Foresight : Sustainability Report FY23

SUSTAINABILITY REPORT 2023

SUPERCHARGING THE

SUSTAINABILITY TRANSITION

1

Foresight Sustainability Report 2023

CONTENTS

Sustainability			Sustainable	The year
at Foresight	Climate	Nature	culture	ahead

01

Group overview Sustainability at Foresight

2	At a glance	9	Sustainability
3	The year in summary		strategy
	Sustainability
4	Our investment	11
	reporting: PACT
	divisions
		Governance
5	Supporting the SDGs	12

1. Investments
2. Partner insight
3. Meet the team

02 Climate

17 Carbon reduction plan

1. Our FY23 emissions
2. Climate disclosure
3. Energy transition

1. Transport transition

03 Nature

1. Forestry
2. Regenerative systems

30 Eden Project partnership

04 Sustainable culture

1. Social value
2. Communities
3. People and sustainable culture
4. Looking out for our people
5. Learning and development

The year ahead

38 A message from our Head of Sustainability

2

Foresight Sustainability Report 2023

GROUP

OVERVIEW

Sustainability			Sustainable	The year
at Foresight	Climate	Nature	culture	ahead

The Group has a total of 13 offices, the most recent addition in Newcastle, UK which has opened as a result of our growing Private Equity business:

AT A GLANCE

We are a sustainability-led alternative assets and UK SME investment manager.

Our investment strategies are aligned with key themes shaping society and the planet, contributing to a resilient decarbonised world and creating high quality, sustainable jobs that will power tomorrow's economy.

We challenge the norm and understand the role sustainable investing can play in evolving established markets, creating new ones and generating long-term value and impact.

We use our insight, expertise and experience to actively manage assets, create flexible and innovative investment solutions for some of the largest institutional investors, and make previously inaccessible markets available to qualified retail investors.

At Foresight, we aren't just looking for short-term returns. We're investing for a smarter future.

Assets under management ("AUM") by investment division (£ billion)

1.4

1.3

9.5

Total 12.2

FORESIGHT CAPITAL MANAGEMENT

INFRASTRUCTURE

PRIVATE EQUITY

•	Cambridge	•	Nottingham
•	Dublin	•	Madrid
•	Edinburgh	•	Rome
•	Leeds	•	Sydney
•	London	•	Melbourne
•	Luxembourg	•	Newcastle
•	Manchester

Number of employees: 313 FTE (FY23 average)

3	Sustainability			Sustainable	The year
Foresight Sustainability Report 2023	at Foresight	Climate	Nature	culture	ahead

THE YEAR IN

SUMMARY

Bending our world towards sustainability - and in particular addressing the climate crisis - is the great challenge of our time. It will remain the dominant global theme for decades to come and sets the context to Foresight's long-term investment programmes. But we are also mindful of our own actions as an organisation and the impacts these have on all our stakeholders. This is the essence of a long-term, sustainable business strategy within investment management.

Foresight Group has had a strong year with key acquisitions and natural growth and our AUM has grown by 37%. Key acquisitions for us over the period were Infrastructure Capital Group which has now become Foresight Australia and the Private Equity Downing portfolio.

Our corporate business has continued to progress its approach to sustainability reporting and commitments.

Without data, we realise we cannot set meaningful goals either for our investments or the Group, so this year we have developed a new sustainability data management platform, "PACT" which features later in the report, supporting both the corporate business and our private equity portfolio of SMEs. Our Private Equity division has launched its first impact fund supporting Irish SMEs.

New investment streams this year demonstrate our commitment to transition the wider economy and

not the energy industry alone. Whilst we've continued to invest in renewable energy projects and enabling projects such as battery storage, we have also invested in geothermal and hydrogen as well as food production from vertical farms to sustainable on-land fisheries.

In June 2022 Foresight officially partnered with the Eden Project to deliver nature recovery across our portfolio and support us in the work we do to engage positively with the natural environment. Since then, we launched our Nature Recovery Ambition Statement, a collaboratively written document which calls businesses

to action and sets out the approach Foresight will take in tackling the nature crisis through the land that we manage and our engagement with communities.

