RQI Investors is a systematic investment manager that looks to incorporate its ESG awareness within these Funds and their investment process. Specifically, this is done through:

1. Investment universe selection through avoiding companies in tobacco, controversial and nuclear weapons and United Nations (UN) Global Compact violators, and limiting exposure to thermal coal producers and oil sands;
2. Stock selection which may increase exposure to companies that RQI believes demonstrate greater diversity and more robust governance practices or greater carbon efficiency;
3. Portfolio construction through reducing carbon footprint of the portfolio relative to the market cap index; and
4. Proxy voting and company engagement.

In determining the investment universe, the Funds exclude the following companies:

• Companies involved in the production of tobacco, manufacture of nicotine alternatives and tobacco-based products;
• Controversial and nuclear weapons producers/manufacturers;
• UN Global Compact Violators as identified by Sustainalytics;
• Companies that produce more than 10% of their revenue or rely on more than 10% of their power generation from thermal coal; and
• Companies where oil sands makeup greater than 10% of a company’s oil and gas production.

Incorporating ESG awareness within the Funds

RQI believes that ESG considerations are not only important but can add value to the overall portfolio through excess return. These considerations may include governance, diversity and carbon.

Incorporating ESG within portfolio construction

As part of the portfolio construction of the Funds, RQI aims to reduce the Funds’ overall carbon footprint relative to the carbon intensity of the respective benchmark.

Proxy voting and company engagement

RQI believes proxy voting and company engagement is an important part of the investment process. RQI will generally vote in all jurisdictions and on all issues where we have the authority to do so. RQI will generally vote its proxies in accordance with predetermined proxy voting guidelines based on the proxy adviser Glass Lewis’ ESG guidelines. In regards to engagement, given the systematic methodology employed in the Funds, RQI may engage with companies based on what it deems to be contentious voting issues such as climate issues, modern slavery and diversity.

ESG Awareness is incorporated into portfolio via exclusions, alpha signals, carbon reduction and engagement. These together make this a responsible investment product.

The portfolio is subject to the following exclusions defined below with the relevant thresholds. Entities that:

• Derive any gross revenue directly from the manufacture of Controversial Weapons (defined below) or Tobacco Products (defined below);
• Own a 50% or more interest in entities that derive any gross revenue directly from the manufacture of Controversial Weapons or Tobacco Products;
• Are materially involved in thermal coal production and oil sands extraction.
• Are UNGC Violators

These exclusions are subject to the following qualifications:

• For the purposes of this exclusion, Controversial Weapons means: anti-personnel mines, cluster weapons, biological and chemical weapons, depleted uranium, nuclear weapons and white phosphorus munitions.
• For the purposes of this exclusion, Tobacco Products means: traditional cigarettes and other tobacco products, such as cigars, chewing tobacco, vaping and e-cigarette products.

For the purpose of the:

• Thermal coal exclusion, "materially involved" means the company produces more than 10% of its gross revenue or rely on more than 10% of its power generation from thermal coal; and
• Oil sands exclusion, "materially involved" means oil sands extraction makes up more than 10% of a company's oil and gas production.
• For the purposes of this exclusion, a UNGC violator is defined as one classified by Sustainalytics as being a UNGC violator.
• This exclusion does not apply to investments in entities with minority investments (i.e. less than 50% interest in the entity) in other entities or joint ventures that are involved in the manufacture of Controversial Weapons or Tobacco Products.

The implementation of this exclusion is dependent on information relating to either reported revenues or revenue estimates provided by reputable third-party research providers. Where such information turns out to be inaccurate or there are delays in accessing such information, the implementation of this exclusion may in turn be delayed, particularly where there has been material changes in the nature of certain investments.

In addition to the exclusions outlined above, a number of ESG signals are incorporated into the model – these consider the governance, gender diversity, carbon intensity and the level of severe incidence of each potential investee company. These are combined with other non-ESG alphas to determine the overall weight of the potential investee company in the fund. The fund is also subject to maintain a maximum carbon intensity of 80% relative to the carbon intensity of the benchmark at a portfolio level. Carbon intensity is measured as Scope 1 and Scope 2 CO2-equivalent emissions in tonnes per million dollars of sales.

Finally, engagement with investee companies is conducted mainly regarding ESG issues. Due to the number of holdings, engagement is not conducted with every investee company but with a select number of companies on a multi-year basis so that the success of the engagement can be monitored.

The combination of these four areas – exclusions, signals, carbon reduction and engagement results in a product that is responsible in its investment choices.