Suffolk County Council Pension No. 1 Fund Paul Markham David Moylett Ian Burger 12 May 2011 Presentation to:

May 11_Inst_Suffolk Cimate change 1 Agenda Overview of your mandate Our thematic investment approach and climate change Your portfolio and climate change related ideas

May 11_Inst_Suffolk Cimate change 2 Suffolk County Council Pension No. 1 Fund Your mandate and team Investment objective: To outperform the Benchmark by 2.5% per annum (gross of fees) over rolling 3 and 5 year periods Benchmark: MSCI All Countries World Index NDR Social, environmental or ethical considerations No investment restrictions placed on Newton in this regard Newton appointed: 27 July 2007 Current value: £214m as at April 2011 Your Newton presenters : Paul Markham Investment manager David Moylett Account manager Ian Burger Corporate governance officer

May 11_Inst_Suffolk Cimate change 3 Idea generation Themes help identify opportunities and challenges ChallengesOpportunities Themes are about change and less likely to be caught out by change Our interpretation of the key forces of global change Themes look through the short-term noise Themes provide a framework for investment thinking Themes ensure we retain a global perspective and are dynamic

May 11_Inst_Suffolk Cimate change 4 Climate change and Newton’s themes It is now almost universally accepted that man-made greenhouse gas emissions are an important contributor to climate change. There is greater pressure than ever for companies to address climate change matters within their corporate strategies. Environmental issues have moved to centre stage in the minds of policy makers. Governments are introducing new regulation to promote a move to a low carbon economy. Current growth trends in the developing world suggest that significant additional pressure on resources and the environment is likely in future. Those most likely to be affected by climate change affected weather patters are those based in the developing world Human population growth is viewed as a major contributor to global warming, given the increased use of fossil fuels. The world’s population has surpassed 6.7bn and continues to increase by around 78 additional people per annum. The total world consumption of marketed energy is predicted to increase by 49 percent from 2007 to As fuel prices continue to increase, the world will seek to consider cheaper and more sustainable energy sources. Climate change

May 11_Inst_Suffolk Cimate change 5 Number of climate change related policies introduced annually Source: Energy Information Agency, Goldman Sachs Research

May 11_Inst_Suffolk Cimate change 6 Beyond Cancun: Climate Change Conference of the Parties Dec 2010 No international binding agreement to reduce greenhouse gases has been reached Kyoto Protocol ends in 2012 In keeping with the Copenhagen Accord December 2009, individual country commitments were reached –mitigate deforestation; funding for developing countries; targets for 2020 submitted –Over 100 countries willing to “associate” with the Accord Clear international agreement that further action is needed but unclear what this means in practice Implications for investors? Next meeting: Durban, December 2011 International Local

May 11_Inst_Suffolk Cimate change 7 Carbon emission mitigation commitment at Copenhagen - Carbon intensity. Reducing carbon intensity means a country's GDP will continue to rise without carbon emissions rising at the same rate due to greater energy efficiency and investment in greener technologies Source: US Climate Network / Newton Targets were reaffirmed at Cancun in December 2010 Business As Usual (BAU). A commitment to reduce emissions from the most plausible projection of the future if climate friendly actions were not taken Emission Reductions. A target which reduces a country's overall greenhouse gas emissions

May 11_Inst_Suffolk Cimate change 8 US & China 15.78% of world’s emissions Democratic government Reliant on legislation support from Congress and House of Representatives Absolute emission reduction target Target of 17% reduction (from 2005 levels) 16.64% of world’s emissions Autocratic government Ability to impose change without approval Carbon intensity target based on GDP growth Resulting in a 15% decrease to a 204% increase, from 1990 levels Account for almost a third of the world’s greenhouse gas emissions Neither country has agreed to legally binding targets

May 11_Inst_Suffolk Cimate change 9 Newton’s climate change action Full member of the Carbon Disclosure Project (CDP) Collaborative engagement on climate change under the PRI 3rd year supporting the investor statement on climate change –sent to the world’s heads of state highlighting the need for clear regulation Signatory to the CDP’s Water Disclosure project Supporter of the Forest Footprint Disclosure project

May 11_Inst_Suffolk Cimate change 10 Nuclear power: a climate change solution? Themed research: energy supply, earth matters, developing economies Nuclear drivers –Increased global demand in energy –Demand for carbon reduction –Energy security and supply constraints –Cost of oil –Government support Nuclear challenges –Safety –Nuclear Waste –Water use –Weapons proliferation –Costs Source: IAEA 2000

May 11_Inst_Suffolk Cimate change 11 Summary Newton portfolios constructed using our best stock ideas from around the world –key factors taken into consideration are themes, fundamentals and valuation Climate change, while not a ‘named’ theme, carries influence in a number of our central investment themes –helps in generating opportunities and identifying threats Our Responsible Investment team’s input is integral to our investment research analysis –adding and protecting value for clients

Appendix

May 11_Inst_Suffolk Cimate change 13 Defining and understanding Responsible Investment Definitions: The consideration of ESG* matters within the investment decision making process NOT negative screening Environmental, Social and Governance (ESG): Collective term for socially responsible investment and corporate governance Socially Responsible Investment (SRI): Consideration of environmental and social matters Corporate governance: The policies, principles and rules by which a company is directed and controlled Why is ESG important? ESG matters can have a material impact on company value and reputation -Risk management -New investment opportunities Ensure that companies are operating in a sustainable manner which benefits shareholders Fiduciary duty for trustees of pension funds to disclose in their SIP the extent to which “social, environmental or ethical considerations are taken into account in the selection, retention and realisation of investments”.** ** The Occupational Pension Schemes Amendments Regulation 1999