We expect the coming year to bring new challenges, particularly in relation to upcoming regulations. One key area that has had fast gained considerable traction this past year is human rights. Foresight Group has recently published its Human Rights

Policy and we plan to build on this over the coming years to better inform our due diligence processes and our engagement with our supply chains.

Awards

The team has been nominated for a number of sustainability and Environmental, Social and Governance ("ESG") focused awards, which validates Foresight's commitment to sustainability across its investment portfolio. Some of the awards and shortlists we have received over the past year include:

What sustainability means to us

Sustainability lies at the heart of Foresight's strategy because we recognise that our ability to succeed today is dependent upon our ability to positively enhance the world for both current and future generations.

In all aspects of executing our business plan we seek to behave with the long term in mind, whether it be making investments, building trusted relationships with investors, or creating environments where we, as people, can flourish and contribute year-after-year.

4	Sustainability			Sustainable	The year
Foresight Sustainability Report 2023	at Foresight	Climate	Nature	culture	ahead

OUR INVESTMENT DIVISIONS

Foresight Capital

Management

Foresight Capital Management ("FCM") is a specialist real asset and sustainability focused team providing actively managed open-ended funds investing in listed securities. FCM has a total AUM of £1.3 billion across its product suite with sustainable investment considerations embedded across the investment process of all of FCM's strategies. Just as Foresight Group is a signatory of the UN Global Compact ("UNGC"), companies

2,662

JOBS CREATED BY FORESIGHT'S

Infrastructure

Foresight invests in infrastructure and other real assets that are driving the global sustainability transition. This includes traditional renewable energy, other forms of energy infrastructure required to catalyse the transition to low-carbon power systems, and, more broadly, economy-wide decarbonisation of sectors such as industry, transport, and agriculture. In addition to physical infrastructure we invest

in natural capital - in particular in forests and soil - in order to assist the recovery of nature and rehabilitation of ecosystems.

Foresight's Infrastructure division is one of Europe and Australia's most established real assets investors and the largest investment division within Foresight Group. Our investments have outsized impacts, and create multiplier effects in

the energy transition which in turn is core to the wider sustainability transition. Long Duration Energy Storage and Interconnectors

are great examples of this.

As at 31 March 2023, we managed 406 infrastructure assets across a number of infrastructure sectors, including assets with 4.4GW of total green energy technology capacity. We have continued to thoughtfully expand the team in FY24, reflecting our commitment to growing and strengthening our infrastructure capabilities for investors. Foresight's infrastructure division uses the Sennen platform to manage portfolio performance as well as sustainability reporting. To better understand Infrastructure's approach to responsible investing, their paper on 'Sustainable Investing in Infrastructure' is available on the Foresight Group website.

within FCM's product portfolios are assessed against the UNGC principles to ensure alignment with FCM's sustainable investment objectives. For example, around a third of the FP Foresight Sustainable Future Themes Fund's ("SFT") portfolio consists of UNGC signatories, which is an important issue engaged by FCM across their strategies. FCM also follows a framework-driven approach aligning with standards like the UN Sustainable Development Goals ("SDGs") and Science-based Targets Initiative ("SBTi"). Sustainability as a long-term focus is fundamental for each FCM strategy. Active engagement is an

REGIONAL17FUNDS SINCE INVESTMENT

>%

OF OUR PORTFOLIO COMPANIES ARE

FEMALE FOUNDED WHILST LESS

THAN 5% OF OPPORTUNITIES

RECEIVED ARE FEMALE FOUNDED

important part of FCM's stewardship activities, outlined in their Stewardship Framework in this report. For more information on FCM strategies, please contact the team.

Private Equity

The Foresight Private Equity Team manages a portfolio of companies 270 strong, reviews over 2,500 business plans per annum manages 18 investment vehicles and has over 50 investment professionals.

Foresight's investment processes are tailored for regional, impact investing. When Foresight raises a new regional fund, it opens a local office and builds a local team to deploy the fund; two new regional offices opened in 2022 with another opening in 2023. The

local knowledge of advisers ensures deeper coverage of the local business ecosystem ensuring that funding reaches companies that suffer from the lower mid-market equity gap. This origination process provides a platform for further investment in the regions from our national regionally agnostic funds. Our VCT funds have deployed over 75% of their capital in companies headquartered outside London and the Thames Valley, whilst market average remains under 25%.