Sustainability related disclosures

Summary

No sustainable investment objective

Cardano Global Sustainable Equity Fund (the “Fund”) promotes environmental or social characteristics, but does not have an objective of investing exclusively in sustainable investments.

Although the Fund does not have sustainable investment as its objective, the Fund does seek to contribute to (particular/predetermined) sustainability goals.

Environmental or social characteristics of the financial product

The Fund invests in shares of companies that contribute to the achievement of certain sustainability goals as mentioned below (the “Sustainability Objectives”) and do no significant harm to any of the social or environmental objectives. The Fund also assesses to what extent the principles of good governance are met for all companies and institutions in which it can invest.

The Fund strives to contribute to the following environmental objectives:

a) Climate change mitigation and adaptation: Achieve net-zero greenhouse gas emissions by 2050 aligned with the Paris Climate Agreement, with intermediate targets set for a 50% reduction in greenhouse gas emissions by 2030 and 75% by 2040 compared to 2019;

b) Sustainable use and protection of water resources: Achieve water neutrality by 2030;

c) Protection and restoration of biodiversity and ecosystems: Achieve zero net deforestation by 2030;

d) Pollution prevention and control: Achieve zero waste production by 2050.

The Fund strives to contribute to the following social objectives:

a) Promotion of a good living conditions – Contribute to a good living environment for communities in places where companies operate.

b) Promotion of a good working conditions – Contribute to the well-being of personnel and that actively manage social injustice and/or inequality.

Investment strategy

The investment objective of the Fund is to achieve a favourable long-term return for Unitholders that approximates as closely as possible the return of the MSCI All Countries World Index Net GBP, unhedged (the “Benchmark Index”) through global investments in equities issued by listed companies. To this end, the Fund invests in globally listed shares of companies that are included in the Benchmark Index, with the exception of shares of those companies that do not meet the sustainability criteria.

The investable universe of the Fund only contains companies that are categorized in the ‘positive impact’ and ‘adaptive’ categories (see: sustainable-investment-policy).

Proportion of investments

The Fund invests in globally listed equities (and depositary receipts for shares) of corporate issuers that are included in the Benchmark Index.

The Fund strives for a high share of sustainable investments in the Fund, with a minimum of 50%.

Monitoring of environmental or social characteristics

The resulting share of sustainable investments that contribute to one of the environmental or social objectives and of the taxonomy-aligned investments is reported in the Fund’s annual report.

Progress regarding the Sustainability Objectives will be reported in the Fund’s annual report.

Reports will include the share of the Benchmark Index that has been excluded because of non-compliance with the Sustainability Objectives.

Methodologies for environmental or social characteristics

To ensure that the Fund’s investments meet the sustainability requirements, a selection procedure and an ESG scoring methodology have been developed. In addition to this, to express active ownership, engagements with companies are being maintained and (proxy) voting at shareholders’ meetings are used as tooling to encourage companies to act more sustainably. The basis for this is the sub-investment manager’s (“ACTIAM”) screening framework, which categorizes all companies in the investment universe and ensures that they contribute to the Fund’s objectives.

The final step of the screening determines what percentage of the investment universe meets the SFDR definition of a ‘sustainable investment’, while ‘not doing significant harm to sustainable objectives’ and following ‘good governance’ principles and making a positive contribution to the targets.

Data sources and processing

ESG information is an integral part of ACTIAM’s investment processes. All investment teams use the screening procedure, ESG scores, impact information, Sustainable Development Goals (“SDG”) – contribution and additional ESG information from companies and governments.

ACTIAM uses various data and benchmarking sources for analysis and reports. Examples and more detail are provided under the relevant section.

Limitations to methodologies and data

The available data from various ESG data providers is not perfect. There are major differences between definitions and data reported by providers. Furthermore, there is often only limited information available about the impact within the value chains for which companies are jointly responsible.

Due diligence

ACTIAM’s ESG models and ESG database are also checked by an internal and an external auditor. All companies in which ACTIAM invests are checked periodically to ensure that the institution also puts its CSR policy into practice and complies with its stated commitments. This includes monitoring any involvement in controversies and violations of relevant standards, as well as the extent to which companies are making progress on their sustainability claims.

Engagement policies

ACTIAM exercises its voting rights and conducts in-depth discussions with companies about identified ESG risks and means for improvement.

Designated reference benchmark

No specific index has been designated for the Fund as a reference benchmark for the Sustainability Objectives.

