1. strategy

1.1 Strategic analysis and measures

Responsible investments are an essential part of naturAlly AG's strategic positioning and approach. For more than 15 years, we have been developing as a fund promoter to implement, launch and promote approved responsible financial products on behalf of institutional investors and other financial market participants. The founders have been involved in responsible investment since the 1980s. naturAlly AG's areas of expertise and strategy include the creation of responsible funds, both private and institutional, the responsible optimisation of existing portfolios, and the integration of investments into a responsible insurance policy. Thus, naturAlly AG's sustainability strategy is automatically integrated into an overarching corporate strategy. The current strategy is constantly being further developed in order to ensure that naturAlly AG's activities will continue to be conducted in a responsible manner in the future.

1.2 Materiality

Climate and ecological changes do not stop at the financial sector. The need to anchor the idea of sustainability more deeply in society is becoming ever greater. The European Union has therefore made a commitment under the Paris Climate Agreement to reduce CO2 emissions by 40 percent by 2030 compared to 1990. More and more banks, asset managers and insurance companies are trying to embrace the trend and offer "green" financial products. This trend carries the risk of "green washing" or, in the investment sector, "impact washing", which can lead to society being deceived and less than desired change taking place. naturAlly AG looks at key transformation issues in the industry from a holistic perspective and is guided in this by scientific "papers" and studies from nationally and internationally recognised quality assurance companies as well as sustainability seals from nationally or internationally respected forums. naturAlly has made it its business to operate orientation, investments and activities from an economic point of view (e.g. profits that accrue on the basis of long-term production and investment strategies and not through corruption), from a socio-ecological point of view (e.g. recycling and reuse of used materials and substances) and from a political point of view (profit-making must be compatible with the development of human, social and cultural capital).

1.3 Goals

As already described, the overarching goals and their achievement within the framework of our existing and further developed sustainability strategy are to be strongly oriented towards the principles of national and international seals and forums. All processes at naturAlly AG will be geared towards aligning all products with those investments that have a positive impact on society. In the case of products to be promoted, the main focus will always be on the combination of achieving an appropriate return through capital growth while observing ethical, ecological and social principles and taking into account internationally recognised standards of good and responsible corporate governance. Care should always be taken to ensure that a pronounced environmental friendliness or adherence to basic ethical and moral principles is clearly recognisable. There will always be situations in which it is particularly difficult to implement and weigh up criteria in product development (e.g. mining companies with raw materials or precious metals that are necessary for the digital transformation). A delicate touch is an important factor in weighing up all the circumstances. At the moment, the achievement of internal transformation goals is controlled by the management. With further projects arising in the future, a "transformation department" will be created here, a firmly defined area of responsibility for initially 1-2 employees of naturAlly AG. This will ensure that transformation goals continue to be pursued and achieved in a goal-oriented manner in order to make the right decisions on an ongoing basis.

1.4 Depth of the value chain

The value chain of naturAlly AG begins with product development and continues through all the following steps, such as qualified sales measures, individual consultation and information, transparent support and ongoing product management. In addition, there are processes such as purchasing (hardware, software, stationery, paper, etc.) or company and personnel organisation (contracts & remuneration). In product development, product management, sales and company organisation, there is sometimes cooperation with external partners. With these, there is a risk of non-sustainable services and products. However, this risk is greatly reduced or eliminated through various security systems that are integrated into cooperation or licensing agreements. The goal is also to set new transformation standards in end-customer advisory services and in sales implementation, as well as to develop guidelines that ensure transparent, fair and responsible advice from external advisors. In this way, the end customer will only be offered products that correspond to his personal profile (risk and sustainability) and at the same time focus on the goals of the Paris Agreement mentioned above.

2. process management

2.1 Responsibility

The central responsibility for sustainability issues lies with the management. As already described, this area of responsibility is taken over by internally defined employees, who control and analyse it and, in close cooperation with the management, make possible adjustments to existing strategies or develop new strategies. In order to obtain meaningful information and to facilitate the research work of the staff, cooperation with various research agencies, which are exclusively oriented towards the goals of the UN described above, is being considered.

2.2 Rules and processes

At naturAlly AG, the corporate or transformation strategy is controlled, among other things, by independent research on the relevant markets and industries, politics, funds, shares and companies. As described above, further data from various research agencies is also used. In the event of changes due to, for example, misconduct by a company such as corruption, immediate action can be taken. In the case of naturAlly AG sales cooperations, new transformation guidelines and goals are firmly agreed.

