Sustainable, Responsible &/or ESG Policy:

The Fund seeks a responsible approach to investing in UK companies by incorporating ESG factors in investment decisions and avoiding companies that the investment manager considers to be involved in business activities and behaviours that may be environmentally and/or socially harmful.

In order to minimise exposure to business activities and behaviours that may be environmentally and/or socially harmful, the Fund/strategy seeks to avoid businesses that have products or operations directly associated with alcohol, animal testing (for non-medical purposes), armaments, chemicals of concern, contentious industries, fossil fuel extraction and refining, fossil fuel power generation, fur, gambling, genetic engineering, nuclear power, pornography, and tobacco (subject to de minimis limits – full details are available in the portfolio’s Investment Principles document which can be found on www.janushenderson.com.

As a result of its investment approach the fund’s carbon intensity (scope 1 & 2) will be at least 25% below that of the FTSE All Share. Furthermore, 70% of the companies held will have a CDP score of C of higher.

ESG Integration
Analysing environmental, social and governance (ESG) issues is an important part of the analysis of a company’s business fundamentals. Environmental factors consider a company’s impact on the environment, social factors consider the way businesses treat and value people, and governance factors focus on corporate policies and how companies are governed. We believe companies with sound governance practices and strong stakeholder relations, that manage relevant environmental and social risks responsibly, have a greater propensity to create long-term value for shareholders.

We examine issues such as a company’s supply chain, reputation, brand value, the use of management incentives and the robustness of industry returns; all of these can potentially be impacted by ESG factors.

Key ESG issues considered as part of the investment process include corporate governance, human capital and diversity, climate change, controversies, disclosure, transparency and business ethics.

As our strategic ESG data provider, MSCI provides various climate-related metrics and tools to enable us to assess climate-related risks and opportunities across portfolios, including various carbon metrics, climate scenario analysis, physical and transition risks assessments, and Implied Temperature Rise.

MSCI also provides an ESG Quality Score which measures the ability of the underlying holdings to manage key medium to long term risks and opportunities that arise from ESG factors. It is based on MSCI ESG Ratings and is measured on a scale of 0 to 10 (worst to best). These ratings are supplemented with Janus Henderson research and analysis as well as engagements with companies when appropriate. The funds ESG Quality Score, as measured by MSCI, is informally anticipated to be higher than that of its benchmark, the FTSE ALL-Share Index.

To make informed investment decisions, a wide range of specialist tools and information are made available to the portfolio manager and broader investment teams. The firm subscribes and uses a number of specialist ESG research and data providers. These providers are selected and monitored by the central Janus Henderson Responsibility Team.

Janus Henderson have appointed specialist companies to provide the environmental and social avoidance criteria screening of potential investments.

Company Engagement
Company engagement forms an important part of the investment process. Meetings incorporate a wide range of topics including environmental, social and governance issues where relevant. We take an active approach to communicating our views to companies and seeking improvements in managing financially material risks and opportunities.

Our analysis of the portfolio against key ESG performance indicators helps us identify topics for engagement, together with the controversies, scientific advances and actions taken by companies. These topics for engagement are not fixed and are subject to change depending on the activities of the company and their materiality.

Janus Henderson’s Proxy Voting Policy and Procedures document, which can be found on www.janushenderson.com, sets out the firm’s proxy voting policy.

Ultimate voting authority rests with the portfolio manager, who is responsible for ensuring that votes are exercised in the best interests of clients, with ESG factors an important consideration where relevant. The portfolio manager is supported by the central Responsible Investment and Governance Team, who work closely with investment teams to help analyse voting-related issues. With regard to voting and company engagement, the portfolio manager considers certain core principles such as disclosure, transparency, board composition, shareholder rights, audit and internal controls, and remuneration. A key element of the approach to proxy voting is to support these principles and practices and foster the long-term interests of shareholders.

Given the fund’s responsible investment process incorporates environment, social and governance factors in investment decisions, there will be relatively few shareholder proposals on ESG issues for the companies held in the fund. We aim to support shareholder proposals on ESG factors for portfolio holdings following our approach to voting and engagement outlined within the fund’s Investment Principles document.

Process:

The investment approach of the Fund is primarily one of bottom-up stock selection. The fundamental positions of companies are examined, and an evaluation made of whether they are well placed to generate good cash flow to ensure that dividends may be sustained and increased over time.

The strategy will typically outperform when markets are driven by a focus on valuation and the strength of underlying businesses in terms of their ability to pay a dividend, grow the dividend, maintain a robust balance sheet, and generate good levels of cashflow.

Conversely, the strategy may struggle to outperform in highly speculative, momentum driven markets in which valuation and fundamental analysis is focused on less. Additionally, due to the Fund’s avoidance criteria, a market which is led higher by carbon intensive sectors such as oil and gas and mining may also be challenging for performance.

