2025 Sustainability Report

Transcript

1. 2024~2025 SUSTAINABILITY REPORT January 2026
2. TABLE OF CONTENTS - Foreword - MPower family - Our ESG highlights - Research highlights - Portfolio ESG perspectives
3. Forward We are proud to report on the progress our portfolio companies are making toward sustainable growth through integrating environmental, social and governance factors in their businesses. We are excited to share with you MPower’s Sustainability Report for 2024~2025. During this time, we accelerated our growth with investments in 9 new companies for our fund. Since our founding 4 years ago as Japan’s first ESG-integrated VC fund, we have grown by investing in global-minded entrepreneurs providing tech-enabled solutions to societal challenges. Kathy Matsui Miwa Seki Yumiko Murakami
4. ESG at MPower
5. Our ESG Charter Long before ESG investing became mainstream in financial markets, the founding general partners of MPower have championed non-financial factors, such as diversity and governance, in economic and financial analysis. We believe that the thoughtful consideration and integration of Environmental, Social and Governance (ESG) factors into companies, including startups, provide them with a core lever for long-term value creation. With the launch of MPower Partners, we are committed to integrating the highest standards of ESG in all aspects of our own fund operations in order to achieve our mission of empowering bold, globally-minded entrepreneurs providing tech-enabled solutions to societal challenges; helping innovative companies drive sustainable growth through ESG integration; and revolutionizing Japan’s venture ecosystem via greater globalization, diversity and innovation. Through our activities, we will promote ESG-integrated investing in the venture capital industry.
6. Our Goals The following are our materialities and goals to achieve the MPower Partners mission ENVIRONMENTAL ❖ Resource management in our own operations – be as efficient as possible in our use of resources ❖ Greenhouse gas emissions – measure, reduce, and offset our carbon emissions ❖ Diversity, equity and inclusion – promote a startup ecosystem, which includes our own workplace, that is diverse, equitable and inclusive ❖ Knowledge, awareness and development – enable learning and betterment for our employees, as well as the broader public, on ESG topics ❖ Health, safety and wellness – ensure health, safety and wellness of our employees SOCIAL GOVERNANCE ❖ Ethical conduct – uphold the highest level of ethical conduct for all of our activities ❖ Accountable leadership – ensure the highest standards of governance in our fund management and operations ❖ Transparency and reporting – provide transparency in our policies and activities, especially to our employees and investors ❖ Data privacy and security – comply and stay up-to-date with all data-related best practices and regulations
7. Our Investment Approach In deal sourcing, we identify investment opportunities that promote tech-enabled sustainable living, while excluding sectors that we believe stand in contrast to ESG (e.g., tobacco, gambling, fossil fuels) as well as businesses with known, repeated, or unresolved human rights violations. We look for an ESG-aligned mindset within leadership teams. We enable access for diverse founding teams. In due diligence, alongside our fundamental assessment of a business, we also conduct a high-level ESG evaluation, in order to understand where environmental, social (including human rights), and governance-related risks may lie and how we can help add value in the company’s ESG integration process. In order to ensure that the founders are committed to their ESG agenda, we request them to sign an ESG Memorandum Of Understanding prior to our investment. Post-investment, we provide hands-on support for each of our portfolio companies to determine the most material ESG factors for their businesses, and based on these, we help them create an ESG roadmap, including specific KPIs. We then maintain a continuous dialogue with each company regarding their roadmaps and closely monitor their progress. Furthermore, ESG principles are embedded in MPower Partners’ own operations. Since 2021, we have been a signatory of the United Nations Principles for Responsible Investment (UNPRI). ESG is core to our investment thesis, and we integrate ESG principles in every stage of our investment process
8. ESG Integration at MPower ESG is integrated in each stage of our investment process PRE INVESTMENT POST INVESTMENT INVESTMENT ESG “exclusion” sectors ESG interview responses ESG MOU signing ESG Lead determination Materiality determination Action steps determination Measurement setting Roadmap implementation and regular review MPower ESG Value-add ESG “101” basic education Provide a roadmap template & suggested timeline Startup ESG Playbook ESG Lead community Study sessions with ESG experts Monthly 1x1 ESG meetings
