European SRI Transparency Code Version 3:0 - … · European SRI Transparency Code Version 3:0 The European SRI Transparency Code (the Code) focuses on SRI funds distributed publicly

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European SRI Transparency Code Version 3:0

The European SRI Transparency Code (the Code) focuses on SRI funds distributed publicly in Europe

and has been designed to cover a range of assets classes, such as equity and fixed income.

All information pertaining to the European SRI Transparency Code can be found at the following

website: www.eurosif.org. The Code comes with a Guidance Manual for fund managers on how to

best use and respond to the Transparency Code. The present version of the Code has been approved

by the Board of Eurosif on October 3, 2012.

TWO KEY MOTIVATIONS UNDERPIN THIS CODE

1. The opportunity for retail SRI funds to clarify their SRI approach to investors and other stakeholders in an easily accessible and comparable format.

2. Proactively strengthen a self-regulation that contributes to the development and promotion of SRI funds by setting up a common framework for transparency best practices.

GUIDING PRINCIPLE

Signatories to the Code should be open, honest and disclose accurate, adequate and timely

information to enable stakeholders, in particular consumers, to understand the ESG1 policies and

practices of the fund.

COMMITMENTS FROM SIGNATORIES

The order and exact wording of the questions shall be respected;

Responses should be informative and clear, and the resources and methodologies deployed should be described with as much detail and precision as possible;

Funds should report data in the currency that they use for other reporting purposes;

Reasons preventing the fund from providing all or part of the information to a given question should be clearly stated and, in such a case, signatories should state when they will be able to answer the question;

Responses shall be updated at least on an annual basis and should have a precise publication date;

Responses to the Code should be easily accessible on the fund’s and/or fund manager’s website. In any case, signatories should make it clear where to find the information required by the Code;

Signatories are solely responsible for the answers to the questions, and should state this in their response.

1 ESG stands for Environmental, Social and Governance.

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To clarify these commitments, signatories should include at the beginning of the response document

the following two statements:

Statement of Commitment

Sustainable and Responsible Investing is an essential part of the strategic positioning and behaviour

of RobecoSAM AG. We have been involved in SRI since 1995 and welcome the European SRI

Transparency Code.

This is our seventh statement of commitment and it covers the period 01.09.2015 to 31.08.2016. Our

full response to the European SRI Transparency Code can be accessed below and is available in the

annual report of the retail funds and on our website.

Compliance with the Transparency Code

RobecoSAM AG is committed to transparency and we believe that we are as transparent as possible

given the regulatory and competitive environments that exist in the countries in which we operate.

RobecoSAM meets the full recommendations of the European SRI Transparency Code.

August 2015

CODE CATEGORIES

Section 1 – Basic Details

The Fund Management Company

1a Provide the name of the fund management company managing the fund(s) to which this code

apply.

Provide general information about The Fund Management Company managing the fund(s) to which

this code applies (e.g. name, address, website…).

RobecoSAM AG (formerly SAM Sustainable Asset Management AG) Josefstrasse 218, CH-8005 Zürich Web: www.robecosam.com Martijn Oosterwoud Head Client Portfolio Management & RFP RobecoSAM Email: [email protected] Tel: +41 44 653 1072 Web: www.robecosam.com

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1b Describe the general approach of the fund management company with regards to how it takes

environmental, social and governance (ESG) criteria into consideration.

Is the fund management company approach towards ESG criteria aligned or inspired by its corporate

social responsibility approach? Yes/No. If yes, insert a link to the company’s CSR policy. If not, explain

why not.

RobecoSAM AG (formerly SAM Sustainable Asset Management AG) was founded in 1995 as an independent asset management company focusing exclusively on sustainability investing, and has grown to become one of the world's leading institutions in this field. Its client base includes banks, insurance companies, pension funds and family offices. In partnership with S&P Dow Jones Indices, RobecoSAM has developed and licenses the globally recognized Dow Jones Sustainability Indices (DJSI), launched in September of 1999. The DJSI family has since grown to include global, European, Eurozone, North American, US, Asia-Pacific, Emerging Markets benchmarks and a Diversified index family. Sustainability Investing is at the heart of RobecoSAM’s business. Our mission is “to translate sustainability foresight into outstanding investment results”. All our business processes (including our corporate strategy, investment approaches, management, and governance structures) are aligned with this goal. Please see below for an overview of RobecoSAM’s corporate responsibility achievements:

2001: RobecoSAM becomes the first company in Switzerland to receive the Carbon

Neutral(r) status in 2001, and is awarded the CarbonNeutral(r) status each year since.

2002: RobecoSAM partners with the Association for Sustainable & Responsible

Investment in Asia (ASrIA) 2004: RobecoSAM signs up to the transparency guidelines for sustainable retail funds

issued by the European Social Investment Forum (Eurosif) 2007: RobecoSAM becomes a signatory of the Principles for Responsible Investments

(PRI). 2009: RobecoSAM becomes a member of the Investor Network for Climate Risk and the

Ceres Coalition.

2010: RobecoSAM signs and endorses the CEO Water Mandate (http://ceowatermandate.org/), which is an initiative of the UN Global Compact.

2011: RobecoSAM becomes a partner of co2-monitor – a tool which enables the users

to discover their personal CO2 emissions and find out how to reduced it. 2012: Drink and Donate: The concept of "Drink and Donate" means that by drinking

Switzerland’s clean tap water, we can donate water to those lacking access. The goal of ZH2O is to create awareness and increase fairness. Awareness that water is precious and we should appreciate the high quality water we have locally and fairness in that we help people without access to clean drinking water. Through our participation in drink & donate, for each employee, RobecoSAM is now able to provide for long term access to clean drinking water to those who lack it.

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2013: RobecoSAM establishes a collaboration with CDP: CDP is the provider of the only global environmental disclosure system and the producer of the annual Climate Disclosure and Climate Performance Leadership Indexes (CDLI & CPLI). In the annual RobecoSAM Corporate Sustainability Assessment, RobecoSAM now asks public companies the same climate change questions as those developed over the past decade by CDP. This collaboration improves the comparability of sustainability data in the global market.

2014: RobecoSAM in cooperation with the Asian Development Bank and Orix announced

the formation of Asia Climate Partners (ACP), a joint venture that undertakes commercially-oriented private equity investments across a variety of environmentally supportive, low-carbon transactions throughout Asia.

2015: RobecoSAM became a signatory of the Portfolio Decarbonization Coalition, a

multi-stakeholder initiative that will drive GHG emissions reductions by mobilizing a critical mass of institutional investors committed to gradually decarbonizing their portfolios.

Has the fund management company signed the Principles for Responsible Investment? If yes, please

insert the link to the answer to the PRI questionnaire. If not, explain why not.

In 2007, RobecoSAM became a signatory of the Principles for Responsible Investments (PRI). In August 2015, RobecoSAM has announced that they have been awarded an A+ score by the UN PRI for their overarching approach to Sustainability Investing. Of the 681 investment managers that are signatories of the UN PRI, only 16% received A+ scores for their overarching approach. RobecoSAM’s responses to the last PRI Reporting and Assessment survey can be requested via [email protected] or [email protected]

Is the fund Manager a signatory or a member of other international and/or national initiatives

supporting SRI practices? Please answer if you deem this information to be useful.

Please refer to our response above on page 3, regarding RobecoSAM’s membership of international initiatives supporting SRI practice. In addition, we are involved in a number of academic collaborations in which we share our sustainability data with partner universities, business schools and research institutions, such as Swiss Federal Institute of Technology (ETH), Erasmus University and WWF UK, and support them in conducting empirical research on the linkages between sustainability performance and financial performance. Finally, we participate in a number of industry forums (such as UNPRI, Ceres, and Forum Nachaltige Geldanlage (FNG)) and thought-leadership initiatives in which we seek to advance key sustainability topics such as water footprint and education.

