Overview

2021/22

Impact Annual Report

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Table ofContents
Overview

3

13

Driving Impact Results

Commitment from Leadership
Becoming a B-Corp

Our Approach4

Impact Metrics
and Highlights

24

14

Artesian’s Theory of Change

15

2021/22 Portfolio Impact Metrics

25

Impact Case Studies

Impact Forward
Informing Investment Outcomes

The Inherent Link Between
Risk/Return and Impact

52021/22: A Year in Review

6

Responsible Investment Commitment

162022/23: The Year Ahead

6

Artesian’s Sustainable and Impact
Investing Focus

17

Exclusionary Screens List
Integrating ESG Considerations into
Our Investments

About ArtesianCompany Overview

7

Responsible Investing Evolution

8

Materiality

9

Team

10

Diversity Breakdown

11

Gender Pay Gap Disclosure

11

Oversight

12

43

Creating a Sustainable Future

Portfolio Impact

Strategic Framework: Measuring andManaging Impact

Progress on Our
Commitments

Fixed Income

27

Venture Capital

30

Venture Capital as a Service (VCaaS)

37

Commitment to Net Zero by 2030

44

Measuring Our Carbon Footprint

45

Total Emissions by Scope

46

Offset Partner

47

Offset Project48

Advancing Gender Equity
49

17

Commitment to Closing Economic
Gender Gaps

18

Gender Impact in Fixed Income

50

Gender Impact in Venture Capital

51

Launch of Artesian Female Leaders
VC Fund52

Impact Perspectives

Impact Processes
Measuring Impact: Methodology andData Collection

19

Managing Impact: Standards andFrameworks

21

Aggregation Confusion and ESG
Irrelevance – Measurable Impact as
the Solution

39

Responsible VC: ESG integration at
the Early Stage (Volume 2)

41

Critical Technologies: Our Position on
National Security-Related VC

42

Engagement, Outreach and Milestones
2021/22 Impact Timeline

55

History of Collaborations andPartnerships

57

Overview

01

Overview
Who we are, what we stand for and our outlook on the future of
responsible investment.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

IN THIS SECTION
Commitment from Leadership
Becoming a B-Corp
Impact Forward
The Inherent Link between Risk/Return and Impact
2021/22: A Year in Review
2022/23: The Year Ahead
About ArtesianCompany Overview
Responsible Investing Evolution
Materiality
Team
Diversity Breakdown
Gender Pay Gap Disclosure
Oversight

3

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Commitment
from Leadership
Becoming a B-Corp

JeremyColless
Co-Founding
Partner

Mei LeePartner

Luke Fay
PartnerMatthew
Clunies-Ross
Co-Founding
Partner

Tim HeasleyPartner

Gilles Plante
PartnerJohn
McCartney
Co-Founding
PartnerVicky Lay
Partner

Stuart Fox
Partner

We are pleased to share that Artesian has successfully
certified as a B-Corporation. The rigorous verification
process is an opportunity to apply our impact
approach on ourselves, demonstrating our corporate
operations reflect the commitment to social andenvironmental sustainability that we apply to ourinvestments.
Artesian has always invested through the lens ofimpact, but in 2019 we formalised our responsible
investment philosophy across all of our business, andcommitted to sustainable and impact investing acrossour venture capital and fixed income strategies.
The next step was to look internally and commit ourcompany-wide operations to the highest
sustainability standards, guided by the principles of
becoming a B-Corporation.

Certified B-Corps are a community of companies all
meeting the highest standards of social andenvironmental performance.

We went right back to our core principles, and to ourcompany constitution, to embed our mission as an
immutable driving force.

They’ve all submitted to a rigorous assessment
process, verifying the impact they have on the world,
and adhering to measures of transparency andaccountability.

As responsible investors, we are committed toconsidering all stakeholders, not just shareholders, in ourinvestment decision-making and purpose as anorganisation.

It’s not an easy process, we began in 2019 and in 2022
Artesian finally achieved an overall B Impact Score of
93.0, outperforming the 50.9 median score forordinary businesses and the minimum 80.0 criteria for
qualification.

But it’s not enough just to say it, to show true leadershipand commitment, you need to build it into yourfoundations.
By working through an in-depth verification process, we
assessed over 200 factors across Governance,
Workers, Community, Environment and Customers. The
process itself helped us examine our processes moredeeply, and further reduce our impacts.
Being a responsible investor, we were able to leverage
our know-how in measuring and managing
environmental and social factors when we turned theanalysis process on ourselves.
We’re proud of what we’ve achieved, and we’re excited
to join a community of the world’s most progressive
companies, to drive a more sustainable economy.

David
Gallagher
Partner

Felix
Zhang
Partner4Overview

ImpactForward
John McCartney
Co-Founding Partner,
Head of ESG

Vicky Lay
Partner, Head of
Impact Investments

Mei LeePartner, Head ofOperations

The Inherent Link
Between Risk/Returnand Impact
As stewards of capital, it is our fiduciary
duty to ensure that we are conscious of
the risk/return trade off for our investors.
Our journey managing assets has brought
us to a place where we see that twodimensional investing of risk vs return isan analogue view of what has become adigital world.
Investors and stakeholders are now
asking how their capital is being used –with red lines being drawn around assetsthat have negative effects on society andthe environment.
Investors, governments, and regulators
are taking aim at business models thatgenerate negative externalities.
Businesses that generate pollution
and/or support inequality, focusing solely
on shareholders (at the expense of otherstakeholders), are finding capital drying
up. With the dramatic growth in United
Nations Principles of Responsible
Investment (UNPRI) signatories andassets under management (AUM), thedifficulty for these types of businesses toattract capital to fund their operations
will only proliferate.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Furthermore, new business models arebeing developed and tested in venture
capital markets – where impact is themission – and are attracting talent andcapital that is trying to solve historicallyintractable problems using the newtechnologies that can scale globally.

This journey has only just begun to show
us that returns are inherently linked tothe impacts a company makes.
Considering and responding to thestakeholders in your business model
doesn’t just make you a better corporate
citizen – it makes you a more profitablecompany and a better investment.

Simultaneously, we have seen the global
capital markets innovate green andsustainable financing – with the green
and sustainable bond market growing
exponentially as government andcorporate institutions raise money toreduce their environmental and social
impacts.

Artesian has equipped its business totrack and collate the impact that ourinvestments are making – as we see thatas the north star that will drive alpha.

Huge datasets are being created on new
platforms, like social media, that give us
better insights into how populations moveand think. As new sensors are deployed, we
get better more granular information on how
our economic activities impact theenvironment around us and the society welive in.
Combining this with artificial intelligence andthe toolbox for solving seemingly intractablesocial and environmental problems seems
possible. Moreover, if companies can alignprofit motives with impact rationale –capitalism will provide pathways to transformthe economy onto a more sustainablefooting.

5Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ImpactForwardHighest standards ofsocial andenvironmental
performance$1bn+
responsible
assetsNet zero across
our operations$100m forfemale founders

2021/22: A Year in Review

2022/23: The Year Ahead

We are proud to share our impact highlights for the 2021/22
reporting year:

Looking ahead to 2022/23, we seek to:§

Certifying as a B-Corporation;§$1bn+ in responsible assets under management1;§

Achieving Scope 1 and 2 Net-Zero carbon emissions
across our operations;§Public disclosure of our gender pay gap and 6 weeks
added to our paid maternity leave policy;§

Build upon our sustainable and impact investment
focus, by continuing to develop products that alignwith our clients’ values of integrating environmental,social, and governance (ESG) and impact into capital
allocation decisions;§

Deepen our impact data collection, measurement,
and management processes, with input fromstakeholders;§Contribute to responsible investor education around
impact and the myriad ways of implementation,measurement and assessment;§

Launch of the Artesian High Impact Green Debt Fund in
North America;§

Launch of the $50m Grain Innovate fund to support
Australian grain growers, in partnership with the Grains
Research and Development Corporation (GRDC);§

Encourage greater ESG disclosure across ourportfolios, particularly in the disaggregated startup
sector;§Launch of the $100m Artesian Female Leaders VC Fund,
Asia Pacific’s first dedicated Series A and Series B fundfor women entrepreneurs;§§

99% growth in investments in green, social andsustainable issues across our fixed income business;

Mitigate any material operational risks within ourbusiness where possible and continue to improveand publicly report on our own internal impact
metrics.

§

78.21% increase in our investments in SDG-linked
startups, scaleups and solutions.

1. The Australian dollar is Artesian’s impact reporting currency.

6

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIAN

Company
Overview
Artesian

AUM

2004

$1

FoundedAlternatives
Investment
Manager

BillionDebt $460M

Asia Pacific Focus with Global Perspective§
Artesian is a global alternative
asset manager focused on public
and private debt, venture capitaland impact investments:§§§

44 employees in 8 cities;
Specialist public & private debt
manager with an ESG focus;§§

VC $540M

Venture Capital, Public and Private
Debt Investment Specialists

London
New York
ShanghaiSingapore
Jakarta>650

Startup Investments

The most active early-stage VC in Asia
Pacific with >650 startup investments inAustralia, NZ, SE Asia and China;
Venture Capital as a Service (VCaaS)
platform for government organisations,
corporations and industry groups;
Vertically integrated accelerators to build
sustainable innovation ecosystems;
Transformational impact investments withcompelling risk/return metrics.

SydneyArtesian offices

Adelaide
Melbourne

7Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIAN

Responsible
Investing
Evolution
The rapid growth of thegreen and sustainable bondmarket has coincided withthe rise of mission-based
start ups in Venture Capitaland the growth of assets
under the UNPRI umbrella
has gone from US $4tn in2006 to US $120tn in 2021.

EIB launches firstgreen bondUN launches the
Principles of
Responsible Investing

Market and Firm
Impact Highlights
Over the Years

2004• IFC issues first US $1bn green bond
• Vasakronan (Sweden) issues first
corporate green bond• Massachusetts issues first municipal green
bond• Solar City (Tesla) issues first solar (green)
ABS bond

2006

Artesian founded as afixed income credit
specialist

Global Impact
Investment Network(GIIN) formed

2007

2009

2011

Artesian starts investingin the Australian earlystage VC ecosystem

Launch of Climate Action
100+ (climate engagementwith investors)

Green bond market hits overUS $1tn outstanding• Global green bond market
hits US $100bn outstanding• UN sets the Sustainable
Development Goals (UN
SDGs)

2013

2014

• Artesian partners with
BlueChilli Australian impact
accelerator• Launch of Australian Fundof Funds (AFOF) #1• Launches Sydney Angel's
Sidecar Fund #1 Australia's firstearly-stage co-investment
seed fund• Artesian starts investing
Partners’ capital in early-stage
VC in China

2015

2017

2019

2018

• Artesian becomes a
UN PRI Signatory• The MedTech
Actuator• Artesian HP China
VC Fund #1• Australian Corporate Bond Fund
(Negative Screening / ESG overlay)• Artesian HP Late-Stage VC fund #1• iAccelerate Fund launched• Sprout X Fund launched• Artesian (HP) China VC fund launched• Sydney Angels Sidecar Fund #2• Clean Energy Seed Fund

•
•
•
•
•

2020

2021

2022

B-CorpCertification• Galileo VC Fund
• SAVCF• Australian Green &Sustainable Bond
Fund

AFOF #2
Grains Trust
AmatilX
Contiguous VC Fund
Boab AI• High Impact Green Bond Fund
• Female Leaders VC Fund

8

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIAN

Materiality
SASB has identified the issues that areconsidered material in capacity to effectenterprise value. 4 out of 26 are identified forthe asset management industry – looking
inward at our exposures:

Product Design and Lifecycle Management: Artesian acknowledges theself-evident importance of incorporating ESG analysis as part of ourinvestment process. As part of this process, management infrastructure is inplace to share information across the firm and beyond, into the market andwider community, to advance understanding on the topic. Furthermore, wehave dedicated investment products that focus on specific impact verticals
that lean in on one or several ESG factors.

Beyond the materiality relevant to Artesian as an asset manager - there arematerial impacts that our investments have on the environment and society. For
Artesian, we are seeking to generate positive impact with the capital we deploy –thus environmental, social and governance issues are material opportunities forour portfolios. Artesian looks to map our positive impact investment thesis totheir relevant impact thematic and report to investors on our progress on anannual basis.

Business Ethics: While our business is global in nature, we choose to operate in
only a handful of countries. These jurisdictions are chosen for the rule of law,respect for capital, and regulatory frameworks which are well established toensure we can operate with the high standards that our clients expect. In
addition, Artesian’s high internal standards have been B-Corp certified, and weare signatories to the UNPRI.

Venture Capital

Fixed Income

Selling Practices and Product Labeling:
Our products contain robust disclosures thatmeet all regulatory requirements. We
ensure clients understand our productofferings through multiple engagements with
our deep bench of the senior investment
professionals who manage those products.
Indeed, part of our product suite is the resultof direct collaboration with investors andinstitutions to design financial and strategic
solutions to meet their needs. Artesian
appreciates the importance of aligning longterm interests across all our major
stakeholders to secure success.

Employee Engagement / Diversity andInclusion: Financial markets (both public andprivate) has a historical narrative of being
piloted by white men - a process we havebeen trying to turn away from at our firm forseveral years. Our gender and ethnic mix is
improving with 45% of our staff identifying as
non-white and 27% of the firm is female.

