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Dear stakeholders and partners,

The past three years have been marked by a myriad of challenges and opportunities that are reshaping the landscape of our global economy and society. As we publish Yaletown Partners’ Annual Responsible Investing Report for 2022, we reflect on the profound transformations we’ve witnessed and the role responsible investing plays in addressing these monumental challenges.

The COVID-19 pandemic disrupted established norms, forcing us to reevaluate notions of essential work, caregiving, and the evolving power dynamics between employers and employees. Economic recessions further complicated this landscape. Simultaneously, 2020’s awakening to racial injustices heightened our awareness of inequality, yet systemic discrimination remains entrenched. Canada, in particular, grappled with its history of residential schools for Indigenous children, emphasizing the urgency of action on Truth and Reconciliation. Climate change, with its erratic weather patterns, extreme events and resultant enormous impact on societies around the globe, demanded our attention, while efforts to reduce Russia’s influence in Europe accelerated a shift away from fossil fuels and bolstered climate tech innovation. Commitments to reduce greenhouse gas emissions became mainstream, backed by regulatory changes worldwide.

In this dynamic environment, Yaletown’s investment focus on the Intelligent Industry has proven exceptionally timely. Digitalization, AI/ML, and smart data application are essential for the global energy transition, aligning with the Paris Agreement’s goal of limiting global temperature increases to 1.5 degrees Celsius. Global energy-related CO2 emissions reached new highs in 2022, underscoring the urgency of transitioning away from fossil fuels. Our portfolio companies, like GoBolt, are actively contributing to sustainability with commitments to carbon negativity and initiatives like sustainable packaging and efficient delivery routes. Group14’s innovative lithium-silicon batteries are propelling electric vehicles towards cost parity with combustion engines. Climate.ai’s predictive climate risk analysis platform empowers businesses to make informed decisions in the face of weather-related challenges, making supply chains more climate resilient.

Responsible investing remains integral to addressing these global challenges. At Yaletown, we integrate equity, diversity, and inclusion (EDI) best practices with the careful management of environmental, social, and governance (ESG) risks and opportunities. Our ESG strategy has evolved and deepened over the years, now incorporating annual carbon footprint assessments and integrated ESG elements into investor rights agreements with portfolio companies. In 2022, we introduced tailor-made dashboards to track our companies’ progress on ESG and EDI, offering insight and facilitating strategic planning.

As a responsible investor, we recognize that being a responsible company is paramount. We are committed to fostering an inclusive work environment where differences are valued, and everyone can thrive. Our 2022 initiatives included updating our employee handbook to prioritize EDI, formalizing a commitment to Truth and Reconciliation, and measuring inclusiveness through employee surveys. We are proud that all new hires in the past year have been women, and we continue to diversify our talent pipeline through partnerships like the CVCA diversity internship and Musqueam First Nations learnership program.

In our commitment to transparency, this report provides a comprehensive view of our approach to ESG and EDI, both in our operations and portfolio. We share our roadmap for these matters, along with our recent efforts, lessons learned, and goals. As we navigate an ever-evolving world, we look forward to sustaining our momentum in 2023.

Yours Truly,

Sophie Gupta                                                 Salil Munjal, ICD.D
Principal &                                                     Managing Partner
Head of Responsible Investing

To obtain a copy of Yaletown Partners’ Annual Responsible Investing Report 2022 please send your request by email to responsible.investing@yaletown.com