In 2004, RobecoSAM signed up to the transparency guidelines for sustainable retail funds issued by the European Social Investment Forum (Eurosif).

Has the fund management company established an ESG engagement policy? If yes, describe the

policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If

not, explain why not.

RobecoSAM’s Governance & Active Ownership team provides engagement and voting services for

institutional investors. We engage with companies on behalf of Robeco Group and our clients to

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maximize the value of their investments, leveraging expertise from our investment analysts and the

sustainability insight accumulated through our annual RobecoSAM Corporate Sustainability

Assessment (CSA) – which forms the research backbone of RobecoSAM’s asset management

activities and the Dow Jones Sustainability Indices (DJSI).

The ultimate goal of our engagement is to increase the long-term shareholder value of the companies

we invest in. Engagement knowledge, sustainability expertise from RobecoSAM and investor insights

from across the Robeco Group are combined in our engagement approach and process. The

Governance & Active Ownership team works closely together with the Sustainability Investing

Research department of RobecoSAM and the Robeco and RobecoSAM investment teams to focus on

financially material engagement cases.

We engage companies by entering into constructive dialogues. Through these dialogues, we

encourage companies to adopt socially conscious, environmentally rigorous and ethically sound

business practices. Our approach also covers corporate governance topics such as the improvement

of the board quality, the remuneration policy of executives, corporate structures and controlling rights.

RobecoSAM’s Governance & Active Ownership team applies two engagement approaches:

Enhanced engagement. Aimed at influencing companies to act according to the UN Global

Compact principles.

Value engagement. Aimed at making a link between investment activities and active

ownership.

Enhanced engagement

Our enhanced engagement program focuses on companies that severely and structurally breach the

principles of the United Nations Global Compact (UNGC).

The process is based on a systematic analysis of alleged breaches of UN Global Compact principles

Our enhanced engagement case selection process is aligned with the Media & Stakeholder Analysis (MSA) performed as part of the annual RobecoSAM Corporate Sustainability Assessment conducted by RobecoSAM’s Sustainability Investing research team.

The MSA process continuously monitors the news flow of global print and online media and other publicly available information from consumer organizations, governments and NGOs based on data provided by service provider RepRisk and evaluates the companies’ responses to environmental, economic or social crisis situations that may have a negative impact on their core business or reputation.

The Governance & Active Ownership team then applies a specific UNGC breach filter on the MSA outcome to categorize the incidents and identify the companies most severely breaching the UNGC.

Companies are selected based on the severity of the alleged breaches and on portfolio holdings.

For engagement, we prioritize those companies which are in the portfolios of Robeco Group and our clients.

Enhanced engagement is aimed at influencing companies to act in line with the UN Global Compact. In order to measure progress we use standardized objectives focused on elimination of the breach, policy, stakeholder dialogue, risk management systems and transparency.

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The engagement typically runs over a three-year period, during which we have regular meetings with company representatives to track their progress against our engagement objectives.

If a company is not willing to improve its conduct during the three years, there is a possibility to revert to more stringent methods such as exclusion from our investment universe.

In this case we can provide clients with an advise for exclusion. The ultimate decision will obviously remain with the client.

Value engagement

The process is focused on making the link between investment activities and responsible ownership activities. By discussing sustainability risks and opportunities with companies and providing them with insights into investors’ expectations of corporate behavior, we encourage these companies to adopt better practices. Companies with sustainable business practices can create a competitive advantage and are likely to improve the risk-return profile of their shares.

Issues are identified based on their financial materiality. We focus our value engagement activities on a limited number of sustainability themes that have most potential to create value. Financial materiality of ESG issues is assessed by the Sustainability Investing research team, investment teams of the Robeco Group and the Governance & Active Ownership team, in consultation with our clients.

Companies are selected based on lagging performance and portfolio holdings. For these financially material themes we conduct a baseline study and develop engagement profiles for the companies to be engaged. We prioritize companies in our portfolios and our client portfolios that have most exposure to the respective engagement theme. Based on the research study, we establish SMART (Specific, Measurable, Attainable, Relevant, Time-bound) objectives and begin a dialogue to encourage companies to address the issues identified. We have regular meetings with company representatives to track their progress towards meeting our engagement objectives over a three-year period. This engagement is aimed at improving the risk-return profile of the company’s stock and ultimately of our client’s portfolio. In most cases Robeco engages with investee companies bilaterally, but there are instances where collaborative engagement is more effective.

Has the fund management company established a voting policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If not, explain why not.

Voting by proxy The RobecoSAM Governance and Active Ownership team consists of 11 persons. This group of voting and engagement specialists acts on behalf of the Robeco Group when engaging with companies on sustainability topics. RobecoSAM votes for all investment funds for which the costs of voting are not expected to have a noticeable, negative impact on investment results. Each year RobecoSAM determines for which of its investment funds it is cost effective to exercise its proxy voting rights. Currently, RobecoSAM votes for the RobecoSAM Sustainable Agribusiness Equities strategy.

To avoid unnecessary costs and to increase the efficiency of the voting services in the interests of our clients, RobecoSAM uses an electronic voting platform to cast votes.

Policy

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Describe how the fund management company or the group contributes to the promotion and the

development of SRI.

Promoting Sustainability Investing RobecoSAM also hosts the annual RobecoSAM Forum, bringing together institutional investors, asset managers and company stakeholders with the goal of analysing key sustainability trends shaping industries and financial markets. By connecting key decision-makers across the financial industry, the RobecoSAM Forum serves as a platform for establishing a global community of thought leaders and practitioners of sustainability investing. In addition, RobecoSAM is actively involved with over 10 other sustainability institutions and organizations.These institutional include the following:, Global Real Estate Sustainability Benchmark (GRESB), CDP, International Corporate Governance Network (ICGN), Investor Network on Climate Risk (INCR)/CERES, United Nations Environment Programme Financ

Initiative (UNEP FI), United Nations Global Compact (UNGC), United Nations Principles for Responsible Investment, Global Reporting Initiative, ASRIA, International Integrated

Reporting Committee (IIRC), and Sustainability Accounting Board Standards (SASB). In our view, the first step to being a responsible and active owner is to send companies a strong signal that we, as investors, are interested in how they manage sustainability issues. Our questionnaire used for the RobecoSAM Corporate Sustainability Assessment acts as a tool to encourage improved disclosure on key sustainability issues of interest to long-term investors and offers companies a blueprint of industry best practices. Moreover, the Dow Jones Sustainability Indices (DJSI), which is based on the results of RobecoSAM’s annual assessment, offers investors an indirect engagement platform to have a collective impact on companies through all our licensees. One of the merits of indirect engagement is that it expands the scope of our efforts. In the first phase of our Corporate Sustainability Assessment process, our invitations to the RobecoSAM assessment reach 3300+ companies every year. Over 860 companies participate actively in the assessment. Subsequently we enter into structured one-on-one dialogues with app. 150-200 companies that have demonstrated an interest in improving their sustainability performance. Discussions with management are based on a company-specific benchmarking report that compares the company’s performance with industry best practices on 120+ criteria. Finally, we engage with companies on an ad hoc basis if they appear to have been involved in controversial business activities or in breach of international norms and standards. The RobecoSAM Corporate Sustainability Assessment process can therefore be seen as a combination of indirect engagement at the systemic level and direct engagement activities through active dialogues with companies which aim to improve specific aspects of corporate behaviour.

1c Describe/List your SRI products and the specific resources allocated to your SRI activities.

Briefly describe the SRI fund range (number, assets under management, strategies, ...)

Describe/Detail the resources allocated by the fund management company (organization, ESG

research internal/external, dedicated portfolio management team, …) and indicate where this

information is available.