Investment screens
The first stage is screening to ensure that the securities are eligible for purchase given the Fund has clear avoidance criteria that it must adhere to as part of its responsible investment approach.

Investible universe
Environmental and social avoidance criteria
To minimise exposure to business activities and behaviours that may be environmentally and/or socially harmful, the Fund seeks to avoid businesses that have products or operations directly associated with the certain criteria, subject to de minimis limits.

De minimis limits: Where possible we will seek to achieve zero exposure in respect of the negative criteria. However, there may be instances when we will apply a de minimis limit. A de minimis limit is a threshold above which investment will not be made and relates to the scope of a company’s business activity; the limit may be quantitative (eg, expressed as a percentage of a company’s revenues), or it may involve a more qualitative assessment. De minimis limits exist because sometimes avoiding an industry entirely may not be feasible given the complex nature of business operations.

In such instances we will invest in a company only if we are satisfied that the ‘avoided’ activity forms a small part of the company’s business, and when our research shows that the company manages the activity in line with best practice.

When the activity relates to a company’s revenues, we will use a 10% threshold. When the activity relates to a company’s operations, we will seek to gain comfort that the company is taking action to improve its performance or is managing it in an exemplary fashion. Any company with a persistent record of misconduct, where such activity relates to company operations, will be excluded unless there is clear evidence of significant progress.

We seek to avoid businesses that have products or operations directly associated with the following criteria (1):

In addition to the avoidance criteria, all holdings in the Fund are compliant with the UN Global Compact and the Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises. The UN Global Compact’s ten principles cover human rights, the International Labour Organisation’s declaration on workers’ rights, corruption, and environmental pollution, while the OECD guidelines cover employment and industrial relations, information disclosure, combating bribery, consumer interests, science and technology, and competition. More detail can be found in the Fund’s Investment Principles document on www.janushenderson.com.

Janus Henderson has appointed specialist companies, to provide the environmental and social avoidance criteria screening of potential investments. An investee company must pass the screens or be approved by the ESG Oversight Committee to be eligible for the Fund.

Fundamentals
Once the avoidance criteria have been applied then fundamental analysis is carried out on securities. The portfolio manager aims to understand what will drive a company’s earnings and profitability over the long term, and then assesses how the market currently values the company relative to its potential.

ESG integration *
Analysing ESG issues is an important part of the analysis of a company’s business fundamentals. Environmental factors consider a company’s impact on the environment, social factors consider the way businesses treat and value people, and governance factors focus on corporate policies and how companies are governed.

* This strategy integrates ESG but does not pursue a sustainable investment strategy or have a sustainable investment objective or otherwise take ESG factors into account in a binding manner. ESG integration is the practice of incorporating material environmental, social and governance (ESG) information or insights in a non-binding manner alongside traditional measures into the investment decision process to improve long-term financial outcomes of portfolios. ESG related research is one of many factors considered within the investment process and in this material we seek to show why it is financially relevant.

We believe companies with sound governance practices and strong stakeholder relations, that manage relevant environmental and social risks responsibly, have a greater propensity to create long-term value for shareholders. Key ESG issues considered as part of the investment process include corporate governance, human capital and diversity, climate change, controversies, disclosure, transparency, and business ethics.

MSCI, an external ESG rating provider, provides an ESG quality score which measures the ability of the underlying holdings to manage key medium to long term risks and opportunities that arise from ESG factors. These ratings are supplemented with Janus Henderson research and analysis as well as engagements with companies when appropriate. It is expected that the Fund’s ESG quality score, as measured by MSCI will be superior to its benchmark, the FTSE All-Share index.

To make informed investment decisions, a wide range of specialist tools and information are made available to the portfolio manager and broader investment teams. The firm subscribes to and uses a number of specialist ESG research and data providers including: MSCI, Sustainalytics, Vigeo EIRIS, ISS, Bloomberg, RepRisk, and Institutional Voting Information Services (IVIS). These providers are selected and monitored by the central Janus Henderson Responsibility Team.

Company engagement and voting
Company engagement forms an important part of the investment process. Meetings incorporate a wide range of topics including environmental, social and governance issues where relevant. We take an active approach to communicating our views to companies and seeking improvements in performance where necessary, including appropriate standards of corporate responsibility.

Our analysis of the portfolio against key ESG performance indicators helps us identify topics for engagement, together with the controversies, scientific advances, and actions taken by companies. These topics for engagement are not fixed and are subject to change depending on the activities of the company and their materiality.

Janus Henderson’s Proxy Voting Policy and Procedures document, which can be found on www.janushenderson.com sets out the firm’s proxy voting policy.

Ultimate voting authority rests with the portfolio manager, who is responsible for ensuring that votes are exercised in the best interests of clients, with ESG factors an important consideration where relevant. The portfolio manager is supported by the in-house Responsible Investing and Governance Team, who work closely with investment teams to help analyse voting-related issues. With regard to voting and company engagement, the portfolio manager considers certain core principles such as disclosure, transparency, board composition, shareholder rights, audit and internal controls, and remuneration. A key element of the approach to proxy voting is to support these principles and practices and foster the long-term interests of shareholders.