No sustainable investment objective

This financial product promotes environmental or social characteristics, but does not have as its objective sustainable investment.

How do the sustainable investments of this financial product not significantly harm any of the environmental and social investment objectives?

To what extent are the sustainable investments aligned with the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights, including the principles and rights set out in the eight fundamental conventions identified in the Declaration of the International Labour Organisation on Fundamental Principles and Rights at Work and the International Bill of Human Rights?

Although the Fund does not have sustainable investment as its objective, ACTIAM promotes environmental or social characteristics and seeks to contribute to (particular/predetermined) sustainability goals. The sustainable investments contribute to the achievement of certain sustainability goals, as mentioned below (the “Sustainability Goals”) and do not significantly harm to any of the social or environmental objectives. ACTIAM also assesses the extent to which the principles of good governance are met for all companies and institutions in which it can invest.

The Fund’s investable universe contains the companies included in the broad market benchmark index, the MSCI All Countries World Index Net GBP, unhedged (the “Benchmark Index”), that comply with the Sustainable Investment Policy and that contribute to the Sustainability Objectives. This assessment procedure, essentially, follows two steps, as detailed below:

First, to ensure that all investees treat humanity, the environment and society respectfully and to ensure they follow principles of good governance a list of Fundamental Investment Principles has been formulated that sets minimum criteria related to human rights, labour rights, controversial weapons, international sanctions, business ethics, environmental, social and governance related severe controversies and activities, and involvement in products and businesses doing harm to human (mental) health (e.g. related to gambling, adult entertainment and tobacco) or to animal welfare. Companies that do not comply are excluded from investment. This includes companies violating the principles as laid down in the UN Global Compact, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights. These investment principles reflect current views and agreements on ethical and social principles that are fundamental to good citizenship and good (corporate) governance.

Second, it is assessed whether companies positively contribute to any of the Sustainability Objectives, without significantly harming other Sustainability Objectives.¹ For this, seven sustainability themes are identified that explain how companies put pressure on the objectives. This assessment is made on the basis of a large number of qualitative and quantitative indicators, including the ‘indicators for adverse impacts on sustainability factors’ and the indicators included in the ‘Principal Adverse Impact Statement’.

Environmental or social characteristics of the financial product

Cardano Global Sustainable Equity Fund (the “Fund”) promotes environmental and social characteristics within the meaning of Article 8 of the Sustainable Finance Disclosure Regulation (“SFDR”). Although the Fund does not have sustainable investments as its objective, as meant by Article 9 of the SFDR, the Fund does contribute to (particular/predetermined) sustainability goals. The investments that contribute to these sustainability goals are considered to be sustainable investments within the meaning of Article 2(17) SFDR.

The sustainable investments contribute to the achievement of certain sustainability goals mentioned below (the “Sustainability Objectives”) and do not significantly harm any of the social or environmental objectives. The Fund also assesses to what extent the principles of good governance are met for all companies and institutions in which it can invest.

The Fund strives to contribute to the following environmental objectives:

a) Climate change mitigation and adaptation: Achieve net-zero greenhouse gas emissions by 2050 aligned with the Paris Climate Agreement, with intermediate targets set for a 50% reduction in greenhouse gas emissions by 2030 and 75% by 2040 compared to 2019;

b) Sustainable use and protection of water resources: Achieve water neutrality by 2030;

c) Protection and restoration of biodiversity and ecosystems: Achieve zero net deforestation by 2030;

d) Pollution prevention and control: Achieve zero waste production by 2050.

The Fund strives to contribute to the following social objectives:

a) Promotion of a good living conditions – Contribute to a good living environment for communities in places where companies operate.

b) Promotion of a good working conditions – Contribute to the well-being of personnel and that actively manage social injustice and/or inequality.

The MSCI All Countries World Index Net GBP, unhedged (the “Benchmark Index”) is a broad global equity index and is not a designated reference benchmark for the purposes of SFDR. This means that the Benchmark Index is not aligned with the sustainability targets of the Fund. A comparison of the Fund with the Benchmark Index is for the sole purpose of tracking the financial objectives of the Fund. In order to assess whether the long-term sustainability goals of the Fund are being achieved, it is periodically assessed whether the Fund is moving at the right speed towards achieving the Sustainability Objectives. This progress is determined for the Fund independently of the Benchmark Index and is included in the annual report of the Fund.