MedTech

AgTechCleanTech AI & Agnostic

ESG Corporate
Bond FundGreen & Sustainable High Impact Green
Bond Fund
Bond Fund

ClimateSASB Materiality Mapping for Asset Managers
Environment

Social Capital

Human CapitalBusiness Model &Innovation

Leadership& GovernanceGreenhouse
Gases (GHGs)

Human Rights & Community
Relations

Labor Practices

Product Design & Lifecycle
Management

Business Ethics

Air Quality

Customer Privacy

Employee Health &SafetyBusiness Model Resilience

Competitive Behavior

EnergyManagement

Data Security

Water &
Wastewater
Management

Access & Affordability

Materials Sourcing &Efficiency

Waste &
Hazardous
Materials
Management

Product Quality & Safety

Physical Impacts of Climate
ChangeEcological Impacts

Customer Welfare

Employee
Engagement, Diversity Supply Chain Management& Inclusion

Management of the Legal &Regulatory Environment

Critical Incident Risk
Management

GenderFood Security

Biodiversity

Animal Welfare

Human Rights(Modern Slavery)

DE&I

Resource Usage
Systemic Risk Management

Selling Practices & ProductLabeling

9

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIANTeamVENTURE CAPITAL

Jeremy Colless

Luke Fay

Vicky LayAli Clunies-Ross

Gilles Plante

Felix Zhang

Tim Heasley

Melody Zhang

Robert Williams

Ananya Sinha

Stuart Fox

Rohan Gray

Richard Case

PartnerPartnerPartner

Portfolio Manager

PartnerPartnerPartner

Director

Director

AnalystPartner

Portfolio Manager

Managing Director

Nayoko Wicaksono

David Rohrsheim

Kirsten Bernhardt

Channing Chen

Diana Tong

Shane Masters

Guy Newton

Kaushalya Gunatilaka

Andrew Lai

Will Smith

David Spencer

AnalystManaging
Director

Director
VCaaS

Head – Partnership &Community

Managing
Director Boab Al

AnalystAnalystFiona Zheng
AnalystAnalystPortfolio Manager
SAVCF

Investment
Manager

VC & Legal
Analyst

DEBT
SydneyMelbourne
Matthew CluniesRoss
PartnerJohn McCartney
PartnerDavid Gallagher
Partner

Kurt TanManaging
Director

Nikolas Koukiasas
Portfolio Manager

Johny Tjheng
Director

Mark Bytheway

Rory Macintyre

Lachlan Hart

Dylan Er

Adelaide

Director, ESG
Research

Director,
Distribution

Fixed Income
AnalystInvestment
AnalystSingapore
Jakarta

OPERATIONS & ADMINISTRATION

ShanghaiLondon
New York
RemoteMei LeePankaj Khanna

Connor Hughes

Kate Robinson

Tam Nguyen

Jenny Chu

Partner

Chief Financial
Officer

Chief Technology
Officer

Senior Lawyer

Fund
AdministrationGroup
Accountant

Mary Angelle
Cansicio

Rosalita
Fortunato

Fhiel Adrian
Angeles

Financial
Accountant

Accountant

Data Analyst

10Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIANTeamDiversity Breakdown of Artesian Employees
Diversity is any characteristic, perspective, or approach to work that different people bring to the workplace. Globalisation has created evolving social, cultural, and political norms aswell as changing demographic and immigration patterns. It has shifted workforce demographics and client compositions in almost all industries and sectors. To gain and maintain acompetitive edge, organisations need people who can best serve their clients. This must be people selected, developed and treated based on merit and fairness. At Artesian, we havealways worked at treating all of our team based on merit and fairness, but we know that we are not perfect. Our disclosure is the first step to setting goals, helping us frame theproblem so we can measure, analyse and address the issues identified.

Disability

16.28%
51.16%

No

27.08%

16.28%

Yes

2.33%

Age

2.38%

48.84%

Ethnicity

Gender

11.63%
20.93%

32.56%

Sexual Minority
No

18 to 34

4.65%

35 to 54

Yes

Over 55
4.37%

Gender Pay Gap Disclosure“The gender pay gap measures the difference between
the average earnings of women and men in theworkforce. The gender pay gap is an internationallyestablished measure of women’s position in theeconomy in comparison to men.”– Workplace Gender Equality Agency, AustralianGovernment
While we acknowledge that we still have work to do, we
seek to publicly and transparently disclose our gender
pay gap and commit to taking the necessary steps toclose it over time.

72.92%

East Asian

Hispanic/Latinx

South AsianSoutheast Asian

White

Other

BASE SALARY PAY EQUITY % :82%

Organisational Gap of 18%
8% IMPROVEMENT (YOY)

Women

Men

Methodology:
For our inaugural analysis, we have collected data from our Australian
offices (where 60%+ of full-time employees are based) and will expand
analysis to international offices next year.
Results:
We are pleased to report an 8% improvement in our organisational
gender base pay gap from 31 December 2020 to 2021. At 18% we areahead of our peers in the professional services industry (averaging
24.4%) but underperforming the national average (13.8%).

“Only what gets measured, gets managed.” - Peter Drucker

11

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

ABOUT ARTESIAN

Oversight
Shareholders / Board Members
At Artesian, the 5Ps that drive our actions are:

ESG Committee
PurposeBy investing with purpose, we are accountable for both the financial and impact
outcomes of our investment decisions. It is critical that both the financial andimpact outcomes are measurable and that we report them transparently.

Quarterly open forum
for all employees todiscuss ESG issues andapprove policy changes.

Sustainability Steering (SS) Committee
PlanetProfitWeekly meetings for ESG thought leadership andcross functional co-ordination across the firm, aligningon ESG issues and controversies, risks, threats andopportunities.

When the long-term health of the planet is prioritised, everyone benefits.
Artesian believes that innovation and technology have a deflationary effect on
the cost of infrastructure required to address critical global issues like climatechange. Innovation and technology can also ensure a rapid and scalable delivery
of solutions, given the existing time constraints, to mitigate climate crisis.

Profit is a downstream result of successfully addressing critical global challenges.
While profit alone is a hollow outcome, when combined with renewability, equality
and scalability, it ensures sustainability. Artesian believes that sustainableoutcomes deliver profits that can be re-invested to ensure the continuation ofvirtuous cycles.

PeopleArtesian is only as good as its people, and our success depends on an ability to
attract and retain a diverse team that aligns their unique talents to a sharedvision. Externally, our approach is reflected in the selection of founders, teams
and companies in which we invest. Diversity, social equality, governance andeconomic empowerment are our key areas of focus.

Product

Artesian’s products are developed through building a deep understanding ofmarket failures and the investors motivated to address them. As financial market
experts, we design products that address the challenges and opportunities
presented by these market failures, generating impact and optimising financial
returns.

Executive taskforce and sub-committees are
responsible for delivery of initiatives acrossenvironment, customer, employee andcommunity impact.

Diversity, Equity
and Inclusion
Committee

Impact Data,
Measurement andReportingTaskforce

Investment and product development teams
work closely with Artesian’s ESG/impact team.
This helps to ensure an integrated approach toincorporating ESG considerations into ourdecision-making processes and triangulation ofviews on material ESG issues.

Fixed
IncomeArtesian acknowledges the value that ESG materiality analysis brings to theinvestment and risk management processes, but it is impact outcomes that will
drive regulatory reporting, capital conviction and returns going forward.”

VentureCapital

VC-as-aService

John McCartney
Co-Founding Partner,
Head of ESG

12

Overview

02

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

IN THIS SECTION
Driving Impact Results
Strategic Framework: Measuring and Managing Impact

Our Approach

Artesian’s Theory of Change

How we deliver financial and strategic returns through the lens of
ESG and impact.

Artesian’s Sustainable and Impact Investing Focus

Informing Investment Outcomes
Responsible Investment Commitment
Exclusionary Screens List
Integrating ESG Considerations into Investments
Impact Processes
Measuring Impact: Methodology and Data Collection
Managing Impact: Frameworks and Guidelines

13

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Driving Impact Results

Artesian’s Impact Measurement and Management Framework

a
Sh
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De ustave inaGo lopm ble
Ind ale
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Key Metrics

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Measuring and managing impact correctly
requires a thoughtful process of experiments,
relevant data systems, stakeholder feedback
loops, and alignment with best of breed
standards and frameworks.”

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Measuring &Managing
Impact

Who
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ew
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ImpactIntegrity

Vicky Lay

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Partner, Head of
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14

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Driving Impact Results

Artesian’s
Theory of
ChangeActivity…in SDG-linked
securities & solutions:•••

Venture capital
Public debt
Private debt

Output…to achieve risk-adjusted
returns for investors anddemonstrable, measurable
impacts for society:
•
•
•
•
•

Climate/clean energy
Food security
Health & well-being
Education
Women’s economic
empowerment

Outcome…which contribute to:
•
•

Input

•
•

Artesian invests:
•
•
•
•
•

Capital
Domain expertise
Knowledge & networks
Platform & infrastructure
Technical support

Innovation and scalable
technology solutions
Climate change mitigation,
adaption and resilience
Inclusive development andeconomic growth
Gender equality

Impact… in alignment with the2030 Global Goals.

15

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Informing Investment Outcomes

Responsible
Investment
Commitment

For Artesian, responsible investing means
incorporating into our investment process
consideration of the actions and impacts on
stakeholders from our investments.
A fundamental cornerstone of Artesian’s
strategy is to build a sustainable investment
platform delivering long-term performance.
Artesian believes that a proactive approachto responsible investment issues and drivers
provides advantages to our business,investment performance, customers andemployees. The benefits include risk
mitigation, greater long-term performanceand a sustainable and responsible business.

Artesian has committed to adopting
and implementing the UN’s six
Principles for Responsible Investment
across its business and for each
investment strategy.

Artesian commits to adopting and implementing the six
Principles for Responsible Investment:
Principle 1
We will incorporate ESG issues into investment analysis anddecision-making processes.

Principle 2
We will be active owners and incorporate ESG issues into
our ownership policies and practices.

Principle 3
We will seek appropriate disclosure on ESG issues by theentities in which we invest.

Principle 4
We will promote acceptance and implementationof the Principles within the investment industry.

Principle 5
The Principles are not a set of prescriptive rules
and are to be applied as appropriate withineach asset class and investment approach.
They provide a robust and widely endorsed
framework through which investors can
incorporate ESG issues into their decisionmaking and ownership practices, and as such,they inform Artesian’s investment processes.

We will work together to enhance our effectivenessin implementing the Principles.

Principle 6
We will each report on our activities and progress towards
implementing the Principles.

16

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Informing Investment Outcomes

Artesian’s
Sustainable
and Impact
Investment
Focus

Artesian’s Sustainable & Impact
Investment Focus
Traditional
Investments

Exclusion

ESG
Integration

Thematic & Impact Investing
Thematic &Impact Aligned

Philanthropy

Impact Investing
ReturnFirst

x Fossil Fuels
x Tobaccox Gaming
x Alcohol
x Pornography
x Munitions

ImpactFirst

Pursuit of financial returns

ESG considerations broaden analysis andconsideration of how companies operate and theoutcomes of this. It requires a deeper and broader
analysis than balance sheet numbers and relativevalue analysis. This includes consideration of matterssuch as where a company sources its power, how it
treats its employees and the diversity of its board.
ESG issues are universal and apply to companies
across the private and public markets.
Material ESG considerations may include both risks
and opportunities, requiring integration into both theinitial investment process and the ongoing
management of the asset.
Impact investing goes beyond the manner in which thecompany conducts itself – it is tying a company’s
product, service or security to an impact thematic or
outcome. As technology and data advances, themarket gains the ability to track strategically important
outcomes. Institutions will look to regulators to embed
this into corporate reporting, which will allow investors
to compare impact outcomes across industries. As
such, we see impact driving capital flow as both
strategic and financial investors gravitate to businessmodels that are impact to profit.

Exclusions Screens

Environmental, social, and governance as risks

Positive Screens
Environmental, social, and governance (ESG) as opportunity

Targeting measurable impact solutions

Shareholder
primacy investing.
Limited or no
consideration forenvironmentalsocial or
governanceaspects in theinvestment
approach.
Focus on quarterly
returns vs driving
long term value.

Strict avoidanceof controversial
business areas
or unethicalbehaviors.

ESG materiality
mapping highlights
both material ESG
risks andopportunities.

Negative screens on
fossil fuels, tobacco,gaming, alcohol,
pornography andmunitions.

ESG & financial
analysis areintegrated andadapted to each
asset class, aligning
exposures toinvestment andimpactobjectives.

Negative screens
may evolve with
Norm-based /Values-based
exclusions, national
exclusions(sanctions),
and/or exclusions
based on businessconduct (UN Global
Compact breaches).

Identifying andparticipatingin sustainablemega trends.
Contribution to
the SDG alignment ofinvestor andenterprise mission
to generate impact
Address societal
challenges
that generatecompetitive
financial returns.

Investing to reduce
the negative
effects of economic
activity on society
and theenvironment.

Addresses societal
and environmental
problems that do notor cannot generate
financial returns.

ü ESG positive filterü Impact measurement
ü Positive gender bias
ü Climate focus
ü Preference for green, social,and sustainable securities

Investments
contribute to
the impact via
financing growthof new businessmodels or financing
current businesses
that are looking to
improve their ESG
footprint.

17

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Informing Investment OutcomesIntegrating ESG
Considerations
into ourInvestments
At Artesian, we believe that consideration of ESG
issues is critical the success of a company, enhancing
their ability to identify potential growth areas andVenture Capital

Fixed Income

Screeni ng

Screeni ng

Identify excluded activities and ESG-related ‘fatal

Mandate-driven screening based on sectors deemed as

flaws’ during early investment reviews that cannot
be resolved through engagement.

generating negative externalities for society and theenvironment. Positive bias towards green, sustainable, socialand sustainability linked securities.

manage risks.

Due Di li gence
We evaluate and incorporate risks and opportunities
from potentially material ESG factors, including
climate change and gender representation, into ourAssess potential material ESG risks andopportunities.

investment processes and engagement approach.
These inherent ESG considerations can substantiallyaffect our assessment of a company’s value and risk
profile, and thus, are vital in influencing decision
making pre and post-investment.

Ownershi p & Moni tori ng
Engage with investee companies on an ongoingbasis to oversee ESG issues as the businessgrows.

Follow-On Inv estments
Re-assess ESG risks / opportunities during followon rounds through to exit scenarios.

Due Di li gence
Consult materiality mapping to assess potential ESG risks
and opportunities for the given sector. Engage with thecompany where possible and write up an ESG company
profile. Appraise and weigh impact estimates / KPIs of any
green, sustainable, social and sustainability linked securities.

Ownershi p & Moni tori ng
Engage with investee companies and other investors todebate ESG issues and measurement. Consult with wider
market, syndicate desks and industry groups to forward
impact goals embedded in investment mandates.

18

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Impact Processes

Measuring
Impact:
Methodology& DataCollection
Public Markets
Data collection on the impact of
deployed capital relies on corporate
disclosure. We draw on the quality of
information provided in publicmarkets to direct our efforts inprivate markets. To this end we focus
on climate and gender – probing ourinvestee companies to give us metrics
that can be compared across the
public and private markets spectrum.

Corporate disclosures allow management to communicate the firm’s
performance and value to outside investors, other stakeholders, andthe public.
The demand for detailed information on corporate sustainability has
grown as ESG risk and opportunities have proven to impact financial
performance. In public markets this is of key interest given regulatory
scrutiny around reporting false or misleading statements. Company
reporting can be a puzzle with reports issued under a variety of ESG
topics such as governance, social responsibility, climate change,
strategic vision and more.

We believe that measurability of ESG impacts
is paramount to legitimising ESG-driven
investment strategies, and to enable our
stakeholders to appreciate the intrinsic valueof each investment we make in the absence ofa universal ESG impact measurement system.”