Given the Fund’s responsible investment process incorporates environment, social, and governance factors in investment decisions, there will be relatively few shareholder proposals on ESG issues for the companies held in the Fund. We aim to support shareholder proposals on ESG factors for portfolio holdings following our approach to voting and engagement outlined within this document.

The Quarterly Voting and Engagement Report for the underlying fund within the portfolio can be found on www.janushenderson.com

Financial discipline and valuation
Valuation discipline
The bottom-up stock selection process is grounded in fundamental analysis that aims to gain a clear understanding of specific companies and their markets, together with a valuation discipline that encompasses a wide range of valuation techniques. Rather than applying a prescribed valuation metric, the portfolio manager uses relative and absolute valuation measures that are relevant to each company’s business and the industry or sector in which they operate.

As well as dividend yield, other factors such as dividend growth, free cash flow yield, cash flow growth, balance sheet strength, and profitability-based metrics such as price/earnings ratios are also considered. The Fund will also consider metrics such as Net Asset Value, EV/Sales and EV/EBITDA. There is a strong emphasis on identifying companies that have good and growing levels of free cash flow with the aim of identifying stocks with the potential for income growth and capital returns. Robust balance sheets are also favoured within the process.
While fundamental analysis may suggest a company has good prospects, the valuation discipline focuses on assessing whether a company is attractively priced. This valuation-driven approach favours temporarily unpopular stocks, resulting in a moderately contrarian portfolio.

Buy/sell discipline
Objective and timely buy and sell decisions are a crucial element in the investment process. While many Investment processes work hard at identifying attractive companies for inclusion in a portfolio, the team’s investment process places equal emphasis on monitoring the progress of existing holdings and applying dispassionate, objective criteria to assess whether a stock should continue to feature in the portfolio. In particular, the portfolio manager’s assessment of company valuations provides a key discipline for making objective sell decisions.

When a stock is bought a target valuation will be set based on the most relevant metric (eg, Free-Cash-Flow Yield, Dividend Yield, P/E, NAV based etc.) and stocks will be reviewed when the valuation target is reached.

Once the target has been reached and if there is no new information and the stock has therefore become more expensive, the position will be sold. If there is additional information and the stock continues to have upside on this basis then a new target may be set, and the position can be retained.

Conversely:

• If the stock falls and becomes cheaper in the absence of any new information – the team will add to the position.
• If the stock falls as a result of new information, but the lower share price more than discounts this news and still results in an attractive upside – the team will look to add to the position.
• If the stock falls due to a deterioration in the company’s fundamentals affecting the outlook or valuation, or if the portfolio manager becomes aware of a flaw in his original investment rationale, the stock will be sold.
• If MSCI / Vigeo Eiris research finds that the Fund’s ESG criteria is no longer met, then the position will be sold.

Further information of third-party data and analytical tools used to support investment and screening process can be found in the Investment Principles document for the underlying fund within the portfolio at www.janushenderson.com.

An investee company must pass the MSCI / Vigeo EIRIS screen or be approved by the ESG Oversight Committee to be eligible for the Fund.

Long-term investment
The Fund takes a long-term approach to investing and will tend to hold individual names for at least five years. Past results from this investment process suggest that the Fund will have single-sided turnover of around 25% to 35% per annum.

ESG key performance indicators
The Fund’s annual ESG report provides information on ESG key performance indicators as well as carbon data reporting (including Task force on Climate-related Financial Disclosures (TCFD). This report can be found on www.janushenderson.com.

We monitor quantitative data on carbon emissions and climate scenario analysis but also assess qualitative factors as to whether companies are measuring and reporting carbon emissions. We strongly support the need for companies to disclose their emissions and to set ambitious targets and verifiable carbon reduction targets in-line with the goals of the Paris Agreement to limit global temperature increases to well-below 2°C. It is expected that the Fund’s carbon metrics, will be lower than those of the FTSE All Share, this is an outcome of the responsible investment approach.

Resources, Affiliations & Corporate Strategies:

As at 31 March 2025, Janus Henderson has 32 Responsibility Team resources. This centralised team are our ESG subject-matter experts who partner with our investment teams on ESG. On our investment teams, we have 12 dedicated ESG experts embedded within numerous investment teams. Additionally, we have 18 portfolio managers* on Janus Henderson’s Brighter Future (ESG-focused) Funds. Our portfolio managers are further supported by our central research functions and/or investment team analysts.

Source: Janus Henderson Investors, as at 31 March 2025.

*Portfolio managers manage multiple strategies, so may not be fully dedicated to ESG-focused products. Note: the methodology to calculate this data has changed and previously included portfolio managers who manage ESG-integrated funds rather than ESG-labelled products.

