2018 Global Core Sustainability Report Hamilton Point Investment Advisors

2018 Global Core Sustainability Report

Hamilton Point Investment Advisors, LLC

100 Europa Drive, Suite 425 (877) 636-3765 Chapel Hill, NC 27517 www.hamiltonpoint.com Table of Contents

INTRODUCTION ...... 1 FIRST REPUBLIC BANK ...... 25 GUIDE TO THE HAMILTON POINT SUSTAINABILITY MATRIX ...... 2 FORTIVE CORPORATION ...... 26 THE HAMILTON POINT SUSTAINABILITY MATRIX ...... 4 JOHNSON & JOHNSON ...... 27 GLOSSARY ...... 5 LITTELFUSE, INC ...... 28 HAMILTON POINT COMPANY ANALYSES……………………………. 7 NIKE, INC ...... 29 ACCENTURE PLC ...... 8 PHILLIPS 66 ...... 30 ALPHABET INC ...... 9 RAYTHEON COMPANY ...... 31 AMGEN INC ...... 10 ROPER TECHNOLOGIES, INC ...... 32 APPLE INC ...... 11 SCHLUMBERGER LIMITED ...... 33 APPLIED MATERIALS INC ...... 12 THE CHARLES SCHWAB CORPORATION ...... 34 AUTOMATIC DATA PROCESSING, INC ...... 13 THE TJX COMPANIES, INC ...... 35 BECTON, DICKINSON AND COMPANY ...... 14 UNILEVER PLC ...... 36 BOOKING HOLDINGS INC ...... 15 UNITED TECHNOLOGIES CORPORATION ...... 37 CHECK POINT SOFTWARE TECHNOLOGIES LTD ...... 16 WATERS CORPORATION ...... 38 CHURCH & DWIGHT CO., INC ...... 17 2018 SUSTAINABILITY REPORT DISCLOSURE ...... 39 CISCO SYSTEMS, INC ...... 18 COLGATE-PALMOLIVE COMPANY ...... 19 CVS HEALTH CORPORATION ...... 20 DANAHER CORPORATION ...... 21 DEERE & COMPANY ...... 22 EBAY INC ...... 23 EMCOR GROUP INC ...... 24 1 Introduction

In 2008, Hamilton Point released its first Sustainability Report to powerful indicator of its capacity to adapt and grow as a business, assess and document the environmental impacts of the companies respond proactively to challenges and succeed in a competitive at- recommended in our Global Core Equity Strategy. For 2018, the re- mosphere. port has been updated to provide our most recent evaluation of these companies' efforts toward sustainability. It was not so long ago that In order to create a report that is user friendly as well as informative, corporate efforts to promote sustainability were viewed as primarily the information about each company found in this analysis will be philanthropic in nature, and associated costs were often bemoaned largely anecdotal in nature; that is to say, we have not provided a by businesses as cutting into their bottom line. Today, it is our belief myriad of tables, spreadsheets or raw data. We have instead pro- that this philosophy has been turned on its head. With an ever- cessed and synthesized the information so that it can be displayed growing demand for organically produced products, volatile energy graphically in our Sustainability Matrix, which serves as our evalua- prices and an increasingly environmentally conscientious consumer, tion of a company’s sustainability performance in comparison to oth- sustainability is now seen, in our opinion, as a key to creating an ef- er companies within its industry and the direction in which a compa- ficient, profitable and responsible organization. ny is progressing. As a supplement to the graphical representation of the companies’ environmental performance, we have provided a At Hamilton Point, we believe that financial markets play an im- snapshot containing quantitative and qualitative data of the innova- portant role in shaping the economic, social and environmental land- tive ways each company is aligning its business interests with those scape of tomorrow. As investment advisors, we must thoroughly of the environment. We hope that you are as pleased as we are to consider these effects as we make responsible investment decisions. learn about the innovative ways these businesses are learning to do Our first and foremost priority is to serve the fiduciary needs of our more with less, as well as to know how we believe these companies clients; therefore, equity recommendations are made with the goal of are helping build a better future for you and for the planet as a maximizing returns while minimizing risk. Nevertheless, we feel that whole. a company’s willingness to evaluate, innovate and streamline its operations in order to become more environmentally conscientious is a Guide to the Hamilton Point Sustainability Matrix 2