Lachlan Hart
Fixed Income
AnalystArtesian’s approach to corporate disclosures looks at 3 levels:

1. Issuer – annually reported data from public companies gives us
guidance on all the activities a company is engaged in. Using
industry templates, we can seek similar disclosures from privatecompanies in our portfolios on a more regular (say quarterly)basis. Impact metrics and narrative may be opaque and require
scrutiny.
2. Sustainability Performance Targets – monitor KPIs thatcompanies set around sustainability goals. This can come in theform of project factsheets or be combined into issuer or security
level disclosures. Data provides clarity for engagement with thecompany.
3. Security – gives a direct line of sight to what impact ourinvestor’s capital is making. We require annual use of proceeds
reports from bond issuers, so we can analyse and report back to
our investors on the impact their capital is making. Impact metrics
and methodologies have normally also been scrutinised byconsultants which adds another layer of oversight.

IssuerSustainability
Performance

Security

Our corporate bond exposures are the result of negative screening
combined with a positive ESG overlay and a preference for green,sustainable and social securities. This preference for labelled bondsmeans we derive most of the impact data at the security level.

19

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Impact Processes

Measuring
Impact:
Methodology& DataCollection
Private Markets
In venture capital, we rely more on
issuer level disclosures. Accessing
impact data for early-stage
companies are more challenging thanfor those with higher market
capitalisation. The quality of the data
provided improves as the company
scales. We are constructing internalreporting architecture to facilitate theflow of this information in a more
standardised and verifiable format
and will update stakeholders on ourjourney as it progresses.

Given the breadth of our portfolio, from established corporates to early-stage
startups, and instruments that vary between debt and equity; investment
considerations are tailored to the type and structure of the investment.
Likewise, our approach to measuring impact is guided by industry-acceptedframeworks but are adapted to the type of investment at hand. Our goal is to
strike a balance on scalability, data integrity, and usability.”

Kurt TanManaging Director, Head of
Impact Measurement &ReportingSc
With each startup investment requiring a high volume of screened
opportunities, it is important to have an impact assessment approachthat can handle a significant early-stage pipeline.

Da
Impact measurability is a challenge when reliable data can be difficult to obtain. Our process for assessing an
investee company’s impact starts with a wide lens at the early stages and gains more resolving power as thecompany’s business matures and more salient impact data becomes available. For example, as companies
settle on a successful product-market fit, the associated impact KPIs surface more easily.

Us
Assessing impact is inherently an imprecise science, especially for young companies.
Sometimes we are required to depend on early-stage business models that may undergochanges both to the revenue model and to the associated impact. We therefore prefer to begenerally correct versus. precisely wrong. We also aim to track impact progress alongsidebusiness and financial progress. By tracking the impact dimension of follow-on investments,
we can use that information to gain confidence in our impact thesis.

ab

ilit

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In t

eg

a la

b il

it y

r it yy20

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Impact Processes

Managing
Impact:Standards &Frameworks
In framing and developing
our ESG policies and impact
processes, Artesian isinformed by and supports:

1.

The Paris Agreement

2.

The Taskforce on
Climate Related
Financial Disclosure(TCFD)

3.

4.

5.

The SDG Goals andtargets
Impact Management
Project (IMPFramework)
UN Principles of
Responsible Investment

About the Paris Agreement and the TCFD

Importance of the Metrics and Targets Recommendation

We are committed to the principles of the Paris
Agreement as it provides a durable framework across
197 countries to reduce greenhouse gas emissions andto work together to adapt to the impacts of climatechange. The Agreement created a framework (TCFD)
for monitoring and reporting on climate goals andmarked the beginning of a shift towards a Net Zeroworld.

Disclosing information in line with the Metrics and Targets recommendation allows investors andother stakeholders to better assess the organisation's potential risk-adjusted returns, general
exposure to climate-related issues, and progress in managing or adapting to those issues.

Recommended
Disclosure

Disclosure Element2

Implementation of the Paris Agreement is essential forthe achievement of the UN Sustainable Development
Goals.

Strategy b)

How climate-related issues have affected business and strategy

1

Metrics and Targets a)

Key metrics on climate-related issues for most recent period and historical periods

2Strategy a)

The material climate-related issues identified for each sector and geography

3

Metrics and Targets b)

Scope 1 GHG emissions for the most recent period and historical periods

4

Metrics and Targets c)

Climate-related targets related to GHG emissions

5

Strategy a)

The material climate-related issues identified

6

Metrics and Targets b)

Scope 2 GHG emissions for the most recent period and historical periods

7

Metrics and Targets c)

The timeframes over which climate-related targets apply

8

Metrics and Targets c)

Key performance indicators used to assess progress against climate-related
targets

9

Governance a)

Board consideration of climate-related issues for major capital expenditures,acquisitions, and divestitures

10

We build upon the TCFD’s core elements ofrecommended climate-related financial disclosures into
our analysis and framework, including:
§
§

§

§

Governance: The organisation's governance aroundclimate-related risks and opportunities.
Strategy: The actual and potential impacts ofclimate-related risks and opportunities on theorganisation’s business strategy.
Risk Management: The processes used by theorganisation to identity and manage climate-relatedrisks.
Metrics and Targets: The metrics and targets used
to assess and manage relevant climate related risks
and opportunities.

Six of the top ten most "decision useful" types of information companies can disclose fallunder the Metrics and Targets recommendation.
Rank

2.These disclosure elements are segments of the guidance under each recommended disclosure. They do not encompass all the information conveyed in each
recommended disclosure.

21

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Impact Processes

Managing
Impact:Standards &Frameworks
About the SDGs

The UN Sustainable Development Goals are a callfor action by all countries to promote prosperity
while protecting the planet. They recognize that
ending poverty must go hand-in-hand withstrategies that build economic growth and addressa range of social needs. Social needs such as
education, health, social protection, and job
opportunities – while tackling climate change andenvironmental protection.

1. No Poverty

2. Zero Hunger

3. Good Health &4. Quality Education

5. Gender Equality

6. Clean Water & Sanitation

7. Affordable & Clean Energy

8. Decent Work & Economic

9. Industry, Innovation &10. Reduced Inequalities

11. Sustainable Cities &12. Responsible Production &13. Climate Action

14. Life Below Water

15. Life on Land

16. Peace, Justice & Strong

17. Partnerships for the Goals

End poverty in all its forms
everywhere.

Ensure access to affordable,
reliable, sustainable andmodern energy for all.

Take urgent action tocombat climate change
and its impacts.

End hunger, achieve foodsecurity and improved
nutrition and promotesustainable agriculture.

GrowthPromote sustained,
inclusive and sustainableeconomic growth, full andproductive employment
and decent work for all.

Conserve and sustainably
use the oceans, seas andmarine resources forsustainable development.

Wellbeing
Ensure healthy lives andpromote well-being for
all at all ages.

Infrastructure
Build resilient infrastructure,promote inclusive andsustainable industrializationand foster innovation.

Protect, restore andpromote sustainable useof terrestrial ecosystems,
sustainably manage
forests, combat
desertification, and halt
and reverse landdegradation and halt
biodiversity loss.

Ensure inclusive andequitable quality educationand promote lifelong
learning opportunities forall.

Reduce inequality within
and among countries.

Institutions
Promote peaceful andinclusive societies forsustainable development,
provide access to justicefor all and build effective,
accountable and inclusive
institutions at all levels.

Achieve gender equality
and empower all womenand girls.

Communities
Make cities and humansettlements inclusive, safe,
resilient and sustainable.

Ensure availability andsustainable management ofwater and sanitation for all.

Consumption
Ensure sustainableconsumption andproduction patterns.

Strengthen the means of
implementation andrevitalise the Global
Partnership for
Sustainable Development.

22

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Impact Processes

Managing
Impact:Standards &Frameworks
About the IMP

What is impact?
Impact is a change in an outcome caused byan organisation. An impact can be positive or
negative, intended or unintended.
An outcome is the level of well-being
experienced by a group of people, or thecondition of the natural environment, as aresult of an event or action.
Impact management is the process ofidentifying the positive and negative
impacts that an enterprise has on people
and the planet, and then reducing thenegative and increasing the positive.

ABC of Enterprise Impact
Any enterprise – whether a large multinational,a small business or a non-profit – can manage
its impact. The ABC of Enterprise Impact helps
enterprises connect their impact goals to thefive dimensions of impact.
From 2016 to 2018, the Impact Management
Project (IMP) convened a Practitioner
Community of over 3,000 enterprises andinvestors to build global consensus on how wemeasure, improve and disclose our positive
and negative impacts (otherwise known as"impact management").
The resulting consensus (or "norms") provide acommon logic to help enterprises and investors
understand their impacts on people and theplanet, so that they can reduce the negativeand increase the positive. These resources
migrated to Impact Frontiers following theIMP’s conclusion in 2021.

A act to avoid harm
B benefit to stakeholders
C contribute to solutions

The 5 Dimensions of Impact
Impacts of enterprises on people and the planet can be understood across five dimensions.

What

What tells us what outcome the enterprise iscontributing to, whether it is positive or negative,
and how important the outcome is to stakeholders.

Who

Who tells us which stakeholders are experiencing
the outcome and how underserved they are in
relation to the outcome.

How Much

How Much tells us how many stakeholders experienced
the outcome, what degree of change they experienced,
and how long they experienced the outcome.

Contribution

Contribution tells us whether an enterprise’s and/or
investor’s efforts resulted in outcomes that were likely
better than what would have occurred otherwise.

Risk

Risk tells us the likelihood that impact will be different
than expected.

Investor Contribution
Investors consider whether their efforts
resulted in outcomes that were likely better
than what would have occurred otherwise,
which is related to but distinct from thecontribution of the enterprises in which they
invest. Investor contribution becomes a ‘sixth
dimension’ of impact for investors.

23

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

03
ImpactMetrics andHighlights
We seek to provide our stakeholders with transparency,
accountability for what and who we are investing in and how weare trying to move capital for purpose.

IN THIS SECTION
Portfolio Impact
2021/22 Portfolio Impact Metrics
SDG Mapping by Asset Class
Impact Highlights and Case Studies
Fixed Income
Venture Capital
Venture Capital as a Service (VCaaS)
Impact Perspectives
Aggregation Confusion and ESG Irrelevance – Measurable Impact as a Solution
Responsible VC: ESG integration at the Early Stage (Volume 2)
Critical Technologies: Our Position on National Security-Related VC

24

PORTFOLIO

Overview

ImpactMetrics

We connect capital to innovative
solutions for improved outcomes forpeople and the planet.
Artesian leverages our extensive global markets investment
experience across the capital structure (from early-stage VC
to public debt markets) to deliver impact at scale.
We build collaborative partnerships with complementary, likeminded organisations to deliver sustainable outcomes. We
believe that innovation, with technology as a key facilitator, canhave a sustainable deflationary effect on the cost of
infrastructure required to address critical global social andenvironmental issues.

Our work directly contributes to fillingthe funding gap for 16 out of the 17 Global
Sustainable Development Goals.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

The graph to the top right represents the combined green, sustainable and social
bonds held within the Artesian Green & Sustainable Bond Fund, the Artesian Corporate
Bond Fund, and the Artesian High Impact Green Bond Fund, notionally weighted versus
their targeted Sustainable Development Goals (SDGs), as at 31st December 2021.

In 2021, our investments in green, social &sustainable issues increased by 99%.
FIXED INCOME

95% Female Board
Representation

12,949t CO2e

across all corporate issuers investedof metric tonnes of carbon abated by Artesian
green & sustainable fixed income investments

GENDER IMPACT BY THE
NUMBERS

CLIMATE IMPACTBY THE NUMBERS

176 Female
Founded Startups

2,899.2t CO2e

funded across our VC funds since inception(companies with at least 1 female founder as at 31
Dec 2021)

of metric tonnes of carbon abated by Artesian clean
energy VC portfolio companies

VENTURE CAPITALIn 2021, our investments in SDG-linked startups,
scaleups and solutions grew by 78.21%.
The graph to the bottom right represents the venture capital investments held
across Artesian’s thematic funds, notionally weighted versus their targeted
Sustainable Development Goals, as at 31st December 2021.

25

PORTFOLIO

Overview

ImpactMetrics

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Level of impact achieved across Artesian’s venture capital and fixed income investments:

147,257

28,050,225

2,463

Litres of water saved.

Square metres of green energy
efficient buildings financed.

353

People provided with access towater & sanitation.

People provided with access to
education.

15,848.2

95%

63%

2,758,903

Female representation on board of
fixed income fund holdings.

Increase in total female foundedstartups funded across our VC
funds since inception, over thelast 12 months.

Hectares of agricultural land withcrop efficacy/effectivenessenhanced through VC
investments.

Trips made on clean & sustainabletransportation.

3,865

Metric tonnes of carbon abatedby Artesian green & sustainable
investments.

These figures are provided on a best endeavours basis and are pro-rata estimates based on issuer’s use of proceeds reporting and startup impact reports.

26

Overview

Fixed
IncomeImpact Highlights

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Artesian is a boutique credit specialist that understands impact can be achieved at scale without compromising on returns or liquidity​​.
Fixed income investing requires identifying durable cashflows. Credit investing requires understanding a company's ability to accumulate capital tobalance debt payments. Environmental, social and governance issues then determine how sustainable the cashflows will be in the future. In focusing
our investment efforts towards green, sustainable and social bonds with a gender overlay, we are investing in a virtuous cycle of an equitable,
sustainable and scalable future.​​We see ESG issues as an integral part of credit risk – and that investing in impact reduces income volatility and provides greater risk-adjusted returns. ​Matthew Clunies-Ross
Co-Founding Partner,
Chief Investment Officer

David Gallagher
Partner, Head ofAustralian Fixed Income
John McCartney
Co-Founding Partner,
Chief Risk Officer,
Head of ESG

Kurt TanManaging Director, Headof Impact Measurement
and Reporting

Australian Green &Sustainable Bond Fund(AGSBF)

Australian Corporate
Bond Fund (ACBF)High Impact Green
Bond Fund (HIGBF)

Women's Economic
Empowerment Bond Fund(WEEBF)The Artesian Green &Sustainable Bond Fundinvests in a diversified
portfolio of liquid,
investment grade fixed andfloating rate green,sustainable and social
corporate bonds. The Fundinvests in Australasian andglobal issuers. The Fund has
ESG integrated investment
research to provide optimal
investment decisions.

The Artesian Corporate
Bond Fund invests in adiversified portfolio of liquid,
investment grade fixed andfloating rate AUD corporate
bonds. The fund has an ESG
overlay (negative screen on
fossil fuels, tobacco, gaming,
alcohol, pornography andmunitions) with a positive
ESG filter and a bias
towards labelled bonds.