Our approach to Responsibility

Janus Henderson has a three-pronged approach to Responsibility.

• The first is our own corporate responsibility. Our commitment to responsibility extends to our corporate practices, embodying the principle that ‘Responsibility starts at home.’ We need to ensure our own policies and practices reflect what our stakeholders demand. At a corporate level, behaving responsibly impacts our people, our culture, and our choices with the ultimate aim of investing in a brighter future for our clients. We leverage our influence to responsibly deliver value to our clients, employees, shareholders, and the wider community.

• The second is ESG integration. At an investment level, we integrate financially material ESG factors into our analysis and processes for most of our actively managed strategies, as appropriate, to help us identify opportunities and risks and to drive the long-term value of the companies in which we invest.

• The third is our JHI Brighter Future Funds. For those clients who want to invest for a purpose beyond risk and return, we have and continue to build our suite of ESG-focused strategies that go above and beyond integration to have ESG considerations at their core alongside the primary financial objective.

Responsible Investment Policy overview and Integration

Janus Henderson’s has had a Responsible Investment Policy since approximately 2001, referring to the legal Henderson policy established at this time. In 2023, we implemented our revised Responsible Investment Policy, which sets out our approach to Responsible Investing and ESG Governance and Oversight.

As an active manager, integrating financially material ESG factors into our investment decision-making and ownership practices is fundamental to delivering the results our clients seek from us. Financially material ESG considerations are a key component of the investment processes employed by our investment teams for most of our actively managed strategies. Our investment teams operate and are structured in ways most suited to their respective asset classes. Aside from expectations outlined within our Responsible Investment Policy, the precise approach to and depth of ESG integration is down to the discretion and judgement of our investment teams, who apply their differentiated perspectives, insight and experience to identify sustainable business practices that can generate long-term value for investors. While the evaluation of our implementation of ESG criteria is carried out at the strategy level, our central Responsibility Team supports each team in their ESG integration with data, tools, stewardship, and ESG research.

Engagement and stewardship approach

Engagement and stewardship are integral and natural parts of our long-term, active approach to investment management. We believe engagement is vital to understanding and promoting practices that position the companies and issuers we invest in for future financial success.

Our investment teams often partner with our central Responsibility Team on engagements with company management teams. We prefer an engagement-focused approach to a firm-level exclusion or divestment policy for companies and issuers where we have identified financially material ESG risks. We believe this approach is best for maximising risk-adjusted returns for our clients.

We have a wide range of engagement themes and topics chosen by individual investment teams or the Responsible Investment and Governance Team, which is part of the broader Responsibility Team. These range from longstanding engagement themes such as climate change and diversity, equity & inclusion, to biodiversity, human capital and culture, health and wellbeing, and sustainable corporate governance.

Most products and services offered by a company or issuer play necessary roles for the global economy – including sectors with higher carbon emissions such as energy, industrials, materials, and utilities. Rather than ignoring companies or issuers in these sectors through automatic exclusion or divestment, engagement leads to two benefits:

• Insight: Knowledge gained through engagements with companies or issuers can be leveraged in the investment process to better inform our research, financial modeling, and investment decisions. Engaging for insight helps us assess the magnitude of any potential risk, how well a company or issuer is managing that risk, and the potential impact on that company or issuer’s financial outcomes.
• Outcomes: Where a company or issuer may be ignoring or not managing a financially material ESG risk, engaging for outcomes can encourage that company or issuer to adopt policies or practices that will address that risk and better position it for the future.

Engagement with the company or issuer’s management or board of directors directly link the ESG consideration to why we believe addressing it makes them a better company, leading to improved cash flows, valuations, cost of capital, or credit ratings. In 2024, we conducted a total of 716 engagement discussions – 666 for insight and 50 for outcomes.

Stewardship is an integral and natural part of Janus Henderson’s long-term, active approach to investment management. We believe that strong ownership practices such as management engagement can help protect and enhance long-term shareholder value.

We support a number of stewardship codes, such as the UK Stewardship Code, and broader initiatives around the world including the UN-supported Principles for Responsible Investment (PRI). We are pleased that the PRI has recognised the significant progress we’ve made in advancing our responsible investment capabilities over the last three years and maintained our high scores in our latest assessment through June 2024. We also continue to remain a signatory to the Financial Reporting Council’s UK Stewardship Code, regarded as a benchmark in investment stewardship.

Our commitment to clients

Janus Henderson understands responsible investing continues to evolve and mature. We are committed to maintaining an open dialogue with our clients, shareholders, employees, industry groups, and regional regulators to ensure we continue to meet their expectations and hold true to our values as a steward of our clients’ capital. This includes listening to client needs and developing new products to meet changing requirements. It also means actively sharing the views of our managers on how they see financially material ESG issues reshaping the investment landscape and where the risks and opportunities lie. The Janus Henderson website provides access to manager insights as well as our Responsibility policies, voting records and annual reports.