Investment Strategy

The investment objective of the Fund is, taking into account the sustainability criteria applicable to the Fund, to achieve a return for the participants that approximates as closely as possible the return of the Benchmark Index. To this end, the Fund invests in globally listed shares of companies that are included in the Benchmark Index, with the exception of shares of those companies that do not meet the sustainability criteria.

In the context of efficient portfolio management, the Fund may temporarily use derivative financial instruments and ETFs. Any such instruments or transactions must also meet minimum environmental or social safeguards, i.e. investments or techniques for specific purposes must be in line with the environmental and social characteristics promoted by the Fund.

A transparent process is followed to select companies for the investable universe, based on strict sustainability and impact criteria.

Based on the indicators described earlier, all companies in which the Fund can invest are divided into the following categories:

• Positive impact: Companies making a positive and intentional contribution to one or more of the Sustainable Development Goals while operating within planetary boundaries and ensuring social foundations (in other words, within the safe and just operating zone).
• Adaptive: Companies that properly manage the sustainability risks they are exposed to, operate within the planetary boundaries and respect the social foundations of society, or that are expected to be on the required pathway towards such a state within the required timeframe. These companies show evidence that they are willing to, and capable of, following the required transition pathway to prepare themselves for the material and operational risks that the transitions bring about in order to comply with the Sustainability Objectives within the required time frame.
• At risk: Companies not operating on the required transition pathway, having unmanaged risks and lacking the adaptive capacity to prepare themselves for the transitions.
• Non-adaptive: Companies far removed from the required transition pathways, lacking the capacity to bring risk management up to standards and running serious operational risks in the short- to medium-term that may lead to stranded assets.
• Harmful: Companies operating outside the boundaries, with activities either through their operations or products that are harmful to society or the environment at a threshold inconsistent with our sustainability beliefs. Examples include companies whose primary business is tobacco production.
• Non-compliant with international norms and standards: Companies that do not comply with recognised international norms and standards. Examples include companies that manufacture controversial weapons or are in breach of the United Nations Guiding Principles on Business and Human Rights.

The investable universe of the Fund only contains companies that are categorized in the ‘positive impact’ and ‘adaptive’ categories (see: sustainable-investment-policy).

An evaluation of ‘good governance’ forms an integral part of the Sustainable Investment Policy. As explained above, the first step of the investment strategy is to assess whether companies comply with the international principles to treat humanity, the environment and society respectfully and to follow principles of good governance. This assessment adopts indicators related to good citizenship, corporate governance, human rights, labour rights, controversial weapons, international sanctions, business ethics, environmental, social and governance related severe controversies and activities, and involvement in products and businesses doing harm to human (mental) health (e.g. related to gambling, adult entertainment and tobacco) or to animal welfare. Companies that do not comply are automatically excluded from investment. The principles follow among other things from the principles as laid down in UN Global Compact, the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights.

In addition, to determine the contribution to the Sustainability Objectives, the organisational behaviour and integrity of each company is assessed. The presumption is that sound corporate behaviour and high integrity levels contribute to the long-term financial performance of companies, the stability of communities and to the Sustainable Development Goals. For this analysis, companies are evaluated on 5 dimensions.

• Corporate governance: related to board composition, pay practices, ownership, voting and shareholder structure and accounting practices and corporate transparency.
• Business ethics: extent to which companies are involved in ethics issues such as fraud, executive misconduct, money laundering or insider trading.
• Anticompetitive practices: extent to which companies are involved in practices such as price fixing, abuse of market power to limit competition, cartel agreements, collusion or price discrimination.
• Corruption and instability: extent to which companies are involved in bribery and corruption scandals or run risks due to political or social instability.
• Tax transparency: extent to which companies provide clarity about their corporate income taxes.

For each company, it is assessed how it manages these topics. Most indicators used for this screening are qualitative indicators. Thresholds are set that define how companies are categorised.

Proportion of investments

The Fund invests in globally listed equities (and depositary receipts for shares) of corporate issuers that are included in the Benchmark Index, with the exception of shares of those companies that are not categorised as ‘positive impact’ or ‘adaptive’ companies. Investments in cash, derivatives and ETFs can be used to hedge risk or provide liquidity. Any such instruments or transactions must also meet minimum environmental or social safeguards, i.e. investments or techniques for specific purposes must be in line with the environmental and social characteristics promoted by the Fund.

The Fund strives for a high share of sustainable investments in the Fund, with a minimum of 50% (see box below category “#1A Sustainable”).