In August 2021, we launched
the USD High Impact Green
Bond Fund - a world first in
combining liquid, publicly
traded green bonds withprivate market venture debt
of clean tech companies.
HIGBF is a total return fund,targeting both carbon
abatement and low volatility
income stream for investors.

In May 2020, Artesianlaunched an impact
partnership with the United
Nations Capital
Development Fund (UNCDF)
to create the Women’s
Economic Empowerment
Bond Fund that invests inliquid debt securities ofbest-in-class corporates
with progressive genderpolicies and governance.

The Fund is open forinvestment.
Please refer to Clause B on page 59 fordisclaimers related to this section.

The Fund is open forinvestment.

The Fund is open forinvestment.

The Fund is looking for seed
investment.

27

Overview

ISSUER

Fixed Income
Case Studies

MERCURY NZ LTD

Issue Size$m

Fixed/
Floating

Maturity

ISSUER

Bond Type

Issue Date

Green

10-Nov-21

200

Fixed

17-Nov-28

NHFIC

Sustainable

28-May-21

Mercury NZ Limited

Currency

AUD

SectorUtility

Mercury Green BondUse of Proceeds
The proceeds of Mercury’s green bond are intended to finance or refinancenew or existing projects and expenditures relating to renewable energy andother Eligible Projects in accordance with the Mercury Green Financing
Framework.

100%

renewable generation and long-term approach to operating
Mercury’s business in commitment to a more sustainable future.

343

Fixed

Maturity
30-Jun-36

IssuerNational Housing Finance and Investment Corporation

Currency

AUD

SectorAgencyEligible Categories

Specific Projects• Loans to registered community housing providers, funding
not- for-profit community housing activities.
• Loans to registered community housing providers funding
mixed tenure development activities where profits areapplied to support affordable housing outcomes.

Use of Proceeds
The proceeds of the bond issued will be used to fund social and affordable
housing projects which have additional environmental characteristics. NHFIC is
unique in that all their debt outstanding is in a labeled format with all proceeds
going towards projects with dedicated impact.

The Canton Beach complex, completed in 2020, incorporates 30 selfcontained studio apartments with internal and external common areas.

Sustainable Bond

Please refer to Clause B on page 59 fordisclaimers related to this section.

Renewable Energy;• Wind energy• Hydroelectricity• Geothermal energy• Solar energy.
Energy efficiency & electrification;• Energy storage (batteries)• Electrical infrastructure associated with renewablegeneration.
Plus other clean transportation projects.

Issue Size Fixed/$m
Floating

NHFIC

The National Housing Finance and Investment
Corporation (NHFIC)’s 15yr sustainable bond wasissued in May 2021. Previously NHFIC had issued 3social bonds, so this was their inaugural sustainablebond. The funds raised from this bond will directly
support the delivery of over 1,100 new homes across
Melbourne, as part of NHFIC’s involvement in a
Community Housing Limited (CHL) driven Building
Communities consortium.

Progress on Our Commitments

Issue Date

Eligible Categories

Mercury NZ Limited (Mercury) is a New Zealandbased public company, deriving revenue from theproduction and sale of energy and energy-related
services to retail and wholesale customers. In
November 2021, Mercury launched its inaugural
green bond in the Australian bond market. William
Meek, Mercury’s CFO, sees the AU $200m CBIcertified bond as a “unique opportunity forinvestors to support renewable generation assets
not readily available in the Australian market.”Impact Metrics and Highlights

Bond Type

IssuerSpecific Projects

Our Approach

28

Overview

ISSUER

Investa Commercial Property Fund (ICPF) is a coreprime office fund for institutional investors thatconcentrates on premium-grade office assets inthe major Australian CBD markets. The new AUD
140m green bond, will add to ICPF’s impressive
existing AUD 770m green bond portfolio. ICPF hasinterests in some of Australia's most pre-eminent
office towers, the fund has been regularly
recognised domestically and globally foroutperformance across a range of environmental
and responsible investment benchmarks.

Please refer to Clause B on page 59 fordisclaimers related to this section.

Gender Bond

Issue Date

Issue Size$m

Fixed/
Floating

Maturity

ICPF

Green

01-Oct-21

140

Fixed

11-Oct-30

IssuerCommercial Property Fund

Issue Date

Issue Size$m

Fixed/
Floating

Maturity

ISSUER

Social

22-Apr-2021

700

Fixed

6-Nov-25

Currency

AUD

Currency

AUD

SectorUtility

SectorReal Estate

Eligible Categories

Specific Projects

Progress on Our Commitments

Bond Type

Bond Type

IssuerImpact Metrics and Highlights

Eligible
Categories• Women’s economic empowerment increased.
• Gender equality in human development enhanced.
• Gender equality in decision-making and leadershipenhanced.
• Women’s time poverty and drudgery reduced.
• Women’s resilience to external shocks strengthened.

Use of Proceeds
ADB is committed to promoting gender equality and the empowerment of
women and mainstreaming gender across its sovereign and non-sovereign
operations. It is also determined to effectively help countries in Asia and thePacific achieve gender related SDGs, including SDG 5, which focuses ongender equality. ADB has accelerated progress on gender mainstreaming
under Strategy 2020 and the Gender Equality and Women’s Empowerment
Operational Plan 2013–2020.

Specific Projects

Buildings to be in the top 15% of emissions intensity
performance in their city;• Emissions intensity expressed as an amount of carbon
dioxide per square metre (kg.CO2/m2).
• Maximum threshold applies in each city which ratchets down
to zero before 2050.
• 10/12 assets meeting the CBI threshold, with the total
weighted average having 36.0% headroom below the CBIrequired benchmark.

Use of Proceeds
The proceeds of the green bond will be allocated to refinance debt that finances(directly or notionally) a pool of eligible low carbon building assets that meet the
low carbon buildings criteria set out in the Climate Bonds Standard, as outlined in
the ICPF Green Bond Framework. Projects will be identified and selected on thebasis that: 1) their emissions intensity met the targets set out in the CLCB criteria;
and 2) their combined book value materially exceeded the face value of theissuance, thus providing significant headroom for the management of unallocatedproceeds.

Investa Green Bond

The Asian Development Bank (ADB) envisions aprosperous, inclusive, resilient, and sustainable
Asia and the Pacific, while sustaining its efforts toeradicate extreme poverty in the region. ADB
assists its members and partners, by providing
loans, technical assistance, grants and equity
investments to promote social and economic
development. The Asian Development Bank’s(ADB) Gender Bond was issued in April 2021. The
bond attracted significant interest, initiallylaunched with an AUD 300m size target, thedemand led the issuer to increase the target to
AUD 500m and then AUD 700m. This was
testament to the significant demand in the market
for bonds targeting gender equality.

Asian Development Bank

Fixed Income
Case Studies

ADB

Our Approach

105 Miller Street Sydney - earmarked as North Sydney’s first Net-Zerocommercial building, is targeting a 6 Star Green Star office design rating and
5.5-Star NABERS Energy Rating.

ADB projects expand women’s job opportunities in agricultural value chainsand help women farmers gain access to finance.

29

Overview

VentureCapital
Impact Highlights

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Artesian believes that technology is a force multiplier for sustainable transformation, enabling price deflation and speed of deployment/adoption. We target
startups building scalable technology solutions across the Asia-Pacific focused on solving existential and endemic risks from climate change and food security,
to health, education. and gender equality. By building a scalable VC platform, we seek to speed up progress on the UN SDGs.

Artesian’s Asia Pacific VC Platform
Snapshot of SDG progress in Asia Pacific, 2021 2

High Impact: Technology is a Force Multiplier for Sustainable Transformation
Speed of Deployment

Price Deflation$359

Price of Solar Photovoltaic/MWh105
yrs
Typhoid Fever

Speed of Adoption

78
yrs
Automobile

The progress gap for achieving the SDGs grows wider
and the prospect of achieving the SDGs now extends
decades beyond 2030. In 2017, the estimated year toachieve the SDGs was 2052, and by 2021, theestimated year had increased to 2065.

Jeremy Colless

14yrs

$37

Measles34
yrs
Computer

2009

2020

1885

1952

2020

2021

Target 2030

Progress since 2015

Regression

Insufficient indicators

Evidence Strength

2015

10
yrs
Tablet<1yr

COVID-19

1915

1982

2020

Existential

Artesian Targets Startups Building Scalable Tech Solutions For Existential & Endemic Risks

Endemic

Jeremy is CEO of
Artesian, which he cofounded in 2004. He
established Artesian's VC
business, now Australia's
largest and most active
early-stage VC.

Our Focus
Our
Focus

Scalable
Technology
Solutions
Scalable
Technology
Solutions

Climate /Energy• electric vehicles• battery storage• renewables logistics• green hydrogen• circular economy• nuclear fusion• waste to energy• LR wireless energy• green cement

Food
Security• farm automation• precision agriculture• carbon sequestration• personalized nutrition• food waste reduction• 3D food printers• indoor farming• nutraceuticals• alt. proteins

Health &Well-being
Education
GenderEquality• genomics/gene editing • health chatbots• health chatbots• AR/VR in healthcare• ML/image recognition • predictive analytics• interactive learning• in-depth research• personalization• blended learning• education platform• unbiased assessment• wearables• telemedicine• career development• future of work
• STEM education• financial literacy• online safety• childcare• femtech• digital adoption &literacy• gamification• simulations

2 “Asia & the Pacific SDG Progress Report 2022” The Economic andSocial Commission for Asia and the Pacific (ESCAP)

30

Overview

VentureCapital
Impact Highlights
Luke Fay
Partner, Head ofVenture Capital

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Artesian is an Asia-Pacific focused venture capital investor that believes we can achieve transformational impact without compromising on risk/return
metrics. Indeed, many of our funds are grounded in the investment proposition of investing for impact.​​
In our VC Practice, we are funding disruptors that will generate positive outcomes for society that are also commercially attractive which are identifying
market opportunities where ESG analysis indicate a market failure and/or industry or incumbent vulnerabilities.
In focusing our investment on companies at the forefront of ESG issues and opportunities, we are investing in a virtuous cycle of positive outcomes forsociety. We see ESG issues as an integral part of startup risk analysis – and that investing in impact enhances equity value, exit pathways, and greater riskadjusted returns. ​Artesian’s Sector Focus

Alexandra Clunies-Ross
Portfolio Manager, Clean
Energy & Female LeadersRohan Gray
Portfolio Manager,
Health/MedTech

Rob Williams
Portfolio Manager,
AgriFood

Melody Zhang
Portfolio Manager,
China & Female
Leaders31

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Venture Capital
Case Studies
5B is a pioneer in prefabricated, rapidly deployed utilityscale solar. 5B has over 50MW of its Maverick solution
deployed across more than 100 sites and five continents
globally, along with an order book of more than 100MW. In
May 2022, it set a new speed record for solar deployment,of 1.1 megawatt deployed in a single day with a total crew of
10 people at AES’ Andes Solar II B facility in the Atacama
Desert, Chile.

Sicona develops next generation battery materials
technology used in the anodes (negative electrodes) oflithium-ion (“Li-ion”) batteries that enable electric-mobility
and storage of renewable energy. Sicona is commercialising
an innovative silicon-composite battery anode technology,
developed and perfected over the last ten years at theAustralian Institute for Innovative Materials (AIIM). Sicona’s
current generation silicon-composite anode technology
delivers 50% to 100% higher capacity than conventionalgraphite anodes and its anode materials can deliver morethan 50% higher cell energy density than current Li-ion
batteries.

SwarmFarm's robots are empowering farmers to deploy
new technology in their fields with customised solutions forchallenges faced in their local farming systems. Currently,
everything we do in agriculture is limited by what we canhook on the back of a tractor or what we can tip in thespray tank. SwarmFarm's robots put new technology in thehands of farmers. SwarmFarm is developing technology
from the soil up, backed by deep industry knowledge andpractical experience. The company is driven to empower
farmers by unlocking the promise of autonomous
agriculture.

Loam uses the world’s smallest organisms to solve theworld’s biggest problems. Microbes have changed thecomposition of our atmosphere through earth’s history.
Loam is ensuring these organisms can do it again. Through abetter understanding of how microbes influence the carbon
cycle, it can create new planetary-scale opportunities forcarbon sequestration and improve agricultural productivity.
Loam delivers high quality CO2 removal with environmental
co-benefits, by providing growers with unique tools, andconnecting them to business leaders who are driving ourglobal path to Net-Zero.

www.5b.cowww.siconabattery.com

www.swarmfarm.com

www.loambio.com

Seoul Robotics creates a 3D perception platform thatpowers autonomous vehicles, smart cities and robots.
Seoul Robotics has grown into an internationalorganisation, with offices in South Korea, Germany and theUS, as well as distribution operations on four continents. It
has customers around the globe, across a range ofindustries and applications. Seoul Robotics' mission is tomake robots intelligent by helping them understand theworld like humans.

TurtleTree is using modern cell-based technology tocreate sustainable food, with a focus on cultivated dairy
products, that are better for the planet, better for the
animals, and better for you. TurtleTree is a rapidly
growing brand with a global presence. It has offices, labs,
and research facilities in Singapore and the US, alongwith an international team.

Evrima is transforming clinical trial recruitment byconnecting researchers, clinicians and patients together
to accelerate research and bring new treatments topatients who need them. Evrima's mission is toaccelerate patient identification and recruitment to help
advance medical development. The company is driven to
reduce the administrative burden on researchers so they
can focus on the high value clinical work required to get
new medicines from bench to bedside.

www.seoulrobotics.org

www.turtletree.com

www.evrima.com.au

Nutromics’ vision is to create a world with zeropreventable deaths due to the lack of timely molecularpatient data. Its mission is to revolutionise healthcare with
Continuous Molecular Monitoring (CMM). Nutromics'
biosensor technology is integrated into a wearable smart
patch that is small and unobtrusive. Important molecularconcentrations are captured continuously, and wirelesslytransmitted to a software application. The software
solution is flexible, designed to connect with mobile andweb solutions for easy integration with consumer healthsoftware and hospital platforms.
www.nutromics.com.au

32

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Venture Capital
Case Studies
Over the next 5 years,

Climate / Energy
Business Challenge

5B

Rapid adoption of EVs is required to reduce emissions
associated with ICEs, but high battery costs and energy
efficiency limitations are currently inhibiting widescale EV
uptake.

of Mavericks,
avoiding at least
2 Mt (megatons)of CO2-eq
projected.