2.3 Control

Monitoring systems are installed for all products developed and/or promoted. For example, funds that are to be promoted or integrated into products are analysed by means of ratings from 5 ESG rating agencies as follows: In order to be rated, the rating must have been carried out in at least 2 rating companies. All ratings are weighted equally, so that the total number of ratings (2-5) is divided by the number of ratings, resulting in a score between 0 and 100. Only funds that achieve a rating of 67% receive Prime ESG status and are therefore eligible for investment. This is followed by the performance rating. Here, a 50% rating results from the performance of a fund over the periods of 3 months, 6 months and 12 months, and at 50% from the risk-adjusted ratings of at least 2 globally recognised rating agencies. So that the performance evaluation at 50% consists of short-term developments and at 50% of medium to long-term risk-adjusted ratings. This means that the target products must be both successful in current periods and historically among the most successful. So that the result of this integrated analysis leads to an overall rating (responsibility plus performance) of the fund. This process is carried out on a monthly basis. At the time of writing, the fund industry is undergoing a process of change brought about by the EU Disclosure Regulation, in which potentially significant new market and quality standards are developing. naturAlly reserves the right to adapt the above criteria to changing situations at any time. An ongoing dialogue will be established with funds or other responsible parties of a target investment to improve material and relevant issues related to the ESG performance of funds or companies and their business results. The engagement strategy aims to engage in meaningful dialogue with funds and companies with the goal of maximising positive change and creating long-term value for all, including society as a whole. Here, too, naturAlly AG can draw on the expertise of external service providers.

2.4 Incentive systems

Sustainability goals are integrated into the remuneration system to the extent that all naturAlly AG remuneration results from the work of developing and promoting responsibility-conscious projects and products. The growing success of our company increases the (positive) impact on society. Growing success of the company leads to growing sustainable income. In this respect, the remuneration system of naturAlly AG is completely linked to transformation goals at all times. Furthermore, not only purely monetary incentives are created in the sales process by filtering out investments without ESG relevance. Clear transformation goals for the cooperation partners are also included in cooperation or licensing agreements. These are reviewed and adjusted annually by the transformation department and the managers and must be adhered to. Thus, common goals are defined and communicated by the management together with the respective managers of the future departments and the transformation department. Furthermore, each partner should become part of the project and be given the opportunity to achieve individual and annually redefined transformation goals.

2.5 Stakeholder participation

Currently, naturAlly provides information on current changes in the investment universe via newsletters and up-to-date reports on naturAlly AG websites. Furthermore, partners are informed about the development of the company's contribution to responsible development in monthly internal newsletters and meetings. Other stakeholders are also kept informed on an ongoing basis; for example, every participant in the value chain must be informed in the event of portfolio changes. There is a constant, targeted exchange with a focus on sustainability.

2.6 Innovation and product management

Things turn out differently than you think. We know from experience that everything can change. Only companies that face up to the changes or even participate in them will be able to survive in the long term. naturAlly is in a constant process of change that will lead to continual adjustments. For example, we are working on a newly planned naturAlly AG product in which an unprecedented responsible product for financial services will be created from various existing products. We will do everything in our power to contribute to the achievement of the 17 Sustainable Development Goals and the Paris Agreement on climate protection. The entire innovation and product management of naturAlly AG has the task of promoting and supporting responsible development in the field of naturAlly AG and in society.

3. environment

3.1 Use of natural resources

At the moment, all employees of the company are in home offices. No extra office space is currently being used or is empty. This should also be the company's goal in the future, in order to continue to waste unused space, rent, energy, land and also water. If the company expands in the future, it will work in co-working spaces in addition to its permanent headquarters. This is to help achieve the transformation goals set by the transformation department operating in the future. Expenses will only be reimbursed to the extent of public transport. Similarly, an internal sharing model for e-carts will be created in the future so that they can be used most efficiently and sustainably should the need arise. The digitalisation of distribution, the relocation to digital spaces and worlds will help to reduce the use of natural resources and thus the ecological footprint of each individual.

3.2 Resource management

Approaches to resource management can be found in the preceding and following lines. We are a small company that has set itself the goal of sustainable growth with a sense of responsibility. Every cooperation partner who is led to the topic of transformation through cooperation with us and who changes his or her actions and activities brings about a positive change. On the other hand, growth usually means more resources. In the next few years, it will be possible to make more precise, predictable statements in this area. As described, targets for cooperation should be set. For example, targets to keep emissions as low as possible. Further targets can be defined for paper and energy.

3.3 Climate-relevant emissions

naturAlly AG is part of the Green Web Foundation. A large part of the cooperations, partnerships and communication runs via a host that is powered by green electricity. Since 2022, the energy supply at the company location and at the co-working spaces has run via green electricity providers. At the moment, further emissions only occur in the context of the necessary travel activities and the procurement of work equipment. The procurement of work equipment is such a small requirement and the travel activities are mainly carried out by public transport and train, as described above, that a special collection of data in this regard is not considered meaningful. Should the size of the company and the number of employees increase, this data will be recorded as a matter of course and further goals defined.

