Sustainable, Responsible &/or ESG Policy:

The Global Renewables Infrastructure strategy invests in companies engaged in the development, operation and ownership of renewable infrastructure assets, associated with electricity. The strategy focuses on companies that are gaining market share in the energy transition away from fossil fuels towards renewable energy and related markets. The Investment Team believes that decarbonising electricity generation has the potential to decarbonise significant portions of the economy and contribute substantially to climate change mitigation. The Fund invests in companies that contribute to targets defined by one or more United Nations Sustainable Development Goals (SDGs) with a focus on climate change mitigation.

The Strategy is long-only, typically focused on 20-40 global stocks from across the market capitalisation spectrum. the Strategy has exposure to multiple regions globally including North America, Europe, the UK and Emerging Markets. The Portfolio Manager aims to diversify across different subsectors, including renewable power, integrated utilities, electric utilities and electricity transmission operators.

No reference benchmark has been designated for the purpose of attaining the sustainable investment objective of this Fund.

The attainment of the sustainable investment objective is measured by the following sustainability indicators:

• Greenhouse Gas Emissions: Consistent with the sustainability focus of the Fund, Redwheel is particularly interested in Greenhouse Gas Emissions (GHG) of portfolio investments. The investment due diligence process considers GHG emissions, GHG intensity, Exposure to fossil fuels, and share of non-renewable energy.
• Proportion of the Fund’s Net Asset Value that qualifies as sustainable investments
• Proportion of the Fund’s Net Asset Value in underlying revenues of investee companies that are considered to contribute to an environmental and/or social objective

Exclusions

The Team complies with SFDR’s Article 9 disclosure requirements.

For companies involved in power generation, the Fund will only invest in such companies that have as a minimum 10% lower CO2 emissions per unit of electricity generated than the grids in which they operate.

Hard exclusions are applied, calculated using third-party data to ensure issuers are disqualified from investment if they:

• Generate 1% or more of revenue from the exploration, mining, extraction, distribution or refining of hard coal and lignite
• Engage in the cultivation and production of tobacco
• Generate 10% or more of revenue from the exploration, extraction, distribution or refining of oil fuels
• Generate 50% or more of revenue from the exploration, extraction, manufacturing or distribution of gaseous fuels
• Engage in any activities related to controversial weapons, namely anti-personnel mines, cluster munitions, chemical weapons and biological weapons
• Generate 50% or more of revenue from electricity generation with a GHG intensity of more than 100g CO2e / kWh
• Are non-compliant with the UN Global Compact principles
• Are in violation with the OECD guidelines for Multinational Enterprises
• Are non-compliant with the UN Guiding Principles on Business and Human Rights

No Redwheel strategy will invest in securities issued by corporates involved in the manufacture of cluster munitions, landmines, or bio/chemical weapons (together defined as Controversial Weapons). In determining whether a company issuing listed securities is involved in controversial weapons technologies, our assessment will be informed primarily by the research of Sustainalytics, a third party specialist sustainability data provider. However, Redwheel reserves the right to use additional information sources as deemed appropriate.

Process:

The Investment Team believe that the power sector is undergoing a profound transformation driven by the decarbonisation and electrification of energy demand. Utilities are at the forefront of this multidecade transition. By adapting and, in many cases, substantially overhauling their business models to accommodate new greener technologies and decentralised power sources, utilities are bound to be major beneficiaries of secular growth and attractive returns on significant capital investments.  The Fund attempts to take advantage of these themes and invests in developers and operators of power generation assets who are leaders in decarbonization, and in ancillary infrastructure companies

The Fund intends to invest in issuers that qualify as sustainable investments by assessing the positive contribution of investee companies towards the SDGs. In order to qualify as a sustainable investment, the company is subject to Redwheel’s sustainable investments assessment framework. This framework includes consideration of a company’s positive contribution towards environmental and/or social objectives, an assessment of whether the company does significant harm to any environmental or social objective, and assessment as to whether the relevant company follows ‘good governance’ practices. To qualify as a sustainable investment, a company must contribute positively through the products and services that it offers, measured primarily through revenues generated from the products and services. The case for positive contribution may be supplemented if the company demonstrates significant contribution through alternative measures such as operational expenditure or capital expenditure. The assessment is conducted at the issuer level and in order to qualify as a sustainable investment, the issuer’s revenue contribution (and alternative measures, where used) must exceed a threshold set by Redwheel. Further information as to the methodology used by Redwheel to define sustainable investments including the applicable threshold may be found on the website www.redwheel.com/uk/en/professional/funds-and-documents/

Redwheel integrates third party data and internal analysis into its sustainable activity assessment framework.

No reference benchmark has been designated for the purpose of attaining the sustainable investment objective of this financial product

Redwheel also utilises third-party data to apply Do No Significant Harm (DNSH) criteria to disqualify issuers that do significant to either an environmental or social objective. The following criteria are included:

• Material negative contribution to an environmental or social objective from its products and services will not qualify as a sustainable investment. Issuers with greater than 10% of revenues negatively contributing to environmental and/or social objectives will not qualify as sustainable investments.
• ESG Risk Rating and Controversy scores, as provided by Sustainalytics or an equivalent third-party sustainability provider. Thresholds are not set, but the Investment Manager will look for an improving outlook when a concern exists.
• Principal adverse impact (PAI) indicators, as detailed below.