Janus Henderson Investors Brighter Future Funds

Many of Janus Henderson’s clients want to invest for a purpose beyond risk and return and, to meet the needs of these clients, we’ve developed our JHI Brighter Future Funds, a suite of ESG-focused portfolios that go above and beyond integration to have ESG at their core alongside the primary financial objective.

ESG-focused portfolios
Across the industry, there are many different approaches to managing ESG-focused portfolios. We consider the following strategies:

ESG leaders
Invest in companies that excel in managing ESG risks or taking advantage of financially material ESG opportunities.

ESG improvers and transitioners
Invest in companies that are actively enacting positive change in their own operations to address financially material ESG issues.

ESG solutions or enablers
Invest in companies that offer products and services that are essential to addressing financially material ESG issues.

Firm-wide exclusions policy

Except as noted below, the firmwide exclusions generally apply to all Janus Henderson Funds and discretionary segregated mandates. They do not apply to index and certain other derivatives or passive portfolios (including ETFs) intended to track a benchmark.

Issuers excluded
A direct manufacturer of and / or minority shareholding of 20% or greater in a manufacturer of:

• Cluster munitions
• Anti-personnel mines
• Chemical weapons
• Biological weapons

Classification of issuers is primarily based on activity identification fields supplied by our third-party ESG data providers. This classification maybe subject to an investment research override, following approval by the ESG Oversight Committee (ESGOC), in cases where sufficient evidence exists that the third-party field is not accurate or appropriate.

In any scenario where a portfolio position is identified as not meeting this exclusion criteria for any reason (legacy holding, transition holding, etc.) the portfolio manager shall generally be granted 90 days to review or challenge classification of the issuer if appropriate. After this period, in the event an investment research override is not granted, divestment is required under normal market trading circumstances.

Cannabis related issuers
To ensure Janus Henderson complies with regional legal and regulatory obligations ‘Cannabis-Related Issuers’ (CRI) may be excluded where an issuer’s revenue from cannabis related activities is understood to constitute more than 5% of their total revenue. A permissibility assessment is undertaken that gives consideration to various factors, including, without limitation:

• Domicile of Janus Henderson Fund;
• Domicile of Janus Henderson Fund Manager, including any sub-delegations;
• Domicile of the CRI; and
• Type of cannabis business operation, product, or activity conducted by the CRI.

Exceptions investing in CRI more broadly may be permitted following request to, and approval from, the ESGOC. All exceptions to this Policy requirement must be suitably documented with the accompanying rational.

Responsibility Team

The central Responsibility Team (the “team”) is a specialised in-house group focused on ESG data analysis and research, governance, ESG company and thematic engagement, and proxy voting and advisory services that serves as a resource for all our investment desks. They play a leading role in working with investment desks to enhance their ESG integration processes and externally leading our active participation in numerous responsibility initiatives. Fundamental, bottom-up research has been at the core of our investment process for more than 45 years and this partnership leads to enhanced research and decision-making by marrying the sector and industry expertise of the investment teams with the responsibility skills of the Responsibility Team.

In December 2022, we appointed Michelle Dunstan, an experienced leader in Responsibility strategy and responsible investing, as Chief Responsibility Officer (CRO) to oversee our Responsibility strategy. To emphasise the importance of our responsibility efforts and embed them across our entire firm, the CRO reports directly to the CEO, provides quarterly reports to our Board of Directors on established metrics and targets, and sits on the firm’s Strategic Leadership Team.

In 2024, we continued to add specialist resources to our central Responsibility Team to better align resourcing with our strategic priorities. As of year-end 2024 the Responsibility Team has 28 dedicated team members working as responsibility subject matter experts partnering with investment teams and firmwide colleagues. The team sits on the investment floor and is easily accessible to investment professionals. The Responsibility Team is centred around four focus areas:

Our Responsibility Strategy and Operations pillar supports our investment and non-investment teams in four areas -ESG Data and Analytics, Content and Learning (including the development of training, reports, client responses, external communications, and ESG thought leadership), Regulations and Risk (collaborating with Regulatory, Risk, Compliance, and Legal on relevant regulatory requirements / disclosures), and Corporate Sustainability (development and support of our corporate environmental strategy and execution).

Our Responsible Investment and Governance pillar provides direct support to our investment teams. The focus of this partnership is on equipping and supporting our analysts and portfolio managers to do what they do best: research industries and securities to select the most attractive candidates for inclusion in our portfolios. Our team will partner with the investment teams to deliver ESG training, support on developing frameworks to identify financial material ESG risks and considerations, planning and conducting engagements, supporting research on issues that can impact cash flows or valuation, and advising on proxy voting.

