Heal Capital - ESG Policy

At Heal Capital, we define 'ESG' as a framework targeting environmental, social, and governance factors that impact both our fund and our portfolio companies. ESG principles are deeply integrated into how we invest, operate, and support the next generation of digital health innovation. Our ESG strategy is primarily focused on SDG 3 - Good Health and Well-being, which aligns closely with our mission to build a future-proof, accessible, and inclusive healthcare landscape. In addition, we incorporate and consider the impact of our investments on four complementary United Nations Sustainable Development Goals: SDG 5 (Gender Equality), SDG 9 (Industry, Innovation and Infrastructure), SDG 10 (Reduced Inequalities), SDG 11 (Sustainable Cities and Communities). As an SFDR Article 8 fund, Heal Capital II commits to promoting environmental and social characteristics throughout our investment approach. We ensure that at least 30% of our investments qualify as sustainable within the meaning of Article 2(17) SFDR, with a strong focus on generating positive social outcomes in healthcare. We regularly assess and evolve our ESG framework to meet regulatory requirements and to ensure meaningful, long-term impact.

While numerous frameworks and definitions of ESG exist, many are not well-suited for application in venture capital or for collaborating with early-stage technology startups. Therefore, we adhere to a definition of ESG developed in collaboration with VentureESG, which organizes ESG into ten issue areas, each linked to environmental, social, and governance dimensions. Environment: considering the environmental impact from a. Scope 1 (directly caused by the company/VC, e.g. through facilities) and b. Scope 2 (indirectly caused, e.g. energy, electricity, waste) to c. Scope 3 (caused by upstream and downstream activities, e.g. business travel, transportation of the product, customers' energy usage); targeting both measuring but most importantly reducing the impact across all scopes (at fund and portfolio level). Social: a. DEI: integrating diverse and inclusive practices across all areas of the business (e.g. diversity of the fund or the founding teams, inclusive hiring practices) b. Team and working environment: building a strong culture and being a conscientious employer (e.g. pay gap, parental leave, living wage) c. Responsible product design: designing and building products with consideration of the ethical and human implications on the end-user and society d. Supply chain: working towards an ethical and environmentally resilient supply chain (including a Supplier Code of Conduct embracing the UN's Global Compact) Governance: a. Legal and regulatory: being on top of and aligned to the latest laws, regulations and compliance standards (e.g. GDPR, UN Guiding Principles of Business and Human Rights, the eight core ILO conventions) b. Governance: having appropriate governance structures in place, according to the company's stage (e.g. board structure, share structure); writing out a code of conduct; adopting a whistle-blower policy. c. Data privacy and security: instilling a strong culture of trust, responsibility and best practice around data. Our governance standards are aligned with globally recognized frameworks such as the UN Global Compact, OECD Guidelines for Multinational Enterprises, and the eight core conventions of the International Labour Organization (ILO).

1. Exclusion list: As a specialized HealthTech fund, we focus exclusively on opportunities within our defined scope. We exclude companies which are directly or indirectly engaged in or derive a substantial part of their revenue from: Production and distribution of arms, ammunition and military equipment; Pornography and the sex industry; Manufacture and distribution of tobacco products; Extraction of critical raw materials (CRM); Production of agricultural products and livestock; Production and distribution of genetically modified organisms (GMO); Gambling; Manufacture of nuclear energy; Extraction of natural gas or crude oil by fracking and production of crude oil from tar sands; Production and/or distribution of coal and other extraction of petroleum or coal. We also exclude companies whose business activity consists of an illegal economic activity or who act in serious violation of the UN Global Compact. 2. Sourcing: We are dedicated to embedding accessibility and diversity as fundamental principles in the sourcing and management of our deal pipeline. Open application process: we have installed a simple typeform on our website for founders to send us their pitch documentation. All applications are screened by at least one member of the investment team. We communicate our investment scope transparently on our website using clear and accessible language. 3. Due diligence / qualitative assessment: ESG considerations are an important part of our process when screening and conducting due diligence on potential investment targets. Tools used: Early contact ESG screening checklist (three quick questions), Due Diligence Stage ESG checklist, ESG term sheet clause and side letter agreement, ESG commitments post-investment with yearly milestone and reporting. We also consider the UN Principles for Responsible Investment (UN PRI) standards as key guidelines. 4. Post-investment portfolio management: On-boarding briefing includes an ESG framework exercise to identify blind spots and company priorities. The outcome is to agree on 5-10 reporting metrics covering the eight ESG areas and set goals for improvements. Regular ESG-focused reporting and milestone meetings conducted every 12 months. 5. Follow-on funding: Receiving follow-on funding is not only based on commercial milestones but also ESG targets. Decisions taken on a case-by-case basis. 6. Exit: In the case of exiting (via sale, M&A or IPO) we will consider possible ESG factors. Making sure that the exit process is prepared with ESG principles in mind.

ESG responsibility: while every member of our investment team thinks along lines of ESG, we have assigned the overall responsibility for ESG to Cecilia von Oldershausen (Senior Manager Finance & Operations). Our approach to ESG will be discussed regularly in our partner meetings (at least once a year). Hiring and working environment: we are committed to hiring a diverse team and providing an inclusive working environment. Good governance: all our decision making in both the management and the investment committee is committed to good governance principles.

As a signatory of the UN Principles for Responsible Investment (UN PRI), Heal Capital is committed to all six principles including ESG integration, ownership engagement, transparency, and industry advocacy. Furthermore, Heal Capital is part of the international VentureESG initiative and community, a group of over 200 VC funds between the US, Europe and Israel driving the industry towards more consideration of ESG principles.

Last Updated: 24/06/2025