Sustainability Solutions The firm’s offering comprises asset management, indices and private equity. Its asset management capabilities include a broad range of global equity, regional, quant, and theme-

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based strategies in the areas of Water, Smart Energy, Smart Materials, Healthy Living and Agribusiness. Every strategy is managed by a dedicated lead portfolio manager who has full decision making responsibility. Portfolio managers directly report to the Head Public Equities, who is a member of RobecoSAM's Executive Committee. In addition to the funds, RobecoSAM offers large institutional investors customized investment solutions and mandates that incorporate sustainability criteria, including optimized, active and unconstrained strategies. The RobecoSAM Private Equity offers core and satellite investment capabilities with a focus on mainstream and resource efficiency to institutional investors. RobecoSAM's Private Equity Resource Efficiency capability is focused on capitalizing on the growing supply-demand imbalance of natural resources. Resource efficient solutions address these issues and are expected to be of vital importance to sustain global growth patterns. Resource Efficiency encompasses a number of key industry sectors such as energy, industrials, water, agribusiness and materials.

Fund name Inception date Strategy AuM (EUR million) as of June 2015

Core Equity Funds

RobecoSAM Sustainable Global Equity Fund 03.05.2004 266

RobecoSAM Sustainable European Equities Fund 28.05.1991 520

RobecoSAM Global Small Cap Equities Fund 30.03.2007* 57

Theme-based Equity Funds

RobecoSAM Sustainable Water Fund 28.09.2001 895

RobecoSAM Smart Energy Fund 23.09.2003 248

RobecoSAM Smart Materials Fund 02.10.2006 238

RobecoSAM Sustainable Healthy Living Fund 30.03.2007 286

RobecoSAM Sustainable Agribusiness Equities Fund 29.08.2008 147

Quant

RobecoSAM Quant Sustainable Global Equities 01.06.2014 106

Private Equity

Resource Efficiency Funds 703

Mainstream Funds 974 *Change of name as of 15.12.2014 (formerly RobecoSAM Sustainable Climate Fund)

In partnership with S&P Dow Jones Indices, RobecoSAM has developed and licenses the globally recognized Dow Jones Sustainability Indices (DJSI), launched in September of 1999. The DJSI family has since grown to include global, European, Eurozone, North American, US, Asia-Pacific Emerging Markets benchmarks and a Diversified index family. Furthermore, RobecoSAM is the centre of expertise for Private Equity within the Robeco group. The Private Equity team consists of 3 investment professionals, 2 senior associates, and 1 research analyst. Sustainability Research RobecoSAM’s Sustainability research is generated internally, and is based on RobecoSAM’s annual Corporate Sustainability Assessment and the annual reports published by the companies covered by RobecoSAM’s Research. Over the last 15 years, RobecoSAM has identified and developed an extensive set of economic, environmental, and social assessment criteria in order to measure a company’s sustainability performance. These criteria are built into the questionnaire, which quantifies the sustainability performance of a company by assigning a corporate sustainability score based on predefined weights for each of the criteria.

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The data we collect is stored in RobecoSAM’s proprietary Sustainability Information Management System (SIMS), where it is converted into investment relevant insights.

Information used as inputs for the RobecoSAM Corporate Sustainability Assessment includes, among others, environmental, social and economic (raw) data provided by the companies, supporting documentation such as internal corporate strategies and policies, position papers, publicly available sustainability, environmental, or occupational health and safety reports.

Internal Research Capabilities

RobecoSAM’s Research team consists of a multi-disciplinary and multi-cultural team of 7 equity analysts and 10 SI analysts with a broad range of backgrounds in the fields of business, natural science, finance and social science. The analysts provide sector, company and sustainability research for the full range of RobecoSAM’s investment strategies. Each analyst possesses several years of experience in either sustainability-related areas or traditional financial analysis, contributing to the firm’s overall research efforts. Each RobecoSAM analyst meets on average at least 50 companies per year. In addition to discussing financial performance issues, analysts also typically steer their conversations with company management towards long-term sustainability topics related to environmental and social issues in order to inform their view of a company’s risk-return profile. Our strong focus on primary research with respect to under-researched topics related to environmental, social and financial considerations enables RobecoSAM research to maintain an information advantage over mainstream investors who do not consider these factors in their investment process. Fund holdings are published in RobecoSAM’s annual and semi-annual reports. These can be downloaded at: Funds | RobecoSAM Publications regarding the product capabilities such as prospectus, factsheets and fund brochures can be found under: http://www.robecosam.com/en/professionals/strategies-services/index.jsp

1d Describe the content, frequency and resources allocated/used by the fund management company

to inform investors about the ESG criteria taken into account.

The RobecoSAM Yearbook can be found in digital form and in form to download under: The Sustainability Yearbook | RobecoSAM RobecoSAM studies and white papers, Foresight, Insight and Flash can be found under: Sustainability insights | RobecoSAM The RobecoSAM Newsletter is on a subscription basis: Newsletter | RobecoSAM

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The SRI Fund(s)

1e Provide the name of the fund(s) to which this Code applies and its (their) main characteristics

Describe the main characteristics of the fund(s): geographical focus, asset class, SRI strategy used

(use the classification provided by Eurosif/EFAMA).

As mentioned above, RobecoSAM exclusively focuses on sustainability investing. Therefore, all RobecoSAM strategies are managed according to the RobecoSAM sustainability principles. The RobecoSAM strategies are long-only equity products. Core strategies (regional): The core strategies invest in companies in the MSCI World, MSCI World Small Cap, and the MSCI Europe that have received a sustainability score (based on the RobecoSAM Sustainability Assessment), plus listed companies outside the respective index that are covered by RobecoSAM's sustainability theme strategies:

RobecoSAM Sustainable Global Equities (LU0188782162)

RobecoSAM Sustainable European Equities (LU0187077218)

RobecoSAM Quant Sustainable Global Equities (LU1036586912)

RobecoSAM Global Small Cap Equities (LU0280770172)

Theme strategies:

Long-term sustainability related trends such as demographic change, resource scarcity, pollution, and climate change shape the competitive landscape in which companies operate. RobecoSAM's theme-based strategies invest in listed companies worldwide that anticipate and respond to challenges in the areas of Water, Smart Energy, Smart Materials, Healthy Living and Agribusiness:

RobecoSAM Sustainable Water Fund (LU0133061175)

RobecoSAM Smart Energy Fund (LU0175571735)

RobecoSAM Smart Materials Fund (LU0175575991)

RobecoSAM Sustainable Healthy Living Fund (LU0280770768)

RobecoSAM Sustainable Agribusiness Equities Fund (LU0374106754)

1f What is (are) this (these) fund(s) trying to achieve through taking into account ESG criteria?

For instance, financing a specific sector, reducing risks, support better CSR practices, develop new

value creation opportunities, other objectives.

Creating shareholder value through sustainability investing RobecoSAM’s overall corporate philosophy, product strategy and focus are based on its aim to provide a compelling range of sustainability products to its clients. By leveraging the comprehensive data collected by the RobecoSAM Corporate Sustainability Assessment, we are ideally positioned to identify companies leading their peers in terms of sustainability and, thus, shareholder value creation. RobecoSAM’s fundamental investment philosophy is based on the premise that overarching sustainability megatrends such as demographic change, resource scarcity, pollution, and climate change shape the competitive landscape in which companies operate and that the financial markets are the most powerful transmission mechanism to promote sustainable business

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practices. We believe that material, non-financial information fully integrated with traditional financial data gives investors an information edge. We believe that sustainability is all about a company’s capacity to prosper by anticipating and managing current and future economic, environmental and social opportunities and risks by focusing on quality, innovation and productivity to create a competitive advantage – and most importantly, long-term stakeholder value. We believe that these objectives focus companies on activities that positively affect their free cash flow, return on invested capital and weighted average cost of capital. RobecoSAM’s in-house empirical analysis demonstrates that sustainability investing delivers alpha to investors. Please consider our white paper "Alpha from Sustainability": http://www.robecosam.com/images/Alpha_from_Sustainability_06_2014.pdf

Section 2. Approach to ESG Evaluation of Companies

2a What fundamental principles underlie the ESG research methodology?

