Sustainable Investment Policy
Established on August 31, 2021
Last revised on July 23, 2024
1. Basic Concepts
Our investment management division provides discretionary investment services foralternative investment products based on investment management contracts withinstitutional investors or investment funds, and investment advisory services for funds. The
former includes gatekeeper services whereby we construct portfolios within the mandated
amount predetermined in the contract with the client.
Concept of Fiduciary Duty
It is our fiduciary duty to support long-term asset-building for our clients so that they canachieve financial returns. From a long-term perspective, we believe that environmental,social, and governance ("ESG") factors can have a significant impact on performance, andthat investments considering these factors contribute to the benefit of investors.
Therefore, our investment activities are based on the following concept:
Pursuing economic investment performance and addressing ESG are not incompatible
in the long term, and portfolios that have properly incorporated ESG criteria outperform
those that have not over the long term.
Furthermore, in the discretionary investment management agreement with the client (andthe investment guidelines, if any), if the investment objective and policy are set to generate
positive environmental and social impact alongside a financial return, our criteria in selecting
the external investment manager will include not only their ESG evaluation but also theintentionality of their impact investments and impact measurements. Figure 1 represents
the stance our company may take.

Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)Member of Japan Securities Dealers Association and Japan Investment Advisers Association

[Figure 1]

Concept of Responsible Investment
We became a signatory to the United Nations Principles for Responsible Investment (PRI)in April 2022 to express our support for the Principles that encourage us to pursue
investment returns on behalf of beneficiaries by considering ESG factors within the scope offiduciary duty and to work towards the construction of a sustainable financial system inpartnership with various players.
In recent years, global initiatives led by PRI and others have been accelerating, such as thedevelopment of unified standards for ESG information disclosure and investment guidance.
We believe we have a duty to actively reflect these evolving standards in our investment
policies and actions, and to contribute to developing a sustainable society and preserving
the environment through the investment chain.
2. ESG Integration in the Investment Process
As a principle, our investment management division implements ESG integration in allinvestments according to the following policy. While this doesnʼt apply to investment
advisory services that do not require investment decision-making, investment advice
Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Associationconsidering ESG factors is provided as necessary.
Since we invest in funds managed by external investment managers, we are not in aposition to directly evaluate the ESG risks/opportunities of the underlying companies inwhich the funds invest or to engage with these companies. Therefore, the focus of ourESG integration is on evaluation of the managers of the funds we invest in. Moreover,the majority of our investments are made through collective investment schemes inwhich we participate alongside external investors. Accordingly, our ESG analysis forthese funds depends heavily on the quality and quantity of available information.
i.

Screening
Our due diligence starts with negative screening. Specifically, we collect ESG-related
information from RepRisk and other external sources to conduct screening inaccordance with the 10 principles of the United Nations Global Compact. If a significant
past event related to ESG is identified, we ask the investment manager to explain how
the event occurred and developed as well as the measures taken to prevent its
recurrence. If a satisfactory explanation is not provided, the fund will be excluded from
our investment universe. Furthermore, if there are any precedent funds in the sameseries or if we have access to the list of underlying companies to which the fund has
already started investment, we will check if there were any ESG-related events in thepast with the underlying investments to the extent practically possible.

ii.

ESG Due Diligence
We conduct ESG evaluations by combining responsible investment policies obtained
from investment managers, other guidelines, fund documents, DDQs, and otherexternal data. For such evaluations, an ESG scale is applied to assign scores from 1 to
4 (1=Poor, 2=Compliant, 3=Good, 4=Outstanding). Funds that are weeded out in thenegative screening are given a score of 1 and excluded from our investment universe.
The ESG score, combined with written comments and specific notes by the evaluator,
is considered in the comprehensive evaluation for investment decision-making.
Items scored are broadly divided into three categories: (1) items related to externalevaluations, (2) items related to the investment manager, and (3) items related to thefund.
1. Items related to external evaluations
We check whether the fund is evaluated by any external organizations such as
Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association

RepRisk, PRI and GRESB, and if so, we look into the results.
2. Items related to the investment manager
At the level of the investment manager, we check for the existence or absence of a
responsible investment policy, an organizational structure including employee
education and deployment of experts, management of environmental and social
risks including climate change and human rights risks, participation in external
initiatives, and the system and frequency of reporting to investors. In particular, themain focus is on how committed the investment managerʼs senior management
team is to ESG and how ESG integration is incorporated into the organization's
investment philosophy and process.
3. Items related to the fundWe check whether the fund implements ESG integration/whether the ESG
integration is explicitly stated in the fund documents/prospectus, whether it
engages with investee companies, whether it identifies sustainability outcomes, andwhether it can provide GHG emissions data, etc. However, in the stewardship
activities of funds investing in real assets or renewable energy projects through SPCs,
the evaluation focuses on engagement with a variety of stakeholders, which isdifferent from the evaluation of funds investing in unlisted companies.
Furthermore, prior to the investment decision for the candidate fund, the Investment
Management Department reports on the ESG scoring results at the Investment
Committee held in advance. The Head of the Corporate Sustainability Office (CSO)
reviews the ESG scoring results in advance, and may require additional investigations
as necessary. Ultimately, if the Head of the CSO determines that the investment does
not meet the requirements from an ESG perspective, the veto will be exercised at theInvestment Committee.
Additionally, at the final stage of due diligence, we seek to incorporate importantmatters not encompassed in the main contract into a supplementary agreement(including side letters, if any). If a client sets guidelines on responsible investment orstewardship, we confirm the investment managerʼs intention to comply with them.
iii.

