Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Global Food Shortages
• Water Shortages
• Poverty
• Safety
• Management
• Governance

Climate Goals & Targets

Environmental Challenges

• Short-termism in investment strategies
• Obsession with benchmarks
• Poor quality management in some companies, even in renewable energy sectors
• Externalities not internalized in financial accounts (e.g., environmental liabilities)
• Excessive use of plastics and its environmental impact
• Irresponsible business practices with suppliers, employees, or customers

Mitigation Strategies

• Incorporating ESG factors into investment analysis and decision-making
• Engaging with companies to encourage sustainable practices
• Defining risk as the risk of losing money, not deviation from a benchmark
• Promoting long-term investment strategies
• Improving transparency and practices in the investment industry
• Reducing dependency on plastic
• Focusing on companies with strong franchises and socially useful products

Supply Chain Management

Responsible Procurement

• Fair treatment of all stakeholders (customers, suppliers, employees)

Climate-Related Risks & Opportunities

Opportunities

• Investment in clean technologies

Environmental Metrics

ESG Focus Areas

• Environmental Sustainability
• Diversity and Inclusion
• Community Involvement and Charitable Giving

Environmental Achievements

• Aligning the sustainability of our offices with our climate change statement. Committed to reducing our own operational emissions and offsetting where this is not yet possible. First Sentier Investors is currently undertaking ISO 14001 Environmental Management System (EMS) certification.

Social Achievements

• Published a statement on diversity and an article on what we have done so far. FSI’s global Diversity, Equity and Inclusion strategy focuses on four pillars: Belonging, Equity, Engaging, and Alignment.
• SI has two foundations, the Maitri Trust, and Tar-Ra, which enables grant giving to Australian registered charities.

Governance Achievements

• As an autonomous investment group within FSI, Stewart Investors is included in FSI’s B Corp certification with a score of 107.2.

Climate Goals & Targets

Environmental Challenges

• Not disclosed

Mitigation Strategies

• Not disclosed

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Focus on quality companies that treat their employees well and manage the risks in their supply chain effectively.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: ISO 14001 (in progress)

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed

Environmental Metrics

ESG Focus Areas

• Human Development
• Climate Change Solutions
• Harmful or Controversial Products

Environmental Achievements

• 40 companies (62%) contributing to climate change solutions, making 129 contributions to solutions.

Social Achievements

• All 65 companies (100%) contributing to at least one human development pillar, making 178 contributions.

Governance Achievements

• Engagement with 73% of Fund companies on environmental, social, and governance issues; proxy voting on 645 proposals.

Climate Goals & Targets

Environmental Challenges

• Data quality and availability for emissions reporting; lag in data updates; limitations of PCAF methodology; Scope 3 emissions difficulty in measurement; companies without climate targets.

Mitigation Strategies

• Engagement with companies to encourage emissions disclosure and setting of climate targets; use of estimates where data unavailable; use of PCAF methodology for carbon footprint calculation; consideration of Scope 3 emissions during investment and engagement.

Supply Chain Management

Responsible Procurement

• Monitoring of supply chains for conflict minerals, deforestation, etc.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: PCAF (Partnership for Carbon Accounting Financials), TCFD (Taskforce for Climate Related Financial Disclosures)

Environmental Metrics

ESG Focus Areas

• Sustainable Development
• Climate Change
• Biodiversity
• Water
• Human Rights
• Modern Slavery
• Diversity and Inclusion

Environmental Achievements

• Reduced carbon footprint relative to benchmark by 86% (as at 30 September 2023)
• Company reports against a high standard of sustainability disclosures (Article 9) under the EU Sustainable Finance Disclosure Regulations (“SFDR”)

Social Achievements

• Godrej Consumer Products' Salon-I vocational training program trained over 220,000 women since 2012, with around 50% securing employment.
• Collaborative engagement on conflict minerals in the semiconductor supply chain resulting in RMI accepting investors as members

Governance Achievements

• Established a new Sales, Marketing and Communications Committee to improve the visibility of the Company and attract a broader range of shareholders.

Climate Goals & Targets

Environmental Challenges

• Market and Foreign Exchange Risk in emerging Asia Pacific markets
• Geopolitical Risk from events causing exchange rate volatility, regulatory changes, and market price falls
• Climate Change Risk impacting portfolio companies and operations
• Black Swan Risk from unpredictable events causing market volatility and supply chain disruptions
• Portfolio Management Key Persons Risk from potential team departures
• Share Price Risk from underperformance relative to peers and investment objectives
• Operational Risk from reliance on third-party service providers
• Supply chain disruptions affecting corporate investment plans and growth prospects
• Technological breakthroughs potentially challenging the addressable market and operations of portfolio companies
• Increasing water scarcity affecting economic development in the Asia Pacific Region, particularly India
• Rise of ‘post-truth’ politics impacting businesses and brands

Mitigation Strategies

• Diversified portfolio to reduce risks associated with individual stocks and markets
• Regular discussions of geopolitical issues and economic conditions with Stewart Investors
• Portfolio considered relatively well-positioned due to Stewart Investors' focus on sustainability
• Monitoring of emerging risks and robustness of business continuity plans from service providers
• Regular reports from the Portfolio Manager on team changes and succession planning
• Review of investment objective and policy, monitoring of KPIs, and annual review of Stewart Investors' appointment
• Periodic visits to key service providers to understand their control environment
• Monthly reports from Frostrow on compliance with laws and regulations
• Review of internal control reports and key policies of service providers
• Risk matrix detailing risks, management approaches, and controls
• Updates on regulatory and legal environment changes
• Reports and assurance from service providers regarding information security controls
• Review of arrangements and services provided by the Custodian
• Review of Stewart Investors' approved list of counterparties

Supply Chain Management

Responsible Procurement

• Engagement with investee companies on supply chain sustainability

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: SFDR, TCFD (partially)

Certifications: ISO 14001

UN Sustainable Development Goals

• SDG 3
• SDG 12

Investments contribute to good health and well-being (SDG 3) and responsible consumption and production (SDG 12).