Sustainable, Responsible &/or ESG Policy:

The Rize Global Sustainable Infrastructure UCITS ETF (NFRA) is an Article 9 fund as per the SFDR classification. The fund seeks to invest in the foremost companies that potentially stand to benefit from the worldwide effort to support infrastructure development in a way that balances economic, environmental and social objectives. The fund invests in companies in the following categories:

1. Transportation Infrastructure
2. Environmental Infrastructure
3. Data and Telecom Infrastructure; and
4. Social Infrastructure

The fund invests in companies within the 12 sub-sectors of our sustainable Infrastructure thematic classification: health care, elderly homes, passenger transportation, ports, airports, toll roads, freight rail transportation, renewable energy utilities and transmission, water utilities, waste management, data centers, and telecom infrastructure. The Thematic Classification is built in partnership with sustainability experts Sustainable Market Strategies.

These companies operate across the full spectrum of global infrastructure, excluding fossil fuel infrastructure, and have been assessed for their relative contribution to the EU Taxonomy for Sustainable Activities and the UN Sustainable Development Goals. Investing in sustainable infrastructure presents an opportunity to support both development and sustainability, contributing to a resilient and prosperous future.

The Rize Global Sustainable Infrastructure UCITS ETF seeks to provide investment results that correspond generally to the price and yield performance, before fees and expenses, the Foxberry SMS Global Sustainable Infrastructure USD Net Total Return Index (the “Index”).

We apply a consistent approach to ESG integration across all our Article 8/9 thematic indices/ETFs. We build all of our ETFs and corresponding indices from scratch, and we can therefore apply a consistent, standardised approach to the integration of ESG features across our full product range. Conversely, most other ETF providers license indices from a variety of third party index providers and, accordingly, cannot adopt/apply their own consistent approach to the incorporation of ESG and Sustainability features across their ETF ranges (i.e. they are beholden to the respective ESG strategies of the various index providers that they use).

Our engagement program specifically targets companies on ESG issues, including performance related to PAI indicators, aiming to foster 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 (applicable to all Article 8 and 9 Rize ETFs)