Describe the principles, standards or norms on which the ESG analysis is based for each of the

environmental, social/societal and governance dimensions. Include brief comments about how

stakeholders are consulted, as appropriate.

Economic, Environmental and Social Criteria

Sustainability is the guiding principle of development “that meet the needs of the present without

compromising the ability of future generations to meet their own needs.”2 Its central element is a

future-oriented perspective that incorporates economic, environmental, and social considerations into business decisions. Factors such as good corporate governance practices, ethical behaviour, human capital management, environmental policies, and risk and crisis management are crucial contributors to the long-term success of a company. Similarly, Sustainability Investing is a long-term investment approach that integrates economic, environmental, and social criteria into the selection and retention of investments. Our conviction is that sustainability trends such as climate change, resource efficiency, or demographics have an impact on the environment in which companies compete, and their response to such challenges determines their ability to create shareholder value. The impact of these sustainability factors and trends on companies’ long-term business and financial performance is under-estimated and under-researched by investors, resulting in market inefficiencies, which RobecoSAM is well positioned to exploit. At the corporate level, sustainability is a future-oriented approach in which companies incorporate economic, environmental, and social considerations into their business decisions. Based on the global trend analysis, research identifies factors such as corporate governance practices, human capital management, environmental policies, and risk and crisis management that have a material impact on the long-term success of a company. Companies that are better at managing corporate sustainability risks than their peers are well-positioned to profit in the long run. By analysing the sustainability profile of companies and integrating it into traditional financial analysis, RobecoSAM gains additional insights that facilitate the selection of stocks offering the potential for attractive long-term returns, while investing in responsible companies.

2 Brundtland Commission, Our Common Future, 1987

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Media & Stakeholder Analysis As part of its annual Corporate Sustainability Assessment, RobecoSAM conducts an ongoing monitoring of companies that have been selected as members of the eligible investment universe for its funds, or as components of the Dow Jones Sustainability Indices. This monitoring process consists of a Media & Stakeholder Analysis, which is based on automated media screens, and frequent interactions with key stakeholders such as NGOs and consumer organizations. Companies are monitored on an ongoing basis to verify their involvement in, and the management of critical environmental, economic and social crisis situations that can have a damaging effect on their reputation and core business. In addition, the consistency and quality of a company’s behaviour, response, and management of such situations is reviewed in line with its stated principles and policies. The Media & Stakeholder Analysis can lead to the downgrading of a company’s sustainability score, which may affect its overall fair valuation score. Examples of critical issues identified and reviewed through the monitoring process include:

Commercial practices; e.g. tax fraud, money laundering, antitrust, balance sheet fraud, and corruption cases.

Human rights abuses; e.g. cases involving discrimination, forced resettlements, child labour and discrimination of indigenous people.

Layoffs or workforce conflicts; e.g. extensive layoffs and strikes.

Catastrophic events or accidents: e.g., fatalities, workplace safety issues, technical failures, ecological disasters and product recalls.

2b What internal and external resources are used to carry out this research?

Describe the general information used to carry out the ESG research: internal analysis, ESG rating

agencies, other external sources of information.

Information Source RobecoSAM’s Sustainability research is generated internally, and is based on RobecoSAM’s annual Corporate Sustainability Assessment and the annual reports published by the companies covered by RobecoSAM Research. Over the last 16 years, RobecoSAM has identified and developed an extensive set of economic, environmental, and social assessment criteria in order to measure a company’s sustainability performance. These criteria are built into the questionnaire, which quantifies the sustainability performance of a company by assigning a corporate sustainability score based on predefined weights for each of the criteria. The data we collect is stored in RobecoSAM’s proprietary Sustainability Information Management System (SIMS), where it is converted into investment relevant insights.

Information used as inputs for the RobecoSAM Corporate Sustainability Assessment includes, among others, environmental, social and economic (raw) data provided by the companies, supporting documentation such as internal corporate strategies and policies, position papers, publicly available sustainability, environmental, or occupational health and safety reports.

Media & Stakeholder Analysis The Media & Stakeholder Analysis (MSA), that represents an integrated part of the RobecoSAM Corporate Sustainability Assessment, is based on information, currently provided by environmental and social dynamic data supplier RepRisk.

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Primary Research Each RobecoSAM analyst meets on average at least 50 companies per year. In addition to discussing financial performance issues, analysts also typically steer their conversations with company management towards long-term sustainability topics related to environmental and social issues in order to inform their view of a company’s risk-return profile. Our strong focus on primary research with respect to under-researched topics related to environmental, social and financial considerations enables RobecoSAM research to maintain an information advantage over mainstream investors who do not consider these factors in their investment process.

2c Which ESG analysis criteria are used?

Indicate what the main criteria for each of the environmental, social/societal and governance

dimensions are. Specify if these criteria differ according to sectors, the geographical zones, the type of

company, … If appropriate, provide an example.

Sustainability Analysis Criteria Based on a global trend analysis, RobecoSAM has identified underlying economic, environmental and social megatrends such as aging infrastructure, access to capital, the scarcity of natural resources, and climate change, coupled with population growth, urbanization, and an aging population. Such trends represent opportunities and risks for companies to develop and market innovative products and services that address these long-term sustainability challenges. Those who can successfully anticipate to these trends are well-positioned to outperform in the long run. We use a “best in class” approach, as through our annual Corporate Sustainability Assessment we identify the most sustainable companies in each of the 59 sectors. The sustainability scores, however, are integrated into the valuation model. Companies with a superior sustainability score will have a positive impact on their total valuation analysis, because we believe that more sustainable companies are better positioned to generate long term shareholder value. Sustainability laggards will have a negative impact on their overall valuation, as they are more likely to be underperformers in terms of their ability to maintain and grow earnings. Based on these trends, RobecoSAM has defined over 120 general and industry –specific criteria, across 59 different industries, which form the basis of the annual RobecoSAM Corporate Sustainability Assessment. All criteria are based on widely accepted standards, best practices and audit procedures as well as extensive input from industry specialists and consultants. RobecoSAM’s annual assessment is also used as the basis for the construction and annual review of the Dow Jones Sustainability Indices (DJSI). General criteria include standard management practices and performance measures applicable to all industries, such as corporate governance, environmental management and performance, human rights, supply chain management, risk and crisis management and labour practices. The industry specific criteria account for the majority of the assessment. Industry-specific criteria take into account the challenges and trends affecting specific industries. They reflect the economic, environmental and social forces driving the sustainability performance of a particular industry. The assessment is divided into three distinct sections, covering the economic, environmental and social dimensions. A selection of criteria used in the Assessment is outlined below.

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RobecoSAM’s Industry-based analysis

RobecoSAM’s industry-based analysis

Economic Dimension• Corporate Governance• Risk & Crisis Management• Codes of Conduct & Corruption• Customer Relationship Management• Supply Chain Management• Innovation Management

Environmental Dimension• Environmental Reporting• Climate Strategy• Operational Eco-Efficiency• Product Stewardship• Environmental Policy & Management Systems

Social Dimension• Social Reporting• Labor Practice Indicators• Human Capital Management• Talent Attraction & Retention• Corporate Citizenship & Philanthropy• Stakeholder Engagement

Over 90 cross- and industry-specific criteria and dimension weights

Industry SpecificCriteria > 50%

GeneralCriteria< 50%

33% 33%

33%

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2d What is your ESG analysis and evaluation methodology (how the investment universe is built,

rating system, …)?

