Rize Circular Economy Enablers UCITS ETF

Sustainable, Responsible &/or ESG Policy:

The Rize Circular Economy Enablers UCITS ETF is a sustainable fund, as per the requirements of Article 9 of SFDR. The investment objective of the Rize Circular Economy Enablers UCITS ETF (the “Fund”) is to replicate the performance of the Solactive RIZE ETF Circular Economy Enablers Index (the “Index”). Accordingly, the Fund shares the same sustainable objective as the Index.

The objective of the Fund is to provide exposure to global companies that are making a substantial contribution to the transition to a circular economy. This includes companies whose products and services are circular in nature and/or directly contribute to an improvement in the state of the natural environment, as well as companies whose products and services enable other companies to enhance circularity within their own business models. Companies are identified, classified and scored and, ultimately, selected and weighted by the Index using a thematic classification for the “Circular Economy Enablers” theme.

The Index is designed to provide exposure to global publicly traded companies that see the transition to a circular economy as a pathway to more sustainable economic growth, in a way that decouples economic growth from the linear use of the Earth’s finite resources and reduces pressure on the environment and ecosystems. The thematic classification used by the Index is designed by reference to the 9 “R” Strategies of the circular economy hierarchy: Refuse, Rethink, Reduce, Reuse, Repair, Refurbish, Remanufacture, Repurpose and Recycle. Companies must derive a significant proportion of their revenues or operating profits from circular economy activities to be eligible for selection, and the Index further applies the Rize Future First exclusions and other investability screens.

Our engagement programme specifically targets companies on ESG issues, including performance related to Principal Adverse Impact indicators, with the objective of fostering improvement and transparency. Our proxy voting policy is also aligned to encourage good governance and address sustainability concerns.

Standard Exclusion Criteria prescribed by the RIZE Future First Policy

The RIZE Future First Policy applies a core suite of exclusion criteria across the RIZE sustainable thematic ETFs, including the Rize Environmental Impact 100 UCITS ETF. These exclusions are designed to mitigate residual ESG risks and ensure that companies whose activities conflict with the Fund’s sustainable investment objective are excluded from the relevant thematic universe and Index.

For the purposes of applying these exclusions, RIZE distinguishes between direct involvement and semi-direct or indirect involvement. Direct involvement typically relates to producers and operators. Semi-direct or indirect involvement includes activities such as distribution, retailing, supplying, licensing, support services and other forms of participation in excluded business activities.

The standard exclusions applicable to the Fund include the following:

Controversial Weapons, Nuclear Weapons and Civilian Firearms
Companies with any ties to controversial weapons, nuclear weapons or civilian firearms are excluded. This includes direct, semi-direct and indirect involvement, with a 0% revenue tolerance threshold.

Thermal and Metallurgical Coal
Companies are excluded where they derive any revenue from thermal coal-based power generation, thermal coal mining, metallurgical coal mining, or thermal coal distribution or transport. The applicable revenue tolerance threshold is 0% across direct, semi-direct and indirect involvement.

Oil and Gas
Companies are excluded where they derive any revenue from oil and gas extraction and production, or from liquid fuel and natural gas-based power generation. A 0% revenue tolerance threshold applies to these direct activities.

Companies are also excluded where they exceed a 5% aggregate revenue threshold across specified semi-direct oil and gas activities, including oil and gas distribution and retailing, equipment and services for oil and gas exploration and production, petrochemical products, oil and gas pipelines and transportation, oil and gas refining, and oil and gas trading.

Nuclear Energy
Companies are excluded where they derive any revenue from nuclear energy-based power generation. A 0% revenue tolerance threshold applies to direct nuclear energy generation. Companies are also excluded where they derive more than 5% of revenue from manufacturing or supplying key products or services to the nuclear power industry, including uranium mining.

Weapons
Companies are excluded where they derive more than 5% of revenue from the production of conventional weapons, components, support systems or services, including biological, chemical or nuclear weapons, delivery platforms, dual-use components and related services.

Military Contracting
Companies are excluded where they derive more than 5% of revenue from military contracting activities, including companies identified through the U.S. Department of Defense Top 100 Contractors list.

Tobacco
Companies are excluded where they derive any revenue from tobacco production. A 0% threshold applies to direct tobacco production, including the manufacture of tobacco products and the growing or processing of raw tobacco leaves.

Companies are also excluded where they exceed a 5% aggregate revenue threshold across semi-direct tobacco activities, including tobacco distribution, retailing, licensing and supplying key products to the tobacco industry.

Gambling
Companies are excluded where they derive more than 5% of revenue from gambling operations, including online or mobile gambling, supporting activities and licensing.

Adult Entertainment
Companies are excluded where they derive more than 5% of revenue from the production, distribution or retail of adult entertainment products or services.

Alcohol
Companies are excluded where they derive more than 5% of revenue from manufacturing, distributing, retailing, licensing or supplying alcoholic products.

