GLIN Impact Capital
Disclosure Statement
Operating Principles for Impact Management
2024.02.28

Introduction
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GLIN Impact Capital hereby affirms its status as a Signatory to the OperatingPrinciples for Impact management (the “Impact Principles”).
The Disclosure Statement applies to the following assets or business lines (the“Covered Assets”): GLIN Impact Capital LPS (VC/Growth Equity)
The total Covered Assets in alignment with the Impact Principles is US$ 10 mil as ofFebruary 2024.
Signed: Masato Nakamura
Name of Institution: GLIN Impact Capital LLP
Authorized Representative: Masato Nakamura
Title: Founding Partner
Date:28th February 2024

Principle 1: Define strategic impact objective(s), consistent with the investment
strategy●PRINCIPLES GUIDANCE:○ The Manager shall define strategic impact objectives for the portfolio or fundto achieve positive and measurable social or environmental effects, which arealigned with the Sustainable Development Goals (SDGs), or other widely
accepted goals. The impact intent does not need to be shared by the investee.
The Manager shall seek to ensure that the impact objectives and investmentstrategy are consistent; that there is a credible basis for achieving the impact
objectives through the investment strategy; and that the scale and/or intensityof the intended portfolio impact is proportionate to the size of the investment
portfolio.

Principle 1: Define strategic impact objective(s), consistent with the investment
strategy●●●●

GLIN Impact Capital has a theory of change with a long term mission "To realize a sustainable
society where the well-being of individuals is high, and people coexist with the environment."
With the long term mission, GLIN does impact investment and support portfolio companies
which generate an immediate outcome: "Impact-oriented funds flow into companies
contributing to the resolution of societal challenges in Japan, such as environmental issues,
diversity, an aging population, agriculture, etc., and Impact Measurement and Management(IMM) are implemented."
GLIN has articulated an impact investing strategy, as detailed in its Theory of Change,emphasizing the firm’s role in promoting impact investing in Japanese society bydemonstrating the viability of the industry and catalyzing the local market. The strategy is inpart based on GLIN’s founders’ research at Harvard Business School into how to promote
impact investing in Japan. Moreover, we have identified eight “sample social issues” that it willseek to address, which include women’s social advancement, the declining birth rate, andsupporting the aging population. Some evidence for these challenges is cited in the Theory ofChange documentation.
GLIN has linked each “sample social issue” to the relevant SDGs in its Theory of Change
documentation.

Principle 2: Manage strategic impact on a portfolio basis.
●PRINCIPLES GUIDANCE:○ The Manager shall have a process to manage impact achievement on a portfolio
basis. The objective of the process is to establish and monitor impact
performance for the whole portfolio, while recognising that impact may varyacross individual investments in the portfolio. As part of the process, theManager shall consider aligning staff incentive systems with the achievement ofimpact, as well as with financial performance.

Principle 2: Manage strategic impact on a portfolio basis.
●●GLIN has developed and started to apply a set of IM processes, including a qualitative
assessment of four impact criteria, a quantitative impact scoring framework, a KPI-setting
process in collaboration with the investee, as well as an impact monitoring system. The
development and implementation of the framework is chiefly captured in the ESG/Impact
Investment Process deck.
GLIN has tied its staff incentive systems to the achievement of impact by setting aportfolio-level hurdle rate. If the hurdle rate is not achieved, 50% of GLIN’s carry will be
donated to relevant NGOs and other organizations.

Principle 3:
Establish the Manager’s contribution to achievement of impact.
●PRINCIPLES GUIDANCE:○ The Manager shall seek to establish and document a credible narrative on its
contribution to the achievement of impact for each investment. Contributions
can be made through one or more financial and/or non-financial channels . The
narrative should be stated in clear terms and supported, as much as possible,
by evidence.

Principle 3:
Establish the Manager’s contribution to achievement of impact.
●●GLIN has a strong focus on indirect (i.e., market-building) investor contribution in its
Theory of Change. In addition, GLIN has developed a process for assessing anddocumenting its direct contribution to the achievement of impact systematically for eachof its investments. For each investment, GLIN assesses its potential to contribute at thelevels of Capital Allocation, Engagement, at the Enterprise level, and at the Stakeholderlevel. At each of these levels, potential investor contribution activities are detailed andcounterfactuals are discussed.
GLIN has started to collect feedback and testimonials (to be featured in GLIN’s annualimpact report) from its investees that detail how GLIN has contributed as an investor to
its investees’ achievement of impact.