Describe the ESG evaluation/rating system and how it is built by explaining how the various ESG

criteria are articulated. If appropriate, provide an example.

RobecoSAM Sustainability Score RobecoSAM’s methodology is based on the application of economic, social and environmental criteria to assess the opportunities and risks deriving from these three dimensions. Over the last 16 years, RobecoSAM has identified an extensive set of criteria which are used to measure a company’s sustainability performance. These criteria are built into an extensive industry-specific annual questionnaire, the RobecoSAM’s Corporate Sustainability Assessment. It is used to obtain insights into each company’s response to a broad range of general and industry specific sustainability challenges. The information provided by a specific company is quantified based on predefined weights for each of the criteria, and results in a Sustainability Score – which is also used as a base for the construction of the Dow Jones Sustainability Indices. Additional sources of information used as an input for the sustainability assessment include supporting documentation such as sustainability reports, environmental reports, and health and safety measures provided by the companies, as well as personal contacts between the analysts and companies. In addition, analysts review media, press releases, articles, and stakeholder commentary written about a company over the past twelve months. This information is integrated into the sustainability analysis, and also serves as a basis for possible downgrading of a company’s sustainability score. Information provided in the questionnaire is verified. Verification includes crosschecking answers with documentation provided by the company, verifying a company’s track record and incidents and crisis management with media and stakeholder reports and, if necessary, direct interaction and clarification with the company.

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Industry-Specific Assessment RobecoSAM analyses the corporate sustainability information collected by focusing on the company’s position within its industry and chosen markets, its degree of preparedness for the opportunities and challenges arising from global sustainability trends, and the degree to which its business practices align management interests with those of the shareholders. Companies that are better at seizing opportunities and managing risks than their industry peers are well-positioned to profit in the long run. Thus, those companies that embrace corporate sustainability as a key source of competitive advantage and implement sustainable practices to mitigate risks and seize opportunities are more likely to receive a higher sustainability score compared to their peers. The score is then incorporated into the RobecoSAM Valuation Model, because RobecoSAM believes that management decisions regarding sustainability factors pertaining to the environment, social considerations and corporate governance have an impact on value drivers such as a company’s resource efficiency, workforce motivation, innovation potential, and reputation with stakeholders. The positive or negative impact of sustainable (or unsustainable) management decisions can then be measured in the company’s financials such as revenues, costs or reinvestment rates. Companies with a high sustainability score will enjoy a higher return on invested capital and/or a lower cost of capital, thus receiving a higher RobecoSAM Fair Value score.

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2e How frequently is the ESG evaluation reviewed?

Please briefly explain the methodology update process and who is involved. If appropriate, explain if

the methodology has changed in the past 12 months and the nature of the key changes.

RobecoSAM continuously makes enhancements to its research methodology in order to identify and interpret corporate sustainability information that has a material impact on long-term shareholder value creation. Such enhancements are aligned with our mission to leverage our understanding of sustainability issues in making better-informed investment decisions. Each SI research analyst is responsible for reviewing the sector-specific portion of the questionnaire for his or her area of coverage, and amending or including new questions for inclusion in the questionnaire, based on industry-specific sustainability trends, risks, and challenges affecting his or her specific research sector. We focus on ESG issues that are material to the companies' respective industries, long-term in nature, and that are under-researched in traditional financial analysis. As sustainability becomes more embedded in corporate practices, RobecoSAM regularly updates the questionnaire to capture new sustainability trends that are likely to have an impact on the companies' competitive landscape, and to continuously challenge companies to improve their policies and processes. The questionnaire for the annual RobecoSAM Corporate Sustainability Assessment is reviewed by RobecoSAM Research each year. Approximately 20-30% of the questions are yearly renewed and optimized. In the 2014 assessment, for instance, new questions on Tax Strategy and responsible taxation policies were introduced and increased focus were put on how companies systematically are measuring the return on investment for their human capital development strategies and for the 2015 assessment, the section on Corporate Governance was extended to cover additional questions about long-term remuneration and sustainability governance. By doing so, we hope to raise awareness and eventually improve corporate performance in these areas. In addition to this, many other criteria were reviewed to ensure consistency, clarity and materiality of the questions asked. Other enhancements to our SI research process include a Materiality Analysis on the most relevant sustainability factors for the GICS industries that RobecoSAM analyses, and a new format for sharing companies’ Sustainability Profiles with other investment professional of the group. Because the Corporate Sustainability Assessment also forms the basis for the Dow Jones Sustainability Indices (DJSI), key criteria changes are published in the form of a Review Presentation, which can be downloaded:

Annual Review DJSI Additionally, we publish an annual RobecoSAM Sustainability Yearbook, which includes some of the major changes to the RobecoSAM Corporate Sustainability Assessment. A copy of the yearbook can be found on our webpage:

RobecoSAM Sustainability Yearbook To ensure quality and objectivity of the RobecoSAM Corporate Sustainability Assessment, an external

review by Deloitte is completed. The review monitors and maintains the accuracy of the assessment procedures and results. The Assurance Statement can be downloaded as a PDF file at:

Deloitte Assurance Report

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Section 3. Fund Management Process

3a How do you take into account ESG criteria when defining the universe of eligible investments?

If appropriate, describe the eligibility threshold and the resulting level of selectivity.

Long-term Sustainability Drivers Based on its long-term experience and in-house sustainability expertise, RobecoSAM conducts a global trend analysis, which serves as the framework for defining sustainability drivers such as Demographics, Resource Scarcity, and Pollution. Investment Universe The investment universe for the RobecoSAM Core Strategies consists of all stocks in the MSCI World All Countries / MSCI World Small Cap / MSCI Europe that have received an above average sustainability score based on the RobecoSAM Corporate Sustainability Assessment, plus any companies with an exposure to one of the RobecoSAM Sustainability Themes: Water, Clean Energy, Materials, Healthy Living and Agribusiness. To demonstrate, we provide the selectivity criteria of the investment universe below for our Sustainable Global Equities strategy: Starting Investment Universe The starting investment universe consists of approximately 3'000 stocks: It encompasses 1'700 companies of the MSCI World Index plus 1'300 companies outside the index that are covered by RobecoSAM's sustainability theme strategies. By broadening the Global Equity investable universe to include small and mid cap companies whose business activities directly address long term sustainability megatrends such as demographic change, resource scarcity, pollution and climate change, we can capture additional alpha opportunities. The starting universe is then screened for stocks above USD 1 billion market cap, resulting in an investment universe of approximately 2'000 companies. 80% of the investment universe consists of large caps which cover 95% of the market capitalization of the MSCI World. 20% of the investment universe consists of mid and small capitalization stocks which are "sustainability pure players", i.e. companies primarily focused on providing solutions to specific sustainability challenges.

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Investment Universe

To identify the most attractive stocks RobecoSAM selects around 200 companies that will be modeled in detail. The selection of competitive companies, where RobecoSAM anticipates high value creation, is done at a sub-industry level. The analysts conduct a peer group analysis by performing a simplified valuation analysis, which is a simplification of the detailed RobecoSAM valuation model explained further on. The focus is on identifying companies that are able to show long term profitability with an attractive valuation. The simplified valuation analysis is based on a Continuous Growth Economic Profit Model that results in a direct relationship between the ratio of the Return on Invested Capital (long term profitability) and the Enterprise Value to the Invested Capital (valuation). The analyst compares the constant growth rate and the Return on Invested Capital implied in the current market price with his first estimate for a potential long-term growth rate and Return on Invested Capital. If his estimate is significantly higher, the company might potentially be undervalued and the analyst would start a detailed financial analysis in order to determine the true economic value of the company. Besides the simplified valuation analysis, the analyst also evaluates balance sheet ratios and reputational risks via the RepRisk tool. This part of the process is not mechanical, i.e. rule-based, but analysts follow a disciplined approach, and common guidelines that are in line with the broader investment philosophy of the fund. Feedback of the whole investment team is generated by presenting the opportunity in the team meeting. (No deeper analysis is done on companies identified as having excessive valuation or red flags in terms of future profitability.)