Hamilton Point Businesses in different industries have ing the sustainability challenges it faces compared to other companies in its Sustainability Matrix inherently different environmental im- specific industry. Thus, the horizontal axis is devoted to our evaluation of

pacts. Colgate-Palmolive, a maker of each company’s efforts to decrease its environmental footprint as best it can,

toothpaste, soaps and household products, relative to other companies that share similar challenges. For companies like

will undoubtedly have a lower impact on Schlumberger and Phillips 66, this means spill prevention, cleaner fossil fuel the environment than Phillips 66, which is research and R&D devoted to finding renewable energy sources. For Col- by nature involved in a “dirtier” industry. gate-Palmolive or Nike, this means finding ways to create less waste during Industry Industry Both household products like soap and manufacturing, using less electricity in their facilities and striving to create

toothpaste as well as hydrocarbons like organic or low impact product lines to fulfill the needs of consumers. Poor Neutral Good

gasoline and propane are crucial to the Poor Neutral Good We feel our two-dimensional matrix thus allows for a more holistic and in- modern lifestyle of billions of people Company formative assessment of the effort each company devotes to creating a sus- around the world, and exposure to both of tainable business in ways that a standard one-dimensional rating system — these industries is, in our opinion, necessary for creating a balanced invest- such as a one-to-five star score — could not. Alongside each Hamilton ment portfolio. Point Company Sustainability Matrix you will see further company fur- Additionally, there is a net benefit argument for many companies that we nished data, such as the Company Snapshot, Key Statistics and Sustainabil- believe is difficult to quantify. For example, Alphabet, Google’s parent ity Accomplishments and Initiatives. These pieces of information serve as company, consumes large amounts of electricity in powering its operations. tools to analyze each of our represented companies and evaluate their envi- However, Alphabet invests heavily in green energy, and as of 2018, 100% ronmental standing and progress. On page 4, you will find the Hamilton of Google’s energy comes from renewable resources. In addition, Alphabet Point Sustainability Matrix displaying all companies in the Global Core Eq- also contributes to enhanced efficiencies and technological innovations that uity Strategy as of June 30, 2018, in aggregate. lead to less consumption of fossil fuels and other resources, on a net basis. In general, we are very pleased to see how much time and manpower many Hamilton Point created the Sustainability Matrix to confront the challenges of these companies spend to make themselves more sustainable. Although of evaluating companies in vastly different sectors of the economy who face there are a few businesses that could use improvement, we are proud to say inherently different levels of difficulty in lowering the environmental foot- that our sustainability analysis of our Global Core Equity Strategy strongly print of their business. Our matrix accounts for the nature of the industry reflects the philosophies of value-added, growth-oriented and responsible that each company is a part of on the vertical axis by rating it on a spectrum business practices that Hamilton Point strives for in all its investments. from poor to good. Industries like oil exploration and production which face higher potential environmental risks and whose products also create pollution are given a poor rating, while most consumer product related industries with much less environmentally damaging activities are given ratings of good. This axis alone cannot inform us as to how each business is confront-

Hamilton Point's commentary is for informational purposes only. This is not a recommendation to buy or sell a particular security. The matrix is not a predictor of success or indicator of performance for a security. Hamilton Point may change is evaluation of securities over time. For additional disclosures see page 39. Guide to the Hamilton Point Sustainability Matrix 3

Individual Company Highlights ronmental performance is difficult to ascertain. Our evaluation of these companies was created to the best of our ability based on the information availa- In this report, Hamilton Point has compiled one page reviews of each Global ble about the industry and the company. Core Equity Strategy company as of June 30, 2018. Each review includes Company Snapshot, Key Statistics and Sustainability Accomplishments and Newsweek Scoring Initiatives sections compiled from various publicly disclosed informational Hamilton Point includes environmental, social and governance (ESG) scores sources. Additional information was collected from company-published ma- and rankings provided by Newsweek to offer a comparison to the Hamilton terials, primarily annual reports, corporate sustainability reports and infor- Point Sustainability Matrix. This report uses the Newsweek 2017 Green mation found on investor relations websites. Rankings. The Sustainability Matrix and Progress & Evaluation sections reflect Hamil- Newsweek partners with Corporate Knights Capital and HIP Investor to rank ton Point’s assessment of a company’s initiatives based on publicly dis- companies based on their Newsweek Green Score, which is calculated using closed information. For further questions, see the full disclosure at the end eight specific indicators: Combined Energy Productivity (15%); Combined of this report. Greenhouse Gas (GHG) Productivity (15%); Combined Water Productivity Non-Reporting Companies (15%); Combined Waste Productivity (15%); Green Revenue Score (20%); Sustainability Pay Link (10%); Sustainability Board Committee (5%); and There were a few companies in the Global Core Equity Strategy that dis- Audited Environmental Metrics (5%). closed little to no information regarding their approaches to promote sustainability or their waste and pollution emissions levels. Some of these companies, such as Check Point and Waters, operate in industries with relatively little impact on the environment. Others, such as Fortive, are relatively new, and therefore have only just begun to release sustainability information to the public. Lastly, Littelfuse is one company that operates in a less environmentally friendly industry and which still fails to set regular sustainability goals and provide data that quantifies its environmental impact. Although the lack of disclosure is a concern for Hamilton Point from an environmentally conscious perspective, we are no less confident in these companies as quality investments based on other merits. These companies have been included in the report and have been given industry ratings that we feel most accurately represent their environmental impact. However, without significant disclosure from the companies, an individual rating of their envi-