4. society

4.1 Workers' rights

Employee rights have a high priority at naturAlly AG. Variable remuneration is structured responsibly. Bonuses, for example, are based on a period of several years. In addition, there is a model of target optimisation for employees, which is linked to a rate of increase. The linkage to the target rate reflects success in terms of a sense of responsibility. Furthermore, naturAlly AG allows its employees to have a large say and to be involved in defining the company's goals. Employees receive more holiday than required by law, and the introduction of more part-time contracts with fair pay is being considered. This should give employees the opportunity to, for example, have more free time or to concentrate on their own work for half of the week in order to receive the greatest possible input from the employees in the half week. The sustainability team that will be established in the future will consist of a representative from the management, a representative from each of the Co-Working Spaces locations and the environmental management officer. Suggestions for measures or concerns can be made directly to the transformation team or also to the management and will be included in the future.

4.2 Equal opportunities

Currently, naturAlly AG consists of three employees and is committed to the principles of the Diversity Charter. In the future, all employees should be offered the same opportunities in recruitment, their further development and their remuneration. Furthermore, naturAlly AG does not tolerate discrimination. There are equal opportunities for all employees at all locations and all have the right to a standard of living sufficient to protect and maintain their own health and well-being and that of their family for naturAlly AG. There is a company-supported pension scheme.

4.3 Qualification

For naturAlly AG, it is becoming increasingly important to focus on internal opportunities for training and further education and dealing with an ageing workforce. At the moment, young employees are being acquired to be developed into suitable skilled workers, specifically for the company's needs. Interesting further training opportunities are openly discussed and will be offered in the future if the number of employees increases. These interesting further training opportunities for young and old should help to position the company as an attractive employer and at the same time ensure that employees can contribute to the company in the best possible way throughout. naturAlly AG has always paid attention to combining the different professional and social skills of young and older employees.

4.4 Human rights

Due to technological development, ageing, increasing inequality, migration and also the shortage of skilled workers, the active integration of all people is under considerable pressure. All naturAlly projects, contribute to the participation of all people in society and to equality and inclusion. All naturAlly projects offer education, access to media and information as well as access to financial services or take on a role model function in promoting social inclusion and equality.

4.5 Community

naturAlly AG focuses on projects that offer an alternative to fossil fuel-based resources, such as renewable energies that produce bio-based materials as an alternative to finite resources, or that contribute to a more efficient water infrastructure and the responsible use of water. The particularly difficult topic of mines & metals is also not left out of the selection. Technical development, digitalisation also cause the extraction of e.g. metals in mining. There are extreme distortions there, which can bring many negative accompanying circumstances. So there is also the search for investments, also there companies that have set out to make this particularly pre-polluted sector better for everyone through targeted changes. naturAlly AG specifically selects projects or investments in which processes are organised according to the principles of the circular economy. The reuse of materials, products and product parts, the reduction of the use of (finite) resources and the recycling of materials are the most important ways to contribute to a functional circular economy. Furthermore, through the promoted products, investment is made in solutions for health issues such as medical technology. This is because, as described in human rights, all people worldwide have the right to a standard of living sufficient to maintain the health and well-being of themselves and their families. In addition, naturAlly AG selects projects or investments that support or promote agricultural systems that conserve soil, water systems, nature and biodiversity. The focus is also on sustainable food products and the promotion of healthy nutrition, as well as the conservation of limited food resources such as fish. So natural and organic food, vegetarian or vegan food, sustainable fishing, nutritious and healthy food. This can include producers, processors, distributors, retailers and other activities to promote food that is healthy for people and the environment. Sustainable solutions to mobility and infrastructure challenges such as urban mobility, sustainable buildings and electric vehicles are also sought. Education, access to media and information, and access to financial services are another pillar. Those who act as role models in promoting social inclusion and equality can also qualify for investment.

4.6 Political influence

naturAlly AG is not politically active. Nevertheless, the business activities of the AG are influenced by a large number of legal framework conditions and guidelines as well as legislation in economic, commercial and corporate law. Furthermore, in politics and society, attention to the topic of sustainable investments has increased more and more in recent years.

4.7 Conduct in compliance with the law and directives

The management bears the overall and ultimate responsibility for compliance with legal requirements. Ethical values, fairness and compliance take a high priority at naturAlly AG, as described in the report. Especially with regard to the financial sector, compliance with applicable rules and laws is important. Violations can have serious consequences under financial or even criminal law, which is why compliance with applicable rules and laws is so important.