Foresight : Sustainability Report FY24

Building a sustainable future

Foresight Group Holdings Limited

Sustainability Report FY24

Our purpose

We invest to build a sustainable future and grow thriving economies.

With decades of experience, our strategies offer investors access to compelling opportunities at the forefront of change. Every day, we are actively building and growing our investments to support the energy transition, decarbonise industry, enhance nature recovery and realise the economic

potential of ambitious companies.

Investing in our future.

It takes Foresight.

Our employee values

Sustainable	Achieve with
impact	ambition

Relationships with	Collective
integrity	success

Company credentials

A FTSE 250 Company

Foresight was awarded the Green Economy Mark at IPO. This recognises companies that derive 50% or more of their revenues from environmental solutions.

Front cover: Nature Recovery Blueprint Launch: Plug planting at Branden Victoria Solar Farm, UK, Cornwall, part of Foresight's JLEN portfolio

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Sustainability Report FY24

Contents

Introduction

Chair and CFO's statement	2
Business review	3
Sustainability at Foresight	4
Responsible investment	11
Sustainability governance	18
Meet the team	24

Environment

Climate - TCFD report	26
Biodiversity and ecosystem	48
Resource use and circular economy	50

Social

Our people	53
Workers in the value chain	60
Affected communities	62
Consumers and end-users	63

Business conduct

Corruption and bribery

66

Indices

TCFD index	69
ISSB index	71

www.foresightgroup.eu

Branden Victoria solar site, Cornwall, UK, part of JLEN Environmental Assets portfolio

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Sustainability Report FY24

Chair and CFO's statement

Introduction

Environment

Social

Business conduct

Indices

"We remain steadfast in our dedication to ESG due diligence, risk monitoring and client engagement. Together with cross-sector collaboration and partnerships, we are building cleaner energy systems and growing thriving economies."

Foresight1 sits at the nexus of major industrial development and growth, investing at the forefront of change. As the energy transition gains momentum and the need to support global sustainability targets becomes increasingly urgent, we recognise our integral role in building sustainable solutions and growing better practices across the sectors in which we operate. Our investments play an important role in reducing the world's carbon emissions, improving social infrastructure for businesses and communities, and supporting the long-term growth of ambitious companies, and we are therefore committed to building strong sustainability practice from within the heart of our business.

In no previous reporting cycle have we seen so many references to terms such as "ESG", "sustainability" and "impact" in reports from all of our peers. We have also seen the emergence of frameworks such as the UK SDR, SRS, and EU SFDR, which reflects a collective commitment by the regulators to standardise these concepts.

We welcome this evolution, recognising the importance of standardised reporting to enable comparison, provide for better informed investment decisions, curb greenwashing and foster transparency.

In terms of our own internal evolution, in FY24 we conducted our inaugural double materiality assessment, aligning with global reporting standards.

Our decision to undertake this early assessment was driven by our desire to re-align and scrutinise our sustainability data, to help improve our product disclosures and documentation and thereby empower our investors to make meaningful choices to drive positive change.

Despite the challenges ahead, we believe that adversity often brings blue-sky thinking and innovation. It is estimated that global investment levels must triple to $4.8 trillion annually by 2030 to achieve net-zero targets2. With the right frameworks in place, we believe that Foresight is well positioned to facilitate such opportunities, bringing them to the markets that need them the most.

Nearly two decades have passed since Foresight's first investments into solar energy, allowing us to develop extensive expertise in the solar market. Today, our European and Australian teams leverage this knowledge to provide valuable insights into renewable energy systems, green hydrogen, clean technology and natural capital. These efforts contribute to advancing our journey towards a greener economy.

Bernard Fairman	Gary Fraser
Executive Chairman	Chief Financial Officer

1. References throughout this document to "Foresight", "Foresight Group", "Group", "we", "us" and "our" are to Foresight Group Holdings Limited together with all its subsidiary undertakings.

80%

of our assets are in investments aligned with the Multilateral Development Banks ("MDBs") list of activities considered universally aligned with the Paris Agreement's mitigation goals.