Hamilton Point's commentary is for informational purposes only. For additional disclosures see page 39. The Hamilton Point Sustainability Matrix 4

This chart is a graphic representation of all companies in our Global Core Equity Strategy as of June 30, 2018. The upper right box depicts what we believe to be the highest-rated companies, while the companies with Poor ratings are located to the bottom left. Good Companies GOOG ACN Accenture Plc EBAY eBay Inc. ACN EBAY CSCO GOOG Alphabet Inc. EME EMCOR Group Inc. CL UL I Good BKNG AMGN Amgen Inc. JNJ Johnson & Johnson JNJ NKE AAPL N ADP AAPL Apple Inc. NKE NIKE, Inc. TJX AMAT D CHKP CVS WAT CHD AMGN AMAT Applied Materials Inc. RTN Raytheon Company U SCHW FRC ADP Automatic Data TJX The TJX Companies, UTX BDX S FTV Processing, Inc. Inc. ROP DHR RTN T BDX Becton, Dickinson and UL Unilever PLC Company R UTX United Technologies CHD Church & Dwight Co., Y Neutral LFUS Corporation Inc.

D EME CSCO Cisco Systems, Inc.

Y CL Colgate-Palmolive Co. DE

N CVS CVS Health Corporation

A Neutral Companies M PSX SLB

I BKNG Booking Holdings Inc. LFUS Littelfuse, Inc. Poor C CHKP Check Point Software ROP Roper Technologies, Inc.

Technologies Ltd. SLB Schlumberger Limited DHR Danaher Corporation SCHW The Charles Schwab DE Deere & Company Corporation FRC First Republic Bank WAT Waters Corporation FTV Fortive Corporation Poor Neutral Good C O M P A N Y B E H A V I O R Poor Companies

PSX Phillips 66

This is not a recommendation to buy or sell a particular security. For additional disclosures see page 39. Glossary 5

Carbon Dioxide (CO2) - the most prominent greenhouse gas produced E-Waste - consumer and business electronic equipment that is near or by human activity, especially the combustion of fossil fuels. at the end of its useful life, of which certain components contain mate- Carbon Disclosure Project (CDP) - an organization based in the rials that render them hazardous, depending on their condition and United Kingdom which runs a global disclosure system that enables density. Common contaminants include lead, cadmium, beryllium or companies, cities, states and regions to measure and manage their en- brominated flame retardants. vironmental impact. The CDP releases an annual climate change, wa- FTSE4Good Index Series - measures the performance of companies ter, forests and supply chain questionnaire that companies can respond demonstrating strong Environmental, Social, Governance (ESG) prac- to as a way to release metrics of their environmental impact to the pub- tices. lic. Green Grid - a global collaboration of IT companies and profession- Climate Change - any long-term significant change in average weath- als seeking to improve energy efficiency in data centers and business er conditions, or in the distribution of weather around average condi- computing systems around the globe. The organization seeks to unite tions. Average weather may include temperature, precipitation, wind global industry efforts to standardize a set of metrics, processes, meth- patterns and other factors. These changes can be caused by dynamic ods and new technologies to further its common goals. processes on Earth, external forces including variations in sunlight in- tensity and more recently, human activities. Greenhouse Effect/Greenhouse Gasses (GHGs) - a reference to a Dow Jones Sustainability Indices (DJSI) - the first global indices to traditional greenhouse’s ability to trap heat from sunlight, where heat track the financial performance of the leading sustainability-driven energy radiated from the Earth is absorbed by atmospheric gasses such companies worldwide. The DJSI US tracks the leading companies in as Carbon Dioxide, Methane and Ozone rather than escaping into the United States, while the DJSI Europe, Asia and North America space. Scope 1 GHG emissions, or Direct GHG emissions, are emis- tracks leading companies on those continents. The DJSI World index sions from sources that are owned or controlled by an organization or tracks the top 250 companies in the world based upon economic, envi- individual. Scope 2 GHG emissions, or Energy Indirect GHG emis- ronmental and social criteria. sions, are emissions generated from the organization’s consumption of Environmental Footprint - the measure of a human, a company or an purchased electricity, steam or other sources of energy. Lastly, Scope activity’s impact on the Earth’s ecosystem. It compares human de- 3 GHG emissions, or Other Indirect GHG emissions, are emissions mand for natural resources with the Earth’s ecological capacity to re- that are the result of the operations of an organization, but which are generate these resources by representing the biologically productive not directly owned or controlled by the organization. land and sea that are needed to regenerate those resources. Glossary 6