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For the RobecoSAM Theme Strategies, the analysts define the universe by identifying companies that offer products and services addressing the sustainability challenges related to the respective theme. In order to be included in a thematic investment universe, a company should derive at least 20% of its current revenues and more than 50% of the anticipated future revenues from activities related to the respective investment strategy. At a portfolio level, at least 70% of the weighted company revenues should derive from activities related to the strategy. (At a portfolio level for the RobecoSAM Sustainable Water Strategy: min. 50% of the revenues.)

3b How do you take ESG criteria into account into the portfolio construction?

Describe how you link ESG selection with the financial analysis or with portfolio management. More

precisely, describe how the results of the analysis of each of the dimensions (E, S and G) are

integrated into the investment / divestment process. If applicable, state where you provide

information on divestments occurred in the past year on the basis of ESG criteria? If appropriate,

explain how potential ESG weightings are defined and describe your treatment of companies that are

not subjected to an ESG analysis.

The integration of sustainability criteria into the financial valuation of companies is the cornerstone of RobecoSAM’s research and investment philosophy. The firm is worldwide one of the market leaders in terms of integrating financial and sustainability insights into a structured investment process. Interpreting and Quantifying Sustainability Data RobecoSAM’s expertise lies in its ability to frame sustainability risks and opportunities, translate them into a proven corporate sustainability assessment methodology, and interpret the sustainability information we receive before incorporating it into our valuation model. The methodology focuses on material, under-researched issues that have an impact on companies’ ability to create shareholder value. The RobecoSAM Corporate Sustainability Assessment results in a sustainability score reflecting the companies’ sustainability performance against their industry peers. Companies that embrace corporate sustainability as a key source of competitive advantage and implement sustainable practices to mitigate risks and seize opportunities are more likely to receive a higher sustainability score. Integration RobecoSAM’s Valuation Model takes into account the company’s sustainability score as an input into the valuation analysis - the positive or negative impact of sustainable (or unsustainable) management decisions can then be measured in the company’s financials such as revenues, costs or reinvestment rates. Companies with a high sustainability score will enjoy a higher return on invested capital and/or a lower cost of capital, thus receiving a higher RobecoSAM Fair Value. Portfolio Construction The identified investment opportunities are individually weighted in order to constitute a well-diversified portfolio of investment holdings characterized by attractive fundamental valuation that considers the corporate sustainability profiles of the companies. Valuation is the main driver of long-term investment returns. By comparing the fair value with the current share price, the price-value discrepancy is determined, indicating the current attractiveness of a stock. In general, stocks with a high price-value discrepancy are bought. Stocks with a low price-

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value discrepancy are sold. The higher the price-value discrepancy of a stock, the higher weighting it receives in the portfolio. The stock selection process results in the best portfolio constituents by combining solid fundamental bottom-up stock analysis with market expectations. A media & stakeholder analysis (MSA) is conducted continuously throughout the year to identify companies in the investment universe that may have been involved in critical environmental, economic and social crisis situations that can have a damaging effect on their reputation and core business, and to evaluate their response and management of such situations. In addition, the consistency and quality of a company’s behavior, response, and management of such situations is reviewed vis-à-vis its stated principles and policies. Involvement cases can lead to a downgrading of the sustainability score, which will have an impact on the total valuation of the specific stock. Please find a listing below of the recent divestments over the last 12 months made based on ESG Criteria:

Effective 6 October 2015, Volkswagen AG (VW) was removed from the Dow Jones Sustainability Indices (DJSI). A review of VW's standing in the DJSI was prompted by the recent revelations of manipulated emissions tests.

Effective 3 August 2015, Toshiba Corporation was removed from the Dow Jones Sustainability World Index (DJSI World). A review of Toshiba's standing in the DJSI World was prompted by the recent disclosure of a long-term fraudulent accounting scandal at the company and the reported widespread involvement of senior management in the affair.

Effective March 23, 2015, Petroleo Brasileiro SA (Petrobras) was removed from the Dow Jones Sustainability World Index (DJSI World). Recent disclosure of fraud and corruption allegations at the Company and its respective communication policy towards investors prompted a review of Petrobras' standing in the DJSI World.

3c Does (do) the fund(s) have a specific ESG engagement policy?

Please explain what you mean by engagement. Describe how you select the companies/themes for

engagement activities and the impact on the portfolio management of the fund(s). Who undertakes

engagement on behalf of the fund (internal and/or service providers)?

The RobecoSAM Corporate Sustainability Assessment as an Engagement Platform

We consider the annual RobecoSAM Corporate Sustainability Assessment, which many companies use as a road map to implementing and improving their corporate sustainability practices, to be our principal platform for engagement. At a strategic level, RobecoSAM’s overarching engagement goal is to raise the bar for companies in terms of their sustainability performance and to send them a strong signal that long-term investors are interested in sustainability factors as a source of risks and opportunities. At the tactical level, we implement this goal by communicating explicitly the sustainability issues that we believe can have an impact on corporate financial performance of companies in a given sector through our industry-specific annual questionnaires (RobecoSAM Corporate Sustainability Assessment).

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Sustainability Benchmarking and Improvement Incentives The RobecoSAM Corporate Sustainability Assessment is a unique approach as it serves as a platform for ongoing engagement that is structured, rigorous, and has a broad reach. Each sustainability issue included in our assessment represents an engagement objective in the sense that we seek to encourage companies to improve their performance in that area. Each year our questionnaire reaches the 3300 largest companies, with approximately 860 companies actively participating in the assessment. Participating companies receive a benchmarking report that compares their sustainability performance to that of their industry peers, as well as industry best practices on over 20 criteria. This benchmarking report is used as the basis for follow up discussions between RobecoSAM and company management. Each year we also enter into a structured one-on-one dialogue with approximately 150-200 companies interested in improving their sustainability performance. By progressively intensifying our dialogue with companies that demonstrate a strong interest in improving their performance, we maximize the impact of our engagement efforts. Ad-hoc engagement is conducted when controversial business activities or a breach of international norms and standards occur. We believe that our engagement approach, based on the annual RobecoSAM Corporate Sustainability Assessment, opens a direct communication channel with senior management, and is an effective way to maintain an ongoing dialogue with change agents within the companies. Our approach is different from more conventional engagement strategies in that engaging with sustainability leaders, as well as companies that aspire to become sustainability leaders, sets high standards for their industry peers, and has an indirect impact on the laggards by putting competitive forces into play. Many firms use the peer benchmarking feedback report from our assessment to identify gaps and initiate improvements in their business practices. Both financial and sustainability considerations shape companies’ success in the long run. RobecoSAM’s integrated approach also helps highlighting for management the importance of managing performance for the long run. An increasing number of firms define inclusion in the DJSI as a corporate goal, as it allows them to gain recognition for their sustainability performance, thus making them more attractive to investors. This serves as an additional incentive for participating in the annual RobecoSAM Corporate Sustainability Assessment.

3d Does (do) the fund(s) have a specific voting policy integrating ESG criteria?

As a signatory of the UN Principles for Responsible Investment (PRI), and in accordance with UN PRI Principle 2 – “We will be active owners and incorporate ESG issues into our ownership policies and practices,” RobecoSAM has always recognized the value of active ownership and engagement. However, as a firm whose key strengths lie in sustainability research, RobecoSAM has historically focused primarily on indirect and direct engagement with companies within the framework of the annual RobecoSAM Corporate Sustainability Assessment. We view this as the most effective means for leveraging our in-house resources and expertise to achieve significant results in an efficient way. As the centre of expertise for Robeco, RobecoSAM took over the responsibility for the 9 person strong team on Governance and Active Ownership of Robeco. This group of voting and engagement specialists acts on behalf of RobecoSAM when engaging with companies on sustainability topics.

