Mandatory disclosures under Regulation of the European Parliament and of the Council on Sustainability-Related Disclosures in the financial services sector (EU) 2019/2088 (“SFDR”)

The following information is given in light of the consideration of sustainability-related aspects in accordance with the Regulation (EU) 2019/2088 of the European Parliament and of the Council of 27th of November 2019 on sustainability disclosure requirements in the financial services sector (“SFDR”).

INTEGRATION OF SUSTAINABILITY-RELATED RISKS INTO THE INVESTMENT DECISION PROCESS

backtrace GmbH ("backtrace", LEI: 3912008UQWDAIP4F2F69) integrates sustainability risks into its investment decision-making process. "Sustainability risks" refer to environmental, social, or governance (ESG) events or conditions that, if they occur, could cause an actual or potential material negative impact on the value of an investment. backtrace assesses sustainability risks as part of the due diligence process conducted prior to any investment decision. This includes the completion of a structured ESG questionnaire to identify and evaluate potential sustainability risks relevant to the target company. The results of this assessment are factored into the overall investment decision, and backtrace may decide to either proceed with or refrain from an investment depending on the nature and severity of the risks identified. In some cases, backtrace may also implement measures to mitigate material sustainability risks. All decisions are made in accordance with the principle of proportionality, considering the strategic relevance and context of each investment opportunity.

TRANSPARENCY OF REMUNERATION POLICIES IN RELATION TO THE INTEGRATION OF SUSTAINABILITY RISKS

As a registered alternative investment fund manager (AIFM) under the German Investment Code (Kapitalanlagegesetzbuch, "KAGB"), backtrace is not required to implement a remuneration policy in accordance with the provisions of the KAGB. Consequently, sustainability risks are not currently integrated into backtrace’s approach to remuneration, in line with Article 5 SFDR.

TRANSPARENCY OF ADVERSE SUSTAINABILITY IMPACTS AT ENTITY LEVEL – PRINCIPAL ADVERSE IMPACT STATEMENT

In accordance with Article 4(1)(b) SFDR, backtrace does not currently consider principal adverse impacts of investment decisions on sustainability factors. Sustainability factors include environmental, social, and employee matters, respect for human rights, anti-corruption, and anti-bribery matters. backtrace has decided not to consider principal adverse impacts at this stage due to several factors, including the limited availability and reliability of data from early-stage portfolio companies and the Fund’s minority shareholding in such companies, which limits its ability to influence ESG data collection and disclosure. backtrace continues to monitor regulatory developments and market standards and may re-evaluate its approach to principal adverse impact consideration in the future.

SUMMARY

Environmental or Social Characteristics: backtrace capital Fund I GmbH & Co. KG (the “Fund”) is a European venture capital fund investing in early-stage, technology-driven companies. The fund promotes environmental and social characteristics by applying a sector exclusion policy, which screens out investments in sectors with potentially significant negative environmental or social impacts (e.g. fossil fuels, weapons, gambling, pornography, and illegal activities). This policy is proportionate to the fund's focus on early-stage startups and supports responsible capital allocation from the outset.

Investment Strategy: The Fund follows a technology-focused strategy targeting companies in software, hardware, and infrastructure sectors. Investments are primarily made at pre-seed and seed stages. Environmental and social characteristics are integrated by excluding specific sectors and assessing governance practices. Governance is evaluated through an annual questionnaire covering management structures, employee relations, remuneration, and tax compliance.

Proportion of Investments: 100% of the Fund’s capital is allocated to investments that promote environmental or social characteristics. All exposures are direct investments in investee entities. The fund does not use derivatives or other indirect exposures for sustainability purposes.

Monitoring of Characteristics: The environmental and social characteristics are monitored through due diligence screening and annual follow-up. The Fund applies exclusion criteria and evaluates governance factors both prior to and throughout the holding period. Portfolio companies complete an annual ESG questionnaire, and responses are reviewed by the General Partner to ensure ongoing alignment.

Methodologies: The Fund uses a questionnaire-based methodology to measure the attainment of promoted characteristics. ESG data is collected annually via an external platform, covering alignment with the fund’s exclusion list and governance criteria.