Green Roof - a roof that is partially covered with vegetation and soil the expense of future generations. or some other growing medium. This technique helps to reduce the Light Emitting Diode (LED)- lighting products that produce light ap- urban heat island effect which is caused by buildings absorbing a proximately 90% more efficiently than incandescent light bulbs. LED higher percentage of heat radiation from the sun than soil or vegeta- lighting is also lasts longer than incandescent and fluorescent, when tion. designed well. Hazardous Air Pollutants (HAPs) - are pollutants that are known or Roundtable on Sustainable Palm Oil (RSPO) - organization with the suspected to cause cancer or other serious health effects, such as ad- objective of promoting the growth and use of sustainable oil palm verse environmental effects, reproductive effects or birth defects. products through credible global standards and engagement of stake- Heating, Ventilation, and Air Conditioning (HVAC)- the technolo- holders. gy of indoor and vehicular environmental comfort. Its goal is to pro- Smart Meters - An electronic device that records consumption of vide thermal comfort and acceptable indoor air quality. electrical energy and communicates the information to the electricity ISO-14001 - a certification for small to large organizations that speci- supplier for monitoring and billing. fies the requirements of an environmental management system (EMS), The United States Environmental Protection Agency (U.S. EPA) - which provides a systematic approach for handling environmental is- is a federal government agency created in 1970 by President Richard sues. Nixon with the purpose of protecting human health and the environ- Leadership in Energy and Environmental Design (LEED) - is a ment. The U.S. EPA sponsors several programs, such as ENERGY green building rating system developed by the U.S. Green Building STAR and the Green Power Partnership, which enable businesses and Council. This system provides standards for environmentally friendly individuals to become more environmentally friendly. construction in order to minimize electricity and water usage and to Volatile Organic Compounds (VOCs) - a large group of carbon- decrease waste and pollution. LEED certified buildings save compa- based chemicals that easily evaporate at room temperature and may nies in the U.S. billions of dollars each year and decrease overall pow- have adverse short- and long-term health effects. VOCs are emitted as er consumption by millions of kilowatt hours annually. gases from a variety of solids or liquids including paints, cleaning sup- Sustainability - in ecology, sustainability describes how biological plies, pesticides, building materials, office equipment, glues, perma- systems remain diverse and productive over time. For humans, sus- nent markers and photographic solutions. tainability is the potential for long-term prosperity, which depends greatly on our ability to live in equilibrium with the natural world around us and to use resources to our benefit without depleting them at 7 Hamilton Point Company Analyses

Compiled and updated in 2018 by Kent McKane, Intern

8 Accenture Plc.

Key Statistics Based in Dublin, Ireland, Accenture Plc. (ACN) is a global professional services company serving clients in various industries and geographic regions, including North America, As of FY ended 8/31/17 Europe, and emerging markets. Accenture has a global presence with 425,00 employees 2017 Revenue: $34.9B in 120 countries. Accenture provides a range of strategy, consulting, digital, technology, Net Income: $3.6B and operations services and solutions for its clients, which include 95 of Fortune Global Business Segments: 100 and more than three-quarters of Fortune Global 500. The ultimate goal of Accenture Products: $9.5B (27%) is to enable its clients to become high performing businesses and governments. The company operates in five business segments: Financial Services: $7.4B (21%) Communications, Media & Tech (CMT), Financial Services, Health and Public Service (HPS), Products, and Resources. CMT: $6.9B (20%) HPS: $6.2B (18%) Sustainability Accomplishments and Initiatives Resources: $4.9B (14%)

