Kuwait Investment K S C P : Sustainability Report for the year ended on 31 December 2023

S U S TA I N A B I L I T Y R E P O R T

2023

Table of Contents

About this Report	4
Sustainability Highlight 2023	5
Message from the Chairman	6
Message from the CEO	8
Overview of KIC	10
KIC's Best Services	11
Business Strategy	12
Financial Performance	13
Materiality	14
Stakeholder Map	15
Materiality Topics	16
Reporting on KIC's Material Topics	17
Responsible Governance	17
Governance Structure	18
Board of Directors	20
Conflict of Interest	21
Compliance	21
Diversity and Inclusion	22
Employees by Numbers	22
Equal Pay	24

Fair Recruitment	24
Parental Leave	25
Grievance Mechanisms	25
Learning and Development	26
Training Programs	27
Career Development	28
Employee Satisfaction	29
Sustainable Investment and Stewardship	30
Equity Investments	30
Real Estate Investments	30
Portfolio Management	32
ESG Risk Management	33
Innovation and Technology	33
Community Engagement	36
Local Contribution & Volunteering	38
Employee Engagement	40
Tackling Climate Change	44
Supply Chain Management	46
GRI Content Index	47

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About this Report

Sustainability Highlights 2023

This report has been prepared in accordance with the GRI Standards. The GRI Standards, first published in 2015, are globally the most applied standards to report on non-financial performance. The GRI Standards enable an organization to publicly disclose its sustainability impacts on the economy, environment, and people, including impacts on their human rights and how the organization manages these impacts. Sustainability reporting, among other benefits, enhances transparency and increases organizational accountability.

Reporting Period and Frequency

The information stated in Kuwait Investment Company's (KIC) first Sustainability Report covers the year 2023 (January 1st to December 31st). Relevant data from the two previous years has been included for comparability. Non-financial reporting is intended to be published from this year on, on an annual basis.

Scope

The 2023 Sustainability Report covers the performance of KIC only and specifies when information about subsidiaries or portfolio companies is stated.

Since its establishment, the company's headquarters reside in Kuwait City. Although managed from Kuwait, the company has through its investment activities, an international reach.

Contact

For any feedback or questions about this report, please contact:

Abdullah M. AbulQassim | Assistant Vice President

Investor Relations Unit | Dir: ([phone] | Tel: [phone]

External Assurance

KIC's Sustainability Report has not been assured by a third-party provider. However, internal stakeholders have reviewed and approved the accuracy of the non-financial disclosures. The consolidated financial statements have undergone an independent audit conducted by the auditor firm RSM Albazie & Co. and have been approved by the Board of Directors.

ENVIRONMENT

SOCIAL

GOVERNANCE

ECONOMIC

355,799kg of CO2e across Scopes 1, 2 and 3.

16.7

training hours on average

0 incidents of corruption.

70% revenue generation in Kuwait.

Significant reduction

of paper waste.

34% of employees have worked for the company for

15+ years.

1 Female board member.

Revenue growth of 32.1%.

Employee awareness session on environmental topics.

Established the young talent group "Diwaniya".

Implementation of PAM solution for improved cyber security.

Profit of

10.34M KWD.

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Dr. Yousef Mohammed Abdullah Alali

Chairman

Message from the Chairman

On behalf of the Board of Directors, I am welcoming you to KIC's first Sustainability Report for the year 2023. The report was drafted in accordance with Global Reporting Initiative (GRI) Standards; the most recognized and applied standards for non-financial disclosure globally. Our participation in this pivotal moment reflects our dedication to international sustainability frameworks and shows our support for homogenizing the global reporting language.

The world is facing a global climate crisis where human activity is pushing Earth to the brink of a dangerous climate tipping point. Across the world, we are already seeing the impacts of extreme weather conditions and irreversible damage to our natural resources. Additionally, socio-economic conflicts and economic instabilities are massively impacting financial markets. These trends do not only affect the investment industry worldwide but also markets in the State of Kuwait. To navigate through these uncertainties, we see it as our duty to act as a responsible partner for our stakeholders and integrate the topic of sustainability at the core of our business activities.

