Sustainable, Responsible &/or ESG Policy:

Investment Philosophy

The objective of the CT Sustainable Global Equity Income Strategy is to provide income combined with prospects for capital growth over the long term (5 years or more), through investment in companies that are positively exposed to sustainable themes through their products and services. It looks to provide an income yield higher than the MSCI All Country World Index over rolling 3-year periods, after the deduction of charges.

The three pillars of our Sustainable Investment philosophy

Our Sustainable Investment philosophy is outlined below. It is our belief that we can create long-term shareholder value by avoiding companies with unsustainable practices/products and prioritising investment in companies that address sustainability challenges. We believe that effecting positive change through our influence as shareholder would create value for all stakeholders and minimise risk.

• Avoid: Avoid companies with damaging or unsustainable business practices
• Invest: Invest in companies that make a positive contribution to society and/or the environment
• Improve: Use influence as an investor to encourage best practice management of ESG issues through engagement and voting

Avoid 

Whilst the Strategy’s positive focus on quality companies with a clear sustainability commitment implicitly precludes it from investing in certain areas of the market, the CT Sustainable Global Equity Income Strategy also has a set of exclusion criteria setting threshold standards to avoid investment in socially or environmentally damaging products or unsustainable business practices. These are product based as well as conduct based.

Invest

The Strategy’s primary focus is to invest positively, in sustainability leaders and solution providers. As such, it is the strategy’s focus to identify, invest and hold these companies for the long term. We find a rich source of ideas comes from considering long-term social and environmental themes which provide a mental framework for idea generation. This allows the identification of companies whose products and services have a clear “A.I.M.” (Additionality, Intentionality, Materiality). It is through this focus that we are able to focus on those companies that are truly contributing to long term sustainability challenges, and where it is material to that business.

Improve

We understand that our clients want to know their investment is being put to good use. We use our relationship with management teams and board of directors of the holdings in the strategy to encourage best practice management of ESG issues through engagement and voting, which is led by the Responsible Investment team, with significant input from the relevant analyst on the Global Equities team.

Furthermore, we believe that long term sustainability opportunities are best harnessed by high quality business with sufficient brand identity, competitive advantages and strong management teams with a clear vision as to the direction of the business. With that in mind, our company selection approach is broadly summarised by the following characteristics:

Quality

• Understandable
• Durable competitive advantages
• Attractive business model
• Strong sustainability characteristics

Management

• Capable operators
• Rational
• Good capital allocators
• Aligned interests
• Prudent
• Transparent with shareholders

Valuation

• Margin of safety
• Present value of future cash flows
• Sustainable superior returns
• ESG score embedded in proprietary Alt WACC

• We favour high quality companies because we believe they tend to be more resilient through business cycles and therefore provide the opportunity for a superior risk/reward payoff. Quality manifests itself in a company’s products/services, its operations, and its overall sustainability characteristics.
• We favour companies with 'wide moats', or durable competitive advantages, that protect the superior returns and cash flows they generate over the long term. Combined with strong balance sheets, these characteristics should ensure the delivery of consistent returns over time.
• The quality of the management team and their ability to add value through capital allocation decisions is a critical part of our assessment, and we look for aligned incentive structures with metrics such as RoIC or RoE embedded into management remuneration structures. If these are not present, this may form one area of governance engagement.
• We apply a disciplined valuation process to determine attractive entry points to take long-term positions (with the aim of a holding period of 5 years +).
• Post investment, we endeavour to develop relationships with the company management and board to engage in a constructive ongoing dialogue on all elements of business strategy including key environmental, social and governance issues. We believe we have a responsibility as shareholders to exercise the rights and responsibilities of ownership and that through engagement and active voting we can encourage companies towards meeting or setting best practice in the management of ESG issues. This should ultimately support long-term performance, reduce risk and contribute to promoting a fairer and more sustainable world.

Process:

Investment Process

There is a five-step investment process led by the Global Equities team, with ESG and SDG consideration embedded throughout.

• Idea generation
• Sustainability analysis
• Company analysis
• Portfolio construction
• Engagement and proxy voting

Step 1: Idea generation (Global Equities team)

The process starts with idea generation from the investment team. We find many strong ideas are initiated from a consideration of long-term social and environmental themes. We believe companies contributing to solutions to key sustainability challenges can deliver long-term growth. We have identified seven “mega” sustainability themes to which the strategy is closely aligned:

• Connect and protect
• Digital empowerment
• Energy transition
• Health and well-being
• Resource efficiency
• Sustainable cities
• Sustainable finance

The identification of themes helps to focus our analytical efforts rather than imposing a strict thematic structure on the portfolio. Additionally, we try to look for companies that have the potential to show meaningful improvement in how they manage key ESG issues.