9. MPower Family
10. Our Team Lisa Shalett OPERATING PARTNER Industry Experts Miwa Seki GENERAL PARTNER Kathy Matsui GENERAL PARTNER Yumiko Murakami GENERAL PARTNER Masatoshi Fukasawa PARTNER Ye Xia PRINCIPAL Chio Ishikawa ASSOCIATE Chika Watanabe OFFICE MANAGER Katherine Davidson OPERATING PARTNER Yuuki Umeda FUND OPERATION Chi Guillemette LEGAL & COMPLIANCE Kirara Tsutsui ASSOCIATE Kazuhiro Hosaka ASSOCIATE Paul N. Matsui HEALTHCARE Kanoko Oishi HEALTHCARE Simeon Bochev AI Mihoko Manabe SUSTAINABILITY Yukiko Takahashi HEAD OF OPERATIONS
11. Our Portfolio Sukedachi MeetsMore Nihon Cyber Defence
12. ESG HIGHLIGHTS Our Operations
13. Events We hosted and participated in over 100 speaking engagements at diverse conferences to foster dialogue on topics important to VCs and startups Publications We issued thought pieces on topics such as AI, healthcare and climate policy 2024 Techcracker Lab startup event With Dr. Jennifer Doudner, Nobel laureate biochemist 2024 AI/DATA event 2025 Global Startup EXPO 2025 with METI 2025 Investment theme panel for LPs Highlights 2024-25
14. Diversity - Our Numbers ”Other minority” defined as non-Japanese for Japanese companies, ethnically diverse for non-Japanese companies Our diverse team assesses an increasingly diverse pipeline of investment opportunities, resulting in a diverse, growing portfolio Diverse investments % pipeline Diverse founder companies % value nvested Of our 17 Japanese portfolio companies
15. Our Engagements STARTUP ECOSYSTEM The Japan Venture Capital Association is a group of more than 200 VC and CVCs. Kathy Matsui serves as a director and chair of the DE&I Committee Tokyo Women in VC is a community dedicated to foster collaboration and support women in venture capital and startup investment. We are active individual members, and Kathy Matsui serves as advisor DiversityVC is a non-profit that offers an assessment and certification process that measures a fund's internal and external DEl policies and programs. We obtained a Level 2 certification, the highest level awarded. We are also proud to be Diversity VC's first certified fund in Asia The Environment and Energy Innovation Community was launched by CIC Tokyo and U3 Innovations with the aim of promoting innovation in the environment and energy field. Yumiko Murakami serves as advisor POLICYMAKING Yumiko Murakami served on the Prime Minister's panel on "the New Form of Capitalism" MPower supported the Ministry of Economy, Trade and Industry's Global Startup EXPO 2025 at the Osaka Expo MPower has been a signatory of the United Nations Principles for Responsible Investment since 2021. We completed our second reporting cycle on our responsible investment activities Tokyo Metropolitan Government Kathy Matsui serves as a Global Advisor Our engagements with organizations in the broad startup ecosystem and policymakers help us amplify our influence, particularly with regard to our materialities around DEI and knowledge. Here are some of our involvements.
16. RESEARCH HIGHLIGHTS
17. Startup Report 2025: Issues and solutions for female founders in Japan This report is the third annual study we have conducted with the Boston Consulting Group on the Japanese startup ecosystem. This year’s topic was female startup founders in Japan. We conducted a quantitative assessment based on an online survey of 46 domestic startups, 9 interviews with founders of Japanese startups, and analysis of Japanese and overseas data and research. The report comprises two sections. The first examines the state of female founders in Japan, the issues they face by growth phase, and gender-related differences. The second section offers solutions to the issues raised in the first section, recommends a successful mindset for female founders, and proposes actions that key stakeholders (founders, investors, the government) should take to maximize the potential of female entrepreneurs and to achieve sustainable growth for startups in Japan.
18. Sustainability Survey 2025 This survey is the third edition of our annual startup ESG report to monitor the progress of our portfolio companies in their ESG integration and DEI initiatives, as well as to gauge the current state of ESG efforts within the Japanese startup ecosystem. This year, we surveyed the 17 domestic companies in our Fund I for which we have established a track record. Our quantitative assessment shows that their initiatives to integrate ESG into their businesses remains on course, and responses are consistent with prior years. Our portfolio companies have benefited from MPower’s guidance. Ones that have been in our portfolio for a while have ESG and DEI programs that are well established part of their organizations. Newer ones are not as advanced, but are seeking guidance from investors like MPower to help implement their initiatives.