As a publicly listed company, we are welcoming the efforts by Boursa Kuwait that encourage companies to disclose their non-financial performance. This initiative aligns with our corporate vision to support the economic development of the country, which we have upheld since KIC's foundation in 1961. Embarking on our sustainability journey is a key milestone that demonstrates our corporate efforts to align with the national vision of Kuwait, aiming to transform the country into a financial, cultural, and institutional leader in the region by 2035.

As an investment company, we are aware that our largest impact on the economy, the environment, and society is through the allocation of our capital. We therefore advocate for engagement and collaboration on sustainability topics in the industry, our portfolio companies, and amongst partners across the value chain. Only if we act collectively, we can transition to a prosperous future and secure long-term business continuity.

We recognize that this report is just the starting point on our sustainability journey, and we must continue to integrate sustainability at the core of our business strategy. However, we see this step as a catalyst for creating scalable economic, environmental, and social value in the region and setting a benchmarking example for peers to follow. As we look ahead to the future, we will continue to innovate, collaborate, and lead by example, leveraging our expertise and resources to drive positive change and create shared value.

I would like to use this opportunity to thank our leadership and His Highness the Emir, Sheikh Meshaal al-Ahmadal-Jaberal-Sabah - may God protect you -, for his visionary approach and his role in driving a prosperous local economy. I also extend my gratitude to all members of staff and our partners for their commitment to producing this Report.

Dr. Yousef Mohammed Abdullah Alali

Chairman

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Fawaz Sulaiman Al-Ahmad

Chief Executive Officer

Message from the CEO

Dear Team,

I am delighted to present our first Sustainability Report, a milestone that reflects our commitment to responsible business practices and environmental stewardship. This report marks the culmination of efforts to collect, analyze, and reflect upon data that was previously uncollected, allowing us to gain a deeper understanding of our organization's impact on the environment and society.

For the first time, we are providing comprehensive insights into our non-financial performance, showcasing our dedication to transparency and accountability. Through detailed data collection and analysis, we have been able to identify environmental and social challenges and opportunities, enabling us to take proactive steps towards a more sustainable future.

One of the most significant achievements during the reporting period is our newfound awareness across the organization regarding sustainability issues. From the boardroom to the operational teams, there is a shared understanding of the importance of integrating sustainability into every aspect of our business.

In terms of environmental impact, we've collected, for the first time, data on our Scope 1, 2, and 3 emissions, providing us with valuable insights into our carbon footprint. This data serves as a foundation for our continued efforts to minimize our environmental impact and reduce emissions. Socially, significant achievements during the reporting period were our volunteering hours, especially during the holy month of Ramadan. Furthermore, our governance practices have remained steadfast in upholding the highest standards of ethics and integrity. I am pleased to report that we have had no incidents of corruption, underscoring our unwavering commitment to conducting business with honesty and accountability.

As we reflect on our journey thus far, our commitment to sustainability is not just a moral imperative but also a strategic advantage. By embracing sustainable practices, we are not only minimizing risks but also fostering long-term resilience while creating value for our internal and external stakeholders. Integrating ESG into our investment practices will, further, improve long-term liquidity, enhance its reputation, and put KIC in a better position overall.

Looking ahead, we recognize that our sustainability journey is ongoing, and there is still much work to be done. We remain committed to improving, understanding our impact, and collaborating with our partners and stakeholders to drive meaningful progress.

Thank you for your ongoing support and commitment to our shared sustainability goals.

Warm regards,

Fawaz Sulaiman Al-Ahmad

Chief Executive Officer

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Overview of KIC

Kuwait Investment Company (KIC) was established in 1961 as the first investment company in Kuwait and the region. Its creation came in the context of the rising development of the State of Kuwait during the second half of the Twentieth Century. Since its inception, KIC has played a vital role in supporting the economy of the State of Kuwait, as one of the pioneering national companies on both the local and regional levels.

The inception of KIC in the early 1960s coincided with Kuwait's independence, symbolizing an early commitment by political and economic leaders to support the country's economic development. From then on, KIC aimed to set new standards in the investment industry of Kuwait. It successfully established itself as a strong partner, adhering to the highest international professional standards.

KIC quickly earned recognition as a visionary for the country, contributing significantly to the national economy's growth and development. After over fifty years of operation, KIC pioneered methodologies and traditions that left a lasting impact on local and regional investment practices. Despite facing crises and economic challenges throughout the years, KIC's resilience, built upon solid foundations, allowed it to adapt and thrive, remaining aligned with the direction of the national economy.