Solution Delivered
Sicona will produce sustainable and efficient/energy
dense battery materials locally in each major global
jurisdiction in which they operate.

Solution Delivered
The solution it offers is ultra low-cost and rapidly
deployed. This is achieved here by prefabricating
modular solar farms, which are then rapidly deployedon site.

Impact CreatedMore sustainable and efficient/energy dense battery
materials produced at a reduced $/kWh price will
improve EV performance and increase adoption:

Impact Created
5B has deployed 52MW of solar to date across 100
sites and has avoided 100 kt (kilotonnes) of CO2 perannum (compared to coal fired generation).

Sicona5B is helping the world face into the challenge of the
80TW of solar required to be built by 2050 tomitigate the impact of climate change, and keep
temperature rises within 1.5 degrees Celsius above
pre-industrial levels.

1GW

Business Challenge85%
reduced anodematerials CO2
production
footprint.

§
§
§
§

Increase range of EVs by 20 – 50%;
Reduce the time it takes to safely charge an EV
to 80% capacity to less than 25 mins;
Deliver localised supply chains in each major
market;Reduce the upfront cost of EVs by US ~$5k.

Climate / Energy / Responsible Consumption

33

Overview

Venture Capital
Case Studies

Impact Metrics and Highlights

Progress on Our Commitments

Over the next 5 years,

116,000

tons of pesticide removed
from use every year, with
200 million acres undermanagement projected.

Business Challenge
Loam Bio uses the world’s smallest organisms to solve
the world’s biggest problems. It is tackling two prevailingsustainability challenges: 1) too much CO2 in ouratmosphere, and 2) too little carbon in our soils.

Business Challenge
Modern farming practices, have evolved by advances from theIndustrial Revolution (tractor replaced the horse and farming
became mechanised), The Green Revolution, (introduction ofpesticides and synthetic fertiliser) and the Biotech Revolution(introduction of genetically modified crops). However, the best
management practices of today are not going to deliver the
next wave of sustainability, yields and environmental
stewardship that farmers and consumers around the globe aredemanding.

Solution Delivered

Loam

Swarmfarm

Food Security

Our Approach

Loam’s products use microbes to supercharge theability of plants and the soil to sequester carbon andincrease the amount of CO2 that can be stored in soil
for the long-term. Loam empowers farmers to capture
carbon from the atmosphere on a gigatonne scale,
improve the health of their soil, and trade a newcommodity – carbon offsets.

Solution Delivered
SwarmFarm Robotics is delivering autonomous farming
robots that fundamentally change the field practices that
farmers use to produce food.

Impact Created
Loam's technology has the potential to drive
gigatonnes of carbon removal while improving the
productivity and resilience of the world's soil.

Impact Created
To date, SwarmFarm robots have commercially farmed over 1
million acres of farmland. SwarmFarm Robots have alreadyremoved 580 tons of pesticide from the environment in 2022.

Loam's technology has the potential to drive gigatonnes ofcarbon removal while improving the productivity andresilience of the world's soil.

Climate / Food Security / Life on Land

34

Overview

Venture Capital
Case Studies

Impact Metrics and Highlights

Progress on Our Commitments

Impact Goal

Seoul Robotics aims to enhance urban mobility safety
and reduce CO2 emissions of vehicles.

Sustainable Cities & Communities

Business Challenge
Providing accessibility and affordability to high value
nutritious milk and milk ingredients to everyone around theworld using sustainable technologies.

Business Challenge
A finished vehicle will have to go through manufacturing>production line->ships/trucks/trains->dealership in acomplete automotive logistics. Each step will create large
inevitable manual labor cost for OEMs and auto parts
makers. The traditional automotives logistics market is 100%labor-driven. It is an untapped market of US $27bn in size
globally in finished vehicle logistics alone, urgently in need foran autonomous revolution.

Solution Delivered

Turtle Tree

Seoul Robotics

Our Approach

TurtleTree is dedicated to producing a new generation ofnutrition—one that’s better for the planet, better for the
animals, and better for people everywhere. Utilising its
proprietary cell-based technologies, TurtleTree is creating
nutritious milk ingredients sustainably and affordably, with
benefits that extend beyond the dining table.

Solution Delivered
Impact CreatedWith Seoul Robotics’ 3D computer vision solution powering
autonomous mobility as a service (MaaS), each vehicle isdetected by at least 2 sensors at all times, making no blind
spots for any vehicle ever. In the cloud, a safe path iscalculated for each autonomous vehicle, from its origin to its
destination. The LV5 CTRL TWR system sends encrypted
control commands to the designated vehicle, using local 4G
or 5G networks or other V2X systems, driving the vehicle toits destination.

The technology has the ability to transform the whole dairy
industry, including infant nutrition, sports nutrition, baby foodand functional food ingredients. TurtleTree aims to create anenvironment where everyone has access to nutritious milk
and its ingredients while minimizing the CO2 impact createdin traditional farming.

Impact CreatedSeoul Robotics collaborated with various cities andregulators around the world to make these cities andcommunities smarter and safer. Data-driven insights about
traffic flow and vehicle/pedestrian interactions allow cities tomeasure traffic volumes and monitor vehicle congestion.
Autonomy through infrastructure allows vehicles to moveefficiently, increase safety and reduce idle time.

Over the next 5 years,

80%

less carbon emission and land area
compared to traditional farming.

Gender Equality, Health &Wellbeing, Life on Land

35

Overview

Venture Capital
Case Studies
Gender Equality / Health &Wellbeing

Getting a new treatment to market is costly and inefficient. 80%of trials are delayed due to patient recruitment challenges.
Without participants in research, new therapies would not havethe chance to reach market. General practice involvement inclinical research and clinical trials in particular needs a higher
profile and more awareness. It is currently under-valued, which
is a significant barrier to participation.

Progress on Our Commitments

Company Vision

Business Challenge

To change
the game inclinicalresearch toincrease
access,awarenessandparticipation.

Nutromics is on a mission to revolutionise healthcare throughcontinuous molecular monitoring. Using their novel biosensing
platform technology, it will help solve unmet clinical needs forthe deadliest disease states in the ICU setting.

Solution Delivered
Nutromics is developing a world-first medical wearable device(patch) comprised of two technologies: a microneedle arraythat provides pain-free access to interstitial fluid, just under
the skin, and DNA sensor technology applied to themicroneedle tips, streaming molecular insights converted into
electrical signals and sent to clinicians via Bluetooth.
Nutromics’ first market is therapeutic drug monitoring forvancomycin, the world’s most dosed antibiotic. The objective
is to ensure that this drug, currently dosed out of range 60%of the time, is dosed correctly and in-range every time.

Solution Delivered
Evrima’s mission is to automate the study start-up andpatient recruitment processes using predictive technology to
reduce inaccuracies, repetitive administrative headaches thatstudy teams, sponsors and patients experience. Evrima’s
mission is to accelerate patient identification and recruitment
to help advance medical development.

Impact CreatedNutromics will complete the world’s first in-human clinicalstudies of its first DNA sensors in 2022, as well as its
integrated alpha prototype device.

Impact Created

FDA approval of the company’s first product, a continuous
monitor for the IV antibiotic vancomycin, is planned for 2025,with a pipeline of new DNA sensors and products also underdevelopment.

Evrima is striving to make a global impact on clinical trial
timelines and enable the industry to advance medical researchswiftly so people get access to the therapies they need.
Its technology has the potential to transform clinical trial
recruitment by connecting researchers, clinicians and patients
together to accelerate research and bring new treatments topatients who need them.

Impact Metrics and Highlights

Nutromics

EvrimaBusiness Challenge

Our Approach

Zero
Company Vision

preventable deaths through personalised
and timely molecular insights.

Health & Wellbeing

36

Overview

VentureCapitalas a Service
Impact Highlights

Gilles Plante

Impact Metrics and Highlights

Progress on Our Commitments

Artesian's revolutionary Venture Capital as a Service, (VCaaS), platform services the increasingly complex
needs of organisations dealing with the financial and strategic challenges and opportunities presented bythousands of potentially disruptive startups.

Client Solutions

Collaborate

To access the financial andstrategic returns of the innovation
ecosystem a collaborative, scalable
and systematized approach toearly-stage investment is required.

Scout

There are often hundreds ofstartups working on any one
vertical-related innovation. Scouting
for the optimal opportunities
requires global resources and wellestablished networks.

Partner, Head of VCaaS

Due to the volume of startups tobe assessed, scouting processes
must be highly scalable to filter thebest opportunities from thefirehose of possibilities.

Guy Newton
Director, VCaaS

Our Approach

Scale

InvestCo-Invest

We build and operate bespoke funds
for clients, investing in startups
delivering strong financial and strategic
returns, and qualified growth-stage
co-investment opportunities.

We will also work with clients to select,invest in and manage co investment
opportunities arising from the deal
pipeline generated via other VC/PE
funds in which they are an LP.

Artesian's VCaaS platform provides corporations, industry groups, government organisations and family
offices access to transformational startups, delivering distributed research and development, financial andstrategic returns, collaborative partnerships, co-investment opportunities and a pre-screened and de-risked
M&A pipeline.
VCaaS delivers financial and strategic (distributed R&D) return, as well as scale, context and focus, providing
the client with a pre-screened and de-risked pipeline of qualified late-stage startups for direct investment.

SDG-Aligned Mandates
Existing Artesian VCaaS mandates that directly support the UN SDGs include the following:
Partner: GRDC
Vertical: AgriFood
Overview: Investing in research, development and extension to create enduring
profitability for Australian grain growers.
Product: $50m Early-Stage VC fund investing in startups delivering innovation for
the Australian grains industry.

Partner: CEFC
Vertical: Clean Energy
Overview: The CEFC is responsible for investing $10bn in clean energy projects onbehalf of the Australian Government.
Product: $26m early-stage VC fund investing in Australian clean energy andclimate technology startups.

Partner: SA Govt.
Vertical: Agnostic
Overview: Enabling innovative SA ventures to secure funding, accelerate growth,
stimulate economic activity and job creation.
Product: $50m Series A/B VC fund investing in helping build dynamic andinnovative South Australian companies.

37

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

VCaaS
Case StudyIn May 2022, GrainCorp partneredwith Artesian to launch its corporate
venture capital fund to invest $30m
into start-ups that help build asustainable future for the Australian
agriculture industry.

Launched in May, GrainCorp Ventures will invest
in innovative start-ups across AgTech, animal
nutrition and food innovation. GrainCorp’s Chief
Innovation and Growth Officer, Jesse Scott, said
that GrainCorp is uniquely positioned to nurture
start-ups that drive innovation across theindustry.
“Activity and investment in agri-related venture
capital has grown significantly across Australia
and the Asia Pacific as a result of rising grower
sophistication, evolving industry structures andemerging technologies,” Mr Scott said.
“GrainCorp’s diverse agribusiness andprocessing businesses and crucial access todomestic and global consumer markets make us
an ideal partner to add value to these startups.
“Our focus on AgTech, animal nutrition and foodinnovation is about ensuring long-termsustainable growth for Australian agriculture.”
Mr Scott said GrainCorp has already beenworking with growers, customers and industry
groups to support burgeoning opportunities inthe sector.

“Our focus is to ensure that we invest ininnovative start-ups that show potential
in securing a sustainable future for ourindustry while supporting those at its
core – growers and primary producers –to have the tools they need for growthin the digital age.”
Jesse Scott“We’re excited by the progress we havealready made through investments incompanies like Hone and FutureFeed, ourrecent partnering with CSIRO and v2food,and the ongoing development of our digitalmarketplace CropConnect.
“Through GrainCorp Ventures, we are looking
forward to finding and supporting start-ups
positively affecting the agricultural supply
chain, with Australian growers at the centreof that progress.”

Partner: GrainCorp
Vertical: AgriFood
Overview: Leading Australian agribusinessand processing company partnered withgrowers and producers for > 100 years.
Product: $30M VC fund focused on startups
shaping the future of Australian agriculture
and food production.

Source: https://www.graincorp.com.au/new-graincorpfund-to-inject-30-million-into-agtech/

GrainCorp has partnered with Artesian
Venture Partners to establish the fund, which
will invest minority stakes in early-stage
opportunities across AgTech, animal nutrition
and food innovation.

38

Overview

ImpactPerspectives
John McCartney

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Aggregation Confusion
and ESG Irrelevance –Measurable Impact as a
Solution

ESG factors gained traction from consumption patterns –as consumers signaled to corporates that they werewilling to pay a premium for products that took
environmental, social and governance factors into
account. Higher margins attracted investors into thespace – precipitating existing market participants andnew entrants to adapt to ESG issues. Investors found thiscycle particularly virtuous as ESG was touted as helping
them both to spot winners and avoid losers.

In 2006 the United Nations launched its Principles
for Responsible Investing (PRI) – where investors
pledge to incorporate ESG issues into theirinvestment practices. The number of signatories tothe initiative has increased from 63 in 2006, to 3826
in 2021, with the assets under the umbrella going from
US $6tn to US $120tn over the same period.

In this cycle everyone is asking for data. Customers – bothinvestors and consumers – are confronting companies
about their ESG footprint as they tried to establish theirown ESG footprint. The data being generated issubjective – and difficult to correlate between companies
and across industries and sectors.

Co-Founding Partner,
Head of ESG

The UNPRI signatories have all agreed to incorporate
ESG factors into their investment decisions – thatmeans being aware of material risks that are outside
the formal ones that are reported in annual reports.
This means digging down into how the company isview by its customers, its employees and what sort of
impact its goods or services have on the environment.
This has two very basic implications:1) Those assets that are deemed to be incompatible
with these principles will struggle to find buyers as
liquidity and financing conditions deteriorate.
2) If you are looking to scale a company, theseprinciples must be taken into account.

“Data is considered the new oil ofthe economy.” – The Economist
3This boom in ESG data lacked standardisation, andseveral frameworks emerged to categorise the data.
The 4 main frameworks are GRI, CDP, SASB, and
TCFD. Each have their own nuance and ascompanies and investors sign up to different
reporting systems to accommodate the flow of ESG
assets, ESG consultancies have sprung up to assist
these investors.