See more here

2. Per the Bloomberg NEF "Energy Transition Investment Trends 2024" report published on 30 January 2024.

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	Sustainability Report FY24

Business review

Foresight's investment strategies are designed to generate long-term investment returns

Environment

Social

Business conduct

Indices

Distribution

Investment

Infrastructure

Our Infrastructure division is one of Europe's and Australia's most established real assets investors, with an investment strategy which focuses on the energy transition, which includes renewable generation, grid infrastructure and hydrogen, and also natural capital, social, transport and digital infrastructure.

Foresight Capital

Management

Our Foresight Capital Management ("FCM") division applies private market expertise to opportunities in listed markets. The FCM Team and investment approach were established in 2017 to facilitate retail and institutional investors accessing infrastructure, renewables and real estate investment opportunities through actively managed open-ended funds investing in listed securities.

Private

Equity

Our Private Equity division is one of the most active UK regional SME investors, supporting companies through their own and economic cycles. We partner with promising SMEs across all sectors and deal stages. Each year we review over 3,000 business plans and are currently supporting more than 250 SMEs.

69%

Institutional AUM

31%

Retail AUM

Office locations

Australia:

- Melbourne

- Sydney

£9.8bn 81%

of AUM

60%

of revenue

£0.7bn 6%

of AUM

7%

of revenue

£1.6bn 13%

of AUM

33%

of revenue

Ireland:

- Dublin

Italy:

- Rome

Luxembourg:

- Luxembourg

Spain:

- Madrid

United Kingdom:

• Cambridge
• Cardiff
• Edinburgh

See more on pages 12 to 13

See more on pages 14 to 15

See more on pages 16 to 17

- Leeds

- London

- Manchester

- Newcastle

- Nottingham

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Introduction

Environment

Social

Business conduct

Indices

Sustainability Report FY24

Sustainability at

Foresight

Highlights of FY24

As we reflect on the past year, we are pleased to share the key sustainability highlights that underscore our commitment to responsible and sustainable growth.

Foresight Sustainability Forum

In May 2023, Foresight hosted its inaugural Sustainability Forum. Taking place at the Eden Project in Cornwall, the event forms a key part of our sustainability partnership with Eden.

International leaders and experts in sustainability, came together to explore pathways for optimising capital towards the net-zero journey, the cascading effects of the energy transition and how technology can help avert a global food crisis.

Showcasing the importance of cross-sector collaboration, the event highlighted how businesses like ours can better support global climate and biodiversity targets.

Key speakers included Chris Skidmore MP, Lord Deben (Chair of the Climate Change Committee), and Jamie Burrows (Founder and CEO of Vertical Future). With positive feedback and strong industry engagement Foresight is looking forward to hosting its next Forum in October this year.

Read more about the Sustainability Forum:

See more here

Foresight's Sustainability Forum 2023 at the Eden Project, Cornwall, UK

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Sustainability Report FY24

Sustainability at Foresight continued

Introduction

Environment

Social

Business conduct

Indices

Highlights of FY24 continued

Amos Bursary - Internship programme supporting a diverse workforce

In August 2023, we introduced Foresight's first departmental internship programme with the Retail Sales team and The Amos Bursary ("AB"). The AB is a charity that supports talented students of African and Caribbean heritage who attend state schools, with academic and professional opportunities. The aim of the initiative was to connect Foresight with skilled university leavers who we might not necessarily have been put in contact with through our traditional recruitment channels, providing a more diverse pool of candidates. This opportunity therefore aligned with Foresight's Employee Value Proposition "Succeed Today, Shape Tomorrow" and core business values, as well as our commitment to driving DE&I across the business, and the Retail Sales team's vision to create positive change in the community.

Munye Abrar, our selected intern, worked with the Retail Sales team for 12 weeks over the summer period. Following a successful few months at Foresight, we were delighted to offer him a permanent Business Development Associate role. The Retail Sales team is implementing this internship model again in summer 2024, this time offering the opportunity to undergraduate students looking to gain work experience in the investment management sector.

UK SDR working group

In FY24, we put focus on developing our products and services to comply with the upcoming UK Sustainability Disclosure Regulation ("SDR"). This internal working group is chaired by the Group Head of Sustainability and includes functions such as Compliance, Risk, Governance, Marketing, IR, all investment streams and Retail Sales. The working group has provided training on the anti-greenwashing rule, labelling, and naming and marketing rules.