KIC was honored as the "Best Investment Firm" of 2023 by the International Finance Magazine, affirming its longstanding reputation and expertise since its establishment. The award recognizes not only past achievements but also anticipates KIC's ongoing commitment to innovation and leadership in investments. Over its more than six-decade journey, KIC has undergone strategic restructuring, maintaining its position as a prominent player in the investment sector. Looking ahead, the organization aims to capitalize on emerging opportunities, sustainably expand its global presence, and prioritize ethical business practices to ensure continued success in the dynamic investment landscape.

KIC's Best Services

KIC engages in a range of investment and financial activities in multiple local, regional, and international markets. The set of investment and financial products are offered to clients based locally in Kuwait, and internationally. KIC's specialized teams have a high level of professionalism and vast experience in the field and can therefore attain the best operational results for the shareholders and clients. KIC is the only investment company in the region that holds a banking license which allows them to take deposits from clients. KIC's investment activities services include:

Portfolio Management

The Local & Arab Fund & Portfolio Management Department offers Local/Regional Asset Management Services for institutions and individuals in Kuwait and the GCC States. The investment professionals provide solutions to clients that cover the full range of asset classes, including equity and fixed income.

Fund Management

The Fund Management Department offers a range of investment products based on foundational principles and global indicators. The Department launched a package of local and regional mutual funds invested across various asset categories.

Direct Investment

The Direct Investment Department is responsible for KIC's proprietary investments and manages and monitors a diversified portfolio of mid to long-term direct investments, primarily in the MENA region.

Treasury

Treasury utilizes and invests resources for the benefit of the company in the Local and International markets. It manages the daily cash flow and is also responsible for monitoring and managing the Assets and Liabilities of the company, Foreign Exchange Trading, and investing in the Bond and Sukuk market. Treasury provides a wide range of services to its clients, including Money Market and Foreign Exchange.

Online Trading

KIC is continuously developing its products and service offerings and is sure to adopt the latest technology, as digital development is a key driver for business success. To serve its vision to become a regional financial hub and a one-stop shop to comprehensively cover the financial needs of its clients, KIC established KIC Trade. The online trading platform facilitates trading in multi-markets through multi-products using multi-currencies.

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Business Strategy

Comprehensive

Corporate Strategy

A strategy designed for the long term, focusing on four core growth initiatives.

Broader

Customer Franchise

Expand our customer franchise by introducing programs that encourage stronger connections and loyalty within target market segments.

Commercial

Real Estate Development

Introducing a new anchor product in the commercial real estate sector, designed to capitalize on emerging opportunities and diversify revenue streams.

Legacy

Assets Optimization

Maximizing the value of retired legacy assets is a key strategic priority.

Additionally, as part of the strategy, there is a focus on enhancing product offerings by launching an online platform, thereby meeting the evolving needs of customers in today's digital landscape. As of the end of 2021, the strategy underwent a thorough review marking the beginning of its implementation. Now, in the third year of execution, significant progress has been made towards the objectives. KIC is currently in the final phase of achieving strategic goals and objectives, with a focus on delivering tangible results that align with the overarching vision for sustained success.

Financial Performance

In terms of assets, equity, and profitability, KIC has evaluated its financial position as being very strong. Results for the reporting year are as follows:

As of 31.12.2023	2021	2022	2023
Revenue	43.815m KWD	20.161m KWD	27.870m KWD
Expenses	13.516m KWD	16.534m KWD	17.070m KWD
Profit	28.836m KWD	3.545m KWD	10.342m KWD

70% of the stated revenue is generated from Kuwait, 4% from the larger GCC region, and 4% from other countries in the MENA region. KIC does not have an explicit tax strategy in place as the organization is only subject to Zakat payments and payments to the Kuwait Foundation for Advancement of Sciences (NLST), which are set at 1% and 2.5% of annual net profit before the Board of Director's remuneration, respectively.

Memberships Associations

Union Of Investment Companies (UIC)

UIC, a non-profit organization, unites professionals in the investment and financial service sectors to foster development, build capacity, and advocate for the leading standards on topics most relevant within the industry. Membership in UIC allows KIC to access a platform for collaboration, share best practices, and stay informed on ethical investment guidelines. These ultimately direct and influence responsible investment decisions.

