National Standard subscribes to impact investing principles as defined by the Global Impact Investing Network (“GIIN”). GIIN defines impact investing as investing with the intention of meeting positive, measurable social and environmental impact whilst making a financial return on a risk-adjusted basis. In line with this definition, National Standard targets to market to above market financial returns whilst making an impact. Key to this is the need to set impact objectives, implement actions to achieve the objectives, manage and monitor achievement of those objectives, measure achievement of those objectives, and reporting to stakeholders. We consider a number of levers over and above impact and financial returns to include risk, liquidity and resource capacity when allocating capital, managing investments and measuring performance. In making decisions, we seek to balance those factors and deploy the least amount of capital for the greatest impact and financial outcomes. This enables National Standard to make well-informed choices and meet our impact and financial objectives.

Impact investment should achieve positive outcomes for individual investors, whole communities and for the economy at large. In addition to creating financial returns for investors, investments should create jobs and expand the provision of goods and services, thus addressing the triple challenges of unemployment, poverty and inequality in line with the United Nations 2030 Sustainable Development Goals (“SDGs”). In addition to aiming for financial returns, National Standard, as impact investors, also aim to achieve a positive impact on targeted social, economic, or environmental goals. This requires integrating impact considerations alongside financial considerations into our investment strategy, into decisions about whether to an investor in certain assets or exit and into the information and data that we monitor and manage.

Impact investing goes beyond asset selection that aligns investment portfolios with impact goals such as the SDGs, to requiring a credible investment thesis of how the investment contributes to the achievement of impact. This requires that we observe and implement Operating Principles for Impact Management developed by the International Finance Corporation of the World Bank Group, outlined broadly as follows:

• • Defining strategic impact objectives consistent with the investment strategy

• • Managing strategic impact and financial returns at the portfolio level

• • Establishing our contribution to the achievement of impact

• • Assessing the expected impact of each investment based on a systematic approach

• • Assessing, addressing, monitoring and managing the potential risks of the negative impact of each investment

• • Monitoring progress of each investment in achieving impact against expectations and responding appropriately

• • Conducting exits of investments considering the effect on sustained impact

• • Reviewing, documenting and improving decisions and processes based on the achievement of impact and the lessons learned

• • Publicly disclosing alignment with these principles and providing regular independent verification of the extent of alignment.

National Standard applies these principles as a guide in our impact investing approach. In view of the impact investing mandate, National Standard has launched, or is in the process of launching, a range of impact investing private debt funds aimed at addressing the social-economic challenges facing South Africa and Africa at large that include the following:

• • Social Housing Private Debt Impact Fund
  • Pension Backed Housing Private Debt Impact Fund
  • Agri-Business Private Debt Impact Fund
  • Renewable Energy Private Debt Impact Fund
  • Sustainable Mining Private Debt Impact Fund
  • SME Development Private Debt Impact Fund