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Voting Policy RobecoSAM buys shares in companies, thereby making it a co-owner of these companies. Each share entitles the owner to vote at shareholders' meetings. The execution of voting rights is an important component of a well-functioning corporate-governance system. RobecoSAM takes its responsibility by voting at shareholder meetings worldwide. By making active use of this right, we can increase control over the company’s management and improve the company’s sustainability, which may eventually contribute to higher shareholder value. RobecoSAM AG bases its voting policy on the principles of the International Corporate Governance Network (ICGN). This is an internationally recognized code for good corporate governance, the basic principles of which allow sufficient scope for assessing companies according to local standards. The national laws and codes of conduct for corporate governance, such as the Nederland’s Corporate Governance Code in the Netherlands, which was anchored in legislation in 2009, are leading in the assessment of companies. Circumstances specific to individual companies also play a role in this. Some of the ICGN Corporate Governance Principles are also covered by the annual RobecoSAM Corporate Sustainability Assessment, which serves as the basis for engagement through intensive dialogues with companies on their ESG performance. RobecoSAM votes for all investment funds for which the costs of voting are not expected to have a noticeable, negative impact on investment results. Each year RobecoSAM AG determines for which of its investment funds it is cost effective to exercise its proxy voting rights. We can also offer proxy voting for clients with segregated mandates who wish to incorporate proxy voting in their investment strategies. To avoid unnecessary costs and to increase the efficiency of the voting services in the interests of our clients, RobecoSAM uses an electronic voting platform to cast votes. This platform is used to vote at most meetings, but in a few cases RobecoSAM attends the annual general meeting (AGM) to cast votes. Electronic voting is an efficient way of voting by proxy. From a cost perspective it is not efficient to conduct an extensive analysis on every specific issue for every shareholders’ meeting in order to determine how to cast our vote. Therefore RobecoSAM AG uses independent voting advice from Glass Lewis, an international proxy voting advisor. The RobecoSAM Governance and Active Ownership team compares the specific voting advice with RobecoSAM AG/Robeco’s corporate governance policy. In case of controversial or important agenda items, the responsible portfolio manager at RobecoSAM AG is consulted to discuss the vote. RobecoSAM AG is ultimately responsible for deciding on how to vote on each issue. In a number of markets worldwide, shares are blocked for sale during a certain period of time if the voting rights attached to the shares are executed. The blocking of shares limits the trading possibilities of the portfolio managers and may, therefore, also harm the performance of the investment portfolio. In such cases, RobecoSAM AG may determine that share blocking is detrimental to investment performance, and will decide not to execute its voting rights because it is not in the best interests of its clients. In addition, in order to complement ICGN Voting Principle 1 “Sustainable Value Creation“ and 3 “Good citizenship, relations with stakeholders and the ethical business conduct” RobecoSAM AG will support shareholder resolutions aimed at improving governance, social and environmental performance of companies on a case-by-case basis.

Promoting Best Practices RobecoSAM employs a unique approach to engagement by conducting a comprehensive annual Corporate Sustainability Assessment to measure the sustainability performance of over 2000 companies. Our annual questionnaire acts as a tool to encourage improved disclosure on key sustainability issues of interest to long-term investors and offers companies a blueprint of industry best practices in the areas of sustainability and corporate responsibility.

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As stated above, companies participating in the annual Corporate Sustainability Assessment receive a benchmarking report from RobecoSAM showing their own sustainability scores against their respective industry’s average and against the industry’s top score. This report provides the company with insights into its strengths and areas for improvement in relation to its industry and peers. These results trigger contacts with senior managers and members of the executive management and board of directors. Many companies use RobecoSAM’s questionnaire as a guide to understanding latest sustainability issues and best practices and to implementing these into their strategic priorities and core business processes. Some companies even publicly disclose the completed questionnaire. The publication of the RobecoSAM screening methodology, criteria, and questions used to measure a company's sustainability performance is a powerful vehicle used by RobecoSAM in order to create awareness and competition encouraging the continuous improvement of corporate sustainability. By actively engaging with stakeholders in public forums, industry-wide initiatives and global standardizing efforts, RobecoSAM promotes excellence and best-practices in the sustainability investment world. For our private equity fund-of-funds, we are active members of advisory committees of the fund managers we select, and sit on boards of companies in which we are directly invested. In all of these activities we are highly sensitive to ESG issues and we will intervene if concerns arise.

RobecoSAM publishes its voting policy and voting reports on the website:

http://www.robecosam.com/en/professionals/strategies-services/activeownership-voting/index.jsp

3e Does (do) the fund(s) engage in securities lending activities?

If yes,

(i) is a policy to recall the securities in place in order to exercise the voting rights? Yes, RobecoSAM recalls securities in securities lending in order to exercise voting rights.

(ii) does the counterparty selection process integrate ESG criteria? The counterparty selection process does not integrate an ESG criteria. Securities lending between the fund and the borrowers is processed via the agent SSB (State Street Bank) who is responsible for the borrower selection, the collateral management, the asset auction and the operations. The activities of the portfolio manager are not impacted by securities lending. Listed below are collateral requirements and selection criteria: • State Street (SSB) as Custodial Lending Agent (assets custodied with State Street). • SSB will be responsible for selecting and monitoring borrowers according to GAM policy which will promise diversification of risk through selection of multiple borrowers. • SSB will be responsible for the Collateral Management (bi-party with SSB or Tri-Party through ext. Collateral Agent), t.b.d. during project phase. • SSB is a specialised first class securities lending agent which guarantees a secure setup with highly standardised lending and collateral management processes. • SSB as Custodial Lending Agent will reflect additional advantages in terms of setting up Operational- and IT connectivity, as well as Trading and Collateral facilities. Accordingly operational risks will be reduced.

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• The collateral requirements are determined as follows: government bonds from G10 countries with a margin of 5% over the value of the loaned securities. • Collateral is held separately with State Street Custody or through Tri-party arrangements. • Daily marking-to-market of the collateral positions. • SSB offers pre collateralization – collateral has to be delivered by the borrowers to SSB before any securities are delivered by the funds to the borrowers. • Only borrowers which have been approved by SSB and GAM participate in the lending program. The counterparty risk is therefore further mitigated by the diversification of borrowers and will therefore not differ to the previous set up. • Additionally SSB offers an indemnification to the funds. In the case of a borrower default, SSB will indemnify the funds for any shortfall in collateral. • GAM monitors and supervises the setup and the involved parties systematically and independently, including the quality of the borrowers, the positions on loan, the collateral, and the operational processes. • Tailor-made reporting according to the clients need.

3f Does (do) the fund(s) use derivative instruments?

If yes describe,

(i) their nature (ii) the objective(s) (iii) the potential limits in terms of exposure (iv) if appropriate, their impact on the SRI quality of the fund RobecoSAM's sustainability strategies may invest in derivative instruments such as options, futures, currency forwards, etc. These instruments are primarily used for hedging purposes, the steering of currency exposure and the short-term management of cash flows. RobecoSAM’s internal guidelines permit investment in FX forwards and equity futures. All other derivatives are currently not allowed. Where exposure is calculated by means of the market value of positions, the positions on financial derivatives are converted into equivalent positions on the underlying assets. Therefore, eligible derivatives exposure is in scope when calculating exposures versus internal limits. Derivative financial instrument within the fund structure have a general legal global limit to a maximum of 100% of the fund’s assets. Although these instruments may be used, they are not a key component of RobecoSAM’s investment approach.