It has also conducted an anti-greenwashing verification exercise to check all retail funds and related marketing material to ensure compliance with the incoming regulations.

Development of Foresight Nature

Recovery Blueprint

In collaboration with our Sustainability Partner, the Eden Project, we launched a Nature Recovery Blueprint. This initiative aims to guide land managers, developers, asset managers and operators in implementing nature-positive management practices. While initially focusing on solar sites, the blueprint is designed to be applicable across various asset types, including wind, forestry and pumped-storage hydro. By providing actionable insights, we hope industry peers will use this guidebook to enhance the monitoring, management and implementation of biodiversity actions across the renewables sector.

The initiative began in 2023, with Eden identifying a suitable Foresight solar site to pilot the scheme. To celebrate the blueprint's launch, we revisited this site and participated in Natural England's pioneering butterfly conservation initiative. This event brought together 18 individuals from the public and private sectors to create vital habitat corridors for the endangered Marsh Fritillary butterfly.

Working with Eden we hope to put the blueprint into action across more of Foresight's global asset types.

To find out more or download the blueprint click here

Founding member of Place Based Impact Investment Network

In September 2023, Foresight Private Equity became a founding member of the Place Based Impact Investment ("PBII") Network, set up by The Good Economy ("TGE"), the Impact Investing Institute and Pensions for Purpose.

The PBII's purpose is to collaborate between local authorities and institutional investors to find financing solutions to help places across the UK. During the year, Foresight Private Equity attended regular member events to discuss how the group can work together to understand each other's needs to support successful place-based investing.

Participation included contributing towards the TGE's report (commissioned by the Greater Manchester Pension Fund) on the efficacy of their impact investment portfolio. TGE featured several case studies on the positive outcomes Foresight's regional companies, ABL Health and Argyle, have delivered. This industry engagement shows Foresight's determination to foster regional responsible growth.

Release of FCM's Stewardship Framework

FY24 saw FCM work diligently to expand our stewardship approach. Highlights of FY24 included the formal release of FCM's Stewardship Framework, which outlined the team's approach to voting and engagement, and the onboarding of new engagement software enabling FCM to track, monitor and report these engagements. Importantly, the team will also soon be releasing its inaugural Stewardship Report, detailing its active ownership throughout FY24. Furthermore, FY24 saw FCM proactively engage beyond its investee companies to drive positive outcomes across the sustainable investment sector. These engagements included participating in industry working groups on SDR and writing letters to HM Treasury over regulations governing fee disclosure. Pleasingly, the increased sophistication of FCM's stewardship processes was recognised by independent entities including the UN PRI. In Foresight Group's 2021 UN PRI assessment, FCM scored 3/5 stars for our voting and engagement processes. By contrast, in Foresight Group's most recent 2023 assessment, the team was delighted to see our progress reflected in the Company's 5-star score across the "Policy, Governance and Strategy" sector.

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Sustainability Report FY24

Sustainability at Foresight continued

Introduction

Environment

Social

Business conduct

Indices

"During FY24, we have become more sophisticated in how we manage sustainability from both Group reporting and within investment processes. We have conducted a double materiality analysis based on ESRS and ISSB which will be our stepping board in how we assess, manage and monitor sustainability impacts, risks and opportunities. We look forward to the coming year of accelerating our work in sustainability in pace with the continuously changing landscape."

Åse Bergstedt

Acting Head of Sustainability, Foresight Group

Our commitments

During the year, we conducted a double materiality analysis, highlighting the most material sustainability topics for us

as a Group and also at a divisional level. We have further driven sustainability initiatives at a Group and investment division level, on topics ranging from People and Culture to Biodiversity (read more about these in "Highlights of FY24"). We are committed to continue taking the actions needed to decrease negative impact, mitigate risks and capture opportunities, while staying up to date with developing sustainability regulations.