*The sustainable investments of the Fund can contribute to both environmental and social objectives and can be Taxonomy aligned without there being a restriction to the minimal share to which the Fund must adhere. Therefore no percentages are included in the graph regarding ‘Other environmental’ and ‘Social’.

Monitoring of environmental or social characteristics

The resulting share of sustainable investments that contribute to one of the environmental or social objectives and of the taxonomy-aligned investments is reported in the Fund’s annual report.

At least annually the Fund’s progress regarding the Sustainability Objectives will be reported. Currently, this covers the following indicators for the climate change and the water related targets:

• Climate change:
  • Greenhouse gas emission intensity (tonnes of CO2 equivalents/euro),
  • Absolute greenhouse gas emissions (tonnes of CO2 equivalents) for scope 1 and 2 and separately for scope 3, and its change over time,
  • Exposure to sectors highly exposed to climate change and its mitigation compared to the Benchmark Index² and
  • Green-to-Brown ratio compared to the Benchmark Index³

• Water:
  • Water intensity (m³ water use/euro), and
  • Absolute water use (m³ of water use).

Specifically for the climate change target, based on the relevant indicators mentioned, the portfolio of the Fund is monitored to determine whether the greenhouse gas reduction pathway follows the pathway that is necessary to reach the intermediate and final objectives. It is also monitored to determine whether the exposure to sectors highly exposed to climate change and the green-to-brown ratio are at least in line with the Climate Transition Benchmark requirements as qualified in Regulation (EU) 2016/1011. If the portfolio of the Fund is at risk of not following the required pathway, screening and selection criteria will be adapted to bring the portfolio back in line with the required pathway.

For the other Sustainability Objectives, no suitable quantitative indicators or data are available yet to consistently monitor progress on a Fund level. For that reason, ACTIAM will actively participate in working groups focusing on matters such as deforestation, biodiversity, plastics pollution, living wage and SDGs to develop such indicators. In addition, the Sustainable Investment Policy, discussed below, has been set up in such a way that companies that would cause substantial harm to any of the objectives are excluded from the portfolio. In the absence of quantitative impact indicators to measure progress of the Sustainability Objectives, qualitative indicators are used to measure exposure to and management of these objectives. These are used to assess whether each investable company makes a high, medium or low contribution to each of the objectives. Reports will include the share of the Benchmark Index that has been excluded because of non-compliance with the Sustainability Objectives.

Methodologies for environmental or social characteristics

To ensure that the Fund’s investments meet the sustainability requirements, a selection procedure and an ESG scoring methodology have been developed. In addition to this, to express active ownership, engagements with companies are being maintained and (proxy) voting at shareholders’ meetings are used as tooling to encourage companies to act more sustainably. The basis for this is ACTIAM’s screening framework, which categorizes all companies in the investment universe and ensures that they contribute to the Fund’s Sustainability Objectives. This procedure is described under the paragraph ‘Environmental or social characteristics of the financial product’ and is described in detail in the Sustainable Investment Policy. The entire investment universe is screened according to this procedure at least four times a year. The companies that pass this screening process do not make a negative contribution to the sustainability goals.

The final step of the screening determines what percentage of the investment universe meets the SFDR definition of a ‘sustainable investment’, while ‘not doing significant harm to sustainable objectives’ and following ‘good governance’ principles and making a positive contribution to the targets. The extent to which a (financial instrument of a) company or institution already contributes to the Sustainability Goals is determined on the basis of the following criteria:

• A company generates at least 10% of its revenue from sustainable activities; or
• A company, determined on the basis of SDG data, makes a significant positive contribution to at least 1 of the SDGs defined by the United Nations, whereby the company in question also makes a positive contribution to at least 7 of the 17 SDGs or that the contribution to the ACTIAM Sustainability Goals has been determined on the basis of alternative objective information if the aforementioned SDG data is not available. The sustainable investments only invest in companies that contribute to achieving at least one of those objectives, without doing significantly harm to the other environmental and/or social objectives.

Data sources and processing

Data sources used to attain each of the environmental or social characteristics promoted by the financial product

ESG information is an integral part of ACTIAM’s investment processes. All investment teams use the screening procedure, ESG scores, impact information, SDG contribution and additional ESG information from companies and (semi) governments. The Sustainability and Corporate Strategy team manages the ESG data and analysis in a proprietary database that stores all input data, screening procedures, fundamental analysis and financial data. The ESG database is accessible to ACTIAM’s portfolio managers via an interactive dashboard that provides them with all the information they need in a quick and clear manner to get an overview of every company and all the funds that ACTIAM manages. This information entails, for example, the climate and water footprint, the extent to which a company operates in line with the Paris Agreement, and the SDGs.