• Thermal Coal
  • Direct involvement: Outright exclusion of companies who have any revenue exposure from their direct involvement in Coal Mining or Coal Power Generation (i.e. there is no acceptable % of revenue exposure).
  • Indirect involvement: Exclusion of companies deriving >10% of their revenue from their indirect involvement / participation in Coal Mining or Coal Power Generation.
• Oil & Gas
  • Direct involvement: Outright exclusion of companies who have any revenue exposure from their direct involvement in Fossil Fuel Production (i.e. there is no acceptable % of revenue exposure), including Arctic drilling, Fracking and Tar Sands.
  • Indirect involvement: Exclusion of companies deriving >10% of their revenue from their indirect involvement / participation in Fossil Fuel Production.
• Nuclear
  • Direct involvement: Outright exclusion of companies who have any revenue exposure from their direct involvement in Nuclear Energy Generation (i.e. there is no acceptable % of revenue exposure).
  • Indirect involvement: Exclusion of companies deriving >10% of their revenue from their indirect involvement / participation in Nuclear Energy Generation.
• Controversial Weapons and Firearms - Outright exclusion of companies who have any revenue exposure, direct or indirect, to Controversial Weapons and Firearms, including civilian firearms and/or production (i.e. there is no acceptable % of revenue exposure).
• Military Contracting - Exclusion of companies deriving >10% of their revenue from their direct or indirect involvement in Military Contracting.
• Gambling - Exclusion of companies deriving >10% of their revenue from their direct or indirect involvement in Gambling.
• Alcohol - Exclusion of companies deriving >10% of their revenue from their direct or indirect involvement in Alcohol. 
• Tobacco
  • Direct involvement: Outright exclusion of companies who have any revenue exposure from their direct involvement in Tobacco Production (i.e. there is no acceptable % of revenue exposure).
  • Indirect involvement: Exclusion of companies deriving >10% of their revenue from their indirect involvement / participation in Tobacco.
• Adult Entertainment - Exclusion of companies deriving >10% of their revenue from their direct or indirect involvement in Adult Entertainment.
• UNGC and OECD Guidelines - Where a company is determined to violate the UN Global Compact (“UNGC”) and/or OECD Guidelines for Multinational Enterprises (“OECD Guidelines”), it will be placed on the Rize Future First Exclusion List applicable to the relevant theme/ETF. However, whilst a company may be flagged by one or more ESG data vendors as being (or having previously been) a violator of the UNGC or OECD Guidelines, it may, depending on the relevant circumstances, be appropriate to conduct further research and engage with the company directly before making a final determination as to whether to place the company on the Rize Future First Exclusion List.
• Bribery and Corruption -  Where a company is determined to be engaged in acts of bribery or corruption, it will be placed on the Rize Future First Exclusion List applicable to the relevant theme/ETF. However, whilst a company may be flagged by one or more ESG data vendors as being (or having previously been) engaged in bribery or corruption, it may, depending on the relevant circumstances, be appropriate to conduct further research and engage with the company directly before making a final determination as to whether to place the company on the Rize Future First Exclusion List.
• Controversies - Where a company is determined to be engaged in controversial behaviour, it will be placed on the Rize Future First Exclusion List applicable to the relevant theme/ETF. However, whilst a company may be flagged by one or more ESG data vendors as being (or having previously been) engaged in controversial behaviour, it may, depending on the relevant circumstances, be appropriate to conduct further research and engage with the company directly before making a final determination as to whether to place the company on the Rize Future First Exclusion List. 
• Poor Governance Practices -  Where a company is determined to be engaged in poor governance practices, it will be placed on the Rize Future First Exclusion List applicable to the relevant theme/ETF. However, whilst a company may be flagged by one or more ESG data vendors as being (or having previously been) engaged in poor governance practices, it may, depending on the relevant circumstances, be appropriate to conduct further research and engage with the company directly before making a final determination as to whether to place the company on the Rize Future First Exclusion List. We do not aim to exclude all companies that have been flagged by one or more ESG data vendors as having poor governance practices, especially where the number of information sources is limited. Rather, we typically seek to (i) exclude the worst offenders (by placing them directly on the Rize Future First Exclusion List) and (ii) engage with the remainder of the companies with apparent governance deficiencies to better understand their issues and encourage them to improve before placing them on the Rize Future First Exclusion List. 
• Armed Conflict / Other - A company may also be placed on the Rize Future First Exclusion List if it is based in (or otherwise significantly exposed to) a country engaged in significant domestic and/or international armed conflict, human rights abuses, corruption or other significant controversies, even if the company itself is not (or cannot be determined to be) directly linked to the activities of the relevant government. Any such determinations would be 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 Global Sustainable Infrastructure UCITS ETF (NFRA), the index is purpose-built in collaboration with our Thematic Industry Expert Sustainable Market Strategies (SMS).

NFRA invests in companies within the 4 categories and 12 sub-sectors of our Sustainable Infrastructure thematic classification. The Thematic Classification is an enabling taxonomy designed for the investment and research communities with the aim of identifying companies that are supporting global sustainable infrastructure development in a way that balances economic, environmental and social objectives. To achieve this, infrastructure projects are classified into four categories and 12 corresponding sub-sectors based on the functionalities and benefits they provide to society. Each company’s sub-sector is determined by reference to the sub-sector that it derives its revenue from. Where a company derives revenue from more than one sub-sector, it will be classified within the sub-sector from which it derives the largest proportion of its revenue.

Transportation Infrastructure

Transportation infrastructure is vital for economic growth, accessibility, mobility, and environmental sustainability, representing a significant portion of public investment. It enhances connectivity, reduces transport costs, and supports economic development, with public transit being key for urban areas.

Its sub-sectors include:

• Passenger Transportation: Promotes sustainability by shifting users from personal vehicles to public transit (rail, bus, bike-share) and pedestrian/bike infrastructure, thereby reducing emissions and congestion while improving accessibility.
• Ports: Crucial for international trade, they enhance sustainability through efficient supply chains, eco-friendly infrastructure (renewable energy, waste management), and smart technologies to lessen environmental impact.
• Airports: Provide economic, social, and environmental benefits by facilitating trade, tourism, and connectivity, with emerging markets having an opportunity to build sustainable airport infrastructure from the outset.
• Toll Roads: Offer congestion relief and can operate sustainably through investments in renewable energy, congestion pricing, EV charging, recycled materials, and green infrastructure.
• Freight Rail Transportation: Provides an efficient, environmentally friendly mode for transporting goods, significantly reducing emissions and costs compared to trucking/shipping, especially when incorporating energy-efficient and smart technologies.

