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Industry News: ESG5

Spotlight on Investors: The Environment Agency Pension Fund

The Environment Agency Pension Fund (EAPF) is a defined benefit Local Government Pension Scheme with 39,500 beneficiaries and assets of £3.6 billion as of September 30th. EAPF has a strong focus on sustainable investing, accordingly they integrate ESG issues into all of their investment, engagement, and voting decisions.

As long term investors, EAPF recognizes Climate Change as a systemic and long-term material financial risk. To manage climate-related risks in their portfolio, the fund applies scenario analysis, carbon footprints 75% of their assets under management, and are compliant with the TCFD recommendations. Finally, EAPF works collaboratively with other investors through Climate Action 100+ and the Transition Pathway Initiative – a tool that ranks companies on their effectiveness to manage Climate risk, and reduce their carbon emissions – to engage with companies to mitigate and adapt to Climate Change.

Responsible Investment Report for 2017-2018

Climate Change Policy

Stewardship Code

Spotlight on Investors: United Nations Joint Staff Pension Fund

The United Nations Joint Staff Pension Fund is a defined-benefit fund established by the General Assembly of the United Nations in 1948, entrusted to provide retirement and related benefits to more than 205,000 staff and retirees of the United Nations and 23 other member organisations. The Office of Investment Management (OIM) manages a US$63 billion multi-asset class, global investment portfolio, 85 per cent of which is actively managed in-house. The fund invests globally in more than 100 countries and 27 currencies, and in multiple asset classes: global equities, global fixed income, private equity, real estate, infrastructure, timber, and commodities.

OIM began the journey towards sustainable investing decades ago by restricting investments in tobacco and armaments, reflecting the values of the United Nations. The office became a signatory to the Principles for Responsible Investment (PRI) in 2006. This was followed in 2008 by investing in the first green bonds, issued by the World Bank, and being the catalyst investor in low carbon exchange-traded funds in 2014.

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2017 Annual Report

Spotlight on Investors: Mirova

Founded in 2012, Mirova is an affiliate of Natixis Investment Management, one of the biggest asset management companies in Europe. Mirova's investment approach is defined by the Sustainable Development Goals framework, as it enables to capture the contribution of an asset to environmental and social sustainability. As of September 30th, 2018, Mirova had USD 11.8 billion of assets under management.

Mirova only invests in countries and firms that contribute to the SDGs. To assess a security's alignment, the organization conducts bottom-up research involving security-level analysis of risk and opportunities, a life-cycle analysis to identify where the impact occurs, and finally an issue-level analysis to understand how specific themes affect the securities. Mirova seeks alignment with the Paris Agreement targets by monitoring the carbon footprint of the equities and bonds they hold in their portfolios. Beyond their investment choices, their approach involves a voting policy aligned to their values, which are accompanied by engagement procedures with issuers and public authorities.

Acting as a Responsible Investor

Controversial Activities

Country Sustainability Analysis

Spotlight on Investors: British Columbia Investment Management Corporation

Created under the Public Sector Pension Plans Act in 2000, the British Columbia Investment Management Corporation provides investment management services to Pension Plans, Government Bodies and other funds located in British Columbia. With CA$ 145.6 billion of assets under management as of March 31, 2018, BCI is one of the largest pension funds in Canada.

BCI believes that environmental, social and governance matters enables investors to better understand, manage and mitigate risks associated with long-term investments. Furthermore, to protect and grow the value of their client's funds, BCI has developed a Climate Action Plan to inform how it integrates climate considerations into their investment decisions, how it seeks new investment opportunities and engages with portfolio companies to increase their disclosure of climate-related risks they face. Finally, BCI was selected by the Bretton Woods II Initiative as one of the 25 most responsible asset allocators in the world for their commitment to investing responsibly.

Responsible Investing - Annual Report 2017

BCI's Climate Action Plan & Approach to the TCFD Recommendations

Spotlight on Investors: AP1

AP1 is one of five funds that act as a buffer in Sweden's national pension system. The Pension System was created in 1960, but it was not until 2001 that the current AP fund structure was established, allowing the AP funds to diversify their strategies. One of the key investment rules, set out by the Ministry of Finance, is to consider environmental and ethical matters without compromising the objective of attaining high returns. As of June 2018, AP1 had SEK 337.7 billion of assets under management (US$ 37.8 billion).

Through sustainable investments and active ownership, AP1 is able to create sustainable value for its trustees. To ensure that ESG issues are being considered across the organization, the Board of Directors provides continuous training on sustainability to their employees. Further, AP1, AP2, AP3 and AP4 collaborate through the Ethical Council to lead engagement with investee companies across issues linked to the Sustainable Development Goals. Finally, AP1 is active in many collaborative initiatives on responsible investing such as the UN PRI, the International Corporate Governance Network, Climate Action 100+, the Extractive Industries Transparency Initiative and many others.

Annual Report - 2017

Ownership Report - 2017

Ethical Council Annual Report – 2017

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