Investment and ESG related restrictions

The Global Sustain portfolio will exclude investments in any company that:

•         as classified by the MSCI ESG Business Involvement Screening Research database (“MSCI ESG BISR database”), has any tie to fossil fuels (such as oil, gas, or coal);

•         has as its Global Industry Classification Standard (“GICS”) energy, construction materials, utilities (excluding renewable electricity and water utilities) and/or metals and mining; or

•         for which GHG emissions intensity estimates are not and/or cannot be estimated (in the Sub-Investment Manager’s discretion).

The remaining companies will then be ranked according to their GHG emissions intensity estimates, and those with the highest emissions intensity excluded from the Reference Universe in accordance with the MSCI ESG BISR database and MSCI GICS classification. This process should collectively result in a reduction of the Reference Universe by at least 20%. The GHG emissions intensity reduction target of the strategy is to seek to be at least 50% lower than that of the Reference Universe on the basis of Scope 1 and Scope 2 emissions.

In addition to the exclusions set out in the preceding paragraph, the Sub-Investment Manager will not knowingly invest in any company whose core business activity (more than 10% of a company’s revenues) as classified by the MSCI ESG BISR database involves the following:

•         Alcohol;

•         Adult entertainment;

•         Civilian firearms;

•         Gambling; or

•         Weapons.

The Sub-Investment Manager will exclude investments in all companies generating greater than 0% revenue as a ‘tobacco producer’ and further exclude any company that generates more than 5% of its revenue from tobacco-related business activities as classified by the MSCI ESG Business involvement Screening Research database.

The Sub-Investment Manager will exclude investments in any company that has any tie to nuclear weapons and shall exclude investments in any company that is defined by the MSCI ESG Business Involvement Screening Research database to have any tie to controversial weapons.

Where the portfolio holds securities in a company that, after the date of purchase, ceases to meet the requirement of this section “Investment and ESG related restrictions”, then such securities will be sold within a reasonable period taking into account the best interests of the portfolio.

For the purpose of these investment guidelines:

·       the term GHG shall be as defined by the Greenhouse Gas Protocol and include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6) in metric tonnes and in tonnes of CO2 equivalent; and

·       the “Reference Universe” shall mean the companies within the MSCI All Country World Index (MSCI ACWI). This term is only used for the purposes of comparing the portfolio’s GHG emissions intensity.

The Sub-Investment Manager uses third-party data providers to ascertain the GHG emissions intensity of companies and in some cases data on specific issuers may not be available or may be estimated by an alternative third-party data provider or by the Sub-Investment Manager using internal methodologies or reasonable estimates. The methodologies used by different data providers may vary and if the preferred data provider changes its methodology, the GHG emissions intensity estimates for one or more companies may also change significantly.