Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Social Responsibility
• Community Reinvestment

Environmental Achievements

• Reduced greenhouse gas emissions by 12 percent from 2006 to 2009
• Achieved LEED certification for six office spaces and call centers
• Exceeded emissions reduction pledge for major office buildings

Social Achievements

• Intermediated over $500 million to more than 30 microfinance institutions
• Enabled the creation of more than 10,000 jobs through community development programs
• Constructed or rehabilitated nearly 13,500 affordable housing units
• Developed more than 2.5 million square feet of commercial space in distressed communities

Governance Achievements

• Established the Environment, Social Finance & Community Reinvestment Group (ESFCR Group)
• Implemented mandatory environmental and social risk management training for Investment Banking and Global Capital Markets teams
• Fundamentally restructured executive compensation to tie a significantly greater portion to long-term firm performance

Climate Goals & Targets

Environmental Challenges

• Managing energy consumption and greenhouse gas emissions from data centers
• Balancing the need for private sector capital with the social and environmental impacts of investments
• Navigating the economic downturn and its impact on affordable housing and community development

Mitigation Strategies

• Focused on improving the efficiency of office buildings and data centers
• Developed robust financial markets and products to attract private sector capital for environmental protection
• Provided advisory services to state and local housing finance agencies on accessing capital markets and federal housing programs

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Procurement policy encouraging purchase of recycled products; requiring suppliers to explain and meet or exceed industry’s environmental best practices

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Financing renewable energy and clean technology

Reporting Standards

Frameworks Used: Null

Certifications: LEED

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Bloomberg New Energy Finance Public Markets Top Lead Manager award
• Numerous other awards listed on page 25 of the report

Environmental Metrics

ESG Focus Areas

• Environment
• Social Finance
• Community Development

Environmental Achievements

• Reduced normalized office emissions year over year (from 14.1 tCO2e/thousand square feet in 2006 to 12.2 in 2010)
• Intermediated more than $5.5 billion in securities in the cleantech sector
• Hong Kong headquarters received LEED Gold certification
• UK operations awarded Carbon Standard for carbon emission reductions

Social Achievements

• Intermediated over $550 million of microfinance securities, benefiting 30 MFIs and several million low-income entrepreneurs
• Funded the preservation and construction of more than 3,680 affordable housing units, creating over 5,400 jobs
• 83 percent rise in employee participation in Global Volunteer Month, nearly doubling the time given

Governance Achievements

• Remuneration linked to sustainability performance for relevant groups
• Updated Environmental Policy Statement to include enhanced due diligence on MTR mining
• Established internal Environmental Risk Policy and Global Franchise Risk Policy

Climate Goals & Targets

Environmental Challenges

• Minimizing environmental and social risks in transactions and operations
• Managing energy use and GHG emissions from data centers and offices
• Reducing waste and conserving water in office buildings

Mitigation Strategies

• Conducting thorough due diligence to identify and mitigate environmental and social risks
• Improving energy efficiency in offices and data centers, utilizing renewable energy
• Implementing waste reduction and recycling programs, installing low-flow fixtures

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Firmwide Sourcing (FWS) Policy
• Minimum standards for green cleaning supplies
• Maximum levels of VOCs in paints and sealants
• Preference for suppliers with certified environmental credentials (ISO 14001 and LEED)

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and systems

Reporting Standards

Frameworks Used: Null

Certifications: LEED (17 offices and call centers), ISO 14001 (implied), Carbon Trust certification (UK operations)

Third-party Assurance: Bureau Veritas North America, Inc. (CDP data)

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Ranked #2 in Working Mother magazine's 100 Best Companies for Working Mothers
• Ranked Top 20 in Great Place to Work Institute (Japan)
• Top 50 Employers for Women (Sunday Times, UK)
• Top 500 Green Companies in the U.S. (Newsweek)
• Financial Services Diversity Corporation of the Year (NGLCC)
• Champions of Diversity Award (New York Urban League)
• Recognized for Commitment to the Success of Women Business Enterprises (Women Presidents’ Educational Organization)

Environmental Metrics

ESG Focus Areas

• Environmental Finance
• Public Finance
• Social Finance
• Community Development
• Risk Management
• Governance
• Ethics
• Employee Well-being
• Philanthropy

Environmental Achievements

• Reduced carbon emissions 15 percent from a 2006 baseline a year ahead of schedule in 2012.
• 21 buildings achieved LEED certification.
• New York headquarters received LEED Gold for Existing Buildings.

