Sustainable Finance Disclosures - Entity level

RunwayFBU Fund Management AS (“RunwayFBU”) considers sustainability risks to be a meaningful component of its investment risk management approach. In accordance with Article 3 of the Sustainable Finance Disclosure Regulation (SFDR), RunwayFBU has developed internal guidelines for the identification and integration of sustainability risks — defined as environmental, social, or governance (ESG) events or conditions that, if they occur, could cause a material negative impact on the value of an investment.These guidelines inform the decision-making processes for investment activities across the firm, particularly in relation to Fund II, which is classified under SFDR Article 8.

RunwayFBU’s internal guidelines are applied across the investment team to help ensure that relevant sustainability risks are considered throughout the investment lifecycle. The guidelines will be regularly updated and embedded into working practices such as:

• Opportunity screening and risk flagging
• Due diligence assessments
• Investment decision-making
• Portfolio monitoring

These practices reflect a firm-wide commitment to responsible investment while allowing flexibility in adapting to company size, stage, and context.

Sustainability risks are identified qualitatively based on factors such as:

• The sector in which a company operates (e.g., high emissions or environmental exposure)
• Stage of maturity and governance readiness
• Geographic or regulatory exposure
• Product- or service-related externalities

Risks that are judged to be material to financial outcomes — such as reputational risks, compliance costs, or operational disruptions — are prioritized for further evaluation and
discussion.

To assess these risks, RunwayFBU uses a mix of internal tools and external inputs, including:

• An internally developed ESG Survey for prospective and current portfolio companies
• ESG frameworks such as SASB and GRI for materiality guidance- while startups cannot be expected to report through SASB or GRI prior to meeting RunwayFBU, such frameworks can be used internally:

        - To frame ESG survey questions by industry
        -  To benchmark materiality by sector (e.g., what to expect from a SaaS company vs an industrial tech firm)
        - To build internal ESG checklists for diligence and monitoring

• Publicly available data from companies, industry sources, and media
• Sector-specific insights from third-party legal, commercial, or technical diligence (when
applicable)

This information is synthesized by the investment team to inform both investment selection and post-investment engagement priorities.

Sustainability risk considerations are embedded into existing investment processes without being treated as a standalone track. This includes:


• Qualitative ESG risk discussions in team meetings
• ESG considerations included in investment memos for Fund II
• Structured prompts in diligence checklists and pipeline tracking tools


While not every investment will present the same level of ESG complexity, all are evaluated against the same internal expectations for identifying material sustainability risks.
 

RunwayFBU’s investment professionals receive periodic training and guidance on ESG integration and regulatory developments related to SFDR. Knowledge sharing within the team ensures that relevant ESG insights are kept current and incorporated into workflows.

These internal guidelines are reviewed annually and may be adjusted as regulatory expectations evolve or as ESG-related risks become more material across the portfolio.

RunwayFBU currently does not consider principal adverse impacts (PAIs) of investment decisions on sustainability factors at the entity level, in accordance with SFDR Article 4(1)(b).

This decision reflects both the current internal capacity of the investment team and the nature and maturity of the companies we invest in.

As a lean organization with a core investment team of five professionals, RunwayFBU operates with a resource model tailored to high-engagement, early-stage venture capital.

Implementing full PAI disclosures would require:

• Collecting a broad set of quantitative sustainability data across multiple companies
• Aggregating, validating, and tracking such data to meet SFDR technical standards
• Developing internal systems to assess and act on negative sustainability impacts

At our current scale, this level of infrastructure and compliance would divert disproportionate time and attention away from core investment and portfolio support activities — without a meaningful improvement in sustainability outcomes.

RunwayFBU invests primarily in early-stage software and technology companies, which typically have low direct environmental footprints:

• Minimal Scope 1 and 2 GHG emissions
• No physical exposure to fossil fuels or high water usage
• No significant supply chains involving deforestation or biodiversity impacts

Furthermore, the size of our portfolio companies makes formal PAI tracking impractical. For example:

• In Fund I, approximately 50% of portfolio companies have fewer than five employees
• Most generate less than NOK 2 million in annual revenue
• ESG reporting structures — and even basic compliance systems — are often still being built

Fund II is expected to follow a similar investment strategy, targeting companies of comparable
stage and profile. 

Therefore, while technically separate, Fund I serves as a valid proxy for evaluating the proportionality and feasibility of PAI disclosures in the context of Fund II.

