Climate Change Data

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance
• UN Sustainable Development Goals (SDGs)

Environmental Achievements

• Kajaria Ceramics installed 1.9 megawatts of solar panels in 2019-2020, increasing total renewable energy capacity to 6.3 megawatts (5.5% from solar and 3.6% from wind).

Social Achievements

• Increased CSR commitments, including financial support for education, building toilets, and feeding seniors.
• Norilsk committed RUB 20 billion to anti-pandemic initiatives, including employee support and regional healthcare.
• Vale invested BRL 500 million in humanitarian aid and purchased 5 million COVID-19 rapid test kits.
• Samsung Electronics provided a facility for patient care and assisted face mask production.
• Metropolis Healthcare increased employee salaries and implemented welfare initiatives.

Governance Achievements

• Improved shareholder communication and non-financial reporting at Kajaria Ceramics, including quarterly conference calls.
• Increased engagement with companies on sustainability topics (over 1000 meetings with 600 companies).

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic and its impact on EM countries.
• Global economic recession.
• Escalating China-US tensions.
• Oil price war.
• Extreme market volatility.
• Lack of transparency and detailed communication from some EM companies.

Mitigation Strategies

• Comprehensive portfolio review.
• Intensified communication with portfolio companies.
• Monitoring of liquidity conditions.
• Balance sheet review to assess companies' ability to weather revenue and earnings decline.
• Adjustment of sustainable earnings estimates and target valuations.
• Remote work arrangements to ensure team safety.

Supply Chain Management

Responsible Procurement

• Sourcing raw materials locally to lower transportation costs and emissions (Kajaria Ceramics)

Climate-Related Risks & Opportunities

Opportunities

• Development of energy-efficient products and renewable energy adoption

Reporting Standards

Frameworks Used: UN SDGs

UN Sustainable Development Goals

• Various SDGs relevant to poverty, inequality, economic opportunity, resource access, and environmental conditions

Inherent in empirical and incident assessments; many EM companies are aligned with SDGs.

Environmental Metrics

ESG Focus Areas

• Climate Change
• Modern Slavery
• Diversity, Equity and Inclusion (DEI)

Environmental Achievements

• Rolled out a climate impact reporting solution (ISS) to provide a baseline understanding of portfolios’ carbon footprints.
• Selected an additional data platform to conduct more structured assessments of transitional and physical risks, including climate-related scenario and alignment analyses.

Social Achievements

• Conducted education series focused on modern slavery and DEI.
• Conducted over 60 ESG-specific engagements in 2021 with a focus on modern slavery, DEI and climate change.
• Made DEI related updates to proxy voting policy and encouraged holdings to publicly disclose DEI data.

Governance Achievements

• Elevated the diversity standard used in board voting criteria.
• Updated proxy voting policy to reflect increased focus on DEI.

Climate Goals & Targets

Environmental Challenges

• Difficulty in obtaining comprehensive emissions data disclosures and ambitious reduction targets from some portfolio holdings.
• Challenges in measuring and disclosing emissions data, particularly Scope 3 emissions.
• Limited near-term ability to address Scope 2 emissions due to global operational footprints.
• Misunderstanding of modern slavery by many companies, focusing on extreme examples rather than broader human rights risks.

Mitigation Strategies

• Conducted educational seminars on modern slavery, climate change, and engagement techniques.
• Engaged with portfolio companies to understand their approach to climate change, focusing on awareness, disclosure transparency, and intentionality around climate action.
• Prioritized engagements with companies lacking comprehensive emissions data disclosures and/or ambitious reduction targets.
• Evolved engagement approach to utilize language oriented around human rights risks, incorporating a broader interpretation of modern slavery.
• Provided advice and resources to companies early in their ESG journeys.

Supply Chain Management

Responsible Procurement

• Supplier code of conduct
• Responsible purchasing policy

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Environmental Metrics

ESG Focus Areas

• Talent Management
• Business Practices
• Environment
• Diversity, Equity, and Inclusion (DEI)

Environmental Achievements

• Created a greenhouse gas (GHG) inventory of corporate emissions and measured the corporate carbon footprint for fiscal years 2019-2022.
• Reduced emissions in 2020 and 2021 due to remote work during the pandemic.
• Built out four new office spaces in 2022 with sustainability considerations (sustainable materials, energy efficiency, reduced water consumption).

Social Achievements

• Conducted a pay equity analysis in 2022, finding no statistically significant gender and/or race/ethnicity pay gaps.
• Implemented programs to provide more equal access to training, development, and mentorship.
• Maintained low employee turnover (9% in 2022) and high average tenure (7 years).

Governance Achievements

• Increased board diversity (three of seven independent directors are female, one ethnically diverse, one LGBTQIA+).
• Established a pay equity statement.
• Enhanced unconscious bias interview training.

Climate Goals & Targets

Environmental Challenges

• Navigating the complex and rapidly evolving ESG landscape and avoiding greenwashing.
• Balancing the benefits of an office-centric culture with the flexibility needed for a hybrid work environment.

Mitigation Strategies

• Thoughtful execution of fundamental beliefs and focus on managing a durable investment firm.
• Principles-based, rather than rules-based, approach to hybrid work, empowering teams to decide on specifics.

Supply Chain Management

Responsible Procurement

• Selection of sustainable materials in new office spaces.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SASB

Environmental Metrics

ESG Focus Areas

• Talent Management
• Governance
• Business Practices
• Environmental Stewardship

Environmental Achievements

• Reduction in Scope 1 and Scope 2 GHG emissions in 2020 and 2021 due to remote work during the pandemic; total Scope 1 and Scope 2 GHG emissions in 2023 remained below pre-pandemic levels despite a slight rise compared to 2022.
• Implemented sustainable building practices in new London office, including using recycled materials and energy-efficient technologies.
• Reduced disposable bottle and can usage by favoring reusable water bottles and smart water systems.

Social Achievements

• Continued to offer unconscious bias interview training.
• Expanded portfolio of community partnerships to broaden talent reach.
• Maintained low employee turnover (8% in 2023) and high average tenure (seven years).

Governance Achievements

• Board of directors provides oversight of sustainability matters.
• Governance and Sustainability Committee oversees sustainability initiatives.
• No material compliance matters identified in 2023.

Climate Goals & Targets

Environmental Challenges

• Slight rise in Scope 1 and Scope 2 GHG emissions in 2023 compared to 2022 due to increased in-office work.
• Uncertainty associated with facilities changing their responses regarding the applicability of certain activity types in the FY23 inventory.

Mitigation Strategies

• Continued focus on sustainable building practices and resource management.
• Further investigation into the reasons for changes in applicability of activity types to resolve uncertainties in future inventories.

Supply Chain Management

Responsible Procurement

• Selection of sustainable materials in new office buildouts (e.g., recycled carpet, sustainable upholstery).

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: World Resources Institute GHG Protocol, SASB

Certifications: LEED (Platinum, Gold, Silver in various locations), Energy Star (in various locations)

Awards & Recognition

• Power of 3 company recognition by Milwaukee Women, Inc.