Environmental Infrastructure

Environmental infrastructure focuses on the green transition, aiming to provide essential services like energy and water in a way that improves environmental outcomes. This includes reducing CO2 emissions through renewable energy, ensuring water supply for various uses, and managing waste for circularity and pollution reduction.

It includes:

• Renewable Energy Utilities and Transmission: These contribute to sustainability by providing clean energy sources and the infrastructure to deliver this electricity, reducing reliance on fossil fuels, pollution, and the need for new power plants.
• Water Utilities: Essential for sustainability, they provide clean drinking water and treat wastewater, crucial for public health, conserving water by reducing loss, and minimizing environmental contamination.
• Waste Management: Proper waste management is key to reducing landfill use, which in turn lessens air, soil, and water pollution, protects natural resources, cuts greenhouse gas emissions, and conserves energy and resources used in disposal.

Data and Telecom Infrastructure

Data and telecom infrastructure is crucial for a sustainable economy by enabling the efficient flow of information necessary for business decisions, optimizing economic processes, and monitoring performance. It supports better communication and collaboration, leading to more informed and sustainable economic outcomes.

It includes:

• Data Centers: These provide the physical resources for data storage and processing, including cloud computing. Sustainable data centers aim for energy efficiency, minimize local environmental impact, and can be socially responsible by providing jobs and using renewable energy.
• Telecom Infrastructure: Enables faster communication, increasing efficiency and productivity, and connecting remote areas to the global economy. Environmentally, it can reduce the need for physical travel infrastructure, and socially, it helps bridge the digital divide, reducing poverty and inequality.

Social Infrastructure

Social infrastructure is fundamental for a sustainable and fair economy, providing resources and services that enable people to lead healthy, safe, and productive lives. It promotes economic growth and reduces inequality by ensuring access to essential services, especially for those most in need.

It includes:

• Health Care: Health care infrastructure (hospitals, clinics, labs) is vital for providing accessible medical services, including preventative care, diagnosis, treatment, and mental health support, ensuring the population's needs are met efficiently and cost-effectively, especially for underserved areas.
• Elderly Homes: Increasingly important with an aging population, elderly homes provide collective care, dignity, independence, social engagement, and recreational activities for seniors, promoting their physical and mental well-being and overall quality of life.

Scoring Methodology

Our scoring methodology for identifying top investable sustainable infrastructure companies involves a three-pronged approach, which includes two sustainability measures and a financial strength assessment. To assess sustainability, we evaluate a company’s revenue sources related to social and environmental objectives, as well as the relationship between its operations and material ESG risks. We use a “double materiality” assessment to examine the effects of a business’s operational performance on its bottom line, as well as the impact of its products and services on the wider world. This approach provides a more comprehensive assessment of a company’s sustainability profile, compared to traditional ESG-only screening. When combined with the financial strength score – all three components being equally weighted – the result is a Sustainable Infrastructure Score.

The Sustainable Infrastructure Score consists of the following elements:

1. Sustainability Adjusted Revenue Score: the relative contribution of a company’s products and services to environmental and/or social objectives. This Revenue Score is then adjusted to reflect how much each sub-sector, within specific geographical regions (developed, emerging, or frontier markets), contributes to environmental and social objectives like the EU Taxonomy and UN SDGs. This regional focus is key because the impact of infrastructure (e.g., a water utility) can be much greater in emerging or frontier markets than in developed ones, though some sectors like renewable energy are highly impactful everywhere. This accounts for ⅓ of the Sustainable Infrastructure Score.
2. ESG Materiality Score: the relative ESG performance of each company. This accounts for ⅓ of the Sustainable Infrastructure Score.
3. Financial Strength Score: the relative financial strength of each company. This accounts for ⅓ of the Sustainable Infrastructure Score.