Accomplishments New Initiatives Continuing Initiatives • Recognized in CDP’s 2017 Climate • In 2018, Accenture plans to implement and • Investing in virtual collaboration Change Report as a leading company for pilot electronically commutated fans across technology in order to continually improve Hamilton Point reducing emissions and mitigating climate offices in India with anticipated savings of and reduce air travel carbon emissions per Sustainability Matrix change more than 7,400 megawatt hours of electrici- employee ty and 6,100 metric tons of CO2 • Included on Dow Jones Sustainability • Promoting energy-efficient transportation Index North America and FTSE4GOOD • 21% of their energy usage came from renew- in India by encouraging shuttle vendors to Global Index for 13 consecutive years able sources in fiscal 2017, leading to an decarbonize their fleets by replacing avoidance of more than 63,000 metric tons of vehicles with natural gas or electronically- • Achieved a 8% improvement in energy CO across global operations powered alternatives efficiency over the previous year in fiscal 2 2017 • Achieved a 52% reduction against 2007 base- • Leading Client Carbon Savings program Industry line in per-employee carbon emissions in that helps their clients meet their own eco- • 76% of key suppliers disclosed emissions fiscal 2017, reaching this goal three years nomic and sustainability goals by reductions actions ahead of schedule developing new strategies and tools to Company • Realized a reduction of approximately capture, measure, and report carbon • Installed more than 650 smart meters in 38 savings 200,000 metric tons of CO2 emissions from buildings across 14 countries by end of FY17 office electricity usage in 2016 Alternative ESG Progress & Evaluation

As a leader in its industry, Accenture has set a great standard by consistently accomplishing their self-imposed energy and environmental Scoring sustainability goals. Not only has Accenture reached their goals, but they have achieved some of them years ahead of schedule. Approximately 80% of their carbon footprint comes from emissions generated by employees during air travel and from the use of electricity. In response to this, Accenture has recently adopted virtual collaboration technology in order to greatly reduce air travel. Externally, Accenture has had a positive impact on the sustainability efforts of their suppliers and clients, which feature over 75% of Fortune 82.5% Global 500, by leveraging their technology and expertise in the field of environmental sustainability. Having offices in 120 countries, Accenture has demonstrated that it is committed to fostering sustainability initiatives globally, especially in growing markets like India. As seen through their 72 page Corporate Citizenship Report, Accenture has demonstrated that they recognize the importance of environmental sustainability through their quantifiable and time specific carbon emissions and electrical usage reduction goals. Hamilton Point assigns Accenture a Sustainability Matrix of Good for their commitment to reducing their carbon footprint and that of their clients. Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

9 Alphabet Inc.

Key Statistics Alphabet Inc. (GOOG), based in Mountain View, California, is an American multinational con- glomerate founded in 2015 as the parent company of Google and companies previously owned by As of FY ended 12/31/17 Google. Google was founded in 1998 by Larry Page and Sergey Brin, who created the world’s most 2017 Revenue: $110.9B effective search engine and improved the accessibility of the internet by downloading and indexing Net Income: $12.7B the entire web. Google later grew to include many recognizable brands, including YouTube, Gmail Business Segments: and Android. Alphabet segments itself into industries such as technology, life sciences, investment Google: $109.7B (98.9%) capital and research. Several of its subsidiaries include Google, Calico, GV, CapitalG, X, Waymo Other Bets: $1.2B (1.1%) and Google Fiber. Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • U.S. EPA Excellence in Green Power Use • Google reached its goal of using 100% • Google’s Project Sunroof uses satellite Award (2017) and Green Power Partner of renewable energy for its global operations in imaging to gauge the suitability of Hamilton Point the Year Award (2011, 2014) 2017 individual homes for solar panels in UK Sustainability Matrix • Featured at a high position on Greenpeace's • In late 2017, Google announced the purchase • Creating and promoting cloud-based prod- 2017 Clean Energy Report of 3 gigawatts of renewable energy, equal to ucts and technologies that allow users to the total energy used by all of its offices and monitor tropical rainforests, detect pipeline • Carbon Neutral for 11 consecutive years data centers globally leaks, map tens of millions of solar roof- tops and reduce GHG emissions • Over 9.2 million square feet of Google of- • Google will use North America’s largest heat fices have received LEED certification pump, rather than fossil fuels, to control tem- • Google’s employee shuttle program and peratures at its new HQ under construction in corporate electric vehicles have taken the Industry • Largest corporate renewable energy pur- chaser in the world Silicon Valley equivalent of 5,700 cars off the road, or about 87 million vehicle miles