Social Achievements

• Launched Investing with Impact Platform, enabling wealth management clients to create financial, social and environmental value.
• Community development initiatives since 2006 committed more than $7.8 billion.
• More than 38,000 affordable housing units constructed or rehabilitated since 2006.
• Over $800 million in microfinance transactions since 2006.

Governance Achievements

• Strengthened governance and risk management structures and processes.
• Board of Directors consists of 14 directors, 11 of whom are independent.
• Implemented a clawback for a substantial portion of incentive compensation.
• Revised and strengthened the Global New Product Approval (NPA) Policy.

Climate Goals & Targets

Environmental Challenges

• Data center emissions doubled since 2006 due to rapid expansion.
• Increasingly stressed government and organizational budgets.
• Inadequate housing in rural areas.
• Need for fresh food in areas with limited access.

Mitigation Strategies

• Multiyear program to reduce the size and increase the efficiency of the North American data center portfolio.
• Finding efficient and creative financing for public projects.
• Working with smaller, local financial partners to ensure that rural communities receive financing.
• California FreshWorks Fund to invest in grocery stores in low- and moderate-income communities.

Supply Chain Management

Supplier Audits: Approximately 2,500 suppliers with 3,500 services evaluated.

Responsible Procurement

• Firmwide Sourcing Policy
• Global Procedures for Supplier Selection and Engagement
• Preference for suppliers with commitment to social, ethical and environmental programs

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI 3.1

Third-party Assurance: Bureau Veritas

Sustainable Products & Innovation

• Investing with Impact Platform

Awards & Recognition

• 2012 Social Media Leadership Award for Banking
• Ethisphere Institute’s Best in Class for Code of Conduct
• Numerous other awards listed on page 66

Environmental Metrics

ESG Focus Areas

• Sustainable Finance
• Community Development
• Philanthropy
• Employees
• Environmental Stewardship
• Governance and Ethics
• Risk Management

Environmental Achievements

• Achieved a 5.65% decrease in office space emissions per square foot from 2012 to 2014, on track for a 15% reduction by 2017 from a 2012 baseline.
• Increased data center efficiency by 5% over 2012 (24% total improvement since 2008).
• Westchester campus solar array produced over 1 million kWh, reducing GHG emissions by 304 metric tons.

Social Achievements

• Launched Senior Mentorship Program to strengthen leadership pipeline.
• Hosted the 2014 OutNEXT Summit for LGBT leaders.
• Launched Return to Work programs in New York and London, with approximately two-thirds of participants becoming full-time employees.
• Employees volunteered 209,304 hours during Global Volunteer Month, a new record.
• Donated more than $98 million, an 8% increase from 2013.

Governance Achievements

• Added a female director to the Board of Directors, one woman to the Operating Committee, and five women to the Management Committee.
• Established a formal Culture, Values and Conduct Program.
• Created a Global Conflicts Office to enhance conflict of interest management.

Climate Goals & Targets

Environmental Challenges

• Reducing energy consumption and driving resource efficiency in operations.
• Managing environmental and social risks in transactions and operations.
• Maintaining a strong risk culture and managing risks in marketing and sales.

Mitigation Strategies

• Investing in energy efficiency projects at offices and data centers.
• Implementing rigorous environmental and social due diligence processes.
• Strengthening risk policies and controls, developing a strong risk culture, and implementing robust compensation policies.

Supply Chain Management

Supplier Audits: Approximately 3,200 suppliers providing 4,400 services evaluated.