While it is the Global Equities team that leads this stage of the process, it is supplemented by idea generation from our 40+ strong Responsible Investment team. Their knowledge and experience across different ESG issues makes them an ideally placed resource that can provide insight into ESG leaders and improvers. Additional internal input into idea generation comes from the experience available through fundamental equity analysts and fund managers across the Columbia Threadneedle group, with research and company meetings being shared across all equity desks. External input includes sell-side research, conferences, industry experts and macro considerations.

Exclusions & screening

The CT Sustainable Global Equity Income Strategy excludes companies with exposure to any business activities deemed to be socially or environmentally damaging, with particular tolerance thresholds. These excluded activities have adapted over time with the development of major social and environmental issues.

The Strategy also excludes companies which do not meet sufficiently high standards in how they operate, based on a detailed assessment of their policies and performance with respect to overall sustainability management. The focus will vary by sector according to relevance and includes certain absolute exclusions in company behaviour but is otherwise often a qualitative judgement. In order to make these assessments, we have established particular positions on a range of relevant issues, such as climate change and what we consider to be progressive approaches to these issues by companies. These positions are based on a range of inputs that include evolving international norms and agreements, extensive primary research, including field visits and the input of our Responsible

Investment Advisory Council.

In addition, we apply a firm-wide exclusion on the manufacture of landmines and cluster munitions. We review the exclusion list regularly and look to amend it accordingly moving forward. We prefer to engage with companies rather than exclude them from our investible universe.

Finally, this Strategy excludes securities that do not issue a dividend at the time of initiation into the portfolio. We look for all holdings to be contributing to the income profile of the Strategy.

Step 2: Sustainability analysis (Global Equities and Responsible Investment teams)

Following idea generation, the Global Equities team and Responsible Investment team work together to assess the true sustainable development impact of the business; both positive and negative. The products and services provided to customers are crucial to that assessment but understanding a business’s impact on society and the environment goes beyond the products and services. We ensure that we look at contribution to all stakeholders, from their supply chain and direct employees, through to the business’s involvement in the industry around them, and the extent to which they are actively progressing ESG issues.

We also consider the company’s contribution towards the Sustainable Development Goals (SDGs) in respect of both product and conduct. The SDGs are an area of specific focus for us. The 17 goals were developed by the United Nations and cross-industry stakeholders with a view to providing a roadmap towards a more sustainable world. The SDGs are ambitious, high-level goals with 169 granular targets that were endorsed by all 193 UN member states. The SDGs provide a clear framework to assess sustainability challenges and how they may be addressed to encourage improvement within investee companies.

On a more granular level, we assess the sustainability impact of the company’s products and services, through the A.I.M. framework, as highlighted below. With increasing rhetoric from both the fund management industry and within the investee corporate landscape regarding sustainability, we look to stay true to what our investors expect of us; that we are clearly, deliberately and diligently investing in companies that are truly delivering upon sustainability challenges. With that in mind, the A.I.M. framework has been established to identify companies that are making a difference, where sustainability is a focus area of the business, and where it does make up a substantial part of the business, rather than being some case study or marketing exercise:

• Additionality: To what extent is the company a sustainability innovator, rather than a follower? Are the products and services truly innovative and making a real-world impact on society/environment? Here we focus on and evidence the fund’s exposure through our view of high quality, wide moat businesses.

• Intentionality: How core is sustainability to the company’s strategy and overall raison d’être? Here we leverage our extensive engagement capability to assess the company’s transparency and communication around strategic goals, which will evidence the management team and Board’s intentions in prioritising these issues/opportunities.

• Materiality: How material are sustainability opportunities for the company? Here, we take the view that over 50% of revenues need to be positively aligned to long term sustainability themes as proxied by the SDGs (Sustainable Development Goals) or be on a pathway to doing so over the medium term.

Following our concerted effort to leverage the broad array of ESG data sets at our disposal, we now collate these into one single interface. Alongside the materiality mapping assessment, this also provides immediate colour around other areas of sustainability, including impact metrics relative to the benchmark.

Assessments across both product/service and also conduct are made in concert with our in-house 40+ strong Responsible Investment team, leveraging the specialist knowledge of that team at the granular industry-level basis. This allows for a detailed, considered and thorough analysis of the sustainability strengths and weaknesses of a business.

