Company Selection: Integrating sustainability criteria INVESTMENT CHARACTERISTICS: Investment themes: Strong management & robust corporate governance Structural competitive advantage Strong ROIC / Growth compounders Cash flow focused / Strong balance sheets Attractive valuations Climate Change Clean Energy Energy Efficiency Water Scarcity Water Treatment & Distribution Responsible Irrigation Waste Management Recycling Food Availability Sustainable Agriculture & Food Production Food Retail Financial Inclusion Banking Insurance FinTech Infrastructure EPC Contractors Building Materials Health & Wellness Medical Care Pharmaceuticals Internet & Communications Telecom Internet Education Schools Technology Electricity Transmission + + + +
Company Selection: Integrating sustainability criteria Full integration of ESG criteria to achieve superior returns Identify companies where sustainability presents an opportunity or mitigates a risk: Superior growth Brand Trust Competitive Position Higher profitability Waste Efficiency Employee Productivity and Retention Lower Cost of capital Transparency Stakeholder Engagement Costs of Debt Compliance & Risk management Regulatory/Litigation Risk Product Integrity Community Relations Opportunity Risk Mitigation Environmental Emissions Resource Intensity Social Customers Employees Communities Governance Corporate Governance Transparency Shareholder Rights
Company Selection: Integrating sustainability criteria Corporate governance factors cut across all regions and sectors… Board structure & compensation Executive incentives & compensation Related party transactions Shareholder rights & alignment of interests Disclosure & transparency Regulatory environment & compliance … AND Other material sustainability factors vary by sector and company Banks Airlines Cement Financial inclusion Responsible lending AML & Cyber security Risk exposure to sensitive sectors Customer satisfaction & loyalty Fuel consumption & carbon pricing Labor relations Accidents & Safety Competitive behavior Customer satisfaction & loyalty Greenhouse gas emissions Water usage & efficiency Waste production & disposal Community relations Health & Safety