Responsible Procurement

• Integrating sustainability considerations into purchasing decisions.
• Requiring suppliers to respect human rights and adhere to international standards.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4

Certifications: ISO 14001 (London offices), Carbon Trust Carbon Standard (UK offices and data centers)

Third-party Assurance: Bureau Veritas North America (environmental data)

Awards & Recognition

• Best Bank for Corporate Social Responsibility (Euromoney)
• Top 50 Military Friendly Employer (MilitaryFriendly.com)
• S&P 500 Carbon Disclosure Leadership Index (CDP)
• Top Corporate Ally for Diversity (Difference Matters)
• and many others listed on page 68

Environmental Metrics

ESG Focus Areas

• Ecological Sustainability
• Food Security
• Climate Change
• Water Scarcity
• Biodiversity Loss
• Human Capital

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on crop yields and livestock production.
• Water scarcity and unsustainable water withdrawals.
• Limited supply of fertile land and soil degradation.
• Biodiversity loss and habitat destruction.
• Overfishing and unsustainable aquaculture practices.
• High energy consumption and greenhouse gas emissions from food production.
• Food price volatility and supply chain disruptions.
• Chronic under-investment in agricultural infrastructure and technology.
• Inequitable distribution of food resources.
• Land grabbing and unclear land tenure rights.
• Lack of access to credit and insurance for smallholder farmers.
• Ageing farming population and lack of skilled labor.
• Poor infrastructure for post-harvest handling and transportation.
• Weak governance and institutional capacity in many regions.

Mitigation Strategies

• Investment in climate-resilient agriculture and water-efficient technologies.
• Improved land management practices to prevent soil degradation.
• Sustainable intensification of agricultural yields through technological innovation.
• Sustainable aquaculture practices and fisheries management.
• Promotion of sustainable energy sources and reduction of greenhouse gas emissions.
• Development of long-term price guarantees for producers.
• Investment in human capital development and skills training.
• Improved infrastructure for post-harvest handling and transportation.
• Strengthening governance and institutional capacity.
• Addressing land grabbing and promoting secure land tenure rights.
• Increased access to credit and insurance for smallholder farmers.
• National food security strategies and policies.
• Use of mobile technologies to improve agricultural production and market access.
• Investment in agricultural research and development.

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Droughts
• Floods
• Heat waves
• Storms

Transition Risks

• Changes in agricultural practices
• Water scarcity
• Land degradation

Opportunities

• Investment in climate-resilient agriculture
• Development of water-efficient technologies

UN Sustainable Development Goals

• Goal 2: Zero Hunger
• Goal 6: Clean Water and Sanitation
• Goal 13: Climate Action
• Goal 15: Life on Land

The report highlights the interconnectedness of food production with various SDGs, particularly those related to hunger, water, climate, and biodiversity.

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance
• Sustainable Investing

Environmental Achievements

• Reduced greenhouse gas emissions by more than 36 percent since 2006; achieved second greenhouse gas reduction target one year early.
• Added a fuel cell to headquarters in Times Square.

Social Achievements

• Investing with Impact Platform reached $6.2 billion in assets invested, more than halfway to the $10 billion goal by 2018.
• Served as lead or joint bookrunner on green bonds totaling more than $6 billion in 2016.
• Launched mandatory training module on Global Environmental and Social Risk Policy to over 44,000 employees.
• Increased deals escalated for environmental and social due diligence by 44% between 2015 and 2016.
• Created a cross-functional working group to review exposure to modern slavery and improve supply chain management.

Governance Achievements

• Board had 15 directors, 12 of whom are independent; two women serve on the Board.
• Enhanced performance evaluation and compensation processes to link performance feedback, pay, and promotions, considering conduct-related factors.
• Introduced a new compliance and risk management policy in Wealth Management for Financial Advisors.
• Implemented a new employee performance dashboard for over 10,000 employees.
• All 2016 Managing Director promotion candidates evaluated against specific criteria related to conduct and culture.

Climate Goals & Targets

Environmental Challenges

• Managing environmental and social risks in transactions.
• Exposure to modern slavery in the supply chain.

Mitigation Strategies

• Environmental and Social Risk Management (ESRM) group reviews transactions and advises on potential risks.
• Mandatory training on Global Environmental and Social Risk Policy.
• Created a cross-functional working group to review exposure to modern slavery and identify opportunities to improve management of our supply chain.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Mobilizing capital for clean technology companies and those that reduce or improve natural resource consumption.