Step 3: Fundamental analysis (Global Equities and Responsible Investment teams)

Once an opportunity is identified and sustainability analysis is completed, we conduct fundamental investment analysis. While we are happy to use sell-side analysis or analysts to identify potential new ideas, we do not use their recommendations to drive our decision making nor do we rely on their research in isolation. We produce our own detailed research notes ahead of an investment to fully understand a business, the quality of its management team, its ‘economic moat’, how it operates and generates cash flows, returns and more importantly, the risks to the durability of these returns. The key tenets of our research are that it is independent, detailed and relevant.

Our proprietary research tools simplify this process and provide a common platform on which to judge very different businesses. The stock template gives a snapshot of the operating metrics of a business, the consensus forecasts for its evolution over the next few years and multiple valuation methodologies. This enables analysts to form an initial view of a company very efficiently. The use of this system has been refined over a number of years having used it to carefully analyse hundreds of companies. The result is a system that ensures a consistency of approach and enables us to be as objective as possible in our analysis. It also means that the workings behind the analysis are transparent and open to be challenged by any other members of the team.

Objectivity is achieved in two principal ways. A dispassionate analysis of cash flows will always be a focus for investment analysis and should provide an unimpeachable assessment of the financial quality of a potential investment. Secondly, for a more qualitative approach, we use input from industry experts who we contact through our service providers. These experts have the benefit of being independent from the financial community so can help provide an unbiased view of a company which is not always the case with the analyst community or indeed by the company themselves. The input from the Responsible Investment team, whether through informal conversations or periodical publications such as their ‘ESG Viewpoint’, provides an additional independent oversight and an objective assessment of the ESG credentials of the company and the industry it operates in.

The team utilises a number of tools to flesh out key ESG risks and opportunities, and the primary source of external ESG data is MSCI ESG Research ratings and analysis. While ESG data quality has improved over time, it is still not perfect. We find the depth of the analysis often lacking, and therefore an insufficient resource on its own. Therefore, we apply the below steps:

• The RI team’s proprietary ESG score which builds on the MSCI ESG score by correcting some of the fallacies. It applies the team’s views on different industries and corrects for environmental and social issues.

• The Global Equities team’s own assessment: this is our own fundamental view on material risks and opportunities facing a company, whilst also taking into account the RI team’s analysis of ESG considerations and engagement efforts. This analysis is compiled within a “sustainability matrix*”, with insights directly integrated into the fundamental analysis including valuation.

When it comes to valuation, we place particular emphasis on cash flows as we believe these provide the most rigorous base for analysis of the underlying financial strength, and therefore quality, of any company. Discounted cash flow models (DCFs) are a key component of our valuation work to determine a ‘conservative assessment of the intrinsic value’ of a share price (CAIV). DCFs are also an important tool to help us determine the margin of safety in a stock by looking at what is implied in the current share price.

Here, ESG factors are considered directly in the analysis of the business model and the assessment of management quality. We factor them into the valuation by flexing assumptions and discount rates as appropriate. For example, we may flex revenue or profitability assumptions across different outcomes reflecting ESG risks and opportunities.

The importance of ESG considerations cannot be understated within our investment process. From initial idea generation in view of the 7 long-term sustainability themes that we focus on, through to the rigor of the A.I.M. framework and sustainability matrix that directly impacts or company-specific cost of capital calculation. Rather than using a CAPM3 style discount rate, we have found a more reliable and truer representation of equity discount rates through our “alternate weighted average cost of capital” (ALT-WACC) methodology; a process that has been in place on desk for some 10+ years.

To add colour to the sustainability side, the impact of the sustainability assessment can have a material impact on the CAIV, with a potential swing of 120bps on the ALT-WACC on account of the sustainability score; the best scores reduce the WACC by 60bps from a neutral rating, and the lowest sustainability scores see an additional 60bps placed on the WACC. At the end of this process, a formal investment research note is produced by the analyst and discussed with the wider team. Stocks researched by the team are rated 1 (most positive), 2, or 3 (most negative). The ratings are active with no neutral rating, determined by the combination of margin of safety and upside to their ‘intrinsic value’ and the level of confidence we have in the quality of the business. The forum for discussing research is our twice weekly research meetings. These are rigorous and thorough meetings during which an analyst will present their research on a stock which must stand up to detailed scrutiny by the team.