During FY25, Foresight will:

• Review and enhance processes for ESG due diligence, monitoring and engagement across the investment streams, reflecting Foresight's material sustainability topics and broader regulatory requirements.
• Enhance the Group Enterprise Risk Management ("ERM") framework by integrating identified risks from the double materiality analysis.
• Enhance our Group Sustainability team function, ensuring we have the skillsets and resources in place to meet the evolving regulations and business needs.
• Identify which of our funds require a sustainability label and ensure those funds secure the appropriate sustainability label.
• Ensure all our communications referring to sustainability are in line with the SDR anti-greenwashing rules.
• Continue to review and enhance disclosures and reporting for all our funds falling under SFDR and SDR.

• Continue to work towards our stated objectives on diversity and inclusion within our own workforce, confirming that our disclosures are in line with the FCA consultation paper on diversity and inclusion.
• Publish an overarchingGroup Code of Conduct.
• Apply the updated UK Corporate Governance Code 2024 at Group level.
• Publish fund-level TCFD reports for applicable funds.
• Advance Group-level TCFD reporting by expanding the scenario analysis to include Private Equity and Foresight Capital Management divisions.
• Develop carbon reduction targets/climate transition plans for relevant funds or portfolios of investments.
• Continue to evaluate the feasibility of a Group-level carbon reduction/transition plan.
• Continue to evaluate whether to include climate-related KPIs for employees as part of the remuneration strategy.
• Further develop the Group-level exclusion list for investments to be aligned with Foresight's sustainability focus.
• Initiate Group-level human rights due diligence process, and review and enhance existing processes at the investment division level where needed, to align with OECD Guidelines and UN Guiding Principles.

For the report for FY25, we intend to integrate the Sustainability Report in the Annual Report, and report and enhance data collection to align with ISSB and upcoming UK Sustainability Reporting Standards ("SRS"). Over the medium term we aim to advance our reporting to meet the Corporate Sustainability Reporting Directive ("CRSD") by using the European Sustainability Reporting Standards ("ESRS").

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Sustainability at Foresight continued

Introduction

Environment

Social

Business conduct

Indices

An interview with Foresight's Senior Independent Non-Executive Director, Alison Hutchinson, CBE

"In my role at Foresight I am responsible for the Group's sustainability strategy and performance. Through this I am able to draw upon my current experience as CEO of fintech charity, The Pennies Foundation, and my broad experience in executive and non-executive roles in retail, IT and financial services."

Alison Hutchinson, CBE

Senior Independent Non-Executive Director

Alison shares her perspective of how Foresight is adapting to maintain its leadership position in driving the sustainability transition through its investment strategies, people

and culture.

Can you tell us about your role at Foresight?

In my role at Foresight I am responsible for the Group's sustainability strategy and performance, as well as Chairing the Group's Employee Forum. Through this I am able to draw upon my current experience as CEO of a fintech charity, The Pennies Foundation, and my broad experience in executive and non-executive roles in retail, IT and financial services.

Over the course of your career as a CEO and as an independent director of various companies, how have you seen conversations around sustainability and non-executive Board members' engagement with stakeholders evolve?

ESG has been around for 20 years but it has really only become a boardroom topic in the last five years. During that time, "ESG" has been increasingly reframed as "Sustainability". Conversations in the boardroom initially leaned somewhat more towards the "E" with environmental impact the dominant focus. Today, we are very much focusing our conversation across the full ESG spectrum with our own corporate governance and social impact seen as core to the health and future of the organisation.

As both a CEO and independent director, I have seen these discussions ascend the priority list, and they keep on rising. It's becoming imperative for companies to communicate transparently with stakeholders on their sustainability objectives, regulatory compliance and progress in these areas along with an increasing need for NEDs to be available to directly engage with the stakeholders involved.

Where else do you focus your time with the business and where are you seeing greatest change at Foresight?

As the Employee Representative on the Board, an important part of my role is ensuring that I am well-versed in the dynamics of Foresight's people and culture. This year marked a significant milestone for Foresight Group with the development of its DE&I strategy, Thrive. This strategy serves as a blueprint, both internally and externally, explaining the objectives and methodologies for achieving them.

On International Women's Day, I participated in an internal panel alongside Gary Fraser (CFO) and Claire Alvarez (PE Partner). Together, we shed light on the approach to gender-related challenges, lived experiences, and showcased initiatives such as Elevate, Foresight's bespoke internal women in leadership programme. The positive feedback received to date on Elevate underscores the programme's efficacy as we embark on the second cohort's journey.