Reporting Standards

Frameworks Used: TCFD, SASB

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Green bonds
• Investing with Impact Platform products

Awards & Recognition

• Black Enterprise — 50 Best Companies for Diversity
• LATINA Style — 50 Best Companies to Work for in the U.S.
• Working Mother — 100 Best Companies, Hall of Fame and Top 10 Best Companies in India
• Minority Business News USA — Champions of Supplier Diversity
• The Times — Top 50 Employers for Women in the U.K.
• Great Place to Work® Institute Japan — Best Company in the Best Workplaces in Japan Survey

Environmental Metrics

ESG Focus Areas

• Climate Change
• Clean Energy
• Diversity & Inclusion
• Ethical Business Conduct
• Community Development
• Sustainable Investing
• Governance

Environmental Achievements

• Announced a 2022 carbon-neutrality goal for operations
• Reduced office greenhouse gas emissions per square foot by 36 percent since 2006
• Achieved 28 LEED certifications for energy-efficient buildings since 2006
• On-site solar and fuel cell installations generate more than 9 million kWh of clean electricity annually
• Added a 1,800 kW solar array at our data center in Somerset, New Jersey

Social Achievements

• Launched the Multicultural Innovation Lab
• Enhanced health and wellness programs
• Hosted first contingent in the New York City Pride March
• Committed $15.5 billion in community development loans and investments since 2010, funding more than 81,000 affordable housing units and creating or retaining more than 93,000 jobs
• Expanded Parental Leave Policy in the U.S.

Governance Achievements

• Appointed the firm’s first chief sustainability officer
• Strengthened human rights approach in business and supply chain
• Improved compensation governance and risk management processes
• Enhanced Enterprise Risk Management (ERM) framework
• Expanded Coal and Oil & Gas Policy Statements

Climate Goals & Targets

Environmental Challenges

• Climate change risks to the global economy
• Managing environmental and social risks in transactions
• Human rights risks in supply chain
• Ensuring business continuity and resiliency

Mitigation Strategies

• Strategic review of Environmental and Social Risk Management (ESRM) function
• Transferring oversight of ESRM activities to the Global Conflicts Office
• Hiring a new professional to oversee the ESRM function
• Enhancing internal guidelines on environmental and social risk
• Providing regular updates to the Global Franchise Committee on environmental and social risk issues
• Enhancing ESRM awareness among employees
• Reducing exposure to coal mining globally
• Enhanced due diligence for transactions involving companies engaged in oil sands, Arctic oil, ultra-deep water oil, or liquefied natural gas export-related activities
• Strengthening human rights approach through stakeholder engagement and policy updates
• Implementing business continuity and resiliency programs

Supply Chain Management

Responsible Procurement

• Global Supplier Selection and Engagement Policy and Procedures
• Inclusion of modern slavery language in supplier agreements and RFP templates

Climate-Related Risks & Opportunities

Opportunities

• Leadership in clean tech financing and sustainability bonds

Reporting Standards

Frameworks Used: TCFD, SASB

Sustainable Products & Innovation

• Investing with Impact Platform (IIP)
• Green and sustainability bonds
• Sustainable investing products

Awards & Recognition

• SRI Bond of the Year from the International Financing Review
• Human Rights Campaign’s Best Places to Work
• Working Mother’s Best Company for Multicultural Women
• Working Mother’s Best 100 Companies for Women
• Black Enterprise’s 50 Best Companies for Diversity
• LATINA Style’s 50 Best Companies to Work for in the U.S.
• The Times’ Top 50 Employers for Women in the U.K.
• Community Business’s Top Five Employers in Hong Kong for LGBT Inclusion

Environmental Metrics

ESG Focus Areas

• Climate Change
• Plastic Waste Reduction
• Inclusive Growth
• Circular Economy
• Sustainable Investing

Environmental Achievements

• Mobilized approximately $50 billion in 2019 toward a $250 billion goal to support climate-related solutions by 2030.
• Committed to achieving carbon neutrality for global operations by 2022.
• Launched the Morgan Stanley Plastic Waste Resolution, committing to facilitate the prevention, reduction, and removal of 50 million metric tons of plastic waste by 2030.

Social Achievements

• Launched Morgan Stanley Impact Quotient® (Morgan Stanley IQ), an impact reporting application.
• Introduced a “Sustainability at Work” program to reduce operational environmental impacts and engage employees.
• Partnered with the Financial Health Network to understand workplace financial stress and expand financial wellness offerings.