Step 4: Portfolio construction (Global Equities team)

The Strategy is based on a concentrated portfolio, with stock selection built on fundamental bottom-up analysis as detailed in the previous steps. All portfolio construction and ultimate buy/sell decisions rest with the lead manager. The decision on the size of a stock position will depend on a combination of factors including:

• The conviction in the investment thesis,
• The quality and visibility of earnings,
• The upside to intrinsic value,
• The dividend yield and income growth potential
• The stock liquidity
• The initial stock position between 1.5% and 5% active weight

We aim to generate a resilient and attractive dividend yield and look to distribute an income yield over and above the benchmark (MSCI ACWI) over rolling 3-year time periods, net of fees. Income is derived through stock selection and the portfolio structure. We do not prescribe a floor dividend yield for stock inclusion other than each security issuing some level of dividend at the point of initiation. Thereafter, we allocate to companies with a diversified yield profile across the portfolio to generate resilient income.

We aim to construct a portfolio of between 30 and 50 stocks and expect active position sizes to be between 1.5% and 5.0%. We do not impose formal country, industry or sector limits. We do not take top-down views on sectors or geographies, and therefore sector and geographic allocations are the output of stock selection and are not benchmark-driven. However, we strongly believe that sound diversification must be considered as an integral element of portfolio construction. Therefore, we typically limit our regional and sectoral positions to +/-15 % relative to the benchmark as we aim for the majority of risk in the portfolio to be stock specific. The portfolio manager is responsible for understanding and managing concentration risk and the portfolio risk profile and ongoing monitoring is performed in coordination with internal risk processes.

Our focus on sustainability results in a differentiated regional and sectoral portfolio composition. Crucially, we focus on an opportunity set with structural tailwinds – contrasting the challenges facing many traditional income-generating sectors, such as oil and tobacco.

Relative to many other sustainability portfolios, we note that the output (a by-product of the process and stock selection, rather than an aim) is a portfolio with style factors that differ from many other sustainable growth funds, with a lower weight to growth and momentum, and higher weight to value and yield (factors that have been identified through regression analysis as supportive of long-term returns).

Sell discipline

Like Warren Buffett, we believe that the best holding period for a good investment is 'forever'; however, we also understand that we will not get it right every time. We have a clear process for monitoring and reviewing stocks within the portfolio. This occurs on an ongoing basis, but more formally during our weekly review meeting. There are three main reasons for us to instigate our sell discipline:

• Investment thesis drift: the continuous monitoring of stocks under active coverage means that should an investment thesis not evolve as expected, the thesis is invalidated, and there is cause to sell. The explicit sell triggers we set as part of the original initiation note (i.e. pre mortem) also serve as objective signposts and are designed to act as warning flags. A breach of any of the pre-set sell triggers will result in a review to determine the validity of the stock as a portfolio position.

• Valuation: We monitor a conservative assessment of intrinsic value (CAIV) for each rated stock. The valuation is usually based on a discounted measure of expected future cash flow. When a stock reaches the previously declared value the lack of upside is flagged, and a review is carried to out to establish if the investment case is still on track and whether we can estimate a viable margin of safety in the holding.

• Performance is the third reason a review holding may be triggered. All rated stocks are monitored from a performance perspective and those which have returned plus or minus 25% relative to the benchmark are automatically flagged with a review. In the case of underperformers, the responsibility for undertaking the review is passed to an alternative analyst to the original analyst. This again ensures an objective approach and helps us avoid behavioural issues.

Step 5: Engagement and proxy voting (Global Equities and Responsible Investment teams)

Active ownership is a key part of our philosophy, and we utilise some of our time with management teams to deepen our understanding of their commitment to sustainability and best ESG practices. These meetings are often co-led with members of the RI team, and through engagement and voting, we seek to influence positive change and encourage companies to meet or set emerging best practice on key ESG issues.

We engage on company-specific, sector and broader thematic issues and at public policy level. Our aim is to reduce risk, to enhance long-term performance, and to encourage a positive contribution to broader social and environmental issues. We use the SDGs as an engagement framework as they are widely 9 recognised and often used by investee companies. We engage through constructive confidential dialogue, typically working one to one with companies, but taking a collaborative approach where this has more impact. We will vote at all shareholder meetings, based on our detailed proxy-voting guidelines.

The engagement activity will meet the Strategy’s requirements in line with its commitments at fund and firm level. For example, on good governance in line with our SFDR Article 9 status as well as engaging companies on their net zero alignment.

Our active ownership piece is integral to our process, both driving ESG improvement and better informing our company analysis and stock selection. Whilst it is incumbent upon us as asset managers to exercise our duty as stewards of capital to encourage improvement in our investee companies, the engagement process also allows us greater insight into the running of each business and the extent to which they are mitigating risks and embracing opportunities; ESG or otherwise. This then informs our decision making; for example, should a company implement strategies aimed at reducing exposure to water risks which could see future challenges associated to global flood or drought driven by climate change, we will be in a position to view this company’s future margin profile more positively than peers that perhaps have not implemented similar mitigation strategies. This is all incremental detail that is not only aligned with our investors’ requirements to see ESG improvement, but we believe it also enhances our stock selection and portfolio risk/return profile in the long term.