ACTIAM uses various data and benchmarking sources for analyzes and reports. The main data sources and their applications are:

• MSCI data: screening of companies for their compliance with ACTIAM’s sustainable investment policy, and as a starting point for compiling the ACTIAM ESG score.
• Sustainalytics data: tracking engagements and reporting on the SFDR Principal Adverse Indicators and Taxonomy Alignment.
• Data from Urgewald: monitoring the expansion plans for coal-fired power plants.
• Access to Medicines Foundation benchmark data: tracking the progress of engagements at pharmaceutical companies.
• Equileap data: analyzing gender equality issues.
• CDP data (Carbon Disclosure Project): source for carbon, water and land data.
• Satelligence data: ACTIAM’s biodiversity commitments and monitoring activities to reduce deforestation.
• Data from the “Transition Pathway Initiative”: monitoring the extent to which a company operates in line with the Paris Agreement.
• TRACE data is used to monitor raw material supply chains and potential deforestation risks.

Measures taken to ensure data quality

The sustainability analysts meet regularly with the various data providers to discuss their quality control procedures, missing information and how to integrate additional insights into their assessments to ensure better quality and accuracy of their assessments. ACTIAM’s ESG models and ESG database are also checked by an internal and an external auditor. The quality checks they perform on the data used by ACTIAM include:

• Comparison of the data in the database with the data from the original source, performed by ESG analysts.
• Performing checks to identify outliers, the probability distribution and the internal logic of the data.

Decisions to exclude a company are never based solely on quantitative data sources but are always combined with fundamental analysis by an ESG analyst to monitor the reliability of data usage. ESG analysts compare different data sources and supplement them with their own research to validate the data.

How data are processed

All data is managed in an ESG database that combines the various data sources and maps data from multiple data providers. The database uses a method that allows the data points to be aggregated at the level of individual issuers, portfolios, asset classes or clients. The data is also used in various models to calculate ESG scores, to screen whether companies are complying with the sustainable investment process or to select companies with a positive impact.

The proportion of data that are estimated The carbon footprint, energy and climate intensity, water use and revenue shares for certain activities are largely based on reported data. Scope 3 emissions are still largely based on estimates, as only a small minority of publicly traded companies and institutions report this data. Many of the more qualitative indicators are based on rules, where certain behaviour or policies lead to a qualitative score. This score is then used to compare companies against each other and to assess company performance. For the SFDR and taxonomy data, ACTIAM publishes which share is based on reported or estimated data. A significant part of the sustainability data is currently still estimated. This will only change once companies and institutions report more consistently and comprehensively.

Limitations to methodologies and data

Limitations to the methodologies and to the data sources

The available data from various ESG data providers is not perfect. There are major differences between definitions and data reported by providers. For this reason, it is important to have a clear policy regarding ESG-related risks and ESG impacts. ACTIAM deals with these limitations in different ways.

Because it is impossible to include all ESG risks and opportunities, ACTIAM distinguishes seven sustainability drivers against which each company is assessed. Quantitative and qualitative indicators are used for each driver, with thresholds set to define boundaries between categories. These thresholds have been compiled, among other things, on the basis of scientific research into the planetary boundaries and the SDGs.

ACTIAM does this by participating in working groups in which methodologies are developed to measure the impact of financial products. Furthermore, ACTIAM is looking for new data sources that help to measure the impact of companies and the materiality of the sustainability themes in a reliable way. In the meantime, measures are being taken to be transparent about the choices made and investment choices made by ACTIAM. Furthermore, there is often only limited information available about the impact within the value chains for which companies are jointly responsible. For example, there is limited information available about human rights problems or environmental incidents that may occur among suppliers. To address this problem, ACTIAM is engaging with companies to point out the importance of monitoring their entire supply chain, to take responsibility for what is happening within these chains and ultimately discuss what steps companies can take to improve this.

How such limitations do not affect how the environmental or social characteristics promoted by the financial product are met ACTIAM continuously monitors whether the sustainability characteristics of the portfolios are improving fast enough to achieve the long-term sustainability objectives. For the objectives for which data are available, such as for CO2 emissions and water footprint, the progress of the portfolios is reported annually. If insufficient progress is made, the screening criteria or engagement criteria will be tightened. Also for the other objectives, it is monitored as closely as possible whether the companies implement the policy that is necessary to achieve the objectives.