Looking ahead, what do you perceive to be the key changes, if any, that Foresight needs to deliver in the short term?

An organisation has to continually evolve to remain relevant and competitive. We are committed to building new governance processes around sustainability at both Group and jurisdictional levels to enable us to better communicate our strengths in this area to investors and Shareholders alike, as well as our other stakeholders. Board diversity is a challenge in many long-established companies, and the small size of our Board adds to that challenge. It's something that we discuss regularly and is wholly integrated into ongoing succession planning discussions.

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Introduction

Environment

Social

Business conduct

Indices

Sustainability Report FY24

Sustainability at

Foresight continued

Our double materiality analysis: a compass for sustainable business

A double materiality analysis is an essential tool for Foresight to navigate the complex world of sustainability.

It is a two-sided analysis that examines how a company's operations impact the environment and society (impact materiality), while simultaneously considering how environmental and social factors can influence the company's financial performance and reputation (financial materiality). The analysis was completed for each of the investment streams separately, as well as the Foresight Group level.

Foresight's investors show increasing interest in and demand for sustainability-related topics, a majority of which consider financial materiality of ESG risks for investments. Our double materiality analysis highlights the key sustainability topics most relevant for both our portfolio companies and assets and their value chains, but also for our investors. The analysis allows us to prioritise how to mitigate risks, capture opportunities and manage our impact.

Our double materiality analysis approach is based on both the International Sustainability Standards Board ("ISSB") as well as the European Sustainability Reporting Standards ("ESRS"). The ISSB is likely to be incorporated upcoming UK Sustainability Reporting Standards (endorsement decision yet to be made), and the ESRS is important for many of our European investors and stakeholders.

The first step of the double materiality analysis involved mapping our value chain and identifying our key stakeholders, such as investors and employees. With support from an independent third party, we conducted dialogues and surveys with key stakeholders to comprehend their perspective on sustainability. Understanding the concerns and priorities of our stakeholders is important for determining which ESG factors are the most material. The stakeholder dialogues were performed in accordance with the AA1000 Stakeholder Engagement Standard (SES).

We have assessed the environmental and social impacts based on both Foresight's internal operations as well as the geographical and sectorial exposure of our portfolio companies and assets, and their value chains. It involved analysing energy consumption, waste generation, greenhouse gas emissions, labour practices and community relations. The next step involved evaluating the financial implications of ESG factors. This included assessing the potential risks associated with, among others, climate change, resource scarcity, value chain workers or regulatory changes related to sustainability. It also involved identifying opportunities to improve efficiency, reduce costs and gain a competitive advantage through sustainable practices. After analysing both internal and external factors, we could then prioritise the most material ESG issues. This paved the way for developing an action plan with defined strategies to mitigate risks and capitalise on opportunities. The stakeholder dialogues were performed in accordance with the AA1000 Stakeholder Engagement Standard (SES).

Financial materiality

Foresight's double materiality analysis shed light on a range of ESG risks and opportunities that could impact our business, and investor confidence. The analysis highlighted how ESG risks and Foresight's management of these could directly affect investors' demand for Foresight's financial products.

The analysis highlighted both risks and opportunities within climate change mitigation and adaptation, and the use and production of energy. The risks relate to some portfolio companies reliant on carbon-intensive industries, in the event of significant increase in carbon pricing. Another risk is extreme weather events caused by climate change affecting portfolio assets. The production of renewable energy serves as an opportunity for Foresight in the transition towards a greener economy. Overall, we see great opportunities to contribute to a low-carbon economy and a world less reliant on fossil fuels.

We do recognise other environmental risks in our value chain, such as reliance on virgin materials and their potential cost increase. We intend to follow these risks closely by integrating them in our overall risk framework.

The analysis also examined the social and governance aspects of Foresight's business. A key social risk is our dependence on raw materials sourced from regions with potential human rights concerns. The analysis also highlighted the importance of investing in our employees' wellbeing. Not doing so poses a risk of high employee turnover which could lead to increased costs and limit our ability to innovate and develop as a company.