The Manager integrates consideration of labour standards or social, environmental or ethical considerations throughthe application of ESG (Environmental Social and Governance) factors when making investment decisions in respect ofthe Fund. Such issues may affect the financial performance of an investment and any such financial effect wouldinfluence our investments.Ellerston Capital subscribes to various third party ESG data and ratings providers which is complemented with other publically availableinformation sources.Furthermore, the May 2019 acquisition of ethical investment specialist Morphic Asset Management (A+ 2018 PRI Assessment acrossall relevant modules), has complemented our ESG experience and added dedicated resource. Morphic’s Head of Research hassubsequently been appointed Head of ESG for Ellerston Capital. As such, he is responsible for ESG issues across the business,complementing the discretion and accountability for investment decisions that remain with the Portfolio managers.

(1) The fund applies negative sectors screens and screens out stocks where ESG outcomes across a range of criteria are sub-standard. A 5% revenue threshold is applied.  -  Significant harm sectors including armaments, tobacco manufacturing are screened; as are other sectors including coal and uranium mining, oil & gas, alcohol, gambling, rain forest logging, intensive animal farming and aquaculture. A 0% revenue threshold is used for significant harm sectors and a 5% revenue threshold is used for the other negatively screened sectors. Additional to the negative screen, the portfolio manager runs a positive screen and identifies companies which it deems to be contributing positively to the following areas-education-health and wellbeing-clean energy-innovation and infrastructure-sustainable cities-responsible production-clean environment(2)Following the positive and negative screen, the team researches company operations to ascertain how the company contributes to the above mentioned areas.(3) Following these screens and research, the impact of the company's ESG credentials on the company financials is evaluated and the investment process takes place. (4)If the fund invests in a company, the investment team has continuous engagement with the company and will raise any ESG issues or opportunities with the company. The team meets with investee companies about 4-5 times a year. Ellerston Global Mid Small Cap Fund uses independent third party sources (primarily Sustainalytics), to compare the overall ESG risk of the portfolio and the carbon risk of our portfolio versus the benchmark to ensure that our portfolio has superior ESG outcomes. We also do an ESG audit to determine where the ESG risks in the portfolio lie. If required, changes are made to the portfolio investments and/or their weights based on measurement outcomes. Furthermore, the fund operates in accordance with the Ellerston Capital Responsible investment policy as well as the Ellerston Capital Proxy Voting Policy which outlines the process and disclosure surrounding investing and voting.