3. The Economist, May 11, 201739

Overview

ImpactPerspectives
John McCartney
Co-Founding Partner,
Head of ESG

There are around 100 providers of these services
now4 and that has doubled in the last year. Somefund managers have decided to do this analysis inhouse rather than outsource – some use a hybrid on
internal and external – and some outsourcecompletely – resulting in thousands of differing
investment methodologies.
MIT Sloan School of Management has dubbed the
problem “Aggregate Confusion” characterised by two
problems:
1) Lack of standardization leads to dispersion of
methods and approaches, making it difficult toevaluate ESG performance of companies or funds.
2) ESG ratings dispersion lowers the incentives toimprove ESG performance. Different ratings fromdifferent vendors leads to mixed signals making themarkets less likely to price in ESG performance.
This exponential growth of Responsible Investing has
outpaced regulators and ratings agencies. As such,the large volumes of data being generated in themarket by responsible investing is creating“Aggregation Confusion” as ratings agencies andconsultants rush to help investors identify sustainableassets.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

These new ESG data sets are creating a wave ofinnovation in the environmental, social andgovernance fields. Regulators, investors, customers,
employees and other stakeholders are asking
questions around ESG and that is creating hugedemand for high quality data sets to measure andbenchmark impact. As data catalyzes newtechnologies and businesses models, we expect aflood of new venture capital opportunities focused on
impact solutions.
In global bond markets, investment grade corporatebond issuers of green and sustainable bonds havebegun to deploy the proceeds into venture capitalsolutions that improve their environmental and social
footprints. By deploying capital into VC, larger
corporates are able to outsource R&D and help themachieve their ESG goals.
As a participant in both the bond and venture capital
markets, we are seeing exciting new developments
where corporates are looking to help shorten the lagtimes for new technologies from inception tocommercialization - which has the potential to help
speed up humanity’s progress on the internationalsustainability agenda.

In response, regulators are embarking on
standardising transparency and reporting, which will
enable investors to compare measurable impact,which in turn will flow through to asset prices.
Regulation will mean companies will be held
accountable for the metrics they report, which in turnwill give investors better insights on the future valueof company assets.
4. The Financial Times, March 18, 2022

40

Overview

ImpactPerspectives
Luke Fay
Partner, Head ofVenture Capital

Vicky Lay
Partner, Head of
Impact Investments

Responsible Venture
Capital: ESG Integration
at the Early Stage(Volume 2)
Venture capital is crucial in shaping ourcollective socio-economic future. It is ananti-fragile market, where new businessmodels and technologies are tested tosolve complex challenges. These toughproblems attract talent - top engineers,
startup founders and financiers, whose
passion draws them to create disruptive
technologies that will frame our lives tocome.
While a sustainable future and venture
capital are inevitably intertwined, ESG
uptake in private markets has lagged thatof public markets. Some of this has been
resource driven, as VC backed companies
with capital-light balance sheets often
lack the ability to invest in ESG
engagement. The hunt for outsized
returns by focusing on scaling startups
that generate rapid growth at all costs, alack of diversity, and the lack of pressure
on VC firms to focus on ESG are also
likely reasons for the slow ESG
integration. This blind spot in VC investing
was exposed by Amnesty international,
which highlighted human rights due
diligence failures5 in the investment
process.

To address this, the UNPRI launched a VC
collaboration initiative in Sept 2021 withmarket participants to “strengthen takeup” of ESG.
The PRI surveyed VC firms to capture asnapshot of what the then current
market looked like and found the following
trends:1) DE&I is a focus, but not integrated into
the investment process. ESG is generally
siloed and whilst DE&I is a focus for theteams they are investing in, it doesn’t
extend to their supply chains.
2) High adoption of pre-investment
screening. Negative screening is common,but leading practices include ESG KPIs in
term sheets and due diligencequestionnaires.
3) Asset Owners (LPs) are not the driving
force behind ESG adoption. Whilst this is
not our experience at Artesian, the UNPRI
survey found that only a minority of VC
firms felt that their LPs were pushing for
ESG integration. Interestingly, the majority
still felt that ESG factors improved
risk/return metrics.
Artesian’s ESG committee has rolled out
materiality mapping for relevant ESG
factors. It guides investment teams toidentify both ESG risk and opportunities
faced by the industries and sectors inwhich we are invested.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Artesian believe that by studying whatstakeholders value (employees,
customers, regulators, suppliers, etc.), we
can drive a business towards success.
Through building trust with stakeholders,
we improve our ability to scale
sustainably, which is the key to long term
profitability.
As we engage with our investee
companies on ESG issues, we know itcreates a lot of work, but we believe it isnecessary for companies to broaden
their investor base, boost employee
retention and ultimately drive overall
performance. It is also a path to disrupt
incumbents who have legacy ESG issues
that new market entrants can use to
generate market share.
One of the main challenges for ESG in VC
is measurement. Many of the tools thathave been used for ESG analysis were
designed for public companies and need
to be retooled for the VC industry. Whatis measured is also dependent on thestage at which the company is at – theearlier the stage, the smaller thefootprint – but the smaller footprint also
makes ESG issues more manageable. By
embedding ESG in a company’s DNA, we
are helping founders anticipate ESG
issues and communicate them toinvestors and other stakeholders andensuring the company can scale into the
future.

5. Amnesty International, July 30, 2021
https://www.amnesty.org/en/documents/doc10/4449/2021/en/

41

Overview

ImpactPerspectives
Guy Newton

Critical Technologies:
Our Position on National
Security-Related VC

Director, VCaaS
Managing Director, Arco

Investing in technology that
protects our future

Critical technology is crucial to theprotection of our way of life and to our
future prosperity, and Artesian ispleased to be playing a core role in the
support of critical technology throughout
Australia and the Indo-Pacific region. We
do this under the brand Arco, Latin for‘protect’. Core to our view within Arco
are innovations that relate to national
security, economic prosperity and social
cohesion and take the form of ‘dual-use’- technology that has an application
within defence and civilian areas.

INVESTMENTS THAT WILLNOT BE CONSIDERED

Our Approach

Dual-use & Non-combatant
Advanced Materials
Coatings • nanoscale materials • novel metamaterials • smart
materials
AI & Computing
Advanced data analytics • integrated circuit design • optical &radiofrequency comms • AI • distributed ledgers • ML • Cyber security
Sensors & Navigation
Imaging systems • timing • gravitational force sensors • miniature &photonic sensors • inertial navigation
Space, transportation & robotics
Positioning & navigation • advanced engines & hypersonics • robotics •autonomous systems • drones & swarming • small satellites • spacelaunch systems & infrastructure
Quantum
Cryptography • communications • quantum computing • quantum
sensors.

Artesian will reject investment
opportunities that are outside theinvestment mandate of the fund or fail
to comply with Artesian VP’s ESG policy.

• ECONOMIC PROSPERITY • SOCIAL COHESION• NATIONAL SECURITY

Impact Metrics and Highlights

Progress on Our Commitments

Why are we investing in criticaltechnology?
We are living in a period of uncertainty, andrecent world events have heightened the needfor greater focus on the sovereign technology
whose intention is the protection of ourcommunity. With Australia’s position
geographically, as well as a creator of world classtechnology, we have a role to play in protecting
the values we hold close, and in supporting theinnovators creating these technologies.
Our focus within Arco is to seek out, invest in andsupport the growth of emerging criticaltechnology companies throughout the IndoPacific region. “Security tech” plays a strong rolein this thesis, but importantly, Arco is not an
investor in weapons or technology designed to beweaponised. Core dimensions of our national
security interests include food security,
infrastructure security, economic security andothers. These are the sorts of complex
challenges that attract top engineers andfounders who recognise the need for liberal
democracies to maintain their technological edge.
The Arco team within Artesian are on a journeyof bringing Australian and Indo-Pacific criticaltechnologies onto the world stage and lookforward to sharing our progress over time.

42Overview

04

Progress on
Our Commitments
We are excited to share our impact initiatives, partnerships and activities
around creating a sustainable future, advancing gender equity, and taking
a proactive approach to engagement.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

IN THIS SECTION
Creating a Sustainable Future
Commitment to Net Zero by 2030
Measuring Our Carbon Footprint
Total Emissions by Scope
Offset Partner/Project
Advancing Gender Equity
Commitment to Closing Economic Gender Gaps
Gender Impact in Fixed Income
Gender Impact in Venture Capital
Launch of Artesian Female Leaders VC Fund
Engagement, Outreach and Milestones
2021/22 Impact Timeline
History of Collaborations and Partnerships

43

Overview

Impact Metrics and Highlights

Progress on Our Commitments

This climate target has created a “race to Net Zero”, withcountries, cities, states, institutions, and corporations rollingout a Net-Zero emissions pledge. It is estimated that two
thirds of carbon emissions are now covered by this type oftarget. For these pledges to be effective, it requires
reducing human originated emissions, such as burning fossil
fuels, as close to zero as possible. Whatever emissions
cannot be reduced must then be offset through carbon
removal options like conservation of natural carbon sinks(such as forests, wetlands, grasslands, etc.) or investing in
new technologies that can pull carbon from theatmosphere. Ideally, the need for offsets would fall overtime as the economy transitions to a greener and cleaner
future.

Creating a Sustainable Future

We Commit
to Net Zeroby 2030
The concept of Net Zero carbon emissions has
emerged from the science of Anthropogenic
Climate Change. The objective is to keep humanrelated carbon emissions within a finite budget
to limit global temperature rising more than 2C.
Note this is not Gross Zero – where we havezero emissions – but Net Zero, where any
carbon emission that are above this budget
must be removed. The theory is that society
reduces carbon emissions as much as possible
and then invest in nature based or artificial
carbon sinks to limit the total amount of carbon
in the atmosphere to less than 770 gigatonnesof CO2. If we allow emissions to rise above thislevel, science predicts a climate catastrophethat will not only destroy the global economy –but is an existential threat to life on Earth.

Our Approach

Artesian has committed to a Net Zero target by 2030 – tothis end we intend to fully leverage our position as an asset
owner, a financial services company, a shareholder, debt
provider and capital markets participant to attain this goal
via a 4-part plan:

n
a
i
s
e
t
o
r
r
A
# NetZe1

Set targets – draw a map of how we are going toachieve a balance between the emissions and offsets.

2

Invest in solutions – capitalise investments in the climatetransition and drive climate risk management in exiting
investments.

3

Engage with counterparties – talk with investee
companies and financial markets counterparts aboutcarbon metrics and how they are enacting meaningful
CO2 reduction strategies.

4

Report on progress – share our Net-Zero journey with
our stakeholders on how we are accounting for ouremissions.

44Overview

Creating a Sustainable Future

Measuring
Our Carbon
Footprint
We took the approach of estimating
our carbon emissions by tracking what
is most material – and for a financial
services firm, that is our electricity
consumption and business travel. We
triangulated this using both online
carbon tracking tools from different
vendors and our own internal research.
Once we had our carbon footprint, wethen looked to the voluntary carbon
markets to ensure we bought credible
carbon offsets to balance ouremissions. To this end we have chosen
Green Collar (www.greencollar.com.au)
to be the conduit to address this.

Carbon footprinting is a typical starting
point for assessing the GHG emissions
and is measured across 3 Scopes:

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Our Net ZeroTaskforce

Scope 1: All direct GHG emissions.
Scope 2: Indirect GHG emissions from consumption ofpurchased electricity, heat or steam.
Scope 3: Other indirect emissions, such as the extraction andproduction of purchased materials and fuels, transportrelated activities in vehicles not owned or controlled by thereporting entity, electricity-related activities (e.g., T&D losses)
not covered in Scope 2, outsourced activities, waste disposal,
etc.

John McCartney

Kurt Tan

Vicky Lay

Co-Founding
PartnerManaging
Director

PartnerMark Bytheway

Mei LeePankaj Khanna

Our Process
Financial services companies emit few greenhouse gases to
run their operations. Artesian’s carbon emissions for Scope 1& 2 are only around 2-14 metric tonnes (MT) depending on
the methodology. Given our Net-Zero pledge, we want to
extinguish our Scope 1 & 2 emissions as promptly as possible– however, as we came out of the pandemic lockdowns, we
saw a natural tendency for our staff to increase businesstravel and we wanted to make sure we accounted for this in
our Net-Zero efforts. Air travel is something that we could
track and estimate – and it also has well defined carbon
emissions. According to the GHG protocol, business travel
should be included in Scope 3, as airlines will account for it intheir Scope 1 & 2 emissions. However, at Artesian, where
impact is a central focus, we see no reason to follow othersand extinguish just our Scope 1 & 2 – we feel that if we canmeasure it, we can tackle it, which is what we have done. To
that end, we have extrapolated our business travel for theyear and have estimated carbon emissions of around 150185MT.
Once the carbon footprint had estimated, the taskforce
engaged an offsets a vendor. Green Collar was chosen basedon their impeccable credentials and adherence to the UN
protocols. Green Collar has matched our carbon emissions
with nature-based solutions in the same jurisdiction fromwhich they have originated.

Director, ESG
ResearchPartner

Chief Financial
Officer

ACTIVITYRELEVANT CATEGORY OF EMISSIONS

Emissions from transportation in vehicles
owned or controlled by the reporting
company.

Scope 1 (for vehicles that consume fuel) and
Scope 2 (for vehicles that consume electricity)

Emissions from the transportation of
employees for business-related activities
in vehicles owned or operated by third
parties.

Scope 3, category 6 (business travel)

Emissions from transportation of
employees to and from work.

Scope 3, category 7 (employee commuting)

Emissions from leased vehicles operated
by the reporting company not included in
Scope 1 or Scope 2.

Scope 3, category 8 (upstream leased assets)45

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Creating a Sustainable Future

Total
Emissions
By Scope
As a financial services company, Artesian
has relatively few direct emissions inline
with others in tertiary industries. To get an
accurate sense of carbon exposures, weneed to calculate Scope 1, 2 & 3 emissions
for ourselves and that of our investee
companies. Corporate reporting has
traditionally concentrated on Scope 1 & 2
emissions, as they have been more straightforward to calculate. The focus is now
shifting to Scope 3, as this represents thebulk of emissions and therefore critical toensuring that businesses don’t simply pushtheir emissions to other parts of the supply
chain (for example, ensure the whole
supply chain is decarbonising).

Scope 3 Upstream
Indirect
LeasedassetsEmployeecommuteBusinesstravelTransportation &distribution

Fuel & energy
relatedCapitalgoods

Purchased
goods

PFCs

Scope 3 Downstream
Indirect
Investments

Franchises

LeasedassetsEnd-of-life treatmentof sold products

Use of soldproducts

Processing ofsold products

CH₄Transportation& distribution

Scope 2

HFCs

IndirectPurchased electricity stream
Heating & cooling for own use

SF6

Scope 1
DirectCompany
facilities

N₂O

Company
vehicles

UPSTREAM ACTIVITIES
While the process for calculating Scope 1& 2 emissions is well established, thesame cannot be said for Scope 3, despiteongoing efforts by coalitions such as theGreenhouse Gas Protocol (GHP), thePartnership for Climate Aligned Finance(PCAF) and the UN Framework
Convention on Climate Change (UNFCC).