Our Responsibility Client Solutions pillar focuses on partnering with our product, distribution, and investment teams to enhance existing portfolios and deliver new portfolios to clients across varying levels of responsibility needs, from robust integration to ESG-focused strategies. They also partner with investment desks to continuously evolve our integration capabilities, including developing and refining integration frameworks that inform research, stewardship, and portfolio construction. Furthermore, the team also contributes to thought leadership content and conducts training on various responsibility topics.

Our Diversity and Community Relations pillar focuses on our core value of “Diversity Improves Results” and community relations. They are committed to creating an inclusive environment that promotes true meritocracy, cultural awareness, and respect.

To support our core value of “Diversity Improves Results” and community relations, we have a DEI Committee that is comprised of representatives from the Executive Committee and Senior Management. The Committee sets the firm overall DEI strategy, monitors progress and allocates budgetary resources. We also have a dedicated regional council. The councils are responsible for implementing our strategy at the regional level. Our Employee Resource Groups (ERGs) lead on championing grass-roots efforts led by employees and support our overall diversity, equity and inclusion goals. Our ERGs offer colleagues with common interests an opportunity to meet on a regular basis and discuss how they can make Janus Henderson a more inclusive workplace for all.

We leverage our ERGs to ensure that policies and communication are inclusive by allowing them an opportunity to review communication and messaging as needed and help design the curriculum to ensure it was relevant for our employees. Our ERGs also support with celebrating important events such as International Women’s Day, PRIDE, Remembrance Day, Black History Month, and more.

Goals for Responsibility Team and Chief Responsibility Officer

The role and goals of the Responsibility Team and Chief Responsibility Officer oversee the areas of our three-pronged approach to ESG.

• The first is our own corporate responsibility. We engage with our investee companies and encourage them to adhere to high corporate responsibility standards as a key driver of financial performance. Consequently, we believe our own standards should mirror those expectations.

• The second is ESG integration. We believe integrating financially material ESG factors is instrumental to fulfilling our fiduciary duty to our clients. Global environmental challenges such as climate change, biodiversity loss and pollution, and societal issues such as wealth and income inequality, access to education and healthcare, and cyberwarfare represent substantial long-term material risks to investor portfolios. We believe integrating these financially material ESG considerations into our investment decisions and stewardship processes allows us to better manage these risks to achieve the best outcomes for our clients.
  We also believe that ESG integration must be robust and incorporated into each appropriate stage of the investment management process, including idea generation, research and forecasting, engagement, investment decisions, and stewardship. We leverage our deep history with fundamental research to approach integration in a thoughtful, practical, research-driven, and forward-looking manner.
  For engagement, we engage for both insight – to understand company strategies and actions and leverage that information in our investment process, and we engage for action (outcome-oriented engagements), to encourage companies to take decisions that are in the best interest of long-term sustainable cash flows.

• The third is our JHI Brighter Future Funds. For clients who want to invest for a purpose beyond risk and return, we continue to build our suite of ESG-focused strategies and initiatives that go above and beyond integration to have ESG at their core alongside the primary financial objective.
  To accomplish this, the Responsibility team and Chief Responsibility Officer have five goals, as agreed upon by the Janus Henderson Group Board of Directors:
  • Enhance ESG insight and integration within investment teams
  • Offer clients a comprehensive, customized Responsibility experience
  • Systematize Responsibility data for enhanced insights and reporting
  • Adopt and embed a long-term strategic approach to addressing ESG Regulations
  • Extend strategic focus of Corporate Responsibility initiatives

The team’s four business lines are set up to accomplish these goals:

• Our Responsible Investment and Governance pillar provides direct support to our investment teams. The focus of this partnership is on equipping and supporting our analysts and portfolio managers to do what they do best: research industries and securities to select the most attractive candidates for inclusion in our portfolios. Our team will partner with the investment teams to deliver ESG training, support on developing frameworks to identify financial material ESG issues, planning and conducting engagements, supporting research on ESG issues that can impact cash flows or valuation, and advising on proxy voting.
• Our ESG Strategy and Operations pillar supports our non-investment teams in four areas - Strategic Initiatives (including responsible investing strategy, policy, and partnerships), ESG Data and Analytics, Content and Learning (including the development of training, reports, client responses, external communications, and ESG thought leadership), and Regulatory/Operations (collaborating with Regulatory, Risk, Compliance, and Legal)
• Our Client Solutions pillar focuses on partnering with our product, distribution, and investment teams to enhance existing portfolios and deliver new portfolios to clients across varying levels of ESG needs, from robust integration to ESG-focused strategies.
• Our Diversity & Community Relations pillar is committed to fostering inclusion, promoting cultural awareness, and establishing equitable policies, benefits, and training that support our people, and our DEI goals, and community outreach and relations.

