria are not applied by default, as they are generally not as easily measurable as other asset classes. The SFDR ratings give us a transparent and objective framework to assess the sustainability profile of our investments.

Our selection criteria focus on:

• Positive contribution to environment and society
• Mitigation of negative impact through Principal Adverse Impact (PAI) indicators, among others
• Promotion of environmentally sustainable investments, where possible within the EU taxonomy

Through this policy, we ensure that our investments not only meet financial requirements, but also contribute to sustainable and social value, appropriate to the ongoing development of sustainability standards and regulations.

Sustainability goals and outcomes

Our investments are assessed using four main criteria:

1. Mitigation of Sustainability Risks (ESG Ratings).

Sustainability Risks and ESG Ratings.

A sustainability risk is an Environment, Social or Governance event or circumstance that could potentially negatively impact the value of an investment. Examples of such risks are:

Environmental risks: Climate change may reduce the value of investments in carbon-intensive sectors because the business model of these companies may not be sustainable over time.

Social risks: Poor working conditions or human rights violations can damage a company's reputation, negatively impacting its bottom line.

Governance risks: Lack of good governance, such as corruption or inadequate risk management, can lead to operational and financial problems.

ESG Ratings measure how well a company handles financially relevant sustainability risks and opportunities. These ratings are used to identify leaders and laggards within sectors based on:

1. Their exposure to ESG risks.
2. Their ability to effectively manage these risks compared to competitors.

ESG Ratings are categorized as:

1. ‍Leaders: AAA, AA‍.
2. Average: A, BBB, BB‍.
3. Laggards: B, CCC

These ratings are applicable to various asset classes, such as equities, fixed income, loans, mutual funds and countries.

Application of ESG criteria to Vive's Investment Policy

At Vive, we actively integrate ESG principles into our investment policies to mitigate sustainability risks and promote responsible investing. Our Best-in-Class approach focuses on selecting funds that outperform their peers on ESG criteria within their sector. This allows us to minimize risk within our portfolio while contributing to positive social impact.

We use ESG ratings as a key metric within our selection process. These ratings help us identify funds that meet our sustainability goals and fit within the standards of our policy. Below is an overview of the asset classes and their ESG ratings, where we aim for the highest scores within each segment.

2. Mitigation of negative impact (PAI).

Principal Adverse Impact (PAI) criteria

An important part of a sustainable investment strategy is the exclusion of investments with negative impacts on people and the environment. At Vive, having an exclusion policy is therefore an essential selection criterion. To limit negative impacts, the Principle Adverse Impact (PAI) indicators have been established. This set of 64 measurable indicators evaluates the potential negative effects of an investment.

For investment products under SFDR Articles 8 and 9, reporting on at least 18 of these 64 PAI indicators is mandatory. Of these 18, 14 are core indicators that are required to be reported for all relevant investment products; in addition, 4 additional indicators may be included at your discretion. The 14 mandatory indicators are:

• Greenhouse gas emissions
• Carbon footprint
• Greenhouse gas intensity of investee companies
• Exposure to companies active in the fossil fuel sector
• Non-renewable energy consumption and generation.
• Intensity of energy consumption by sector with major climate impacts
• Negative impacts on biodiversity-sensitive areas
• Emissions to water
• Hazardous and radioactive waste ratio
• Violations of UNGC and OECD guidelines.
• Lack of procedures and compliance mechanisms for monitoring compliance with UNGC and OECD guidelines
• Unadjusted gender pay gap
• Gender diversity board of directors
• Controversial weapons

Impact PAI criteria on Vive Investment Policy.

All funds in Vive's portfolio, where relevant, mitigate negative impacts through strict exclusion policies. This exclusion policy is an essential selection criterion in our investment policy. Each fund reports which negative impacts it mitigates, using PAI indicators to make its sustainability performance transparent.

Below is an overview of the asset classes and the specific PAI indicators by which negative impact is actively mitigated:

3. Positive social and environmental contribution (SFDR).

Sustainable Finance Disclosure Regulation (SFDR) classifications.

The Sustainable Finance Disclosure Regulation (SFDR) provides a European framework for classifying investments based on their sustainability performance. Only investments that meet the SFDR requirements may be labeled as sustainable. These regulations require financial institutions to report transparently on how sustainability is integrated into their investment choices and allow investors to be better informed about the sustainability of investment products. SFDR divides products into three categories based on the extent to which sustainability plays a role:

• Article 6: Investment products that do not actively integrate sustainability and typically do not provide specific information about addressing sustainability risks within the investment strategy. These products are often referred to as "gray investments."
• Article 8: Investment products that consider the impact of investments on ESG criteria, without requiring sustainability to be the primary focus. These funds can pursue sustainable investment goals, but this is not mandatory. Article 8 funds are known as "light green investments."
• Article 9: Investment products with an explicit focus on sustainable objectives, aiming for measurable positive impact on ESG. Article 9 funds focus on deep sustainability and are referred to as "dark green investments."

This rating system helps investors discern the sustainability performance of investment products and provides a standardized basis for responsible investment choices.

Impact SFDR rating on Vive Investment Policy.

What is a sustainable investment in accordance with SFDR?

Fund managers have internal policies and methodologies to measure whether an investment is sustainable in accordance with SFDR. There is no uniform set of tools to classify investment as sustainable in accordance with SFDR. SFDR legislation prescribes that an investment may be called sustainable under three conditions:

1. The investment must make a positive contribution to an environmental or social objective.
2. The investment must comply with the "Do No Significant Harm" principle, which means that the investment does not contribute to activities that could cause significant harm, such as controversial weapons.
3. The company being invested in must have good governance with clear rules to prevent social problems.

If a fund manager determines that an investment adheres to all 3 of these conditions, then it is a sustainable investment in accordance with SFDR.

4. Ecologically sustainable investments (EU Taxonomy).

EU Taxonomy

An investment is only classified as environmentally sustainable by the EU Taxonomy if the underlying activity contributes significantly and measurably to at least one of the six established environmental objectives. In addition, data must also show that the company does not significantly harm other environmental objectives (the "Do No Significant Harm" principle). The company must also meet social benchmarks, such as protecting labor rights and respecting human rights.

The six ecological objectives of the EU Taxonomy are:

1. Climate change mitigation: Reducing the company's impact on global warming by, for example, reducing greenhouse gas emissions.
2. Climate change adaptation: Measures to manage the impact of climate change on the organization by, for example, building levees to protect against flooding.
3. Sustainable use and protection of water and marine resources: promoting efficient water use and protecting water quality.
4. Transition to a circular economy: promoting recycling, reuse and reducing waste generation.
5. Pollution prevention and control: preventing and reducing air, water and soil pollution.
6. Protection and restoration of biodiversity and ecosystems: Conservation and restoration of natural habitats and prevention of biodiversity loss

Impact of EU Taxonomy on Vive Investment Policy

Vive continually examines the supply of environmentally sustainable investments within the EU taxonomy. Due to limited supply, currently the Corporate Loans Euro fund reports a limited environmentally sustainable investment of 1.06% (31/12/2023) in accordance with the taxonomy criteria. Currently, none of the funds in Vive's portfolio have set specific targets for environmentally sustainable investments.

Continuous Improvement and Adaptation

Sustainability is a topic in constant evolution. At Vive, we recognize that the standards, legislation and insights surrounding SRI continue to evolve. We therefore continue to continuously hone our sustainability policy and adapt it to the latest developments. This enables us to continually align our strategy with industry best practices to achieve lasting positive impact.

With this approach, Vive remains committed to a responsible and sustainable investment strategy, focusing on delivering value for our clients and promoting a better world.