Monitoring
We conduct an annual ESG review for all existing fund investments using an ESG scoringtable. In the review process, we collect case studies of the stewardship activities of theMitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association

investment manager (including escalation cases). In addition to a regular assessment,
if significant ESG risks are identified during the period, an ESG review is also conducted
for the related funds.
For funds whose scores were lowered upon review, we will seek to conduct more
frequent and detailed monitoring and solve the problem by urging the investment
manager to implement improvements. If it is determined that the problem cannot beresolved, changes in the allocation to, or redemption of, the fund will be discussed forredeemable funds. At the same time, we will promptly report the situation andmeasures to be taken to investors.
Also, the results of the annual regular review are reported to the Risk Management
Committee, and a summary and special notes are reported further to the Board ofDirectors.
3. Stewardship Policy
We believe that an ultimate investee company building good relationships with stakeholders
and focusing on both financial and non-financial factors will generate more corporate value
over the medium- to long-term, and consequently, enhance investor returns. We recognizethat the core of our stewardship responsibility is to identify and invest in funds managed byinvestment managers who share such a philosophy.
Although we invest in funds seeking various strategies managed by external investment
managers, the details and method of stewardship activities required of managers varydepending on the investment strategy, investment assets and ownership, among others.
Therefore, by focusing on the following points and verifying the policies and performance ofthe managers, we check whether managers are taking approaches that are suitableaccording to the characteristics of the fund. After investing in the fund, we request regular
reporting from the manager where possible, and discuss necessary approaches with themanager as well.
i.

Engagement with ultimate investee companies and stakeholders (including escalationpolicy)ii.

Collaborative Engagementiii.

Policy Engagement
Furthermore, when checking the stewardship activities of external investment managers,
we refer to the “Environmental and Social Risk Heat Map for Business,” which is an analytical

Mitsui & Co. Alternative Investments LimitedRegistered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association

report formulated by our parent company, Mitsui & Co., Ltd., to understand the potential
risks that should be addressed as priority for the main investment sectors of the fund, andfocus on assessing how well these risks are managed.
As an activity that we conduct directly, we recognize it as our duty to fully understand ourclientsʼ interpretation of stewardship responsibilities as institutional investors in ourcommunications with them, to convey the information to external investment managers,
and to provide appropriate feedback to the clients. Furthermore, through participation invarious industry initiatives, exchanges of opinions in workshops, and support for policy
recommendations issued by industry associations, etc., we strive to collaborate withstakeholders as much as possible toward the resolution of systematic ESG issues.
4. Governance Framework for Sustainable Investments
The Investment Management Department integrates the ESG perspective into theinvestment process. In the Investment Committee, ESG evaluation results for investment
candidate funds are reported to the Head of the CSO, who then determines their suitability
from an ESG perspective and checks the management status of ESG risks for existing fundinvestments via the Risk Management Committee. The Board of Directors, as the supreme
supervisory body, receives reports on important matters from the Investment Committee
and the Risk Management Committee and provides advice on the required responses.
Furthermore, it decides on important matters such as revisions to the Sustainable
Investment Policy and joining new industry initiatives.
In addition, ESG regular meetings comprised of the management team, full-time directors,
the Head of the Legal and Compliance, and members of the Corporate Sustainability Office
are held twice a month, in principle. The management team receives proposals and reports
from the Corporate Sustainability Office, discusses important matters such as our basic
policies in response to the environment in a timely manner, and supervises the progress,providing advice as necessary.

Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association

[Figure 2]

5. Impact Investment
Our company invests in impact investment funds managed by external investment
managers only when it is clearly stated in the discretionary investment managementagreement (and the investment guidelines, if any) with the client that, in addition toachieving financial returns, the client aims to address environmental and social issues.
Although interest in impact investing has been growing rapidly in recent years, themethodologies and definitions for measuring and managing impact vary by investment
manager, and no clear evaluation criteria has been established as of yet. Our company
strives to build up reliable knowledge by participating in initiatives that bring together
experts and leading financial institutions in impact investing, always keeping abreast of thelatest industry trends.
6. Reporting
In reporting investment performance, we provide information and data on the status ofinvestments, investment activities of the investment managers and their outcomes, andinvestment outlook, in order to assist clients in monitoring how their investments areperforming. This includes reporting on the progress of ESG initiatives for the funds in their

Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association

portfolios through both regular and irregular reporting.
Furthermore, we also seek to disclose our own initiatives through the Sustainable
Investment Policy, PRI public transparency reports and our website, among others.
7. Company-level Sustainability Initiatives
We believe it is important for our employees to be correctly informed about environmentaland social issues that are occurring or could occur around us or anywhere in the world, sothat they can consider the impact of their activities on the environment and society in theirbusiness and private lives. As a company, in creating additional value through our business,
we have identified several priority issues as materiality (for more on materiality, click here)
and seek to enhance employees' awareness and knowledge of various ESG issues throughtraining and awareness-raising events.
8. Policy RevisionThis policy may be reviewed and revised as appropriate in response to changes in ourbusiness activities and the environment, subject to resolution by the Board of Directors.
In the July 2024 revision, the title of this policy was changed from “ESG Investment Policy”
to “Sustainable Investment Policy.”

Mitsui & Co. Alternative Investments Limited
Registered Financial Instruments Business Operator with Kanto Local Financial Bureau (Registration No.88)
Member of Japan Securities Dealers Association and Japan Investment Advisers Association