May 11_Inst_Suffolk Cimate change 14 Identifying ESG risks & opportunities GLOBAL RESEARCH Control Regulatory Physical Dilution Reputational Product/Technical Litigation Supply Chain Vulnerability Competitive Advantage Shareholder Rights License to Operate Evolution Integrated investment resource Responsible Investment – part of the investment process Research recommended Model portfolios Client portfolio s GLOBAL RESEARCH Team interaction GLOBAL RESEARCH

May 11_Inst_Suffolk Cimate change 15 Responsible investment considerations Environmental Climate Change Water Energy Use Industrial Waste Product Life Cycle Biodiversity Governance ESG Disclosure Shareholders’ rights Business Ethics Remuneration Regulation Capital structure Social Human Rights Employment Supply Chain Education Animal Testing Health & Safety Research Risk Analysis Engagement Reporting Voting Taking a proactive and pragmatic approach

May 11_Inst_Suffolk Cimate change 16 Responsible Investment at Newton Responsible investment: Integration of environmental, social and governance (ESG) with the investment process Research and analysis of ESG investment risks and opportunities Integrated with Newton’s investment process Engage with companies on E, S & G Exercise voting rights, globally Collaborate with other investors Influence industry debate BRAVA; 5% of research vote Investor codes: UK Stewardship Code (formally, Institutional Shareholders’ Committee Code). Newton complies with the code UN PRI (Principles for Responsible Investment) – Incorporating ESG into investment decisions and ownership practices. Newton joined in Feb 2007

May 11_Inst_Suffolk Cimate change 17 Responsible Investment at Newton Key ESG groups ES groups: Carbon Disclosure Project Extractive Industries Transparency Initiative Forest Footprint Project UK Sustainable Investment and Finance G groups: Asian Corporate Governance Association Corporate Governance Forum International Corporate Governance Network Institute of Chartered Secretaries and Administrators Investment Management Association Focus Group Reporting Responsible investment policies and principles Quarterly reports on ESG activities ESG focus notes and reports Client specific voting reports

May 11_Inst_Suffolk Cimate change 18 Future of responsible investment Continued global growth More regulation Greater onus on shareholders acting responsibly Transparency Client interest / demand / outsourcing Unintended consequences –fragmentation –box-ticking

May 11_Inst_Suffolk Cimate change 19 Protecting and enhancing shareholder value Responsible investment considerations are an integral part of Newton’s investment process Identifying risks and opportunities that may have a bearing on investments Structure in place that encapsulates research, debate, engagement and voting Engagement and voting activity reported quarterly plus additional ad hoc ESG Focus Reports

May 11_Inst_Suffolk Cimate change 20 PHOTO Size 3.5 x 2.5 Paul Markham Investment manager PHOTO Size 3.5 x 2.5 David Moylett Account manager PHOTO Size 3.5 x 2.5 Ian Burger Corporate governance officer 1998 to dateNewton Investment Management 1997 – 1998Morgan Stanley & Co – Client services executive, capital markets 1995 – 1997Visa International – Wholesale business development executive 2010 to dateNewton Investment Management 1997 – 2010UBS Global Asset Management – Executive Director and Client Relationship Manager 1987 – 1997Provident Mutual (now part of Morley Asset Management) – Head of Institutional Client Relationship team 1979 – 1987Allied Irish Investment Bank – Pension Fund Client Service executive 1998 to dateNewton Investment Management 1997 – 1998Rainey Kelly Campbell Roalfe – Assistant to finance director Responsibilities Investment manager – global funds Member of the global investment meeting Member of the global equity model group Member of the equity strategy group Institutional client services – Segregated funds account management Corporate governance officer Member of the responsible investment strategy group Member of the counterparty risk group Qualifications BAInstitute of Chartered Secretaries & Administrators Certified Diploma in Accounting & Finance Fellow of and advisor to the Chartered Institute of Secretaries (FCIS) BA MSc 12 years at Newton 12 years’ investment experience 23 years’ investment experience13 years at Newton 13 years’ investment experience Newton biographies

May 11_Inst_Suffolk Cimate change 21 Important information Past performance is not a guide to future returns. The value of investments and the income from them can fall as well as rise and investors may not get back the original amount invested. The value of overseas securities will be influenced by fluctuations in exchange rates. If part of the portfolio is invested in sub-investment grade bonds, which typically have a low credit rating and carry a high degree of default risk, then please be aware that this can affect the capital value of your investment. If the portfolio has exposure to hedge funds, gold, private equity and property via publicly quoted transferable securities, then there are additional risks associated with these sectors. The information contained within this document should not be construed as a recommendation to buy or sell a security. It should not be assumed that a security has been - or will be - profitable. There is no assurance that a security will remain in the portfolio. The opinions expressed in this presentation are those of Newton Investment Management and should not be construed as investment advice. In addition the information contained in this presentation should not be construed as a recommendation to buy or sell a security. Newton Investment Management Limited BNY Mellon Centre 160 Queen Victoria Street London EC4V 4LA Tel: Registered in England No BNY Mellon Fund Managers Limited BNY Mellon Centre 160 Queen Victoria Street London EC4V 4LA Tel: Registered in England No Registered office: as above. Both firms are authorised and regulated by the FSA, are members of the IMA and are Bank of New York Mellon Companies SM Also at Newton Edinburgh Capital House 2 Festival Square Edinburgh EH3 9SU Newton Leeds 1 Whitehall Riverside Leeds West Yorkshire LS1 4BN