Genetic Engineering
Companies are excluded where they derive more than 5% of revenue from genetic engineering activities.

Embryonic Stem Cell Research
Companies are excluded where they are involved in embryonic stem cell research.

International Norms and Standards Violations
Companies flagged as having violated one or more of the major global norms frameworks are excluded. These frameworks include the UN Global Compact, the OECD Guidelines for Multinational Enterprises, the International Labour Organization’s broad principles, the International Labour Organization’s core principles, and the United Nations Guiding Principles for Business and Human Rights. Companies flagged on the watch list for three or more of these frameworks may also be excluded. Depending on the relevant circumstances, further research and direct engagement with the company may be undertaken before a final determination is made.

Controversies
Companies determined to be engaged in controversial behaviour, including environmental controversies that may significantly harm one or more environmental objectives, may be placed on the RIZE Future First Exclusion List. Where appropriate, further research and engagement may be undertaken before a final determination is made.

Poor Governance Practices
Companies determined to be engaged in poor governance practices may be placed on the applicable Exclusion List. This includes concerns relating to sound management structures, employee relations, staff remuneration and tax compliance. RIZE typically seeks to exclude the worst offenders directly and engage with companies with apparent governance deficiencies where further assessment is warranted.

Armed Conflict / Other Significant Controversies
A company may also be placed on the Exclusion List if it is based in, or otherwise significantly exposed to, a country engaged in significant domestic or international armed conflict, human rights abuses, corruption or other significant controversies, even where the company itself is not directly linked to the activities of the relevant government. Any such determination is made by the Sustainability Committee.

Process:

For our RIZE by ARK Invest sustainable thematic funds, we build all our indices and ETFS from scratch allowing for the possibility to apply a consistent approach to ESG and sustainability to the Fund. In the case of the Rize Circular Economy Enablers UCITS ETF, the index is purpose-built in collaboration with our Thematic Industry Expert Sustainable Market Strategies (SMS).

The SMS Circular Economy Enablers Thematic Classification (“Thematic Classification”) is a transparent and forward-looking classification framework which has been designed to identify and assess the relative impact of publicly listed companies that are making a substantial contribution to “The Transition to a Circular Economy” objective of the EU Taxonomy, either through their own enabling Circular Products and Services or through Enabling Products and Services that support (i.e. enable) other companies (i.e. industry practitioners) to enhance circularity within their own business models. The Thematic Classification prioritises companies contributing to circularity within the key product value chains (sectors) where the need to transition towards greater circularity is highest and where urgent, comprehensive and coordinated actions are needed.

To be eligible for consideration, a company must be involved in either:

1. Circular Products and Services – i.e. the direct provision of enabling products or services that are circular in nature and/or directly contribute to an improvement in the state of the natural environment including (i) the Circular Design and Production of products predominantly using recycled or otherwise wasted materials (e.g. the production of paper and packaging from recycled materials or the production of biogas from wasted organic material); (ii) services that intensify and optimise the Circular Use of individual products and assets (e.g. product leasing services); and/or (iii) Circular Value Recovery services (e.g. remanufacturing, recycling and waste management services); or
2. Enabling Products and Services – i.e. activities that support (i.e. enable) other companies (i.e. industry practitioners) to enhance circularity within their own business models by allowing them to (i) improve the Circular Design and Production of their own products and materials with the aim of retaining long-term value and reducing waste; (ii) extend the life of or intensify and optimise the Circular Use of their own products or assets by customers during the use phase and/or the use of materials by the company itself during the use-phase; and/or (iii) enhance the Circular Value Recovery potential of their own products in the after-use phase.

The Thematic Classification does not seek to capture industry practitioners who are simply enhancing circularity within their own business models.

The result of the classification process is the SMS Circular Economy Enablers Stock Universe (“Stock Universe”) which includes publicly listed companies that have been thematically categorised by SMS across the various sectors of the Thematic Classification and assigned a Circular Enablers Score reflecting the 9 “R” Strategies of the Circular Economy Hierarchy.

As part of the thematic classification process, each company is assigned a “Circular Enablers Score” which is a measure of each company’s contribution to (i.e. impact on) “The Transition to a Circular Economy” objective of the EU Taxonomy. A company’s Circular Enablers Score is measured as a combination of (1) the proportion of its revenues derived from Circular Products and Services or Enabling Products and Services and the position of those revenues within the Circular Economy Hierarchy (i.e. the attribution of those revenues to the 9 “R” Strategies of the Circular Economy Hierarchy, each such “R” Strategy which is weighted relative to its potential impact); (2) the degree to which that company’s economic activities directly tackle the primary linear economy challenges identified for circularity improvement in certain key industries prioritised by the European Union, and (3) the company’s financial strength.

It is possible that the sub-segments described above and/or the key industries that are prioritised for circularity improvement by the European Union may evolve over time and that additional subsegments and key industries may be added in future to reflect the dynamic nature of the transition to a more circular economy.