Resources, Affiliations & Corporate Strategies:

Responsible Investment Team

We have a dedicated in-house Responsible Investment (RI) team, one of the most experienced and established teams of its kind. The award-winning 40+ member team supports our clients, our investment teams and our overall business through expertise across ESG thematic research, ESG integration, ESG policy, client reporting and thought leadership content. Beyond these core activities, the team also supports a plethora of activity from representation on responsible investment industry groups, public policy contribution, ESG thought leadership, ESG product development, portfolio level ESG analytics, screening for specialist ESG portfolios and reporting on active ownership activities. Active ownership is a key aspect of our RI work, and within the team there are more than 20 professionals focused on engagement and voting activity.

The RI team works hand in hand with our research and investment professionals to enrich their understanding of key sustainability trends as they relate to specific sectors and issuers, collaborating to highlight risks and opportunities within industries and sectors, informing investment decisions across asset classes.

The RI team was awarded ‘Best ESG Research Team’ at the 2018, 2019 and 2020 Investment Week Sustainable & ESG Investment Awards, ‘Best ESG Reporting – Asset Manager: Large’ at the 2019 Environmental Finance Awards, and ‘Best ESG Research: Fixed Income’ at the 2020 Environmental Finance Awards. We were also awarded ‘Best ESG Fund House’ at the 2022 ESG Clarity Awards.

Responsible Investment Advisory Council

The Council is a six-member committee of experts, who are leaders in their fields and bring international experience across responsible investment, ethical, environmental, and social issues. Their primary role is to provide advice on the ethical criteria for our specialist Responsible strategy range. The Responsible Investment team is also able to draw on their expertise in informing our broader engagement and responsible investment approach.

The Council’s president is the Most Reverend Justin Welby, Archbishop of Canterbury. The Chair, who heads the quarterly meetings, is Howard Pearce, formerly Head of Environmental Finance and Pension Fund Management at the UK’s Environment Agency Pension Fund (EAPF).  More detail on the Council can be found here.

Affiliations & Memberships

We make efforts to promote responsible investment in multiple ways, including participation in speaking engagements, industry working groups, responsible investment conferences and collaborative initiatives.

A list of key responsible investment memberships and affiliations for Columbia Threadneedle Investments is shown below.

• Environmental

Climate Action 100+

Climate Action 100+ is an investor initiative launched in 2017 to ensure the world’s largest corporate greenhouse gas emitters take necessary action on climate change. We are a member of the investor coalition, leading 8 and supporting 38 engagements.

Date of joining: CTML: 2017, TAML: 2021

Transition Pathway Initiative (TPI)

A PRI sponsored initiative; this is an asset-owner led initiative which assesses companies' preparedness for the transition to a low carbon economy. It is supported by London School of Economics, a research driven initiative on high emitting sectors carbon transition and strategic/management commitment to address climate transition.

Date of joining: CTML: 2020, TAML: 2021

Net Zero Asset Managers Initiative

Founder signatory of this international group of asset managers committed to supporting the goal of net zero greenhouse gas emissions by 2050 or sooner, in line with global efforts to limit warming to 1.5 degrees Celsius; and to supporting investing aligned with net zero emissions by 2050 or sooner.

Date of joining: CTML: 2020, TAML: 2021

Carbon Disclosure Project (CDP)

Non-profit organisation that runs the global disclosure system for investors, companies, cities, states and regions to manage their environmental impacts. We are member of the investor coalition, leading and supporting several engagements.

Date of joining: CTML: 2000, TAML: 2005

Carbon Trust

We partner this organisation that supports companies to accelerate towards Net Zero. From target setting, Net Zero pathways, assurance and footprinting, to policy advice, strategy setting and programme delivery.

Date of joining: 2010

Task Force on Climate-related Financial Disclosures (TCFD)

We have committed to producing reporting as part of TCFD, an organisation that was established in December 2015 with the goal of developing a set of voluntary climate-related financial risk disclosures.

Date of joining: CTML: 2020, TAML: 2022

Sustainability Accounting Standards Board (SASB)

ESG standard setter (Member Standards Advisory Group & sub-groups). SASB guides the disclosure of financially material sustainability information by companies to their investors.

Date of joining: 2018

Science Based Targets initiative (SBTi)

The SBTi is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the Worldwide Fund for Nature (WWF). Guides companies to set science-based targets to mobilize the private sector to take urgent climate action.