Governance Achievements

• Appointed the firm’s first Chief Sustainability Officer.
• Enhanced ESG integration into business activities and operations.
• Strengthened efforts to eradicate modern slavery in operations and supply chains.

Climate Goals & Targets

Environmental Challenges

• Climate change poses significant risks to the global economy.
• Managing human rights risks in operations and supply chains.
• Addressing plastic waste and its environmental impact.

Mitigation Strategies

• Supporting the transition to a low-carbon economy through products, services, and analysis.
• Conducting due diligence on transactions to identify and address potential human rights issues.
• Implementing the Morgan Stanley Plastic Waste Resolution to reduce plastic waste across the value chain.

Supply Chain Management

Supplier Audits: Evaluated 150+ responses from a corporate social responsibility survey of top global suppliers.

Responsible Procurement

• Supplier Code of Conduct addressing human and labor rights, environmental protections, and ethical business practices.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products and services
• Growth in sustainable finance

Reporting Standards

Frameworks Used: SASB, TCFD

UN Sustainable Development Goals

• SDG 6
• SDG 7
• SDG 12
• SDG 13
• SDG 14

Various initiatives contribute to these goals, including low-carbon financing, plastic waste reduction, and sustainable investing.

Sustainable Products & Innovation

• Green bonds
• Social bonds
• Sustainability bonds
• Blue bonds
• Impact investing products

Awards & Recognition

• Morgan Stanley IQ won MMI and Barron’s Sustainable Investing Award
• Lead Manager of the Year 2019 for U.S. Municipal Green Bonds by Environmental Finance

Environmental Metrics

ESG Focus Areas

• Climate Change
• Labor Practices
• Customer and Data Privacy
• Governance
• Energy Transition
• Circular Economy
• Access and Affordability

Environmental Achievements

• South African pulp and paper company decreased greenhouse gas emissions and shifted most of the product mix to recyclable, reusable or compostable materials; set an ambitious science-based target to achieve net-zero by 2050.
• Mexican retailer committed to sourcing 100% of its energy from renewable sources, becoming a net-zero emissions company by 2040, and preserving 50 million acres of land and 1 million square miles of oceans by 2040; made progress by transforming their fleet into electric vehicles, having 80% of their stores in Mexico using renewable energy, and piloting technologies that increase stores’ energy efficiencies.
• Chinese apparel manufacturer set a short-term 2025 emissions goal and shifted away from coal to more renewables, such as solar and wind; terminated cooperation with a supplier that was involved in human rights issues related to the Xinjiang cotton controversy.
• Semiconductor manufacturer in Asia set a science-based target for Scope 1 and 2 emissions and planned to achieve this through optimization of manufacturing processes and increasing renewable energy use; committed to reducing their Scope 3 emissions 15% by 2030 from 2020.

Social Achievements

• Mexican retailer focused on improving customers’ physical and financial wellness through an online teaching platform on healthy lifestyles and a digital wallet to help onboard unbanked and underbanked customers.
• Chinese apparel manufacturer maintained strong labor relations for many years through higher wages and work benefits.
• Largest mobile operator in Kenya promotes access and inclusion by linking its profitable products to improve health, energy, education and agriculture in Kenya; asset financing platform offers consumers essential products on credit, enabling customers to save money and improve the health and safety of their living circumstances; digital platform for smallholder farmers reduces barriers and attracts younger people to the space.

Governance Achievements

• Actively examining and voting proxies; voted against management in 8% of cases in 2021; focus on board independence and remuneration plans.

Climate Goals & Targets

Environmental Challenges

• Lack of ESG awareness across companies in emerging markets; some managements are just beginning their journey to understand what sustainability means to them.
• Scope 3 emissions are typically most of companies’ total emissions, but most companies do not include them in their carbon accounting, and some do not even track it.
• Many companies do not have tangible working plans to achieve net-zero commitments.
• Lack of transparency and understanding of risk from management on ESG issues.
• Methane emissions leakage during gas production.
• Poor data protection measures leading to high risk of data breaches.