The thematic classifications and Circular Enablers Scores of the companies are re-assessed on a semi-annual basis as part of the semi-annual update of the Stock Universe in June and December each year.

Index selection and weighting

Pursuant to the Index Methodology, the following selection and weighting criteria are applied:

• Companies must be listed on an eligible stock exchange listed in the Index Methodology to be eligible for selection.
• Companies must derive a significant proportion (at least 50%) of their revenues or operating profits from the foregoing sub-sectors to be eligible for selection, meaning that only those companies that are making a substantial contribution to “The Transition to a Circular Economy” objective of the EU Taxonomy of sustainable activities are eligible for selection.
• Companies on the Rize Future First Exclusion List are excluded from the selection. The Rize Future First Exclusion List is a public list of companies that conflict with the screening criteria of the Rize Future First Policy which covers a range of economic activities (such as fossil fuels and controversial weaponry), controversies, the violation of international norms and principles (including the UNGC and OECD Guidelines) and governance. Both the Rize Future First Policy and the resulting exclusion list can be accessed at https://arkeurope.com/.
• Companies must meet certain minimum free-float market capitalisation and liquidity thresholds tobe eligible for selection.
• Companies are ranked by their Circular Enablers Scores and the median is identified to select only those companies in the upper two quartiles.

Having been selected for inclusion within the Index, companies are weighted according to their relative Circular Enablers Scores (i.e. the higher a company’s Circular Enablers Score, the higher the company’s weight in the Index).

Resources, Affiliations & Corporate Strategies:

ARK Invest Europe’s sustainability function is led by a dedicated in-house Sustainability Lead, who oversees ESG integration across portfolio construction, semi-annual rebalances, SFDR compliance, stewardship activity and impact reporting as a full-time equivalent role. ESG integration is overseen by the Sustainability Committee, which meets at least quarterly and comprises senior management of ARK Invest Europe (the “Promoter”) and IQ EQ Fund Management (the “Manager”), an external ESG professional and two independent directors. This Committee approves ESG-related policies and disclosures, reviews exclusion lists, stewardship priorities and escalation outcomes, monitors engagement activity, and helps ensure alignment with evolving regulatory standards and fiduciary responsibilities.

We also partner with specialist research firms, including Sustainable Market Strategies and Tematica Research, to develop bespoke thematic classifications and impact-scoring methodologies for our index funds, helping to ensure they focus on companies delivering measurable environmental and social benefits. On the external research side, we subscribe to MSCI ESG Manager for ESG business involvement screening, norms-based screens and EU Taxonomy alignment metrics, and we use ISS ProxyExchange for proxy voting execution, while retaining full authority and accountability for voting decisions.

Our RIZE Future First Policy underpins our sustainable-investment approach by combining rigorous exclusion screens, thematic classifications and proactive stewardship to ensure consistency and integrity across our sustainable thematic ETFs. This framework has now been complemented by the dedicated RIZE Future First Stewardship Policy, which sets out how stewardship is exercised across the RIZE suite through direct engagement, collaborative initiatives, proxy voting and escalation where material ESG risks remain insufficiently addressed. The policy also formalises record-keeping, annual review, and an escalation pathway that can ultimately lead to inclusion on the RIZE Future First Exclusion List and divestment at the next scheduled index rebalance where concerns remain material.

In addition, ARK Invest Europe has expanded its sustainability reporting capabilities through the launch of the RIZE Impact Calculator and a new suite of fund-level Impact Reports. The RIZE Impact Calculator is designed to translate an investment allocation into quantified environmental and social outputs, with underlying definitions, sources and calculation steps visible to investors. This framework underpins the annual Impact Reports, which provide fund-level reporting on tangible outcomes such as renewable energy enabled, emissions avoided, water saved, waste diverted and other theme-relevant indicators, using a consistent in-house impact methodology.

Throughout the organisation, ESG factors are incorporated into research, stewardship and risk-management processes, supported by internal training, shared reporting tools and cross-functional implementation by the sustainability, investment and compliance teams. ARK Invest Europe is also a signatory to the UN Principles for Responsible Investment (PRI), participates in collaborative initiatives such as CDP’s Non-Disclosure Campaign, and is a member of organisations including ShareAction, and FAIRR. These affiliations support our commitment to continuous improvement in stewardship, engagement and the delivery of measurable environmental and social outcomes.

Dialshifter

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

This fund is helping to ‘shift the dial from brown to green’ by investing in companies that are making a substantial contribution to “The Transition to a Circular Economy” objective of the EU Taxonomy of Sustainable Activities, either through their own Circular Products and Services or through Enabling Products and Services that support (i.e., enable) other companies (i.e. industry practitioners) to enhance circularity within their own business models.

SDR Labelling:

Not eligible to use label (out of scope)