IA Clarington Inhance SRI Funds Andrew Simpson, CFA Dermot FOley, CFA June 2018

Socially Responsible Investing (SRI) Socially Responsible Investing (RI) is the integration of environmental, social and governance (ESG) considerations into the management and selection of investments. Why SRI? Means to identify and manage risk Can help to generate long-term value Encourages companies to improve transparency, be accountable and enhance risk management Sustainable Profitable Responsible

ESG framework For illustrative purposes only.

Who is using MSCI ESG Research? Pension funds Consultants equity quant Fixed income Insurance Endowments & foundations Stewardship & governance ESG specialist CIO office Fund selection compliance Risk management Financial advisors retail emerging Passive fund & ETF Active fund ASSET MANAGEMENT Wealth management Asset owners 4 of top 6 global investment consultants work with MSCI 46 of the top 50 global asset managers* use MSCI ESG Research to integrate ESG into their investment process Merrill Lynch partners with MSCI to bring ESG scores to client dashboards on Merrill Edge $10bn+ in AUM in equity ETFs linked to ESG equity and fixed income indexes Based on latest P&I AUM data and MSCI clients as of December 2017; http://newsroom.bankofamerica.com/press-releases/merrill-lynch/merrill-edge-simplifies-stock-research-self-directed-investors-through-

MSCI ESG Rating Methodology Identify leaders and laggards within each industry Industry-Relative ESG Ratings (AAA-CCC) Focus on most relevant ESG factors by industry Quantitative Approach + Annual Consultation Focus on risk exposure not just disclosure Scoring Models Assess Risk Exposure + Risk Management Analysis begins with a deep governance assessment Ownership, Board, Pay, Accounting, Corporate Behavior Sources: MSCI ESG Research

Carbon Risk Management Three APPROACHES CARBON ANALYSIS OF PORTFOLIOS DE-CARBONIZATION / SCREENING CARBON RISK MANAGEMENT & STRATEGY Analysing carbon exposure of portfolios, including carbon footprint. Tilting or screening portfolios to reduce fossil fuel and carbon exposure, and/or increase clean-tech exposure. Incorporating climate change into risk management strategies and scenario analysis, or construction of portfolio aligned with low-carbon trajectories. At minimum, involves estimating the carbon footprint of a portfolio Beyond footprinting, it may include assessments of carbon risk management efforts, fossil fuel exposure, clean-technology, etc. This analysis sets a baseline to inform future actions. Involves the use of divestment, tilting and allocation strategies to: Reduce exposure to carbon- intensive assets such as fossil fuels, coal based utilities, etc. Increase exposure to clean- technologies. Involves evaluating the financial implications of climate risk for companies, securities, and industries, and incorporating this analysis into investment decisions. May involve use of scenario analysis along specific time horizons, or assessments of companies’ risk management efforts and capabilities. MEASURE TILT MANAGE / TEST

VCIM climate risk strategy Our integrated investment process incorporates a four part climate strategy Divestment: eliminate fossil fuel companies as viable alternatives emerge Decarbonization: avoid companies with above average environmental emissions, energy use, production costs Re-Investment: seek opportunities to invest in sectors with potential to provide lower-carbon energy and services Engagement: encourage companies to disclose their climate risk exposure and strategies

Renewables & clean tech Climate risk management Increasing exposure to renewables & clean tech opportunities Renewables & clean tech Oil and gas producers IA Clarington Inhance Global Equity SRI Class 15.3% 0.0% IA Clarington Inhance Monthly Income SRI Fund 11.3% 5.7% IA Clarington Inhance Canadian Equity SRI Class 4.3% 6.9% Combined Funds Weighted Avg. 11.5% 4.0% Source: Vancity Investment Management Ltd., April 30, 2018. Excludes cash. DEALER USE ONLY

Carbon Footprint IA Clarington Inhance Global Equity SRI Class MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

Carbon Footprint IA Clarington Inhance Canadian Equity SRI Class S&P/TSX Capped Composite Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

Carbon Footprint IA Clarington Inhance Global Equity SRI ClasS MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

Carbon Footprint IA Clarington Inhance Canadian Equity SRI ClasS S&P/TSX Capped Composite Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

5 Actionable Impact Themes applicable to institutional investors A clear framework: Msci sustainable impact metrics 17 Sustainable Development Goals applicable to a broad set of stakeholders 5 Actionable Impact Themes applicable to institutional investors Product & service revenue by theme and solution category (SDG16) (SDG17) (SDG1) (SDG2) (SDG14) (SDG3) (SDG15) (SDG6) (SDG12) (SDG11) (SDG13) (SDG4) (SDG7) (SDG5) (SDG9) (SDG8) (SDG10) Not all of the SDGs are applicable to investors, this is why we have grouped them

UN Sustainable Development Goals and Impact IA Clarington Inhance Global Equity SRI ClasS IA Clarington Inhance Global Equity SRI Class MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

UN Sustainable Development Goals and Impact IA Clarington Inhance Global Equity SRI Class IA Clarington Inhance Global Equity SRI Class MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

UN Sustainable Development Goals and Impact IA Clarington Inhance Global Equity SRI Class IA Clarington Inhance Global Equity SRI Class MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

UN Sustainable Development Goals and Impact IA Clarington Inhance Global Equity SRI ClasS MSCI World Index Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

UN Sustainable Development Goals and Impact IA CLARINgton Inhance Global equity SRI Class Source: VCIM utilizing tools from MSCI ESG Research LLC, April 17, 2018

Gender Diversity IA Clarington Inhance Canadian equity SRI class Source: VCIM, March 31, 2018

Gender Diversity IA Clarington Inhance Canadian equity SRI class Source: VCIM, March 31, 2018

Gender Diversity IA Clarington Inhance Canadian equity SRI class S&P/TSX Capped Composite Index IA Clarington Inhance Canadian Equity Class Source: VCIM, March 31, 2018 and 2017 Diversity Disclosure Practices: Osler, Hoskins and Harcourt LLP S&P/TSX data includes companies disclosing under NI58-101 .

Thank You

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