Environmental. Social. Governance.

Nautic’s investment Criteria and Firm Culture hinge on our industry experience, ability to identify and execute value creation strategies, and cultivation of a powerful partnership culture. Collectively, we believe these factors have helped to drive growth for our portfolio companies. Furthermore, we believe that managing businesses responsibly is key to remaining a partner-of-choice and generating long-term value. Therefore, we actively consider environmental, social, and governance (“ESG”) factors in our investment decisions and as part of our long-term strategy to create value for our portfolio companies and shareholders.

Nautic believes that the integration of ESG into our investment process is an effective strategy for mitigating ESG risks, capitalizing on ESG opportunities, and meeting the expectations of our constituents throughout the investment lifecycle. In so doing, we will seek to identify and address material issues and opportunities that have, or have the potential to have, an impact on an organization’s going-forward ability to create, preserve or erode economic value, as well as environmental and social value.

We seek to integrate ESG throughout our investment process:

ESG in Action

We generally integrate several environmental, social, and governance considerations into our investment decision and portfolio oversight processes, consistent with and subject to the firm’s ESG policy. Examples of such considerations include, but are not limited to:

Environmental Management: Respect for the environment is an important part of Nautic’s approach to managing risk and creating opportunities in portfolio companies. Furthermore, we believe that mismanagement of the environment can negatively impact the local communities in which our portfolio companies operate, result in regulatory scrutiny, and risks to the health of our portfolio companies’ constituents. Where necessary, the firm performs environmental due diligence to assess relative risk and evaluate opportunities.

Diversity and Equal Employment Opportunity: Nautic seeks to prioritize protecting employees from discrimination and harassment in the workforce, as a part of maintaining our reputation as a partner-of-choice to key employers. Furthermore, Nautic recognizes the importance of diverse perspectives in our firm and at our portfolio companies and is committed to engaging in dialogue regarding the representation of historically marginalized identities within the firm’s target verticals.

Social and Labor Conditions: Nautic is committed to supporting fair working conditions and working to refine the employee value proposition to attract and retain top talent and engage workforces. Our portfolio companies rely on human capital to generate value, and Nautic considers employee management and engagement, including factors such as development, advancement, retention, and compensation, when evaluating target investments and managing investments.

Worker Health and Safety: Nautic strives to ensure employee wellbeing, whether at Nautic or at our portfolio companies, by addressing occupational safety and health risks in the workplace. Where applicable, we seek to work with internal and external management teams to address any employee health and safety concerns and institute work procedures that align with best practices.

Data Privacy and Security: Where applicable, Nautic seeks to ensure that appropriate data governance standards and procedures are implemented both internally and at our portfolio companies to comply with regulatory standards and safeguard sensitive data, including proprietary portfolio company intellectual property, from malicious actors.

Anti-Bribery and Corruption: Nautic’s anti-bribery and corruption diligence is targeted at improving companies’ capacity to prevent incidents that may arise from operations in countries at risk of bribery and corruption, preserving reputational capital and aiding adherence with regulatory standards. 

Ethics, Compliance and Governance: Nautic seeks to guide portfolio companies to behave ethically and in compliance with local, state, and federal laws and regulations. This includes setting standards and providing guidance to portfolio company employees and affiliated third parties to prevent conflicts of interest and encourage ethical behavior. Existing compliance programs, ethical business guidelines, and other material ESG matters are reviewed as part of the due diligence process. Further, once a Nautic fund is invested in a portfolio company, our board of directors representatives encourage targeted attention to any material factors related to corporate governance, management structures and compensation, and other similar factors with the goal of improving performance and minimizing adverse impacts in these areas.

The above information is qualified in its entirety by Nautic’s ESG policy, which describes important details and considerations regarding Nautic’s ESG investing approach.

ESG Leadership

Nautic believes that it is important for our internal employees to support the implementation of the firm’s ESG policy. As such, every Nautic employee attests to our ESG policy, and the firm’s senior leadership provides guidance for the firm’s ESG activities.

In addition, certain Nautic employees dedicate time specifically to advancing the firm’s activities and resources within ESG.

Nautic ESG Team

While Nautic seeks to integrate certain ESG factors into its investment process in accordance with its ESG policy and subject to its fiduciary duty and any applicable legal, regulatory, or contractual requirements, there can be no guarantee that Nautic’s ESG policy is successful or that its investments create a positive ESG impact. In addition, applying ESG factors to investment decisions is qualitative and subjective by nature, and there can be no guarantee that the criteria utilized by Nautic or any judgment exercised by Nautic reflects the beliefs or values of any particular investor. There are significant differences in interpretations of what positive ESG characteristics mean by region, industry, and issue, and these interpretations are rapidly evolving.

Certain statements about Nautic made by portfolio company executives herein are intended to illustrate Nautic’s business relationship with such persons, including with respect to Nautic’s facilities as a business partner, rather than Nautic’s capabilities or expertise with respect to investment advisory services. Portfolio company executives were not compensated in connection with their participation, although they generally receive compensation and investment opportunities in connection with their portfolio company roles, and in certain cases are also owners of portfolio company securities and/or investors in Nautic-sponsored vehicles. Such compensation and investments subject participants to potential conflicts of interest in making the statements herein.