Due diligence

The investable universe is composed on the basis of a screening of the entire universe. During this screening, ACTIAM determines which companies, governments and institutions meet the sustainability criteria as laid down in the ACTIAM Sustainable Investment Policy. For the entire assessment procedure, see the section entitled ‘Environmental or social characteristics of the financial product’. Before ACTIAM invests in a company, government or institution, it checks whether it is involved in controversies and violations of relevant international standards (UN Global Compact, UN Principles for Responsible Investments and ACTIAM’s own Sustainable Investment Policy). Subsequently, in-depth due diligence is performed to determine whether there is a risk that the company is guilty of ‘greenwashing’. The companies that do not comply with the Sustainable Investment Policy are fundamentally assessed by analysts from the Sustainability & Corporate Strategy team before the ESG Committee decides on exclusion. Within this review process, the analysts can add and remove companies from the universe based on their checklists and assessments. These steps result in the investment universe. All companies in which ACTIAM invests are checked periodically to ensure that the institution also puts its CSR policy into practice and meets its stated commitments. This includes monitoring any involvement in controversies and violations of relevant standards, as well as the extent to which companies are making progress on their sustainability claims. ACTIAM also exercises its voting rights and conducts in-depth discussions with companies on identified ESG risks and means for improvement.

Engagement policies

General philosophy

ACTIAM encourages companies to perform better in the field of sustainability by voting at shareholders’ meetings and by conducting engagements. There are several reasons to start an engagement with an issuer. For example, an engagement can be carried out in response to specific incidents or with a proactive aim, to encourage companies to create a positive impact. ACTIAM encourages companies by conducting engagements to seize sustainability opportunities, to operate within the planetary boundaries and to respect the social foundations of society. This can be about creating innovative opportunities, circular production processes or taking a leadership role in sustainability.

An engagement can have a proactive purpose, for example in response to a possible violation of ACTIAM’s fundamental investment principles or because the company is not taking enough steps in the transition to a sustainable way of operating. If the companies improve sufficiently on the basis of the engagements, they can remain (or become) part of the investable universe. In the event that an engagement proves unsuccessful and the company continues to violate ACTIAM’s fundamental investment principles, this may lead to exclusion. Engagements play a key role in driving change in the real economy.

Process

ACTIAM carries out different types of engagements to achieve different objectives. The engagements can be conducted as an individual dialogue with a company, but also as a collaboration with other asset managers. The engagements are often long-term processes, where objectives are determined in advance. ACTIAM also holds talks with companies on an ad hoc basis, for example during one-off meetings, at events or to clarify ACTIAM’s points of view.

For long-term engagements, the objectives of the dialogues are determined in advance. Active ownership specialists determine the relevant objectives at the start of an engagement and perform a baseline measurement to see where the company stands. ACTIAM then follows the progress of the dialogues by keeping track of the performance achieved by the companies against predetermined milestones and specific objectives. Progress is monitored, recorded and reported to customers at least quarterly. During and at the end of an engagement, ACTIAM monitors whether the company meets the expected progress and also puts its CSR policy into practice. The level or lack of progress is a factor in determining next steps.

ACTIAM carefully determines whether a company should be excluded from its investment universe. When a controversy arises, ACTIAM’s first reaction is always to enter into a dialogue with management. In this way, ACTIAM tries to find solutions for the existing problems together with the company and to prevent further controversies in the future. Exclusion is a measure used by ACTIAM only as a last resort. An exception applies to specific activities in the arms and mining industry, which lead to immediate exclusion. These activities include the production of controversial weapons (such as nuclear weapons) and the discharge of toxic waste into rivers. More details about ACTIAM’s engagement policy can be found on the website – https://www.actiam.com/en/

Designated reference benchmark

No specific index has been designated for the Fund as a reference benchmark to meet the Sustainability Objectives.

[1] Note that these indicators are used to measure whether a company contributes to a target, but are not necessarily suitable for evaluating whether the target is reached on a portfolio level.

[2] As defined in the EU Delegated Regulation (EU)2020/1818 of 17 July 2020 supplementing Regulation (EU) 2016/1011 f the European Parliament and of the Council as regards minimum standards for EU Climate Transition Benchmarks and EU Paris-aligned Benchmarks.

[3] As defined in the final report of the EU TEG on Sustainable Finance on climate benchmarks and benchmark’s ESG disclosures of September 2019.