We continue to monitor regulatory expectations, market best practices, and data availability.

RunwayFBU may reconsider its position on PAIs as:

• Portfolio companies grow in size and reporting capacity
• ESG frameworks for early-stage VC become more streamlined
• Internal resources allow for meaningful implementation and oversight

In accordance with Article 5 of the SFDR, RunwayFBU discloses how sustainability risks are considered in relation to its remuneration policy. Sustainability risks are integrated into our investment decision-making and monitoring processes, but they are not a separate component of staff remuneration. As a lean early-stage investment manager, compensation is based primarily on financial performance and operational results of the Fund. We consider this approach to be proportionate to the size, nature, and complexity of our business.

Sustainable Finance Disclosures – Fund level

A. Summary

RunwayFBU Fund II AS (“the Fund”) promotes environmental and social (E/S) characteristics in line with Article 8 of the SFDR. While the Fund does not have sustainable investment as its objective, E/S considerations are integrated throughout our investment process — from screening and due diligence to monitoring and engagement. We assess portfolio companies against ESG indicators tailored for early-stage ventures and support them in building scalable, responsible business practices.

B. No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

C. Environmental or social characteristics of the financial product

The Fund promotes characteristics such as:

• Responsible environmental practices (energy use, waste, emissions, water, biodiversity).
• Inclusive and fair workplaces (gender diversity in leadership and boards, worker satisfaction, anti-harassment policies).
• Sound governance (independent board members, ESG risk integration, GDPR compliance, whistleblowing frameworks).

These are measured through company- and portfolio-level KPIs (see ESG Survey) and are prerequisites for investment and ongoing support.

D. Investment strategy

The Fund invests in early-stage technology companies transforming industrial sectors through digital, data-driven, and AI-enabled solutions. While financial performance remains the investment objective, ESG integration is a part of our strategy. Exclusions apply to controversial weapons, nuclear treaty violations, coal, tobacco, and pornography-related activities above defined thresholds. Investee companies must demonstrate or commit to good governance and respect for human rights and labor rights.

E. Proportion of Investments

The Fund’s investments are expected to meet the binding ESG elements of our investment strategy. The Fund does not currently commit to a minimum share of “sustainable investments” under the EU Taxonomy. All investments are classified under “#1B – Other E/S characteristics”.

F. Monitoring of environmental or social characteristics

ESG characteristics are monitored via an annual RunwayFBU ESG Survey, portfolio reviews, and board-level oversight. Results are benchmarked against company-level and portfolio-level KPIs. Where deficiencies are identified, corrective action plans are agreed, progress is tracked, and in some cases follow-on funding is tied to ESG improvements.

G. Methodologies

We apply a structured ESG Survey aligned with SASB/GRI materiality guidance and the Voluntary Sustainability Reporting Standard for non-listed SMEs (VSME). Indicators include quantitative metrics (e.g. energy use, gender balance) and qualitative measures (e.g. anti-harassment policy, board independence). These are assessed pre-investment and annually thereafter.

H. Data Sources and Processing

Data is primarily sourced directly from portfolio companies through the ESG Survey. We supplement this with public data, industry reports, and third-party due diligence when needed. Data is collected, validated by the investment team, and aggregated for portfolio-level reporting.


I. Limitations to methodology and data

As an early-stage venture fund, many portfolio companies have limited resources and immature ESG systems. Data quality may vary, and certain quantitative indicators may not yet be available. To mitigate this, we emphasize proportionality, require minimum standards, and encourage companies to improve reporting capacity over time.

J. Due Diligence

All prospective investments must complete the ESG Survey as part of due diligence. Material risks are flagged in investment memos and considered by the Investment Committee. Where gaps are found, corrective action plans may be required before investment, or the opportunity may be declined. ESG risks are reassessed annually post-investment.

K. Engagement policies

RunwayFBU actively engages portfolio companies on ESG topics through board participation, regular reviews, and targeted support. We may:

• Require formal improvement plans.
• Tie follow-on funding to ESG progress.
• Escalate issues to the Investment Committee.
• In severe cases, recommend governance changes or withhold capital

L. Designated reference benchmark
 
No specific index has been designated as a reference benchmark to measure attainment of E/S characteristics. Progress is instead measured directly through company- and portfolio-level KPIs as defined in our ESG framework.