Data Sources and Processing: Most data is sourced directly from portfolio companies. Where companies are unable to complete the questionnaire, the General Partner provides the information based on direct engagement. All data is reviewed internally to ensure quality and relevance. No data is estimated; instead, missing responses are supplemented by informed input from the General Partner.

Limitations to Methodologies and Data: Limitations exist primarily due to the early-stage nature of investees, where some companies may not respond directly. The General Partner mitigates this by completing the ESG questionnaire based on knowledge gained through engagement. This approach does not compromise the promotion of environmental or social characteristics.

Due Diligence: Due diligence is conducted by the General Partner on all prospective investments. It includes exclusion screening and assessment of good governance. All findings are integrated into the investment decision-making process. No external due diligence providers are used at this stage.

Engagement Policies: Engagement is primarily conducted through the annual ESG questionnaire. Follow-up discussions occur if gaps or inconsistencies are identified. In case of sustainability-related controversies or repeated non-responsiveness, the fund may engage further with the company to ensure alignment with its sustainability goals.

Designated Reference Benchmark: The Fund does not designate a specific reference benchmark for the purpose of attaining the environmental or social characteristics it promotes.

NO SUSTAINABLE INVESTMENT OBJECTIVE

The Fund promotes environmental or social characteristics, but does not have as its objective sustainable investment.

ENVIRONMENTAL OR SOCIAL CHARACTERISTICS OF THE FINANCIAL PRODUCT

The Fund is a European venture capital fund that invests in early-stage, technology-driven companies. While the Fund does not pursue sustainable investment as its objective, it promotes environmental and social characteristics by applying a sector exclusion policy to all of its investments. This exclusion policy ensures that the Fund’s investment universe is aligned with its investment beliefs and thesis, and that capital is not allocated to activities that are considered to have significant negative environmental or social impacts. As such, the Fund does not invest in companies operating in the following sectors:

• Performing research and innovation activities considered as illegal according to the applicable legislation in the country of the Portfolio Company;
• Any illegal economic activity (i.e., any production, trade or other activity, which is illegal under the laws or regulations applicable to the Fund or the relevant Portfolio Company, including without limitation, human cloning for reproduction purposes);
• The production of, and trade in, tobacco, distilled alcoholic beverages, other non-alcoholic recreational drugs and related products;
• The financing and production of, and trade in, weapons and ammunition of any kind;
• Gambling;
• Oil and gas or metals and mining exploration, extraction or operation;
• Retail banking;
• Pornography;
• The research, development or technical applications relating to electronic data programs or solutions, which are intended to enable to illegally (i) enter into electronic data networks; or (ii) download electronic data.

This approach is considered proportionate to the early-stage nature of the Fund’s portfolio companies and is designed to integrate environmental and social considerations into the investment process without imposing undue burden on startups at their inception stage

INVESTMENT STRATEGY

This financial product follows a technology-driven investment strategy, targeting innovative companies operating in the fields of enterprise software, hardware, infrastructure technology, and software solutions that support practitioners throughout the full software development lifecycle. The strategy is implemented by focusing on early-stage investments, specifically in pre-seed and seed rounds, including late seed rounds. To implement the strategy on a continuous basis, the investment team applies a rigorous sourcing and due diligence process to identify companies with high growth potential and strong technological foundations. Investments are selected based on clear sectoral alignment with the Fund’s focus areas and are monitored post-investment to ensure alignment with the strategy. The Fund aims to build a diversified portfolio across a broad range of economic activities within the technology sector, maintaining a consistent focus on early-stage opportunities throughout the lifecycle of the product. To assess the good governance practices of its portfolio companies, the Fund distributes an annual questionnaire that all portfolio companies are required to complete. This questionnaire covers sound management structures, employee relations, remuneration of staff and tax compliance.

PROPORTION OF INVESTMENTS

100% of the Fund’s capital is allocated to investments that promote environmental or social characteristics in accordance with the commitments made in the pre-contractual disclosures under Article 14 SFDR Delegated Act. All investments are made through direct exposures in investee entities, including Special Purpose Vehicles (SPVs). The Fund does not engage in other types of exposures (e.g. derivatives, cash holdings, or indirect investments) for the purpose of promoting these characteristics.

MONITORING OF ENVIRONMENTAL OR SOCIAL CHARACTERISTICS

The Fund monitors the environmental and social characteristics it promotes primarily through the application of an exclusion policy and assessment of good governance practices, both during the due diligence phase and throughout the holding period.