Mitigation Strategies

• Dedicated ESG engagements with company management; focus on material issues and integration.
• Encourage companies to set more short- to midterm measurable targets to effectively evaluate their progress toward their long-term goals.
• Proactive engagement with stakeholders on material issues; proposing specific, actionable approaches for companies to improve and enhance value.
• Exit positions in companies with poor ESG performance and lack of transparency.
• Encourage companies to report emissions intensity, all scopes of emissions, water recycling rates, breakdown of waste management practices and any ESG KPIs tied to compensation.
• Encourage companies to adopt best-in-class practices, including transparent disclosures of metrics, appropriate safety policies and processes, and safety-related metrics tied to executive remuneration.

Supply Chain Management

Supplier Audits: 90% of strategic suppliers audited (for one semiconductor company)

Responsible Procurement

• Working with suppliers to understand exposure to environmental risks and opportunities
• Providing support and resources to ensure suppliers are well-equipped to maximize sustainable practices
• Supplier contracts addressing human rights issues (e.g., forced labor, child labor, compensation, working hours)

Climate-Related Risks & Opportunities

Opportunities

• Investments in various parts of the low-carbon energy value chain
• Uranium mining for nuclear power

Sustainable Products & Innovation

• Sustainable paper and packaging products (South African pulp and paper company)
• Electric vehicles (Mexican retailer)
• Energy-efficient machines (Chinese apparel manufacturer)
• Solar-powered lamps (Kenyan mobile operator)

Environmental Metrics

ESG Focus Areas

• Diversity & Inclusion
• Climate
• Sustainability

Environmental Achievements

• Achieved carbon neutrality across global operations in 2022
• Mobilized $700Bn+ toward a $1Tn goal by 2030 for sustainability solutions, including $550Bn+ in low-carbon and green solutions
• Supported the prevention, reduction, or removal of nearly 14 million metric tons of plastic waste by 2030 (goal is 50MM tons)

Social Achievements

• Launched the Equity in Education and Career Consortium, supporting young adults from low-income backgrounds
• Launched the Small Business Academy, aiding the growth of diverse-owned small businesses
• Expanded caregiver and healthcare benefits, including paid family caregiver leave and expanded parental leave

Governance Achievements

• Enhanced Firmwide ESG governance by formalizing and standardizing the ESG organizational structure
• Created or modified existing regional and business-unit-level committees to ensure consistency
• 75% of CEO's incentive compensation was deferred over three years, subject to clawback

Climate Goals & Targets

Environmental Challenges

• Data lag in obtaining client carbon data (12-18+ months)
• Limited company reporting across GHG scopes, especially scope 3 emissions
• Variability in company-reported emissions figures across different disclosure channels
• Methodological changes by third-party data providers leading to restatements of prior years' data

Mitigation Strategies

• Developed a Climate Strategy Assessment Framework (CSAF) to understand clients' transition plans and commitments
• Encourage companies to report emissions data accurately and comprehensively and to restate prior years, where appropriate
• Incorporate the data provider’s updated scope 3 company emissions values into previously published 2019 FELI and Absolute Financed Emissions (AFE) results
• Regular reviews of the Firm’s progress toward meeting interim targets by the Climate Risk Committee (CRC) and Emissions Oversight Committee (EOC)

Supply Chain Management

Responsible Procurement

• Supplier Diversity Program
• Supplier Code of Conduct

Climate-Related Risks & Opportunities

Physical Risks

• Hurricanes
• Floods
• Wildfires
• Higher temperatures
• Sea-level rise
• Long-term drought

Transition Risks

• Policy and legal changes
• Technology advancements
• Market changes

Opportunities

• Development of energy-efficient products
• Growth in renewable energy sector

Reporting Standards

Frameworks Used: SASB, TCFD

Third-party Assurance: Deloitte & Touche LLP (limited assurance on Scope 1, 2, 3 emissions for 2022)

UN Sustainable Development Goals

• Various UN SDGs (specific goals mentioned throughout the report)

Initiatives align with various UN SDGs, as detailed throughout the report

Sustainable Products & Innovation

• Sustainable finance products and services

Awards & Recognition

• Top Companies for Women Technologists
• Top Women Financial Advisors
• Best Workplaces in Japan
• Best Workplaces for Women
• Corporate Equality Index (100%)
• America’s Greatest Workplaces for Diversity

Environmental Metrics

ESG Focus Areas

• Governance
• Decarbonization
• Supply chain management

Environmental Achievements

• A major copper miner in Latin America achieved full energy replacement with renewables and published an updated emissions reduction pathway after engagement.
• Two car manufacturers in Asian and global portfolios maintained compliance with EU emission standards by optimizing their vehicle portfolio mix.

