ESG Factors & SRI Criteria For those clients who wish to incorporate ESG factors and/or SRI criteria into their investment policy, this document is intended to be the starting point for a discussion. ESG analysis refers to a broad approach of ranking companies relative to peers across Environmental, Social and Governance criteria. Socially Responsible Investing (SRI) screening is historically an exclusionary approach based on activities or business practices that clients may find objectionable. In addition, many clients wish to include companies with certain activities or business practices in their portfolios. See page two for representative lists of both exclusionary and inclusionary SRI criteria. BROAD ESG IMPLEMENTATION Approaches to incorporating environmental, social and governance factors listed below  Restrict investments to best of breed companies across all ESG factors  Exclude worst of breed across all ESG factors, with all others acceptable  Emphasize best of breed and deemphasize worst of breed (nothing excluded) ♦ E ♦ ♦ ♦ ♦ ♦ ♦ S ♦ ♦ ♦ ♦ ♦ ♦ G ♦ ♦ ♦ Toxic emissions: Emissions levels, intensity of emissions, company policies and systems designed to manage and reduce emissions Carbon emissions: Emissions levels, intensity of emissions, company policies and systems designed to manage and reduce emissions Water stress: Exposure to water-stressed regions and company policies and procedures designed to manage water use Biodiversity, land use, use of natural resources and impact on surrounding ecosystems Environmental opportunities: Exposure to environmental improvement or management Supply chain labor standards (e.g., controversies related to treatment of workers and management systems in place to monitor supply chain compliance) Sourcing from or selling into controversial regimes (e.g., Sudan or Iran) Labor management: History of legal cases, benefits controversies, employee mistreatment, etc. Discrimination & workforce diversity (e.g., history of involvement in discrimination cases based on sex, race, ethnicity or sexual preference/gender identity) Employee health & safety: Company policies and performance Social opportunities: Involvement in initiatives designed to improve the well-being of people in communities local to the company’s operations, disadvantaged populations, or people more broadly Product safety and quality: Exposure to legal cases due to defective or unsafe products and services Independence and/or diversity of the board of directors Independence of key committees (e.g., audit and compensation) Business ethics practices: Evaluation of historical involvement in bribery, tax evasion, accounting irregularities or other issues and policies in place to ensure compliance Shareholder rights practices (e.g., shareholder rights restricted due to super-voting shares) ————————————————- 1 ADDITIONAL CARBON / ENERGY RELATED (check one) Exclude top fossil fuel reserve holders as per 350.org Low carbon: Reduce the carbon footprint and intensity of a portfolio by excluding large emitters Also exclude top fossil fuel reserve holders Carbon tilt: Emphasize companies with strong carbon management strategies and performance and deemphasize companies with the weakest performance (nothing excluded) Also exclude top fossil fuel reserve holders Hydraulic fracturing (fracking) exposure: Companies in the energy industry are evaluated for fracking exposure, including direct exposure, supporting products or services, and the strength and transparency of company policies and procedures designed to manage fracking-related operations SRI CRITERIA EXCLUSIONARY CONSUMER PRODUCTS INCLUSIONARY SOCIAL OPPORTUNITIES Production or distribution of alcoholic beverages Workforce diversity: Women and minorities in Production or distribution of tobacco executive positions or on boards Workforce dignity: Strong track record with regard to employee working conditions, compensation & benefits and non-discrimination policies Women’s health: Improves access to products and services Research in or production of genetically modified foods HUMAN LIFE ISSUES Use of embryonic stem cells Exposure to abortion products/services Exposure to contraceptive products/services Research involving genetic engineering MILITARY Research or production of weapons/systems Major military contractor (other than weaponry) OTHER Exposure to gambling Non-accredited animal testing Production/distribution of gratuitously violent, misogynistic/pornographic media Ownership/operation of nuclear energy facilities Poor environmental track record Poor track record on ESG social factors (page 1) Discriminatory lending practices ENVIRONMENTAL OPPORTUNITIES Alternative energy: Renewable energy or alter- native fuels Energy efficiency: Infrastructure/technology that helps to reduce energy demand Pollution prevention/recycling: Technology or services that help reduce or recycle waste Green building: Products/services used in building cleaner and more sustainable buildings and other infrastructure Sustainable water: Products/services that address water scarcity or quality issues Sustainable agriculture/natural & organic foods: Companies that support sustainable agriculture and the natural & organic food supply chain Please use the Notes section on Page 3 to list additional activities or business practices you would like to exclude or include ————————————————- 2 NOTES Please use the space provided below to note any additional activities or business practices that should be avoided or emphasized in portfolios and how you would rank the criteria that are most important to you or your organization overall. ______________________________________ Client Signature ______________________________________ Portfolio Manager Note: Company information is obtained from sources we believe to be reliable. Our research sources include: MSCI ESG Services Interfaith Center on Corporate Responsibility Investor Responsibility Research Center Bloomberg, L.P. Thomson Financial Company regulatory filings ————————————————- 3