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Materiality

KIC follows GRI's definition of "Material Topics" - topics that represent the organization's most significant impacts on the economy, environment, and people (including impacts on their human rights). In 2023, the organization carried out a four-step process to determine its key topics:

Define the internal and external stakeholders and assess their relationship with KIC.

Conduct research on the financial and investment industry, including trends, opportunities, and regulations, helping to understand where KIC is standing regarding sustainability performance.

Compare with regional and international peers as well as international sustainability standards like SASB and the SDGs to identify the main ESG topics.

Engage with external and internal stakeholders through:

• Surveys

• Qualitative engagements

• Qualitative and numeric data collection

The Materiality Analysis allowed KIC to publish its updated stakeholder map and its material topics for 2023, visualized in a materiality matrix. Details on both are found below:

Stakeholder Map

		Stakeholder Group	Engagement Types	Key Topics of Discussion
			Quarterly BoD Meetings and monthly	Strategic oversight, financial
		Board of Directors	and non-financial performance,
		monitoring of financials.
			governance.
NA L
	Daily collaboration through online and in-	Strategic planning, financial
ER		Executive Management	and non-financial performance,
	person interactions.
		shareholder protection.
I N T
Top Management and	Dedicated investment manager, and	Financial and non-financial
		BoD of Subsidiaries and	performance, oversight, and
		quarterly board meetings.
		Associations	compliance.
			Subject to the laws of the state's
			regulatory authorities (Central Bank of
			Kuwait, Capital Market Authority, and
			Kuwait Stock Exchange)
			As a listed company, financials are	National laws and regulations,
		Government and Regulators	governance and compliance, policies,
		published at Boursa Kuwait.
			and socio-economic impact.
			At quarterly investor conferences,
			financials are discussed.
A L			Regulatory reports mandated by CMA.
RN		Shareholders and Investors	Investor relations team, and suggestions	Financial performance, shareholder
	and opinions through feedback.	protection.
E X T E
	Daily collaboration through online and in-	Employee welfare, learning and
		Employees	development, career progression,
		person interactions.
			and employee management.
		Community Partners	Community events.	Community support, partnerships,
		and socio-economic impact.
		Suppliers	Tenders, RFPs, and negotiations.	Fair competition and partnerships.
		Media	Social media posts, and press releases.	General company performance,
		business accolades, and awards.

Internal and external stakeholders are responsible for governing sustainability topics. The Board of Directors oversees and reviews, together with the Risk Management Unit, the different possible sustainability impacts, and delegates the management of these impacts to the relevant units and their senior executives. Senior executives then assign Associate Vice Presidents who are responsible for delegating and overseeing sustainability-related topics to the employees of its unit.

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Materiality Topics

KIC has identified the below eight topics as the most material to their business. The organization aims at monitoring market trends, regional developments, and new mandates by regulators to identify if and how they impact the business. As per industry best practice, KIC aims to review its material topics on an annual basis and redo its materiality assessment every two to three years. The focus in the upcoming years is to improve the quality and depth of the impact assessments of each material topic.

Most Important
		1
Stakeholdersto		3
		2
Importance	5	4
	6
	8	7
Important
Important	Importance to KIC	Most Important

Material Topics

1 Responsible Governance

2 Diversity and Inclusion

3 Sustainable Investment and Stewardship

4 Learning and Development

5 ESG Risk Management

6 Innovation and Technology

7 Community Engagement

8 Tackling Climate Change

Reporting on KIC's Material Topics

Responsible Governance

Establishing strong and ethical governance procedures at KIC is crucial. As a listed company on Boursa Kuwait, the national stock exchange, and as a 62% owned subsidiary of Kuwait Investment Authority (KIA), it is crucial to comply with local and internal laws and regulations. The main target regarding governance during the reporting period was to ensure no penalties from the regulatory parties were received. To ensure that all targets are met, and to continuously put forward responsible governance practices, KIC's employees attended all relevant seminars given by the Capital Markets Authority (CMA) during the reporting period. Although it can be challenging to train employees in all new and emerging processes and procedures, the organization is committed to investing in training and development and monitoring changes in the market.

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