Principle 4: Assess the expected impact of each investment, based on a systematicapproach.
●PRINCIPLES GUIDANCE:○ For each investment the Manager shall assess, in advance and, where possible,
quantify the concrete, positive impact potential deriving from the investment. The
assessment should use a suitable results measurement framework that aims to answer
these fundamental questions: (1) What is the intended impact? (2) Who experiences theintended impact? (3) How significant is the intended impact? The Manager shall alsoseek to assess the likelihood of achieving the investment’s expected impact. Inassessing the likelihood, the Manager shall identify the significant risk factors that
could result in the impact varying from ex-ante expectations. In assessing the impact
potential, the Manager shall seek evidence to assess the relative size of the challenge
addressed within the targeted geographical context. The Manager shall also consider
opportunities to increase the impact of the investment. Where possible and relevant forthe Manager’s strategic intent, the Manager may also consider indirect and systemic
impacts. Indicators shall, to the extent possible, be aligned with industry standards andfollow best practice.

Principle 4: Assess the expected impact of each investment, based on a systematic
approach.
●●GLIN has demonstrated a clear approach in evaluating the expected impact of its
investments across the five investments it has made so far. Using GLIN’s “impact rating”
tool, each investee is assigned a rating, for which GLIN utilizes the Impact Management
Project (IMP)’s 5 Dimensions of Impact, where each dimension houses at least 4
sub-criteria. Ultimately, the tool aggregates these ratings towards a final “impact rating”.
For the investment to be approved, it must earn a score of at least 6 of 10 for theinvestment committee to consider it. The results of this assessment are weighedalongside other factors by the Investment Committee.
Having confirmed the impact viability of a prospective investee, GLIN works with theinvestee post-investment to develop an impact logic chain to map its investee’s future
inputs, activities, outputs, outcomes, and impacts. Informed by the logic chain analysis,
GLIN and the investee also select the appropriate KPIs to track across the life of theinvestment. GLIN draws on IRIS+ to select the right KPIs, where appropriate.

Principle 5: Assess, address, monitor, and manage potential negative
impacts of each investment.
●PRINCIPLES GUIDANCE:○ For each investment the Manager shall seek, as part of a systematic anddocumented process, to identify and avoid, and if avoidance is not possible,
mitigate and manage Environmental, Social and Governance (ESG)7 risks.
Where appropriate, the Manager shall engage with the investee to seek its
commitment to take action to address potential gaps in current investee
systems, processes, and standards, using an approach aligned with goodinternational industry practice8 . As part of portfolio management, the Manager
shall monitor investees’ ESG risk and performance, and where appropriate,engage with the investee to address gaps and unexpected events.

Principle 5: Assess, address, monitor, and manage potential negative
impacts of each investment.
●●GLIN has established a process to identify and assess the ESG risks of its investments
ex-ante, which includes leveraging due diligence conducted by third-party providers (i.e.,MSCI) and conducting due diligence for material risks based on sector-specific SASB
standards. A summary of material ESG risks are included in the IC memos for eachtransaction, and GLIN measures and monitors a range of ESG KPIs.
GLIN also draws up Environmental/Social Action Plans (ESAPs) and implements thoseaction plans by providing active support. GLIN uses a three-tier process to identify themost material issues that will drive enterprise value creation and engages with investee
management to implement action items.

Principle 6: Monitor the progress of each investment in achieving impact against
expectations and respond appropriately.
●PRINCIPLES GUIDANCE:○ The Manager shall have a process to manage impact achievement on a portfolio
basis. The objective of the process is to establish and monitor impact
performance for the whole portfolio, while recognising that impact may varyacross individual investments in the portfolio. As part of the process, theManager shall consider aligning staff incentive systems with the achievement ofimpact, as well as with financial performance.

Principle 6: Monitor the progress of each investment in achieving impact against
expectations and respond appropriately.
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GLIN maintains a KPI tracker spreadsheet for each investee where it monitors theprogress of its investments towards impact targets. GLIN records the following data in thespreadsheet: impact targets, data collection methods, expected collection cadence, andimpact data from the latest collection period, among other relevant data.
In addition, GLIN’s process of setting KPIs and associated targets allows the firm tocompare impact performance against expectations on an ongoing basis.
GLIN has begun to track impact outcomes; we contracted with 60 decibels to produce areport on stakeholders’ experience with On the Slope’s work and the firm intends toexpand this practice.

