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

2. 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

3. ESG framework
For illustrative purposes only.

4. 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;

5. 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

6. 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

7. 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

8. 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, Excludes cash.
DEALER USE ONLY

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

10. 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

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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

18. 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

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

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

21. 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 .

22. Thank You

24. Disclaimer
The information provided herein does not constitute financial, tax or legal advice. Always consult with a qualified advisor prior to making any investment decision. Commentaries are provided by the portfolio manager or sub-advisor responsible for the management of the fund's investment portfolio, as specified in the applicable fund's prospectus ("portfolio manager"). Statements by the portfolio manager represent their professional opinion, do not necessarily reflect the views of iA Clarington, and should not be relied upon for any other purpose. Information presented should not be considered a recommendation to buy or sell a particular security. Specific securities discussed are for illustrative purposes only. Mutual funds may purchase and sell securities at any time and securities held by a fund may increase or decrease in value. Past investment performance of a security may not be repeated. Unless otherwise stated, the source for information provided is the portfolio manager. Statements that pertain to the future represent the portfolio manager's current view regarding future events. Actual future events may differ. iA Clarington does not undertake any obligation to update the information provided herein. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Trademarks displayed herein that are not owned by Industrial Alliance Insurance and Financial Services Inc. are the property of and trademarked by the corresponding company and are used for illustrative purposes only. Source: MSCI Inc. MSCI makes no express or implied warranties or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced by MSCI. The iA Clarington Funds are managed by IA Clarington Investments Inc. iA Clarington and the iA Clarington logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under license.