19. Highlights from the 2025 Sustainability Survey 6% 71% 23% Which of E, S, and G is the most critical to your business? The biggest bottleneck to engaging in ESG efforts 77% 88% Positive impact from ESG Top objective for engaging in ESG efforts and their impact on your business Improving employee satisfaction, retention and recruitment Social Environmental Governance 12% 59% Requests from investors Top reason to initiate/accelerate ESG efforts Compared to a year ago, is ESG integration more or less important to your business now? Insufficient resources to allocate to ESG 65% less 6% no change 71% more 24% Overseas expansion 12% Social momentum for ESG
20. PORTFOLIO ESG PERSPECTIVES
21. Factful thinking Clinically good, Socially good All for one, One for all Save lives with medical data Guided by the above values, TXP, a startup improving healthcare through technology, is moving with dedication and transparency towards its mission to “save lives with medical data.” As a leader in developing a sustainable healthcare system in Japan, TXP is promoting ESG as a core initiative that it plans to strengthen further. TXP Medical's Materialities In October 2024, TXP identified and disclosed ESG materialities through a comprehensive approach, holistically taking into consideration the following elements: ❖ Expectations and requests from stakeholders ❖ Latest trends in the healthcare industry ❖ Key issues from a sustainability perspective Materiality Matrix TXP created the materiality matrix, shown on the right. The company has set KPIs for each “high priority” materiality item and is actively managing toward achieving them. Source: https://outlook.txpmedical.jp/esg/
22. Beyond the Roof: Making Quality Living Accessible A co-living startup in Indonesia, Rukita conducted a detailed analysis to identify the largest sources of energy consumption and to focus its energy efficiency strategies on where they will have the most impact. Its Scope 2 emissions, broken down below, are generated from purchased electricity and represent the most significant portion of its carbon footprint. Tenant Electricity Consumption （81%） The electricity consumed directly by tenants is the largest contributor to the Scope 2 footprint. Rukita engages with tenants and deploys in-room energy-efficient technologies, and the company was able to reduce electricity consumption in communal spaces by 18.5% in 1 year. Communal Spaces（14%） Energy efficiency programs focus on LED lighting and energy-efficient HVAC systems to reduce energy used to power shared communal spaces Headquarters（3%） Rukita is exploring on-site renewable solutions, such as solar panels, as a pilot project Central Water Heaters（2%） The company is exploring more energy-efficient technologies to minimize emissions from operating its central water heaters Source: https://www.rukita.co/en/esg
23. The information contained in this Sustainability Report is provided for general informational purposes only and should not be construed as specific legal, financial or tax advice. Readers are strongly encouraged to obtain their own independent, professional legal, financial and tax advice regarding the assessment, interpretation and implication of the matters presented in this Sustainability Report. This Sustainability Report is not an offer or solicitation to buy or sell securities or any other financial instruments. The information contained in this Sustainability Report does not constitute and should not be interpreted as constituting an invitation to enter into any transaction or agreement to engage in any investment activity. The information contained in this Sustainability Report is based on sources believed to be reliable. However, it has not been audited and no warranties or representations, whether express or implied, are made regarding the accuracy, completeness or reliability of the information. Readers should exercise their own judgement and independently verify any information before relying upon it and shall bear in mind that MPower Partners and the authors and distributors of this Sustainability Report shall not be held liable for any loss, damage or expense (including but not limited to direct, indirect, incidental or consequential damages) arising out of or in connection with the use or reliance on the information provided in this Sustainability Report. This Sustainability Report may contain forward looking statements that involve inherent risks and uncertainties. Actual results may differ materially from those projected in the forward-looking statements and past performance does not guarantee future performance. Readers are cautioned not to place undue reliance upon such statements or upon past performance. Access to and the distribution of this Sustainability Report may be restricted or prohibited in certain regions or jurisdictions. It is the responsibility of the Reader to comply with all applicable laws, rules and regulations to ensure that they are legally permitted to access this Sustainability Report. In the event the Reader has received this Sustainability Report in error, please contact MPower Partners immediately. Please be aware that currently, there is no single, universally accepted framework, whether legal, regulatory, or otherwise, that defines what constitutes "sustainable", "responsible" or equivalent "ESG" investment, product or offering. There is also no market consensus on these terms. Further, it cannot be guaranteed that such a universally accepted framework or consensus will be established and adopted in the future. While certain jurisdictions, particularly the European Economic Area, have made regulatory efforts to define these concepts, the legal and regulatory framework governing sustainable finance is still in development. Readers are advised to carefully review this disclaimer and any applicable terms and conditions before proceeding to read the Sustainability Report.