I - INTRODUCTION

CONTEXT

FCDE is a French private equity firm that supports the development and transformation of SMEs and mid-cap companies with a strong growth potential. Based on a responsible approach, FCDE provides human and financial resources to help management teams drive sustainable operational improvement and long-term strategic value creation. FCDE has supported more than 30 entrepreneurial projects, helping them reach the next stage of their development by implementing transformative strategies and driving change.

SUSTAINABILITY JOURNEY AT FCDE

Sustainability is a key focus for FCDE and has been an important part of its strategy as an investor since 2015. FCDE has implemented an ambitious and structured ESG framework based on a comprehensive approach at each stage of the investment process. There is a shared commitment towards ESG from both FCDE and the portfolio companies and a continuous improvement process towards sustainable value creation. At the forefront of the FCDE sustainability strategy is the commitment to focus efforts on targeted ESG improvements tailored to the portfolio company business case.

As a majority shareholder, FCDE is aware of its major role to be played in the sustainable transformation of companies. Thus, FCDE has chosen in 2025 to accelerate on this dimension, and strengthened its ESG policy, in order to reaffirm its commitment, clarify its positioning and strengthen the sustainable support provided to its portfolio companies.

II - ESG STRATEGY

ESG AMBITION

FCDE's ESG ambition is aligned with its investment thesis:

“Supporting the sustainable transformation to ensure the long-term resilience and value of companies”

This ambition is supported by 3 key ESG convictions regarding portfolio companies:

• The commitment of top-management and teams to sustainable transformation

• The ability to capture ESG opportunities to ensure a leadership position among peers

• The alignment of companies’ overall strategy with their ESG strategy

These convictions are translated into 9 ESG objectives at portfolio level:

Management of ESG

1- Completion of a ESG materiality analysis in the following year of acquisition

2- Definition of a relevant ESG strategy and roadmap within 2 years after acquisition

Environment

3- Calculation of their carbon footprint for scopes 1, 2 & 3

4- Identification of opportunities in the circular economy

Social

5- Promotion of policy in favour of human resources retention

6- Deployment of value-sharing mechanisms within companies

Governance & Ethics

7- Alignment of companies’ top management remuneration schemes with ESG objectives

8- Deployment of a relevant responsible purchasing policy addressing their sector’s key ESG issues

9- Implementation and publication of a Code Of Conduct & Ethics

ESG FRAMEWORK

In compliance with the SFDR, this Sustainability Policy aims to demonstrate how FCDE’ policies integrate sustainability risks through all its investment life cycle:

• In its investment decision-making process, 

• In the due-diligence policies with respect to the PAIs,

• Throughout the whole investment period during which FCDE supports the sustainable transformation of its companies

This Sustainability Policy covers all FCDE’s investment activities. It ensures compliance with the requirements set out in Articles 3, 4 and 5 of the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27 November 2019 on sustainability-related disclosures in the financial services sector (the "SFDR").

The SFDR is based on the principle of double materiality and identifies two main types of risks:

• Sustainability risks: An environmental, social or governance event or condition where, if it occurs, could cause an actual or potential negative impact on the value of the investment

• Principal Adverse Impacts (PAIs): PAIs of investment decisions on sustainability factors which are defined as environmental, social and employee matters, respect for human rights, anti-corruption, and anti-bribery matters.

In compliance with the SFDR, this Sustainability Policy aims to demonstrate how FCDE’ policies integrate sustainability risks in its investment decision-making process as well as the due-diligence policies with respect to the PAIs.

III - CORPORATE ESG GOVERNANCE

ESG ROLES AND RESPONSIBILITIES

The ESG policy and approach at FCDE is delivered by:

 • The ESG Team at the corporate level, responsible for coordinating the internal sustainability approach, including the management of sustainability risks and PAIs of investments, as well as ensuring FCDE’s continuous improvement and compliance with regulations;

• The ESG Referents within Deal Teams, in charge of monitoring ESG performance of portfolio companies, and supporting them on a day-to-day basis in their sustainable transformation;

• All investment team members, including Partners, to challenge the portfolio companies’ ESG priority initiatives, and escalate ESG incidents if any.

