Classification: only to be shown if not public

Nina Roth

Director, Analyst,

Responsible Investment

ESG

engagement

For professional investors only

Self-signoff

April 2019

Classification: only to be shown if not publicAbout BMO Global Asset Management

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Source: BMO Global Asset Management as at 15-Mar-19. ESG = Environmental, Social and Governance.

• Launched Europe’s first social and environmentally screened Fund in 1984.

One of the largest Responsible Investment teams in EuropeLeadership

Global coverage

In-house expertise

Engagement

• Dedicated Responsible Investment team (16 in total) conducting ESG

analysis, proxy voting and engagement

• Experienced, well resourced, active global equities team with extensive

fundamental research capabilities and risk management

• Engaged 665 companies in 2018

A history of innovation in Responsible Investment…

1984

Launch of

Stewardship

Growth –

first ethical

portfolio

in UK

1987

Launch of

Stewardship

Income &

Stewardship

North American

portfolios

1998

Stewardship

North America

becomes

Stewardship

International

portfolio

2000

Launch of

Responsible

Engagement

Overlay

(reo®)

2006

Founding

signatory to

Principles for

Responsible

Investment

(PRI)

2007

Launch

of Ethical

Bond

portfolio

2010

Launch of

Emerging

Markets

ESG

Strategy

2012

Launch

of ESG

Risk Tool

2016

Launch of Green Bond

Strategy and BMO

Responsible Global

Equity Strategy ESG

Profile and Impact

Annual Report

2018

Launch

of BMO

Responsible

Euro Credit

portfolio

2019

Launch

of BMO SDG

Engagement

Global Equity

portfolio

Classification: only to be shown if not publicWhat is responsible investment?

Social• Labour standards

• Human rights

• Health and safety

Environmental• Climate change

• Water management

• Pollution

Governance• Executive pay

• Business ethics

• Corporate governance

Responsible Investment is an approach to investing that aims to incorporate environmental,

social and governance (ESG) factors into investment decisions, to better manage risk and generate

sustainable, long-term returns. UN Principles for Responsible Investment”

“

3

Classification: only to be shown if not publicApproach to engagement

4

• Engagement focuses on encouraging companies to address material environmental, social and

governance issues, with a view to reducing risk and supporting long-term performance

• We use constructive confidential dialogue, typically working one-to-one with companies, but taking

a collaborative approach where this has more impact

• Effective engagement requires:

– A deep understanding of how ESG issues impact mainstream business strategy

– The building of long-term relationships with companies

– Local/regional knowledge and context

– Access to management and Board

• Where engagement is not effective, we may use a range of escalation strategies:

– Escalating from management to Board level

– Bringing collaborative investor pressure to bear

ESG = Environmental, Social and Governance.

Classification: only to be shown if not publicEngagement prioritisation

5

Top DownBottom-up Event-driven

THEMATIC

ENGAGEMENT

Engagement with

companies to improve

practices in specific

themes

PRIORITY

COMPANIES

Frequent engagement

with companies with

significant ESG risks

REACTIVE

ENGAGEMENT

AGMs, controversies

and UN Global

Compact breaches

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6

In addition ➔ 66 priority companies, covering 19 countries

Source: BMO Global Asset Management as at 01-Jan-19.

Thematic projects 2019: five key focus areas

Gender equality

• Diversity best practice in senior

management (new)

Climate change

• Climate Action 100+ (ongoing)

• Sustainable banking in ASEAN

banks (new)

• Marine transportation (new)

Biodiversity and water

• Ocean plastics (ongoing)

Also ongoing:

Disclosure at mid-cap companies, Nutrition,

US governance

Protecting vulnerable workers

• Living wages in the retail

sector (new)

• Modern slavery (ongoing)

• Sustainable sourcing for

apparel (new)

Antimicrobial resistance

• Pharmaceutical sector response to

antimicrobial resistance (new)

Classification: only to be shown if not publicProject highlight: sustainable banking in ASEAN banks

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• Sustainability strategy

– Senior leadership

– Roles, responsibilities, reporting lines

– Staffing

• Environmental & social risk management

– Detection, analysis, mitigation, monitoring

– Policy development for key risk areas

• Thematic focus:

– Climate change: identifying key portfolio risks/exposure to climate change effects

– Palm oil: development of dedicated policy, incl. no deforestation, no peat, human rights)

• Transparency:

– AR/CSR/Sustainability/online reporting

– TCFD reporting

Classification: only to be shown if not publicCollaborative engagement – 2019 (selection)

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‘Systemically

important emitters’:

improving governance,

curbing emissions and

strengthening climate-

related financial

disclosure.

Palm oil:

producers,

traders, retailers &

banks to develop

and disclose

NDEP policies.

Deforestation

(soy, cattle).

Living wage:

improving data on

how companies

manage workers in

their direct

operations and

supply chains.

Gender diversity:

broaden the pipeline

of women at all levels

of organisations;

board appointments.

Classification: only to be shown if not public

APPENDIX

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Classification: only to be shown if not publicESG standards of our responsible strategies

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*Responsible Global Equity strategy.

Screening criteria

• Technological innovation

• Healthcare

• Responsible finance

• Sustainable mobility

• Resource efficiency

• Energy transition

• Human rights

• Labour standards

• Product safety

• Animal testing and welfare

• Responsible sales and marketing

• Bribery and corruption

• Compliance and ethics

• Climate change

• Biodiversity loss

• Waste management

• Water consumption

• Alcohol

• Fossil fuels

• Fur

• Gambling

• Genetic modification

• High interest rate lending

• Nuclear energy

• Pornography, harmful and violent materials

• Transport

• Tobacco

• Toxic chemicals

• WeaponsPositive themes*

Classification: only to be shown if not publicDisclaimer

Views and opinions have been arrived at by BMO Global Asset Management and should not be

considered to be a recommendation or solicitation to buy or sell any products that may be mentioned.

Classification: only to be shown if not publicContact us

Extensive worldwide investment capabilities

• Total focus on clients

• Comprehensive range of products

and solutions

• Defined expertise – including a suite of specialist

investment boutiques

BMO Global Asset Management (EMEA) – Head OfficeExchange House

Primrose Street

London EC2A 2NY

Tel: +44 (0) 20 7628 8000

Calls may be recorded.

bmogam.com

© 2019 BMO Global Asset Management. All rights reserved. BMO Global Asset Management is a trading name of BMO Asset Management Limited, which is authorised and

regulated by the Financial Conduct Authority.