Climate Change Data

Environmental Metrics

ESG Focus Areas

• Climate Change
• Diversity & Inclusion
• Governance
• Sustainable Investing
• Responsible Investing

Environmental Achievements

• Reduced estimated climate value-at-risk (CVaR) of aggregated equity book to -6.04% over the next 15 years under a 2-degree scenario (compared to -9.32% for the MSCI ACWI).
• Introduced a Thermal Coal Involvement Policy prohibiting new investments in companies with >25% revenue from thermal coal mining or expanding thermal coal power generation.

Social Achievements

• Introduced proprietary Diversity Index and Equity & Inclusion Index to benchmark progress on EID.
• Donated over $1 million to the NAACP Legal Defense Fund.
• Developed vendor/supplier policy tied to pay distribution, advancement/retention, and hiring.
• Signed the CEO Action for Diversity & Inclusion pledge and named a Best Place to Work for LGBTQ Equality.

Governance Achievements

• Published voting intentions in advance of 31 shareholder meetings (NB Votes initiative).
• Supported shareholder proposals in opposition to management around half of the time.

Climate Goals & Targets

Environmental Challenges

• Low bond yields and tight credit spreads.
• High equity market index valuations.
• Need to close potential return gaps for clients.
• Pandemic-related disruptions to in-person client engagement.

Mitigation Strategies

• Developed "income without duration" strategy in fixed income.
• Expanded into alternative and private credit markets.
• Shifted to digital and virtual client communication.
• Developed new products and solutions to meet client needs.
• Increased engagement with companies to improve sustainability and governance.

Supply Chain Management

Responsible Procurement

• Vendor/supplier policy tied to pay distribution, advancement/retention, and hiring.

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: PRI

UN Sustainable Development Goals

• UN Sustainable Development Goals (SDGs)

Several strategies aim to invest in companies whose goods and services support the SDGs.

Awards & Recognition

• PRI Leaders’ Group (2020)
• A+ rating from PRI for ESG integration
• Fund Intelligence Asset Manager Podcast of the Year (2020)

Environmental Metrics

ESG Focus Areas

• Climate Change

Environmental Achievements

• 50% of the buildings in which we have a tenancy have a sustainability accreditation such as LEED, BREEM or WELL
• 60% waste diversion rate in our New York headquarters

Governance Achievements

• Established an ESG Advisory Council comprised of six industry experts, including three with climate expertise.

Climate Goals & Targets

Environmental Challenges

• Data limitations in private markets and certain asset classes hindering comprehensive climate risk assessment.
• Inconsistency in data coverage and reporting frequency for private markets investments.
• Difficulty in obtaining look-through data for secondary private equity investments.
• Lack of CVaR and carbon metrics from data vendors for certain asset classes (Senior Floating Rate Loans, Municipals, Currency and Cash Management, and some Alternatives).

Mitigation Strategies

• Utilizing third-party and proxy data alongside internal research.
• Developing proprietary ESG rating (NB ESG Quotient) and Net-Zero Alignment Indicator.
• Engaging issuers to request ESG data metrics.
• Advocating for greater standardized disclosures with regulators.
• Working with ESG data vendors to improve data coverage.
• Developing a methodology for estimating carbon footprint of private markets investments (limited to certain direct and primary funds).

Supply Chain Management

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Flooding
• Extreme heat

Transition Risks

• Policy changes
• Regulatory changes
• Technological shifts
• Market shifts
• Reputational risks

Opportunities

• Investing in climate solutions
• Developing climate-resilient portfolios
• Capitalizing on mispriced transition-alignment

Reporting Standards

Frameworks Used: TCFD

Environmental Metrics

ESG Focus Areas

• Environmental
• Social
• Governance

Environmental Achievements

• Not disclosed

Social Achievements

• FV Hospital (FVH) provides quality health services across 30+ specialties to a patient base in Vietnam, where an ageing population, growing middle class, and proliferation of chronic diseases (which account for 10 out of 12 causes of death) have overburdened the country’s public healthcare system. The company is a leading tertiary hospital in Ho Chi Minh City and the only JCI-accredited hospital in South and South Central Vietnam, an acknowledgment of the hospital’s pursuit towards quality yet affordable patient care. Today, FVH operates two facilities with more than >211 operational beds and caters to >250k patients per annum. Quadria has worked with FVH on ESG initiatives including continuing education for employees and creation of economic opportunities for women in support of gender equality. The company’s commitment to diversity is apparent given its female staff ratio of over 70%.

Governance Achievements

• Update to Responsible Investment Policy to reflect evolving regulatory definitions.

Climate Goals & Targets

Environmental Challenges

• Challenging exit market for private equity portfolios, especially in the first half of 2023.
• Headwinds that faced share prices within the sector for much of 2022 persisted in the first half of 2023.
• NBPE’s share price was not immune to these headwinds, declining by (3.9)% in the six months to June.
• Although discounts across the sector appear to have stabilised in 2023, they remain wide, despite overall positive performance from most listed private equity funds, including NBPE.
• Higher interest rates are undoubtedly a top concern among investors and we are closely monitoring the ability of companies to continue to operate in a higher interest rate environment.
• Weaker overall consumer environment caused orders to be delayed or projects limited, as business customers worked through backlogs or destocking of inventories.

Mitigation Strategies

• Accretive M&A continues to be a strong theme within the portfolio as a route to value creation.
• Private equity managers are active owners and in this high interest rate environment the demonstrated ability of our portfolio companies to add value and execute on operational improvements is even more important.
• Private equity managers have taken action in these instances in several ways including reducing costs and optimising operating costs, monitoring margins, and in some cases, upgrading management teams.
• NBPE’s strategy of investing in high quality private companies and aiming to deliver multiples of capital and strong compounding returns over time will drive the best long-term performance for shareholders.
• The Company has repurchased approximately $5 million of shares, at a weighted average discount of 32%, resulting in a $0.05 accretion to NAV.
• Outstanding long-term investment performance, coupled with excellent investor relations and strong corporate governance.

Supply Chain Management

Supplier Audits: Not disclosed

Responsible Procurement

• Not disclosed

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: Null

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 3

FV Hospital's initiatives contribute to Goal 3 (Good Health and Well-being) through providing quality healthcare services and supporting continuing education for employees and economic opportunities for women.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Not disclosed