Our Chief Responsibility Officer (CRO) provides quarterly updates to the Governance and Nominations Committee on progress against a range of tangible metrics. These metrics include:

• Upholding strong corporate practices: Maintaining strong ESG scores; setting and achieving governance goals.
• People, Community, and Environment: Setting and achieving people goals (including diversity, equity, and inclusion targets); setting and achieving corporate environment goals (including Scope 1, 2, and 3 emissions targets).
• Enhancing ESG reporting and messaging: Credibly assessing and effectively managing risks of current and future ESG regulations and reporting requirements; developing credible and consistent firm-level ESG messaging.
• Building our brand for thoughtful responsible investing: Developing ESG thought leadership; improving external ratings (from PRI and other bodies) for our responsible investing practices.
• Enhancing ESG integration and development of new ESG strategies: Increasing prevalence and quality of ESG integration; increasing number of (and assets in) ESG-focused strategies.

Additionally, the CRO first presented a dashboard of ESG and climate metrics to the Janus Henderson Board at our July 2023 Board meeting (data pertained to 30 June 2023). The CRO has presented the same dashboard for each quarter since then.

Investment Team Resources Dedicated to ESG Investment Research Analysis

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Portfolio managers who manage Janus Henderson Investors Brighter Future Funds

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Responsibility Team

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Responsible Investment Policy Oversight and Governance

Board of Directors

While our Board of Directors has received updates on sustainability, climate and ESG issues in the past, oversight of Responsibility and Responsible Investing, including climate considerations, were formally put under the remit of the Governance and Nominations Committee of the Janus Henderson Group Board of Directors in 2023. The Governance and Nominations Committee has established tangible ESG and climate metrics and targets for both our operational and investment activities, Our Chief Responsibility Officer presents a quarterly update to the Governance and Nominations Committee on the metrics, progress against targets, and advancements on strategic Responsibility initiatives. In addition, the Chief Responsibility Officer conducts a Director education session for the Governance and Nominations Committee each quarter; this is a “deep dive” into an important ESG topic—which could include our own corporate responsibility practices or our responsible investing practices.

ESG Oversight Committee

Our ESG Oversight Committee (ESGOC), which reports to Janus Henderson’s ExCo, provides direct oversight of ESG investment-related matters. The ESGOC provides oversight over ESG investment processes including credibility and feasibility of ESG-related commitments in portfolio design, portfolio management, various ESG data and toolsets, as well as non-investments oversight over ESG processes including regulatory and client reporting standards, and ESG disclosure. The ESGOC is responsible for ensuring that the firm’s framework to manage ESG-related risks is adequate and effective. Specific duties include:

• Review of ESG-related metrics and commitments for new funds and mandates and changes to ESG-related commitments to existing mandates
• Review of ESG-related processes, systems, and resources in place for funds and mandates
• Review of output from ongoing ESG oversight controls monitoring of key ESG-related metrics and exceptions, as well as escalations of matters identified during the course of the monitoring, if any.

The ESGOC is chaired by our Chief Responsibility Officer with additional membership from Responsibility, Product, Investment Controls & Governance, Compliance, Financial Risk, and Legal.

Internal Audit

Janus Henderson has an independent internal audit function, which reports to the Janus Henderson Group Audit Committee. It is responsible for the internal audit of the firm’s worldwide activities. Internal audit operates a multi-year, risk-based audit plan that covers all aspects of the firm’s investment and stewardship activities, such as proxy voting. Internal Audit embeds ESG considerations in all relevant audits within its cyclical risk-based plan. In addition, Internal Audit includes thematic reviews, which in 2024 included a review of the ESG control framework with a focus on regulatory compliance. The findings of these internal audits are regularly shared with the Janus Henderson Group Audit Committee as well as other relevant boards.

Risk management functions

Our Operational Risk function provides support and oversight to each business function to ensure all operational risks are managed in accordance with the risk appetite statement of the firm. Climate risks associated with each operational risk are identified and analysed as qualitative scenarios. Corporate physical and transition risks are reviewed at least annually and reported in a formal corporate Climate Risk Report to the Janus Henderson Group Risk Committee (including escalations of matters identified during the period, if any).

Our Financial Risk team is an independent function reporting directly to the Chief Risk Officer. Its activities include market risk oversight, liquidity risk monitoring and counterparty credit risk management. Further, the team reviews and challenges investment management in light of ESG-related risks— including climate risks—alongside traditional market risk metrics and embeds sustainability risk into the risk profiles of our funds, as appropriate. Beginning in 2023, the Financial Risk team further supports the investment desks in providing portfolio-level oversight of sustainability, climate, and ESG risks. Risk oversight meetings are held with investment desks regularly, with an agenda item to ensure climate-related portfolio risks have been identified.

Compliance

The Compliance team implements automated investment restriction controls within Janus Henderson’s order management system for ESG-related screening and supplements this approach with further controls for qualitative commitments. Additionally, the Compliance team reviews regulatory adherence to the investment policy via the execution of a risk-based monitoring plan. The Compliance team provides board and committee reporting on ESG regulatory matters and are members of the ESGOC.