Date of joining: 2020

Impact Investing Institute

Focuses on the development of outcome related investment, to encourage more investment made with the intention to generate positive, measurable social and environmental impact alongside a financial return. TAML is a Founding supporter and member of the Advisory Council and working group for the Green+ Gilts

Date of joining: 2020

Institutional Investor Group on Climate Change (IIGCC)

IIGCC works with business, policy makers and investors to help define the investment practices, policies and corporate behaviours required to address climate change. A member of the RI team serves on the Board. We lead and support several engagements.

Date of joining: 2001

IIGCC's Global Investor Statement

A joint statement coordinated by the seven Founding Partners of The Investor Agenda to all world governments urging a global race-to-the-top on climate policy and warns that laggards will miss out on trillions of dollars in investment if they aim too low and move too slow.

Date of joining: 2009

IIGCC’s Investor Position Statement on Transition Planning

Signatory of this investor statement by 56 leading investors calling for the implementation of new corporate governance measures to ensure shareholders can hold companies to account in achieving net zero emissions commitments.

Date of joining: 2021

Ceres Land Use and Climate WG (Biodiversity)

Ceres works with the most influential capital market leaders to advance innovative solutions to the climate crisis and achieve a zero emissions future where people and the planet can prosper.

Date of joining: 2020

Cerrado Manifesto SoS

Public statement committing to halt deforestation in the Cerrado, adopt sustainable land management practices and mitigate financial risks associated with deforestation and climate change. It is endorsed by global FMCG companies and institutional investors.

Date of joining: 2021

ChemScore

Benchmark created by NGO International Chemical Secretariat (ChemSec). It ranks the world’s top 50 chemical producers on their work to reduce their chemical footprint.

Date of joining: 2021

Nature Action 100

Founding member of investor-led collaborative engagement programme to engage with companies and policymakers on nature.

Date of joining: 2022

Taskforce for Nature-related Financial Disclosures

As a forum member, we support the taskforce aiming to develop and deliver a risk management and disclosure framework for organisations to report and act on evolving nature-related risks.

Date of joining: 2020

Sustainability Policy Transparency Toolkit (SPOTT)

SPOTT scores palm oil, tropical forestry, and natural rubber companies annually against over 100 sector specific ESG indicators to benchmark their progress over time. As an investor supporter we express need for enhanced transparency.

Date of joining: 2019

Investor Policy Dialogue on Deforestation

Collaborative investor initiative set up to engage with public agencies and industry associations on the issue of deforestation. The goal is to coordinate a public policy dialogue on halting deforestation. We are a member of the Advisory Council, leading/supporting engagements going forward.

Date of joining: 2021

ShareAction Chemicals Working Group

Investor group focused on engagement with the chemicals sector on decarbonisation.

Date of joining: 2021

• Social

Global Network Initiative (GNI)

Member of this initiative seeking to safeguard freedom of expression and personal privacy against government restrictions. The protections are facilitated by a coalition of companies, investors, civil society organisations, academics, and other stakeholders.

Date of joining: CTML: 2008, TAML: 2002

Interfaith Centre on Corporate Responsibility (ICCR)

Coalition of over 300 global faith- and values-based institutional investors. We are members of the Food Justice and Racial Equity workstream.

Date of joining: 2020

ICCR's Investor Alliance on Human Rights (IAHR)

Part of the ICCR, IAHR provides a collective action platform to facilitate investor advocacy on a full spectrum of human rights and labour rights issues.

Date of joining: 2020

ICCR's Investors for Opioid and Pharmaceutical Accountability (IOPA) Part of the ICCR, IOPA addresses the fallout of the opioid crisis and other business risks by seeking accountability and mitigating further risk at pharmaceutical companies through comprehensive shareholder reforms.

Date of joining: 2021

ShareAction Good Work Coalition

Investor engagement initiative aimed at driving up standards in the workplace. Engagement focus on labour standards, living wage standards, accreditation, transparency of the FTSE350, extension to DEI with a focus on ethnic diversity.

Date of joining: 2021

ShareAction Healthier Markets Investor initiative aimed at improving children's health by increasing access to affordable, healthy food.

Date of joining: 2021

Access to Medicine Foundation

Member of the investor coalition, leading and supporting several engagements. Independent, non-profit organisation working to stimulate and guide the pharmaceutical industry. Produces the Access to Medicine Index, Antimicrobial Resistance Benchmark, Access to Vaccines Index.

Date of joining: 2021

Investor Action on Antimicrobial Resistance (AMR)

A coalition between the Access to Medicine Foundation, the FAIRR Initiative, the Principles for Responsible Investment and the UK Government Department of Health and Social Care to galvanise investor efforts to address global AMR. We are leading and supporting engagements.