Waste fromoperations

CO2

REPORTING COMPANY

Artesian has taken the approach to begin
to rank the emissions we can track andthen look to purchase offsets once thoseemissions have been determined.
Furthermore, given these are best
endeavour estimates of our carbon
footprint, we round emissions calculations
up in order to ensure we are covering the
maximum amount of carbon emissions
calculated.

DOWNSTREAM ACTIVITIES

We’re a human capital-driven
organisation, as such, our direct carbon
emissions are mainly office-related
emissions. Scope 1 & 2 make up
approximately 10% of our footprint.6
Business travel constitutes the largest
emission category for our organisation.
We prudently manage our travel needs
where possible and purchase responsible
offsets against this Scope 3 activity.

As an investment firm, the investments we hold on
behalf of our clients constitute Scope 3. We will beworking with our portfolio companies to map out theirfootprint.
Over time, as the portfolios grow and mature, we aim tohave a system that can be adopted by all our investee
companies in order to provide reportable and actionable
Scope 3 information (by us and by our clients).
6. “For most companies, the value chain is responsible for the vast majority ofemissions, often around 90%.” (https://normative.io/insight/scope-1-2-3emissions-explained/)46

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Creating a Sustainable Future

OffsetPartner
About GreenCollar
Bringing science, land and people together to decrease emissions,improve water quality, reduce plastics and increase biodiversity.

GreenCollar works alongside
Australia’s leading fundmanagers, corporates, land
managers, researchers andenvironmental organisations toaccelerate the transition to a
Net-Zero world and drive
positive impact at scale.

Australia’s largest and mostsuccessful environmental
market project developer andinvestor.

• Leading generator of nature-based carbon credits in the Australian market.

Track record in newenvironmental markets.

• Proven track-record of developing new methodologies that maximise potential within
the existing carbon market and open up new environmental market opportunities
such as water quality, plastics and nature positive offsets.

Embedded sustainability within
agricultural businesses to deliver
ACCUs without impacting
productivity.

GreenCollar is Australia’s
most “bankable” counterparty.

Rigorous due diligence framework
informed by real world experience.

• An existing portfolio of 200+ registered and contracted projects covering over 10
million hectares and generating 126+ million Australian Carbon Credit Units (ACCUs).

• GreenCollar’s ‘paddock-tested’ teamwork in partnership with all stakeholders todesign and implement projects that complement agriculture operations andmaximise real and tangible social, economic and environmental outcomes.
• GreenCollar works to ensure projects deliver additional benefits for land managers
and local communities, helping to regenerate the land and boost long-term
productivity whilst promoting business sustainability.
• Backed by two prominent investors – US $1.3bn KKR Global Impact Fund and one of
the world’s largest pension plans in Ontario Teachers’ Pension Plan, with US ~$227.7
bn in net assets.
• GreenCollar has a 10 year+ track record, and the most “bankable” counter-party bysize, counter-party credit, and scale in Australia.
• Sophisticated risk management systems, established procedures and robust
operating standards ensure delivery of high quality, high integrity, high impact
environmental credits.

47

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Creating a Sustainable Future

OffsetProject
Arbon-Tooligie Human
Induced Regeneration Project

Impact Story
Set in rich undulating farmland near Cummins in South Australia, thisproject is regenerating permanent native forest across over 3,000ha ofland that had previously been cleared and regeneration of native
vegetation had been suppressed.
In addition to the carbon sequestration delivered by the regenerating
vegetation, the project has seen a proliferation of wildflowers poppingup, and the landholders say the land now recovers quicker after dry
periods due to improved water retention in the soil.

Methodology

Human-Induced Regeneration of a
Permanent Even-Aged Native Forest- 1.1 Methodology Determination 2013

Registered ID

EOP100275

Date Registered

December 2013

#ACCUS to date

130,374

Project area

3,401haPermanence

100yrsKey Benefits

Location

Cummins, South Australia§

Carbon sequestration to mitigate climate change.

§

Regeneration of native forest with active management and protection
for 100 years.

§

Supporting the local ecosystem with improvements in native flora andfauna.

§

Improved drought resilience.

§

Investment in the local economy and creation of jobs.

SDGs

Native wildlife has also increased, and the additional income the carbon
project provides has been invested back into the local economy via
machinery and infrastructure investment which has gone back to local
suppliers and has helped hire local contractors.

48

Overview

Advancing Gender Equity

We Commit
to Closing
Economic
Gender Gaps
In 2021, the World Economic Forum’s Global Gender
Gap Report estimated that it would take over 250
years to close the gender gap for economic
participation and opportunity. While the report didnote a marginal improvement from 2020, it also
highlighted that women are still underrepresented inleadership seats, occupying only 27% of manager
positions.
The impact of COVID-19 on economic gender gaps isyet to be fully measured, but preliminary results in the
Global Gender Gap report indicate an asymmetricimpact to the participation of women in the workforce.
The UN’s SDG goal for Gender Equality remains apressing challenge in 2022, and as responsible
stewards of capital, Artesian is determined to be partof the solution.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Artesian is committed to improving the economic gender
gap by using our position and influence to invest with agender lens, educate and engage with our industry partners
and support female and non-binary leaders. Artesian has
committed to effecting change in four key areas:

1

Backing female and non-binary founders and fundmanagers.

2

Engaging with the VC industry on integrating gender into
investment decision making.

3

Engaging with corporations on gender equality.

4

Amplifying the work of women impact leaders.

In fixed income, markets have recognised that publiccompanies addressing gender metrics benefit from better
margins, lower costs of capital and higher retention rates
for human capital. As such, it is a metric by which weengage with the companies we invest in.
Similarly in private markets, Artesian believes that talent isevenly distributed but opportunity is not. Female-led
businesses can bring unique perspectives to traditionallymale-dominated industries and capitalise on new,unexplored market opportunities. More importantly forventure capital, they offer a differentiation of perspective
and exposure that adds to financial diversification andreturn profile.
This year Artesian launched a dedicated $100m Female
Leaders VC Fund, in partnership with Scale Investors.

49

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Advancing Gender Equity

GenderImpact in
Fixed
IncomeKurt TanManaging Director, Headof Impact Measurement
and Reporting
Dylan Er
Fixed Income Analyst

John McCartney
Co-Founding Partner,
Chief Risk Officer,
Head of ESG
Vicky Lay
Partner, Head of
Impact Investments

Female Board Representation

95%

of bonds held have at least 1 female board member§ 95% female board representation was achieved for investments in theArtesian Green and Sustainable Bond Fund, the Artesian Corporate Bond
Fund, and the Artesian High Impact Green Bond Fund.
§ For our positions where issuers do not have female board representation, weare going to work with the issuer to find out why they have not addressedgender imbalance at the highest levels of the company.
§ While gathering female board representation metrics, we discovered thatthough some issuers have female board representation at the multinational/parent level – the local Australian subsidiary, from which the bonds
have been issued – does not have gender balance on the board.

Gender Pay Gap

30%

of issuers have reported on gender pay gap§ When working on the gender pay gap metric – which we see as a strong
indicator of commitment to equality, we were pleasantly surprised to findthat 30% of the issuers in the portfolio had reported, versus the Equileap7
universe of public companies at only 17%.

2022/23
Corporate Issuer
Engagement
Strategy
We have flagged female board
representation and gender pay gap
reporting and disclosure, as our twopriority areas for engagement for
the next reporting period.
As an example, while governments
report on the gender pay gap forthe general populace, we foundsome state government issuers lackgender pay gap disclosures for theirown employees.

§ Another insight was revealed from sovereign and supra-national issuers
where we had expected a higher reporting standard – but we have seen
several states/territories and supra-national issuers not reporting this metricdespite their declared goals around equality for all. Again, we have flagged
this as a priority for engagement for the next reporting period.
7. Equileap research and rank over 3,500 public companies around the world using a unique and comprehensive Gender Equality ScorecardTM
across 19 criteria, including the gender balance of the workforce, senior management and board of directors, as well as the pay gap and policies
relating to parental leave and sexual harassment.

50

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Advancing Gender Equity

GenderImpact in
VentureCapitalAli Clunies-Ross
Portfolio Manager

Gender Representation in Startup Teams+63%

female founded startups across our VC portfolio8§ Startups with male-only founders receive more than 85% of global VC
funding, while those with female-only founders receive less than 3%.
§ To address this systematic gender bias, we established the Female Leaders
VC Fund to focus on identifying high-growth startups overlooked by other
VCs and underrepresented in Artesian’s existing portfolio.
§ We look to back best-in-class female leaders in any industry, but are
exploring ventures which we see are generating additional gender equality"impact alpha" for the maximum number of stakeholders and view this aspart of the gender arbitrage that we believe will generate excess returns.

Ananya Sinha
Venture Capital
AnalystJeremy Colless
Co-Founding Partner,
Chief Executive Officer

Melody Zhang
Portfolio Manager

Female Economics as a Force Multiplier$45m

in VC funding unlocked for women entrepreneurs§ Through investment and field-building activities, we seek to activate andmobilise capital for female leaders, normalise and advance gender-smart
investing practices across the Asia-Pacific, and increase transparency anddisclosure of data in VC.

2022/23 Startup
Engagement
Strategy
We have flagged female andnon-binary representation at
founder, board member, andexecutive levels, as well as
gender-equal workplaces, as
our two priority areas forengagement for the nextreporting period.
For example, Artesian will
engage with VC portfolio
companies to improve theirDiversity, Equity, and Inclusion(DEI) policies and practices forrecruiting and retaining diverse
talent.

§ Artesian believes that by providing more opportunities for female
founders, investors, directors and executives in startups, we generate
momentum for women to gain greater representation in later-stage
ventures and public companies, helping to build a fly-wheel effect for
female economic empowerment.
8. Percentage increase of startups with at least 1 female founder51

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Advancing Gender Equity

Launch ofArtesian
FemaleLeaders
VC FundBacking Female and Non-Binary Founders
Talent is Equally Distributed, But Opportunity is Not

Examples of material inequality:

The Female Leaders VC Fund will exclusively target Series A and B rounds of high-growth femaleled ventures across the Asia Pacific region.
Artesian and Scale recognise that talent is evenly distributed across male and female founders (aswell as investors, employees, and board members). However, there is material inequality between
the opportunity available for male and female founders in the startup ecosystem.

§

founders receive >85% of
global VC funding.
§

95.2% of VC investment
partners are male.

§
GENDER BIAS ARBITRAGE IN VENTURE CAPITALIn November 2021,
Artesian launched the$100m Female Leaders
VC Fund in partnershipwith leading femalefocused angel investor
group, Scale Investors.
The Fund has attracted$45m of cornerstone
investment fromindustry super funds,
Hostplus and legalsuper.

Startups with male-only

MALE ONLY FOUNDERSINVESTMENT BIAS(# VCs, % funding,deal size, follow-on
funding etc.)

Ø Startups with male only

founders: receive >85% of
global VC funding 1
Ø 95.2% of VCs are male 2
Ø Male founders &employees own 89% of
total startup equity 3

founders receive <3% of
global VC funding 4
Ø average deal size is <0.5xthat of only male-foundedstartups. 5
Ø Female founders &employees own only 11%
of total startup equity 6

GENDER BIAS ARBITRAGE

Top 10% of Talent

However, there ismaterial inequality
between the opportunity
available for male andfemale founders in thestartup ecosystem

FEMALE ONLY FOUNDERS
Ø Startups with female only

own 89% of total startup

M

M

F

Male founders and employees

equity.

The systemic gender bias
creates opportunity for thefund to tap into the underinvested pool of female
talent and realize:§

Ø unique perspectives in§

unexplored markets
Ø financial return / portfolio
diversification
Ø impact - female economic
empowerment SDG 5

founders receive <3% of global
VC funding.

We believethat talent isevenly distributed
across male & female
founders (as well as investors,
employees & board members)
M
F TALENT

SOURCES:1. Crunchbase (2020)
2. Fast Company / Women in
VC (Oct 2020)
3. Carta / Axios (2019)
4. Harvard Business Review(Feb 2021)
5. TechCrunch (Nov 2020)
6. Carta / Axios (2019)

Average deal size of femalefounded startups is <0.5x thatof male-founded startups.

§

F

Startups with female-onlyFemale founders andemployees own only 11% of
total startup equity.

52

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Advancing Gender Equity

Launch ofArtesian
FemaleLeaders
VC FundThis endemic gender inequality has
resulted in asymmetrical capital
distribution and a relative value pricing
opportunity. The Female Leaders VC
Fund will address this market failure
and target strong returns by providing
financial and strategic support to theunique perspectives, unexploredbusiness opportunities and underinvested talent of female founders inAustralia, NZ, and the broader Asia
Pacific region.

Artesian’s Proprietary Gender Framework
Artesian has developed a proprietary Gender Diversity Criteria Assessment Score (GDCAS)
to be used during the sourcing and deal pipeline process to establish which startups are
eligible for potential investment from the Fund.

GenderDiversity
Criteria
Assessment
Score(GDCAS)

Artesian hopes that the GDCAS will be adopted more broadly, across the ecosystem, tobenchmark gender diversity in early-stage companies, provide greater transparency, and ameans by which to measure future impact and progress.

GENDER DIVERSITY CRITERIA ASSESSMENT SCORECRITERIA:

EXAMPLES:

The following criteria are assessed during thesourcing and deal pipeline process to establish
which startups are eligible for potential
investment from the Fund1.
GENDER DIVERSITY CRITERIA% female founders (& equity
stake)% representation of women in
executive management
e.g. CEO, COO, CFO, CTO% representation of women on
the board
Public commitment, transparency& accountability to genderequality2
Gender Diversity Criteria
Assessment Score (GDCAS)

MAX. POINTS
50

STARTUP 1

INELIGIBLE• 3 founders (1 female, 2 male - eachwith equal equity stakes)• 1 female executive (CTO)• 1 woman on 4-person board,• no public commitment, transparency& accountability to gender equality

CRITERIA
Percentage of female founders(and equity stake)
Representation of women in executive
management e.g. CEO, COO, CFO, CTO
Representation of women on board
Commitment, transparency &accountability to gender equality

20
20
10
100

STARTUP 2

ELIGIBLE• 2 founders (1 female, 1 male - eachwith equal equity stakes)• 2 female executives (CEO & CFO)
• 2 women on 4-person board,• public commitment, transparency &accountability to gender equality

CRITERIA
Percentage of female founders (andequity stake)
Representation of women in executive
management e.g. CEO, COO, CFO, CTO
Representation of women on board
Commitment, transparency &accountability to gender equality

GDCAS = Criteria% x Points
Generally, a GDCAS >40 points isrequired for a startup to be eligible for
an investment1.
1.