 Index Selection Process

The Index's constituent selection process is a multi-step procedure. Initially, companies are screened for eligibility, ensuring they are listed on an Eligible Exchange and are not on the Rize Future First Exclusion List, which is designed to filter out companies with certain undesirable exposures, such as significant involvement in fossil fuel infrastructure (like fossil fuel utilities, natural gas, and pipelines). Following these exclusions, a size and liquidity screen is applied. Companies that pass these initial filters are then ranked by their Sustainability Adjusted Revenue Score, and the top 100 are selected. This pool of 100 securities is further refined through an inverse ranking based on their 12-month annualized volatility, with the top 75% (those exhibiting the lowest volatility) being chosen to form the Index.

Once selected, these constituents are weighted within the Index primarily based on their Sustainable Infrastructure Score; generally, a company with a higher Sustainable Infrastructure Score will receive a higher initial weight, before any adjustments for liquidity caps are made.

The Index is rebalanced on a semi-annual basis in March and September each year pursuant to the published Index Methodology using the latest Stock Universe delivered by the Thematic Research Partner and screening criteria of the Rize Future First Policy.

Managing Sustainability risks

As detailed in the fund Supplement, “Each Fund that tracks or replicates an Index with a sustainability objective is built following a two step process for achieving that sustainability objective. The first step is to identify an investment theme/objective (which could be a particular industry/sector or combination of industries/sectors) that is inherently-positive and sustainable and use the expertise of thematic/industry experts to develop that theme into a defined classification system/taxonomy that represents the various sectors and sub- sectors within the broader theme/objective and enables publicly-traded companies to be identified, researched and classified in accordance with that classification system/taxonomy. However, even investment themes that are intuitively and inherently positive can expose investors to individual companies that, whilst on the face of it are broadly aligned to that theme, may also be involved in activities that contradict the positive objective of the Fund. For example, a company producing strictly plant-based foods, and which would be principally aligned to a sustainable food system where one of the aims is to reduce the impact of human-made greenhouse gas emissions in the food system from the consumption of meat, may also be a big user of palm oil or soybean with inadequate controls in its supply chain to ensure the sustainability of the palm or soybean it procures. Accordingly, the second step is to identify any screening criteria relevant to the particular investment theme/objective to ensure that no significant harm is caused by any constituent companies that are, in the first instance, aligned to the theme/objective. Finally, an index is purpose-built in conjunction with a benchmark administrator to represent the theme and implement a transparent and rules-based investment strategy that the relevant Fund will track or replicate. Further details of the approach are available at https://arkeurope.com/.”

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 and stewardship programmes 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 all ESG-related policies and disclosures, reviews exclusion lists, monitors engagement outcomes and ensures alignment with evolving regulatory standards. We also partner with and use the ESG expertise of specialist research firms such as Sustainable Market Strategies and Tematica Research to develop bespoke thematic classifications and impact-scoring methodologies for our index funds, guaranteeing 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 partner with ISS ProxyExchange to execute proxy votes in line with our Climate & SRI voting policy.

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 all our sustainable thematic ETFs. Throughout the organisation, we incorporate ESG factors into research and risk-management processes, supported by ongoing internal training and shared reporting tools.  As discussed above, we have a Sustainability Lead responsible for ESG and stewardship oversight, with the broader investment and compliance teams sharing responsibility for policy implementation and monitoring .

ARK Invest Europe is a signatory to the UN Principles for Responsible Investment (PRI), an active participant in CDP’s annual Non-Disclosure Campaigns, and holds memberships in ShareAction, the FAIRR Initiative and the SME Climate Hub, among other collaborative industry forums. These affiliations underpin our commitment to continuous improvement in stewardship, engagement and the delivery of positive environmental and social outcomes.

Dialshifter

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

…Investing in companies supporting global infrastructure development in a way that balances economic, environmental and social objectives. The ETF seeks to provide exposure to companies involved in maintaining and upgrading the existing infrastructure of more industrialised economies, as well as companies developing the new infrastructure required for the economic advancement of less industrialised economies. This includes companies involved in the development of the environmental and social infrastructure needed for our transition to a greener, fairer economy.

SDR Labelling:

Not eligible to use label (out of scope)