Social Achievements

• An Indonesian dairy and consumer food products company expanded its door-to-door sales program, employing over 4,000 women.
• A Philippine FMCG company added nutrition as a pillar of its sustainability framework, fortifying nutrients in core products and introducing plant-based alternatives.

Governance Achievements

• Increased transparency on executive compensation across multiple portfolio companies.
• Improved board composition discussions and proactive engagement well ahead of votes.

Climate Goals & Targets

Environmental Challenges

• Rising absolute emissions in emerging markets despite growing decarbonization momentum.
• Limited progress towards decarbonization in some sectors.
• Complexity of implementing EU supply chain disclosure requirements in emerging markets.
• Lack of basic disclosures on supply chains, including supplier details and assessment metrics, in many EM companies.
• Limited transparency and disclosure around management incentives and compensation in EM companies.

Mitigation Strategies

• Sectoral approach to decarbonization engagement, focusing on high-emitting sectors.
• Company-by-company engagement, considering differentiated levers and pathways for emissions reduction.
• Monitoring the regulatory landscape around emissions and decarbonization.
• Follow-up engagements with companies to monitor progress on supply chain risk management.
• Encouraging companies to adopt long-term and performance-based pay, aligned with shareholder interests.

Supply Chain Management

Responsible Procurement

• Supplier Code of Conduct
• Audits on major suppliers

Climate-Related Risks & Opportunities

Transition Risks

• EU Carbon Border Adjustment Mechanism (CBAM)
• Domestic carbon pricing schemes

Opportunities

• Green capex investments

Reporting Standards

Frameworks Used: TCFD

Sustainable Products & Innovation

• Photovoltaic (PV) inverters
• Energy storage systems

Environmental Metrics

ESG Focus Areas

• Climate Change
• Social Responsibility
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• Not disclosed

Governance Achievements

• Not disclosed

Climate Goals & Targets

Environmental Challenges

• Lack of clear definition of "robust" transition plans for traditional energy companies.
• Concerns around greenwashing and trust in corporate disclosures.
• High capital intensity of sustainability improvements.

Mitigation Strategies

• Increased focus on forward-looking metrics like CapEx and R&D investment in sustainability.
• Development of frameworks for evaluating future sustainability trajectories.
• Regulatory guidance on sustainable improvers (e.g., UK FCA's improver label, ESMA guidance).

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products, building renovations

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Energy-efficient products

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity, Equity and Inclusion
• Governance
• Environmental Sustainability
• Social Responsibility
• Human Rights

Environmental Achievements

• Multiple funds aim to maintain a carbon profile substantially lower than their benchmarks, with targets to halve carbon intensity by 2030 (compared to 2020 or 2022 baselines). Specific reduction percentages are not provided for all funds.

Social Achievements

• Several funds prioritize investments in companies demonstrating leadership or improvement in workforce diversity and inclusive work cultures. Specific metrics are not consistently provided across all funds.
• Engagement with company management on financially material ESG issues.

Governance Achievements

• Funds exclude companies involved in severe ESG controversies or those failing to comply with UN Global Compact or ILO Fundamental Principles. Specific numbers of incidents are not provided.

Climate Goals & Targets

Environmental Challenges

• Data limitations on specific ESG metrics for some issuers, requiring the investment manager to use reasonable estimates or alternative data sources.
• Managing sustainability risks in emerging markets.

Mitigation Strategies

• Utilizing a combination of company-disclosed information, non-company disclosed information, and third-party research and data to assess sustainability risks.
• Active engagement with company management to discuss ESG practices and drive positive change.
• Exclusion of companies with high exposure to sustainability risks.

Supply Chain Management

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SFDR (Sustainable Finance Disclosure Regulation)