Date of joining: 2021

Investor Initiative for Responsible Care

Collaborative engagement group coordinated by UNI Global Union focused on working standards and quality of care in the listed nursing care sector.

Date of joining: 2022

Workforce Disclosure Initiative (WDI)

Disclosure body. We are Signatory, member of the Advisory Group; leading/supporting several engagements. Investor initiative aimed at improving corporate transparency and accountability on workforce issues. Provide companies and investors with comprehensive and comparable data.

Date of joining: CTML: 2021, TAML: 2020

Global Investor Collaboration on Farm Animal Welfare & Global Investor Statement on Farm Animal Welfare

Engagement collaboration with BBFAW (Business Benchmark on Farm Animal Welfare), member of the investor coalition, supporting and leading several engagements.

Date of joining: 2021

Platform Living wage Financials

Coalition of financial institutions that encourages and monitors investee companies to address the non-payment of living wage in global supply chains. We are chair of the Platform's Garment Working Group; member of the Food, Retail and Agri working group.

Date of joining: 2020

Find it, fix it, prevent it

Engagement collaboration. Member, leading on engagements. Investor led initiative targeting UK-listed companies to demonstrate commitment to eradicating modern slavery from their supply chains.

Date of joining: CTML: 2020, TAML: 2021

KnowTheChain

Engagement collaboration. Member of the investor coalition, supporting several engagements. KnowTheChain is a resource for companies and investors to understand and address forced labour risks within their global supply chains.

Date of joining: 2021

Access to Nutrition Index

Engagement collaboration. Member of the investor coalition, supporting several engagements. Independent, non-profit organisation producing the Access to Nutrition Index. Benchmark evaluates the world's largest food and beverage manufacturers' policies and performance related to the world's most pressing nutrition challenges: obesity and undernutrition.

Date of joining: 2021

Human Capital Management Coalition (US)

Engagement collaboration. Member of the coalition of investors to elevate human capital management. Engages companies and other market participants with the aim of understanding and improving how human capital management contributes to the creation of long-term shareholder value.

Date of joining: 2021

Investors for Racial Justice

Member of this information sharing network and engagement collaboration.

Date of joining: 2020

Votes Against Slavery 2022

Member of this investor collaboration engaging with FTSE 350 companies on their compliance with the Modern Slavery Act 2015. We joined the collaboration for the 2021 campaign.

Date of joining: 2021

• Governance

International Corporate Governance Network (ICGN)

Member of investor led organisation advancing the highest standards of corporate governance and investor stewardship worldwide in pursuit of long-term value creation.

Date of joining: CTML: 2007, TAML: 2017

Investment Association (IA)

Member of UK industry body; facilitates the monitoring and responding to ESG policy and regulatory changes impacting our activities.

Date of joining: CTML: 2000, TAML: 1998

Corporate Governance Forum

European focus - UK based asset management governance teams. Informal discussion on companies and industry issues.

Date of joining: 2012

Global Institutional Governance Network (GIGN)

US/Global focus - Global asset management governance teams. Discussions on companies and industry issues.

Date of joining: 2012

Council of Institutional Investors (CII)

Member of this non-profit organisation promoting effective corporate governance policies.

Date of joining: 1996

Investor Forum

Member and proactive collaborator with the Forum, which helps investors to work collectively to escalate material issues with the Boards of UK-listed companies.

Date of joining: 2005

Asia Corporate Governance Association

Member of independent, non-profit membership organisation dedicated to working with investors, companies and regulators in the implementation of effective corporate governance practices throughout Asia.

Date of joining: CTML: 2004, TAML: 2010

Asia Research & Engagement (ARE)

Engagement collaboration. Organisation that structures, implements and assembles investor collaborative engagement programmes across Asia. Performs in-depth industry and company research that provides strategic insight into key ESG issues to underpin engagement work.

Date of joining: 2021

Pre-Emption Group (PEG)

Members of the UK Capital markets group that sets guidelines on the application/dis-application of pre-emption rights in UK capital issuance.

Date of joining: 2016

30% Club UK Investor Group

Campaign for greater representation of women on company boards. Member of the investor coalition, leading and supporting several engagements.

Date of joining: 2021

30% Club France Investor Group

Member of this investor-led group aiming to boost the number of women in board seats and executive leadership of companies in the SBF 120 index.

Date of joining: 2021

30% Coalition (US)

Campaign for greater diversity on company boards. Member of the investor coalition, leading and supporting several engagements.