Front Office Controls

The Front Office Controls & Governance team provide ongoing assurance that investment products are managed in line with documented sustainability commitments, where automated controls and/or third-party data are not available.

ESG Ratings and Recognition

We believe there is a strong link between sustainability issues and the companies that will grow and succeed going forward. This applies to us as an organisation, as well as the companies our investment teams actively engage with in their pursuit of long-term risk-adjusted returns for our clients.

Janus Henderson has been certified as a carbon neutral entity since 2007 by offsetting our corporate greenhouse gas emissions in accordance with The CarbonNeutral® certification. We continue to be certified as a CarbonNeutral® entity in 2024, including for emissions across our corporate Scope 1, 2 and a subset of upstream Scope 3, including business travel, waste, and homeworking. We have been an investor signatory of the Carbon Disclosure Project since 2000 and we are a registered supporter of the Task Force on Climate-related Financial Disclosures (TCFD) with our first report published in 2023. In 2024 we maintained high scores in our Principles for Responsible Investment (PRI) reporting covering the prior year through 30 June 2024.

Janus Henderson actively participates in a variety of independent ESG/CSR benchmarking exercises including with firms such as MSCI, Sustainalytics, DJSI, UN PRI, and CDP to evaluate the sustainability of our practices alongside our peers. As of November 2024, our firm received a AAA rating from MSCI. This rating keeps us in the top cohort of 7% of industry peers (which has shrunk from 10% last year), defined by MSCI as the 27 asset managers and custody banks in the MSCI ACWI index.

Janus Henderson Group is rated at the parent company level and continues to maintain the following ESG Ratings

• MSCI: AAA as of November 2024
• Sustainalytics: 16.8 / low risk as of December 2024
• CDP: C as at December 2024
• FTSE Russell ESG Scores: 3.9/5 as of June 2024
• ISS: C- ESG Corporate Rating (E&S ratings updated as of September 2024, G updated as of May 2024)

Further, in February 2024, Janus Henderson’s ESG commitment level rating was upgraded by Morningstar from Low to Basic, where many of our peers are ranked. This is a very important development as many clients look to these ratings as evidence of our ESG capabilities. Furthermore, any individual fund’s ESG rating cannot be more than one notch higher than the firm-wide rating, so this will enable ESG rating upgrades to ‘Advanced’ for some of our strategies.

The Responsible Investment Brand Index (RIBI™) is an index scale that evaluates more than 600 asset managers on their commitment to responsible investment and branding. In April 2025, RIBI™ rated Janus Henderson Investors "Avant-Gardist" for the second year in a row. This rating is their highest distinction, with only 20% of asset managers assessed achieving this category.

ESG Affiliations, Memberships, Initiatives and Certifications

In addition to being a founding signatory of the United Nations-supported Principles for Responsible Investment (PRI), Janus Henderson is involved in a wide range of ESG-related initiatives and working groups as a member, supporter or in an advisory capacity.

Our participation in industry working groups along with our sharing of insights and knowledge of ESG through our published materials reflects our status as an active proponent of sustainable investing.

For the full list of our ESG Affiliations, Memberships and Certification details please refer to the Affiliations section in our website: Responsibility-Related Affiliations at Janus Henderson - Janus Henderson Investors

In addition, we publicly support standard setters and industry groups who work with governments to implement stronger sustainability standards in the investment management industry. Where possible, we contribute to ESG policy and regulatory discussions through our response to consultations.

Thought Leadership

As part of our commitment to advancing the industry dialogue around ESG, we seek to make the thinking of our investment teams widely available to our clients, shareholders, and other stakeholders through a variety of content, including white papers, articles, podcasts, videos, and panel debates. As with our ESG research, we aim to publish content that contains thoughtful, practical, research-driven, and forward-looking insights.

In 2024, we generated 25 thought leadership and educational pieces on ESG topics. The insights included portfolio manager-specific views related to sustainable investment themes, including relevant topics such as responsible AI investing, the changing regulatory landscape, and our 2024 ESG Outlook.
In terms of specific themes and topics, we produced broader papers and debates on a variety of ESG issues, including methane emissions from the oil & gas industry, deforestation, the role of metals in decarbonisation, renewable energy, and electric and autonomous vehicles. We also published articles outlining our approach to ESG and natural capital investing.

For further information on Janus Henderson’s ESG capabilities, policies, engagement etc., please visit to the ESG Resource Library in our website: ESG Resource Library at Janus Henderson - Janus Henderson Investors.

Dialshifter

This fund is helping shift the dial from brown to green by...

The Fund seeks a responsible approach to investing in UK companies by ESG factors in investment decisions and avoiding companies that the investment manager considers to be involved in business activities and behaviours that may be environmentally and/or socially harmful.

SDR Labelling:

Unlabelled with sustainable characteristics

SDR Literature:

• Consumer Facing Disclosure
• Fund Prospectus