Investment Approach

As part of our investment process we assess a range of ESG factors, particularly climate change risk. The Company believes that climate change-related risks, in particular a company’s greenhouse gas (GHG) emissions, will have a material effect on a company’s long-term profitability, sustainability and investor returns.

In addition, the Company may evaluate companies’ management structures, financial strength, resources, products & services, business practices, future earnings, sustainable impacts to the world around them, and a wide range of additional relevant factors to identifying investment opportunities, and the consideration of ESG factors.

ESG monitoring process will also be one of our risk control process that helps to identify investments that may require an elevated level of research, review, and debate. If needed, we may employ industry available third-party ESG data in our investment process together with our own proprietary analysis.

We will use our best efforts to stay alert of any exposure to critical ESG issues and act accordingly. such as including involvement in controversial behaviours, possible human rights violations according to a comprehensive assessment of international norms, the general ESG quality of their holdings as well as ratings for climate transition risks and opportunities and exposure to controversial sectors.

Engagement

We actively engage on ESG to help us understand, quantify and influence a company’s exposure to climate change-related risks and the way it is managing those risks.

Emissions Disclosure

We expect companies in which we invest to make appropriate and timely public disclosure of carbon and other GHG emissions. Such disclosure should include targets for emissions intensity reduction and absolute level reduction.

Low-Carbon Transition Plans

We expect companies in which we invest to have a credible, publicly-disclosed plan to reduce GHG emissions.

Actions that should be included in a low-carbon transition plan are:

• Change business processes to reduce the company’s carbon footprint;
• Introduce efficient energy management into buildings and factories;
• Source low carbon energy through direct generation or power purchase agreements;
• De-carbonise transport fleets, e.g. through electric vehicles;
• Offset emissions from corporate travel, e.g. through afforestation;
• De-carbonise supply chains and helping customers lower their carbon intensity;
• Advocate for regulations which drive the de-carbonisation of their industry to ensure its sustainability.