Date of joining: 2021

Women in Finance Charter

First asset manager signatory to the UK charter committing to support the progression of women into senior roles in the financial services sector, set targets and publicly report on progress against these targets to support transparency and accountability.

Date of joining: 2016

Eumedion

Member of this non-profit organisation aiming to promote good corporate governance and sustainability policies at Dutch listed companies and to promote engaged and responsible shareholding by its members.

Date of joining: 2009

• Environmental, Social & Governance

Principles for Responsible Investment (PRI)

Global responsible investment association, membership is a pre-requisite for many clients. TAML & BMO GAM are Founding Signatories to the UN supported PRI. CTML, formerly known as BMO GAM EMEA, was part of BMO GAM at the time of becoming a signatory. BMO GAM EMEA business was acquired by Ameriprise Financial, Inc. in 2021. CMIA became a signatory in 2014.

Date of joining: CTML & TAML: 2006, CMIA: 2014

UK Stewardship Code

Set of principles for asset owners and managers. We are signatories of the 2020 code.

Date of joining: 2012

Investor Stewardship Group (ISG)

Members of the network of investors and asset managers formed to promote good practice in stewardship and corporate governance, specific to the US.

Date of joining: 2018

Investment Company Institute (ICI)

US Industry body; facilitates the monitoring and responding to ESG policy and regulatory changes impacting our activities.

Date of joining: 2019

UK Sustainable Investment and Finance Association (UKSIF)

Network focused on the UK sustainable investment market, pre-requisite for FNG certification. A member of the RI team chairs the Policy Committee.

Date of joining: CTML: 2000, TAML: 2020

Taiwan Stewardship Code

Signatory to the Taiwan Stewardship Code, which is based on a ‘comply or explain’ approach.

Date of joining: 2022

Japan’s Stewardship Code

Signatory to Japan’s Stewardship Code, which is maintained by Japanese Financial Services Agency, based on a ‘comply-or-explain’ approach where signatories comply with the principles of the code or explain why they do not comply.

Date of joining: 2022

Global Real Estate Benchmark (GRESB)

Member of this organization whose data facilitates our ability to track trends in corporate environmental and social risk management performance as it relates to property.

Date of joining: 2013

London Stock Exchange

Members of the LSE’s Primary Markets Group, advising on primary market issues.

Date of joining: 2012

The Big Exchange

TAML is a founding partner and members of the Impact Committee.

Date of joining: 2019

Global Impact Investing Network (GIIN) Member of this leading non-profit dedicated to increasing the scale and effectiveness of impact investing

Date of joining: 2020

FAIRR Collaborative investor network that focuses on ESG risks and opportunities around animal agriculture.

Date of joining: 2021

Investor Tailings Safety Initiative & Investor 2030 Mining Agenda We are the founding supporter of this initiative and will co-lead on some of the corporate engagements.

Date of joining: 2021

Centre for Audit Committee and Investor Dialogue Network initiative that enables investors, audit committee members and auditors to discuss issues of common interest.

Date of joining: 2013

International Capital Markets Association (ICMA)

The development of green, social and sustainability bond principles relevant to our fixed income investments in an RI context. Members of the Social Bond Working Group and members of working groups on the SDGs and on impact reporting.

Date of joining: 2016

Source: Columbia Threadneedle Investments, as at March 2023. Includes memberships held by CMIA, TAML, CTML and other group affiliates. CMIA = Columbia Management Investment Advisors, LLC; TAML = Threadneedle Asset Management Limited; CTML = Columbia Threadneedle Management Limited.

Dialshifter

This fund is helping to ‘shift the dial from brown to green’ by…

Our responsible / sustainable investment philosophy is based on three pillars:

• Avoid: Avoid companies with damaging or unsustainable business practices
• Invest: Invest in companies that make a positive contribution to society and/or the environment
• Improve: Use influence as an investor to encourage best practice management of ESG issues through engagement and voting

This philosophy underlies the process that is applied to define the investable universe through screening, the subsequent investment analysis, stock selection and active ownership.

Our organisation is helping to support the Paris Climate Agreement and the Race to Net Zero by…

Our methodology to implement our net zero commitment for equities and corporate debt is based on the Net Zero Investment Framework, developed by the Paris Aligned Investment Initiative. Our approach to net zero is focused on real world decarbonisation, using stewardship to help drive improvements in companies’ practices and alignment to a net zero trajectory. More details on our methodology can be found here: Net zero investing: Columbia Threadneedle Investments Approach

At the enterprise level, we continue to evolve our climate change strategy and reporting, and in 2022 produced our first full carbon footprint assessment of Ameriprise Financial, Inc.

SDR Labelling: Sustainability Focus label

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