3g Is a share of the fund(s) invested in unlisted entities pursuing strong social goals?

If yes, please provide a brief description of the objective(s) of this investment, in no more than one or

two sentences.

RobecoSAM's sustainability strategies exclusively invest in listed equities. In order to service redemptions RobecoSAM takes into consideration the stocks' daily liquidity as well as the market capitalization.

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Section 4. Controls and ESG Reporting

4a What internal/external control procedures are in place to ensure the compliance of the portfolio

with the ESG rules defined in section 3 of this Code?

State who is carrying out the controls, their frequency and within which timeframe the fund(s) have to

comply should a breach be detected.

Once a company is selected as a member of the RobecoSAM investment universe or the DJSI, it is continuously monitored for its corporate sustainability performance. The objective of the monitoring process is to verify a company’s involvement and management of critical environmental, economic and social crisis situations that can have a highly damaging effect on its reputation and its core business. In addition, the consistency of a company’s behaviour and management of crisis situations is reviewed in line with its stated principles and policies. The Corporate Sustainability Monitoring can lead to the downgrading of a company’s sustainability score, regardless of how well the company performed in the annual RobecoSAM Corporate Sustainability Assessment. When an issue or crisis situation arises, prior to making a decision to downgrade a company’s sustainability score, RobecoSAM evaluates its impact and the Quality of Crisis Management:

Impact Evaluation The extent of the crisis within the company, geographically and in the media is monitored. As a result, the impact of the crisis on the reputation of the company and its core business is assessed. If the impact evaluation of the crisis is far reaching, covered worldwide in the media or is an important concern for the company, then the second step is an analysis of the quality of the company’s crisis management. Quality of Crisis Management RobecoSAM monitors how well the company communicates, informs the public, acknowledges responsibility, provides relief measures, involves relevant stakeholders and develops solutions to preventing a similar crisis in the future. In this context, RobecoSAM Research weighs the severity of the crisis in relation to the company’s reputation and quality of crisis management.

If the crisis management of an important issue is considered poor from a sustainability point of view, its sustainability score can be downgraded. A downgrading of a company’s sustainability score may not necessarily lead to an automatic exclusion from a fund. However, it may have a negative impact on the overall stock valuation, making it less attractive for continued inclusion in the investment portfolio. With regard to the DJSI, all decisions go through the Index Design Committee. If deemed appropriate, the company can also be removed from the DJSI. RobecoSAM informs the affected companies about their exclusion from the Index. RobecoSAM does not apply minimum sustainability criteria to the stocks held in its investment funds. Rather, RobecoSAM focuses on the integration of sustainability measures into the financial valuation of a company. We use a “best in class” approach for the core strategies, as well as for the sustainability indices, which are based on our annual Corporate Sustainability Assessment to identify sustainability leaders within each industry. This is done deliberately to promote an overall development in the direction of sustainable corporate behaviour, including for those companies in industries that are typically labelled as unethical/unsustainable (Oil and gas, Alcohol, Tobacco, etc.).

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4b Please list all public media and documents used to inform investors about the SRI approach to the

fund, and include URLs. This should include a link to the detailed, no more than 6 months old, list of

holdings of the fund(s).

Product Publications frequency Format Language

Factsheets monthly PDF and HTML German, English, French,

Italian, Spanish, Dutch

Fund Brochure ad hoc PDF, HTML and

print

German, English, French,

Italian

Monthly Manager Report monthly PDF English

Annual Report yearly PDF and HTML German, English, French,

Italian, Spanish, Dutch

Semi-annual report semi-

annual

PDF and HTML German, English, French,

Italian, Spanish, Dutch

Prospectus ad hoc PDF and HTML German, English, French,

Italian, Spanish, Dutch

Corporate Publications frequency Format Language

Sustainability Yearbook yearly PDF, HTML and

print

English

RobecoSAM Monthly Newsletter monthly HTML German, English

Sustainability Studies / White

Papers

ad hoc PDF, HTML and

print

German, English

RobecoSAM Foresight monthly HTML and PDF German, English

RobecoSAM Insight 3-4 times

per year

HTML and PDF German, English

Publications regarding the product capabilities such as prospectus, factsheets, holdings and brochures for a specific fund can be accessed via the RobecoSAM webpage. Chose a strategy, and click on the respective link in the menu “Learn more”.

Holdings can be accessed directly under this menu. Factsheets and other legal publications such as annual reports and prospectus: The following link leads to the online platforms of the respective legal Management Company, http://www.robeco.com/en/professionals/products/index.jsp, where the documents can be downloaded after a search for fund name. The RobecoSAM Yearbook can be found in digital form and in form to download on the RobecoSAM Webpage under “Sustainability Insights”:

http://www.robecosam.com/en/sustainability-insights/library/the-sustainability-yearbook.jsp

RobecoSAM studies and white papers, Foresight, Insight and Flash can be found under “Sustainability Insights”: http://www.robecosam.com/en/sustainability-insights/index.jsp The RobecoSAM Newsletter is on a subscription basis. The registration form can be filled in online: http://www.robecosam.com/en/sustainability-insights/library/newsletter.jsp

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Additional

If applicable, specify what the amount of donations and the percentage of management fees that the

fund gave to charities in the last year.

The fund does not donate via the management charge.

_______________________________

COMMITMENT FROM EUROSIF AND THE NATIONAL SUSTAINABLE INVESTMENT FORUMS

Eurosif is responsible for maintaining and publicising the Transparency Code.

Eurosif promotes received responses to the Code on its website.

Eurosif maintains a “transparent” logo that is awarded to those funds complying with the Code and whose answers have been sent to Eurosif. Complying funds can use this logo in their marketing collateral, in accordance with the Logo Specifications Manual (see. www.eurosif.org) and provided the Code is up to date.

Eurosif commits to reviewing the Code. The process for reviewing the Code will be open and inclusive. European SRI Transparency Code

ABOUT EUROSIF

The European Sustainable Investment Forum (Eurosif) is the leading European membership

association whose mission is to develop sustainability through European financial markets. Eurosif

works as a non-for-profit partnership of the national Europe-based national Sustainable Investment

Forums (SIFs) with the support and involvement of Member Affiliates.

Eurosif Member Affiliates include a range of organisations covering the value chain of the sustainable

investment industry, from institutional investors, asset managers to financial services providers, ESG

analysis firms, academic institutes and NGOs.

Eurosif speaks authoritatively and broadly on SRI (sustainable and responsible investment) issues.

The main activities of Eurosif are public policy, research and creating platforms for nurturing

sustainable investing best practices. For more details, please see www.eurosif.org.

National sustainable investment forums in Europe to date include:

Dansif, Denmark

Finsif, Finland

Forum Nachaltige Geldanlagen* (FNG) e.V., Austria, Germany Liechtenstein and Switzerland

Forum per la Finanza Sostenibile*(FFS), Italy

Forum pour l’Investissement Responsable* (FIR), France

Norsif, Norway

Spainsif*, Spain

Swesif*, Sweden

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UK Sustainable Investment and Finance Association* (UKSIF), UK

Vereniging van Beleggers voor Duurzame Ontwikkeling* (VBDO), the Netherlands

*Member of Eurosif

For further information on Eurosif or more details on the European SRI Transparency Code, please

look at our website, www.eurosif.org and contact Eurosif at +32 (0)2 274 14 35 or by email at

[email protected].

Eurosif A.I.S.B.L. 331, rue du Progrès, 1030 Brussels, Belgium Tel.: +32 (0)2 274 14 35

Disclaimer – Eurosif does not accept responsibility or legal liability for errors, incomplete or

misleading information provided by signatories in their responses to the European SRI Transparency

Code. Eurosif does not provide any financial advice nor endorse any specific funds, organizations or

individuals.