The Investment Committee will use GDCAS as a guideline for
eligibility. The committee will have the ability to approve
exceptions, and these exceptions will be documented andreported to LPs (along with scores for all portfolio companies).
2. UN Women’s Empowerment Principles (UNWEP) as key guideline

STARTUP 3

ELIGIBLE• 2 founders (2 female)• 3 female executives (CEO, CTO &CFO)• 3 women on 4-person board,• public commitment, transparency &accountability to gender equality

CRITERIA
Percentage of female founders (andequity stake)
Representation of women in executive
management e.g. CEO, COO, CFO, CTO
Representation of women on board
Commitment, transparency &accountability to gender equality

WEIGHTING

SCORE

33% x 50

17

25% x 20525% x 20

50% x 10

0

GDCAS

27

WEIGHTING

SCORE

50% x 5025

50% x 20

10

50% x 20

10

100% x 10

10

GDCAS

55

WEIGHTING

SCORE

100% x 50

50

75% x 20

1575% x 20

15

100% x 10

10

GDCAS

90

GDCAS is calculated using apoints system based on thecriteria below, with a maximum
total of 100:§ Percentage of female
founders (and equity stake).
§ Representation of women in
executive management.
§ Representation of women on
the board.
§ Public commitment,
transparency andaccountability to genderequality.

53

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Advancing Gender Equity

Launch ofArtesian
FemaleLeaders
VC Fund
Artesian is the investment
manager for the Female Leaders
VC Fund, which has a
predominately female investment
team including Partners, Mei Lee
and Vicky Lay, as well as portfolio
managers, analysts
and legal/operations staff
including Ali Clunies-Ross,
Ananya Sinha, Melody Zhang,
Fiona Zheng, Kate Robinson,
Kirsten Bernhardt, Channing Chen,
Diana Tong, Jenny Chu, and Mary
Cansicio.

A Predominantly Female Investment TeamINVESTMENT MANAGER

COMMUNITY ENGAGEMENTINVESTMENTS

ALI CLUNIES-ROSS
Portfolio Manager
SydneyANANYA SINHA
AnalystSydneyMELODY ZHANG
Portfolio Manager
Shanghai

CHAIR

FOUNDERSFIONA ZHENG
AnalystShanghai

VICKY LAY
Artesian Partner
Sydney/NY

LUKE FAY
Artesian Partner
Melbourne

SUSAN OLIVER
Co-Founder
Melbourne

ANNETTE KIMMITT
Co-Founder
Melbourne

CAROL SCHWARTZ CATHERINE ROBSON
Co-FounderDirector
Melbourne
Melbourne

DIRECTORSKATE ROBINSON
Legal Counsel
SydneyKIRSTEN BERNHARDT
AnalystAdelaide

CHANNING CHEN
AnalystShanghai

DIANA TONG
AnalystShanghai

JEREMY COLLESS
Artesian Partner
Sydney

MEI LEE
Artesian Partner
Melbourne

ADAM PASCOE
Director
Sydney

VICKY PAPCHRISTO
Director
Melbourne

JENNY CHU
Group Accountant
Melbourne

TAM NGUYEN
Fund Admin
Melbourne

PENNY HEARD
Director
Melbourne

TEAM

OPERATIONSPANKAJ KHANNA
CFO
Melbourne

LYNDA COKER
Director
SydneyMARY CANSICIO
Financial Accountant
Melbourne

CATHERINE ROBSON LYNNE THORNTON
Scale Investors
Scale Investors
Melbourne
Melbourne

CHELSEA NEWELL
Co-CEO
Melbourne

SAMAR MCCEILEH
ROO HARRISLIBBY BRIGGS
Co-CEO
Investment Manager Education Program
Melbourne
Melbourne
Melbourne

Female-led startups suffer underinvestment not due to a lack of talent, but from the lack of opportunities causedby cognitive biases and pattern recognition in an industry where 95.2% of VCs are male. Artesian has recognised
the chance to invest in an opportunity hiding in plain sight – female led startups raising Series A and Series B
funding. Artesian relishes our role as first-movers and ecosystem builders and believe that you do not have tosacrifice market leading returns while delivering transformational change.”

Ali Clunies-Ross
Portfolio Manager

54

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Engagement, Outreach and Milestones

2021/22
ImpactTimeline

July 2021

August 2021

Partner, Vicky Lay, discusses green bonds, impact startups

Artesian’s Sydney Angels Sidecar Fund investment,

Portfolio Manager, Ali Cllunies-Ross,

and best practice impact reporting on the Good Future
Podcast.

Clarity Pharmaceuticals, lists with an initial market

included in KPMG’s “30 Voices on 2030:
The Future of Energy.”

cap. of $360M, making it the largest biotech IPO in

September 2021

the history of the ASX - a 9-year angel investment
journey and win for SDG#3!

Investor Education

Milestone

Partner, Gilles Planté, demystifies startup

Partner, Davidvaluations for healthtech/medtech angel
investors in collaboration with LaunchVIC.

Gallagher,
participates in the

October 2021

McCartney, discusses investing in theenvironmental and infrastructure

Survey in the first-

The Clean Energy Finance Corporation(CEFC), the $10bn investment arm of the

Sustainable

Australian Government, invests $25M in

Finance Magazine.

Sustainable Bond Fund.

Co-founding Partner, John

sectors at a COIN-hosted webinar.

2nd Annual ESG
ever edition of
KangaNews

Artesian’s Australian Green andIndustry Recognition

Industry Engagement

Investor Education

Investor Education

November 2021
Milestone

Portfolio Manager, Ali Clunies-Ross, speaks at the
Impact X Summit session “Shifting Capital - Bringing
new technologies to scale” and participates in Energy
Tech Hub’s webinar about the emerging investment
opportunities for investors as part of the energy

Launch of the $100m+ Female Leaders
VC Fund with community partner Scale
Investors, targeting Series A/B rounds offemale-led startups underrepresented in
VC portfolios in the Asia Pacific region.

transition.

Investor Education

Milestone55Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Engagement, Outreach and Milestones

2021/22
ImpactTimeline

February 2022

March 2022
Artesian signs up to the Beyond theBillion pledge campaign to invest in
more female-founded startups.

Partner, Vicky
Lay, speaks at
an ESG in VC
panel at the13th Women's
PrivateCapitalSummit in
New York.

Artesian welcomes
Kirsten Bernhardt to
its South Australia
office, expanding its
female investment
team.

Industry Engagement

Partner, Vicky Lay,participates as aspeaker/guest on:

Ananya Sinha to its
Sydney office as a1) UNCDF panel to about how VCs can
support female entrepreneurs;

2) The Sustainable Finance Podcast
about jumpstarting VC funding forfemale-led startups; and3) “Reaping What We Sow” ESG panelat the Asia Pacific Impact Investment
Summit.

Investor Education

Diversity, Equity, & Inclusion

Portfolio
Artesian welcomesrings the ASX

ESG event in Melbourne. Partner, John
McCartney, presents on:

analyst, expanding its

bell tocelebrate

June 2022

April 2022
Artesian hosts an Impact Investing andmarket open

Diversity, Equity, & Inclusion“The Future of
Investing: Positive
Impact as the third

International
Women's Day
2022.
Industry Engagement

May 2022

Launch ofAnalyst, Ananya

Artesian’s
ImpactSinha, moderates
City of Sydney

Investment

panel on Diversity

Series.

and Web3.

Investor Education

Investor Education

Manager, Ali
Clunies-Ross,

venture capital
female investment
team.

November 2021

Industry Engagement

dimension of investing.”
Investor Education

Artesian certified as a B Corporation.

Milestone

56

Overview

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Engagement, Outreach and Milestones

History ofCollaborations& Partnerships

Scale Investors
Scale Investors is Australia’s first and only network of angel investors committed to investing in and empowering exceptional women
entrepreneurs.
Artesian has partnered with Scale Investors on the Female Leaders VC Fund and a series of startup and female angel investor events.

UNCDF
The UN Capital Development Fund makes public and private finance work for the poor in the world's 46 least developed countries (LDCs).
Artesian launched an impact partnership with UNCDF to support gender-lens investing, boost female leaders in the corporate workplace, andsupport women’s economic empowerment in the world’s 47 Least Developed Countries (‘LDCs’).

Beyond The Billion
In 2018, Beyond the Billion began a pledge campaign for The Billion Dollar Fund for Women, aiming to address the gender gap in venture
investing. The goal was met in under 9 months and the campaign ended successfully in 2020. Since then, Beyond the Billion has launched asecond campaign that will run till 2023, supporting women-led innovation by directing capital towards funds for female-founded companies.
Artesian pledged its commitment to Beyond the Billion in March 2022, becoming the first Australian VC firm to do so.

SheSyndicate
SheSyndicate is a 501(c)3 non-profit organisation that aims to economically empower women and girls around the world through education,
research opportunities, mentorship and capital stewardship.
Artesian is the proud founding sponsor and supporter of SheSyndicate.org.

Equileap
Equileap research and rank over 3,500 public companies around the world using a unique and comprehensive Gender Equality ScorecardTM
across 19 criteria, including the gender balance of the workforce, senior management and board of directors, as well as the pay gap and policies
relating to parental leave and sexual harassment.
Artesian and Equileap are impact partners on the Women’s Economic Empowerment Bond Fund.

Grains Research & Development Corporation
The Grains Research and Development Corporation (GRDC) is one of the world’s leading grains research organisations, responsible for planning,
investing in and overseeing RD&E to deliver improvements in production, sustainability and profitability across the Australian grains industry.
Artesian has partnered with Grains Research and Development Corporation (GRDC) to establish the $50m GrainInnovate fund to boost
innovation in the grains industry.

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Overview

Engagement, Outreach and Milestones

History ofCollaborations& Partnerships

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Grain Corp
GrainCorp is a leading agribusiness and food-ingredients processor, proudly connecting with customers and rural communities to deliver value
through innovation and expertise.
Artesian has partnered with GrainCorp on their $30m Agtech VC fund investing in startups that help build a sustainable future for Australia.

Clean Energy Finance Corporation
The Clean Energy Finance Corporation (CEFC) is an Australian Government-owned Green Bank that was established to facilitate increased flows offinance into the clean energy sector.
Artesian and the CEFC established the Clean Energy Seed Fund which invests in scalable, high growth potential startups, encouraging innovationand creating opportunities in the development of clean technology. The CEFC are also an investor in the Artesian Green & Sustainable Bond Fund.

Future Super
Future Super is an Australian retail superannuation fund that offers superannuation services, focusing on zero fossil fuel investment and on
holistically ethical investment with an emphasis on clean energy projects.

At Artesian, we strive to be a force for change in
our investments. We seek to actively engage
and assist our portfolio companies in exploring
ways to align their business, strategy, andoperating policies with best practiceinternational standards and ESG frameworks.”

Future Super seeded the Artesian Green and Sustainable Bond Fund in September 2020, the fund invests in a diversified portfolio of green,sustainable and social bonds issued by companies and governments.

HostPlus
Hostplus is the industry superannuation fund with over 1.3 million members and $68bn in funds under management (30 June 2021).
Artesian launched its first Clean Energy Seed fund in 2016, with thought/market leaders such as CEFC, Australian Ethical, Future Super andHostplus as investors.

Mei LeePartner, Head ofOperations

In 2021, Hostplus seeded Artesian’s Female Leaders VC Fund with a $45m of cornerstone investment, alongside Legalsuper.

LegalsuperFounded in 1989, Legalsuper is the industry super fund dedicated to the legal community. With over 41,000 members, more than 10,000
employers and over $5bn funds under management.
In 2021, Legalsuper seeded Artesian’s Female Leaders VC Fund with a $45m of cornerstone investment, alongside Hostplus.

Brinc
Brinc is one of Asia’s most active accelerators platforms with 15+ programs, a portfolio of 150+ startups and a global network of co-investors
and corporate partners.
In 2019, Brinc and Artesian launched a Sydney-based accelerator to invest in and support clean energy and climate conscious startups inAustralia.

58

Overview

Artesian believes thata cross-asset classapproach to impact
investment, informed
by a deep
understanding of
cutting-edge
innovation andtechnology, createssuperior andsustainable strategic
and financial returns.

Our Approach

Impact Metrics and Highlights

Progress on Our Commitments

Disclaimers
CLAUSE A) This publication has been prepared by Artesian Capital Management (Delaware) LP (Artesian), to provide you with general information only. In
preparing this publication, we did not take into account any person’s specific investment objectives, financial situations or needs. It is not intended to takethe place of professional advice and you should not take action on specific issues in reliance on this information. Neither Artesian nor any of its relatedparties, associates or affiliates, including Artesian’s employees, general partners and directors, provide any warranty regarding accuracy or reliability inrespect of such information. To the extent permitted by law, Artesian disclaims all liability to any person relying on the information in respect of any loss ordamage (including consequential loss or damage) however caused, which may be suffered or arise directly or indirectly in respect of such information. Past
performance should not be taken as an indicator of future performance. You should obtain a copy of the relevant product disclosure statement before
making a decision about whether to invest in any Artesian product. Copies of the product disclosure statements can be obtained by visitingwww.artesianinvest.com.

CLAUSE B) Equity Trustees Limited (Equity Trustees) ABN 46 004 031 298 AFSL 240975, is the responsible entity for the Artesian Green & Sustainable
Bond Fund (Fund). Equity Trustees is a subsidiary of EQT Holdings Limited ABN 22 607 797 615, a publicly listed company on the Australian Securities
Exchange (ASX: EQT). This publication has been prepared by Artesian Corporate Bond Pty Ltd ACN 618 342 895 (Artesian), the investment manager for
the Fund and an authorised representative of Artesian Venture Partners Pty Ltd ABN 58 112 089 488 AFSL 284492 (Artesian VP), to provide you withgeneral information only. In preparing this publication, we did not take into account the investment objectives, financial situation or particular needs of any
particular person. It is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information.
Neither Artesian, Artesian VP, Equity Trustees nor any of their related parties, their employees or directors, provide any warranty of accuracy or reliability
in relation to such information or accept any liability to any person who relies on it. Past performance should not be taken as an indicator of future
performance. You should obtain a copy of the Product Disclosure Statement before making a decision about whether to invest in this product. Copies ofthe product disclosure statement can be obtained by visiting www.eqt.com.au/insto or request a copy by emailing Artesian atgreenbondoperations@artesianinvest.com, visiting www.artesianinvest.com or calling +61 3 9028 7392.

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