Principal adverse impact (PAI) indicators are considered as part of the assessment to ensure sustainable investments are not significantly harming any environmental or social objectives. The Investment Manager considers all mandatory PAI indicators, as well as optional PAI indicators considered of particular relevance. The assessment seeks to identify environmental or social risks that relate to the company. The Investment Manager may look to undertake stewardship activites with companies to understand, monitor and advise on relevant sustainability issues. No specific thresholds are set with respect to PAI indicators, but if concerns exist regarding a number of indicators then the issuer may not qualify as a sustainable investment. In cases where the adverse impacts are identified but do not lead to exclusion, the Investment Manager may look to undertake stewardship activites with companies to understand, monitor and advise on relevant sustainability issues.

In the absence of data from third-party providers, the investment team will undertake reasonable steps to conduct an assessment of the relevant criteria, this may include both quantitative data and qualitative judgements.

Resource wise the Investment Team relies primarily on first-hand information sources, using:

• Qualitative analysis: The team uses proprietary risk models to assess a company’s asset quality, management, stability of cash flows and ESG factors.
• Quantitative analysis: The team employs proprietary financial models to understand growth prospects, liquidity position and sensitivities to key drivers.
• Relative value analysis: Valuation models and equity markets indicators guide portfolio weightings; screening tables allow the investment team to compare companies and stocks according to different criteria (for example, regulatory risk profile, valuation metrics, ESG scores, historical valuation ranges).
• Carbon analysis: in partnership with a third-party provider, the team updates annually a global proprietary database of power generation companies with detailed CO2 emissions by source of power and by company.

Research is conducted by every member of the investment team. Each member is assigned coverage of companies across sub-sectors and countries – so they are generalists within their specialist sectors – and each is responsible for developing and updating financial models on companies and industry fundamentals, maintaining relationships with management teams, and analysing company financial disclosures and news events. Research responsibilities also naturally include listening to conference calls, evaluating operations and news releases, and understanding assets. In the process of this research, we also interact with competitors, customers, and vendors/suppliers to verify and understand business dynamics (such as pricing power, volume sensitivities).

The promoter of a new stock idea presents “an investment case” to the team during the weekly meetings. There is an opportunity for an open discussion, with any member of the team entitled to challenge assumptions and conclusions. The outcome of the discussion might be that 1) usually more fundamental work is required, to be answered by the analyst and presented back to the investment team 2) sensitivities need to be computed to assess more scenarios, or 3) the idea is accepted or rejected by the team and taken up then by the PM and analyst in conjunction with the risk manager to consider other factors of name inclusion into the portfolio (factor risks, correlations to existing positions, overall volatility profile) and to optimize a process for positioning (identifying catalysts, relative performance considerations, technicals among others). The discussions are documented in the minutes of the weekly meetings, which are then circulated to all members of the Investment Team.

Resources, Affiliations & Corporate Strategies:

Our investment teams and wider business are supported and challenged by specialists split across three sustainability verticals:

The Strategy, Governance and Policy team is led by Olivia Seddon-Daines and is responsible for policy design, sustainability strategy setting, building and operating governance processes, communication and advisory with investment teams, and communication with a range of internal and external key stakeholders. Olivia is supported by Djolan Captieux and Emma Kurtz.

The Stewardship and Regulatory Change team is led by Chris Anker who supports investment teams with engagement and proxy voting and, working closely with our Legal and Compliance teams, monitors and evaluates global regulatory initiatives relating to responsible investment

The Thematic Sustainability Research team, Greenwheel, is led by Stephanie Kelly. This team’s remit is to produce thematic sustainability research commissioned by Redwheel investment teams and support Redwheel’s responsible, transition and sustainable investment strategies at each stage of the product life cycle. Stephanie is supported by a team of specialists with experience from within and outside the asset management industry. Her team includes Jessica Wan who leads social research and Paul Drummond who leads climate and environment research both of whom joined in 2023.

Olivia, Chris and Stephanie report directly into our Head of Investments Arthur Grigoryants who is executive level sponsor for our firm's activities relating to responsible investment. His regular interactions with investment team heads ensures frequent reflection on evolving client interests.

All investment teams are encouraged to actively engage and participate in the work of Redwheel’s Sustainability Forum, whose principal aim is to support debate and discussion on ESG integration approaches. The forum meets on a monthly basis and provides a key mechanism for our business and our investment teams to:

• develop and improve - through collaboration - organisation level and Team level policies and practices with respect to sustainability.
• share knowledge and understanding of current best practices in respect of company ESG risk management, ESG integration, engagement activities, voting, dealing with client expectations, reporting etc.
• monitor and agree current priorities for engagement and collaboration activities.
• develop and implement education programs for the investment Teams. This could include updates on regulatory frameworks, insights into client expectations, thematic topics (climate, biodiversity etc.)
• leverage Redwheel level membership in organisations/initiatives

Governance and oversight is provided via the Redwheel Sustainability Committee. Standing committee members in addition to Heads of sustainability functions include CEO Tord Stallvik and Head of Investments Arthur Grigoryants, who are both members of Redwheel’s Executive Committee. The Sustainability Committee meets formally on a quarterly basis to review sustainability issues both in a corporate sense and in terms of the delivery of responsible investment in practice by our investment

Redwheel are a signatory or a supporter of the following organisations and initiatives:

• UN Principles for Responsible Investment (2020)
• Investor Forum (2020) - one of our portfolio managers is a member of the board
• ClimateAction100+ (2021)
• NatureAction (2023)
• Institutional Investors Group on Climate Change (IIGCC, 2021)
• Investment Association – Sustainability & Responsible Investment Committee (2021)
• Investment Association – Stewardship Committee (2024)
• Corporate Governance Forum (2021)
• Pensions and Lifetime Savings Association - Stewardship Advisory Group (2021)
• CDP (2021)
• UN Global Compact (2022)
• UK Stewardship Code (2022)
• Access to Medicines Index (2023)

SDR Labelling:

Not eligible to use label