Principle 7:
Conduct exits considering the effect on sustained impact.
●PRINCIPLES GUIDANCE:○ When conducting an exit, the Manager shall, in good faith and consistent withits fiduciary concerns, consider the effect which the timing, structure, andprocess of its exit will have on the sustainability of the impact.

Principle 7:
Conduct exits considering the effect on sustained impact.
●Reflecting its early stage, GLIN has not had any exits yet. However, GLIN envisions itself
as a future market leader in facilitating “impact IPOs” for social enterprises in Japan.
Though it is still too early for GLIN to have brought an Impact IPO to pass, it has takensome concrete steps to prepare for such an eventuality. GLIN has begun to formulate inits ESG/Impact Process Documentation the strategies to best support the listing of oneof its own investees; these plans include a roadshow for the investee and the facilitationof contacts with large public equities investors. GLIN has also worked as one of thecommittee members at “Impact IPO Working Group” under GSG Japan’s banner, wherethe members worked to create a disclosure guideline for social enterprises that decide tobecome listed companies to better disclose their social impact to listed equity investors.

Principle 8: Review, document and improve decisions and processes based on theachievement of impact and lessons learned●

PRINCIPLES GUIDANCE:○ The Manager shall review and document the impact performance of each
investment, compare the expected and actual impact, and other positive andnegative impacts, and use these findings to improve operational and strategic
investment decisions, as well as management processes.

Principle 8: Review, document and improve decisions and processes based on theachievement of impact and lessons learned●●

GLIN has included a basic outline of GLIN’s review process for the performance ofongoing investments; GLIN has adopted the “Continuous Cycle of Measurement
Objectives” as a guide for assessing impact performance. Furthermore, GLIN has
proposed a framework for reviewing impact performance of investments post exit, though
GLIN has not yet exited an investment yet.
Current ways of review include setting aside time at an annual off-site retreats forreflection on possible improvements to GLIN’s own impact management systems, allowing
each of staff to offer their opinions on the firm's internal systems.

Principle 9: Publicly disclose alignment with the Impact Principles and provide
regular independent verification of the alignment.
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PRINCIPLES GUIDANCE:○ The Manager shall publicly disclose, on an annual basis, the alignment of its
impact management systems with the Impact Principles and, at regularintervals, arrange for independent verification of this alignment. The
conclusions of this verification report shall also be publicly disclosed. These
disclosures are subject to fiduciary and regulatory concerns.

Principle 9: Publicly disclose alignment with the Impact Principles and provide
regular independent verification of the alignment.
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This Disclosure Statement confirms the alignment of GLIN’s procedures with the Impact
Principles and will be updated annually.
The independent assurance report on the alignment of GLIN with the Operating Principles
for Impact Management is shown in the following pages.
BlueMark is the independent verifier for GLIN.
Qualifications: “BlueMark is a leading independent provider of impact verification services
in the impact investing market. BlueMark is a subsidiary of Tideline Advisors, LLC, aspecialized consulting firm that works with asset managers and allocators to design andimplement best-in-class impact management and measurement systems. ”
BlueMark’s address: 915-2 Battery St. San Francisco, CA 94111
Most recent review: September 2023 “diagnostic verification”. We will conduct our firstfull verification in 2024.
GLIN intends to undertake verification every 3 years.

Principle 9: Publicly disclose alignment with the Impact Principles and provide
regular independent verification of the alignment.

●The information contained in this Disclosure Statement has not been verified or endorsedby the Global Impact Investing Network (“the GIIN”) or the Secretariat or Advisory Board.
All statements and/or opinions expressed in these materials are solely the responsibilityof the person or entity providing such materials and do not reflect the opinion of the GIIN.
The GIIN shall not be responsible for any loss, claim or liability that the person or entity
publishing this Disclosure Statement or its investors, Affiliates (as defined below),
advisers, employees or agents, or any other third party, may suffer or incur in relation tothis Disclosure Statement or the impact investing principles to which it relates. For
purposes hereof, “Affiliate” shall mean any individual, entity or other enterprise ororganization controlling, controlled by, or under common control with the Signatory.

© 2021 GLIN Impact Capital. All rights reserved. Strictly Confidential.

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