Due Diligence Phase:

• Exclusion Screening: All potential investees are screened against the Fund’s exclusion list, which includes sectors such as tobacco, weapons, fossil fuels, and other activities considered misaligned with the Fund’s sustainability objectives.
• Good Governance Assessment: backtrace evaluates whether the investee company adheres to good governance practices, including sound management structures, employee relations, remuneration of staff, and tax compliance.

Holding Period:

• Annual Monitoring: Portfolio companies are required to complete a sustainability questionnaire on an annual basis. This includes reconfirmation of compliance with the exclusion list and updates on governance practices.
• Ongoing Oversight: Responses are reviewed internally to ensure continued alignment with the Fund’s environmental and social characteristics and to flag any material developments that may warrant engagement or reassessment.

This structured monitoring approach ensures that the sustainability characteristics of the Fund are maintained throughout the lifecycle of the investment.

METHODOLOGIES

The Fund uses a structured, questionnaire-based methodology to assess the attainment of the environmental and social characteristics promoted by the financial product. An external data platform is used to distribute ESG questionnaires to portfolio companies and collect responses. The questionnaire includes specific indicators related to the Fund’s exclusion policy and good governance assessment criteria. Responses are reviewed to confirm that portfolio companies continue to meet the Fund’s sustainability standards.

DATA SOURCE AND PROCESSING

Data Sources: The primary data source is direct input from portfolio companies via an external platform. In cases where smaller companies are unable to complete the questionnaire, the General Partner (Backtrace) collects the relevant information and submits responses on their behalf.

Data Quality Measures: The platform ensures data consistency through standardized templates and predefined questions aligned with the Fund’s exclusion and good governance criteria. Internal checks are performed to ensure data completeness and identify inconsistencies.

Data Processing: All data, whether submitted by portfolio companies or entered by the General Partner, is reviewed by backtrace to assess alignment with the Fund’s environmental and social characteristics.

Proportion of Estimated Data: While most data is reported directly by companies, a small portion may be provided by the General Partner based on engagement and documentation when companies are unable to report themselves. In such cases, data is not estimated but informed by direct knowledge of the investee company.

LIMITATIONS TO METHODOLOGIES AND DATA

While the Fund aims to collect data directly from portfolio companies via a dedicated ESG platform, there are occasional limitations, particularly with early-stage or small companies that may lack the capacity or resources to complete the questionnaires. In such cases, the Fund’s General Partners step in to complete the questionnaire on behalf of the company using information obtained through ongoing engagement and available documentation. These limitations are mitigated through the Fund’s close involvement with portfolio companies and do not affect the ability to monitor or promote the environmental or social characteristics of the financial product. The methodology remains consistent, and the sustainability profile of each investment is continuously assessed throughout the holding period.

DUE DILIGENCE

backtrace conducts due diligence on all potential investments prior to commitment, focusing on alignment with the Fund’s environmental and social characteristics and good governance principles.

The due diligence process includes:

• Exclusion Screening: Assessment of whether the potential investee is involved in any activities on the Fund’s exclusion list, such as fossil fuels, tobacco, or weapons.
• Governance Assessment: Evaluation of governance practices including transparency, anti-corruption policies, and compliance with tax obligations.

Controls: The General Partner is responsible for conducting and reviewing the due diligence for each investment. Findings are documented and discussed as part of the investment decision process.

ENGAGEMENT POLICIES

The Fund’s approach to engagement is primarily centered around the annual ESG questionnaire sent to portfolio companies. This process is designed to promote awareness of the Fund’s environmental and social expectations and to monitor ongoing alignment with its sustainability-related criteria. Engagement activities include:

• Annual ESG Questionnaire: Portfolio companies are asked to report on the environmental and social characteristics that the Fund promotes.
• Follow-Up Communication: Where gaps or inconsistencies are identified, the General Partner may follow up directly with the company to clarify responses and encourage progress on relevant sustainability matters.
• Escalation Procedures: In cases where a material sustainability-related controversy arises or where there is a repeated lack of responsiveness, the Fund may engage more intensively with the company’s management to address the issue or assess potential implications for continued investment.

DESIGNATED REFERENCE BENCHMARK

The Fund does not designate a specific reference benchmark.