The ESG Team is comprised of three Partners. 

The ESG Referents are designated among FCDE middle-managers.  

ESG QUARTERLY REVIEWS

FCDE has set up quarterly reviews with each portfolio companies, to deal with ongoing ESG priority initiatives and sustainable transformation strategies. These reviews are animated by the ESG Referents with their respective portfolio companies, focusing the discussions on:

• Monitoring key ESG KPIs specific to the company industry & context

• Steering on the deployment of key ESG initiatives

• Discussion on main ESG challenges, opportunities and sectorial trends

After these reviews, an internal meeting is set-up between FCDE's ESG Referents and the ESG Team, in order to share progress report on ongoing initiatives, best practices and potential obstacles to overcome.

ESG COMMITTEE

FCDE has set up an annual ESG Committee gathering all FCDE Teams, animated by the ESG Team and an appointed ESG advisor.

The purpose of the ESG Committee is to share with all deal teams the main accomplishments of portfolio companies regarding ESG, and coordinate progress on sustainability stakes within the portfolio companies. 

For each portfolio company, the ESG Referent presents to the Committee:

• The sustainable performance of the company, including the analysis of sustainability risks and PAIs of investments on sustainability factors

• The actions taken, and to be taken, in terms of sustainable value creation for the company

• The KPIs to be monitored in order to improve this performance and limit sustainability risks

The ESG committee makes recommendations to be implemented and monitored by the investment teams in relation to the portfolio companies.

ESG ANNUAL SEMINAR

On an annual basis, an appointed ESG advisor conducts a sustainability training with the participation of the full FCDE team. This seminar includes sharing the results of the FCDE annual sustainability reporting campaign pushed to the portfolio companies as well as the results of the ESG Committee consultation. This training also acts as the forum for discussion around prospective sustainability good practices that could generate improvements with respects to ESG and sustainability.

IV - SUSTAINABILITY ASSESSMENT AND TRANSFORMATION, THROUGH THE INVESTMENT PROCESS AND HOLDING PERIOD

OVERVIEW

The incorporation of ESG and sustainability risks into FCDE’s investment process dates back from 2015. FCDE identifies, analyses, and monitors sustainability risks & maturity assessment of investments at each step of the investment life cycle, while adapting its approach to each investment to ensure an appropriate and effective ESG strategy.

SUSTAINABILITY ASSESSMENT DURING INVESTMENT PROCESS

Sustainability is integrated into FCDE selection process and investment decision through key steps:

• A sectorial exclusion policy

• A pre-investment ESG analysis of companies, and complete ESG due diligences to identify potential ESG issues

• An initial assessment of ESG maturity of companies, and the identification of priority sustainability initiatives

• Integration of sustainability into the Investment Memo, and presentation to the Investment Committee of the ESG risks, opportunities and stakes associated with the proposed investment

INVESTMENT RESTRICTIONS - EXCLUSION POLICY

FCDE excludes certain investment sectors for ethical reasons and do not invest in companies located in non-cooperative countries with regards to the efforts to combat corruption and terrorist financing.

The Funds are prohibited from investing, directly or indirectly, in companies:

• Whose activity consists primarily in the production, sale, storage or services for and of firearms, and in particular cluster munitions, cluster bombs, landmines, anti-personnel mines

• Whose activity consists of or is related in any manner whatsoever to prostitution

• Whose activity is to manufacture complete tobacco products (threshold for application: revenues above five percent (5%) of the relevant company's total revenues)

• Whose main activity consists of or whose main portion of revenues is issued from the production, the exploitation, the sale and/or distribution of tobacco

• Involved in the production, sale or storage of chemical, biological and depleted uranium weapons

• Violating, repeatedly and seriously, one or more of the ten principles of the Global Compact, without credible corrective action

• Which are coal developers (i.e., corporations currently developing or planning to develop new thermal coal capacities along the value chain – mining, production, utilities and transport infrastructure)

• Whose significant part of activity consists or whose significant portion of revenue is issued from the extraction, the exploitation, the sale and/or distribution thermal or metallurgical coal