• Invested $76 million in a 300MW wind farm in Beaver County, OK (2015) • Google currently has 26 renewable energy Company projects around the world Progress & Evaluation Alternative ESG Not only is Alphabet a global pioneer in technology and innovation, but also in environmental sustainability and corporate responsibility. Scoring Like many technology companies, electricity used by Alphabet’s data centers is the company’s main potential carbon footprint. Through its investment in wind and solar power, Alphabet’s Google announced that renewable energy now powers 100% of global data centers, an in- credible feat. Through its over $3.5B investment in renewable energy, Alphabet is setting an excellent example for other technology companies to follow. As a result of Alphabet’s commitment to renewable energy, its sustainable and energy-efficient workplaces, and its net zero carbon footprint, Hamilton Point assigns Alphabet Inc. a Sustainability Matrix classification of Good. 14.9%

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

10 Amgen Inc.

Amgen Inc. (AMGN), based in Thousand Oaks, California, is a multinational biopharmaceu- Key Statistics tical company that uses biology to discover, develop, manufacture and deliver innovative and As of FY ended 12/31/17 advanced human therapeutics for patients suffering from serious illnesses. The Amgen approach is deeply rooted in research and focuses on areas of high unmet medical needs and 2017 Revenue: $22.8B limited treatment options. Amgen leverages its biologics-manufacturing expertise to strive for Net Income: $2.0B healthcare solutions that dramatically improve lives. A biotechnology pioneer since 1980, Business Segments: Amgen has grown to be one of the world's leading independent biotechnology companies, has reached millions of patients around the world Human Therapeutics: $22.8B and is developing a pipeline of medicines with breakthrough potential. Amgen has a strong history of corporate and environmental responsibil- (100%) ity, and the company operates in a single business segment: Human Therapeutics. Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Winner of the U.S. EPA’s Presidential • In 2017, Amgen reached 2020 target of reduc- • Releases detailed sustainability reports Green Chemistry Challenge (2017) ing 3,000 metric tons of fleet carbon, a 20% annually with sustainability measurements decrease from 2012 baseline that review progress and note achievements Hamilton Point • Corporate Responsibility Magazine’s 100 Best Corporate Citizens (2016-2017) • Reduced carbon emissions by 118,200 metric • Amgen’s 2020 environmental plan Sustainability Matrix tons, or 28%, from 2007 through 2017 by currently aims to reduce facility carbon by

• DJSI World Index (2014-2017) and Dow implementing energy conservation and carbon 10%, waste disposed in landfills by 35%

Jones North American Index (2013-2017) reduction projects and water use by 10%

• Received Energy Project of Year award • Implemented new air exchange reduction and • Taking action to become more selective of (2017) and Corporate Energy Management air handling conservation projects in 2017 suppliers and to educate and empower staff Award (2014) from the Association of resulting in an energy reduction of 5,200 GJ to be more environmentally responsible

Energy Engineers Industry • Water conservation projects implemented in • Using facility data evaluation program that • Three buildings certified by U.S Green 2017 resulted in an additional 63,000 cubic has conserved 67,800 gigajoules at U.S. Building Council, one at LEED Platinum, meters (CM) of annual water reduction to based locations one at LEED Gold, one at LEED Certified achieve a total of 266,000 CM since establish- Company ing 2020 targets in 2013 • Encouraging alternative methods of • Awarded the Cool Planet Award by South- commuting to work, such as carpooling, ern California Edison and The Climate • Waste reduction programs decreased an addi- and providing electric vehicle charging Registry (2014) tional 188 MT of annual waste in 2017 to stations Alternative ESG achieve a total of 1,038 MT since establishing • Puerto Rico Manufacturers Association Scoring 2020 targets in 2013 recognized recycling, waste minimization, water reuse and energy conservation performance (2014-2015) Progress & Evaluation 62.8% The biotechnology industry in which Amgen conducts business is relatively sustainable in nature. Many of the largest environmentally sensi- tive portions of the business revolve around energy consumption, water usage, and toxic waste disposal. In 2017, Amgen accomplished their goal of reducing fleet carbon emissions. Hamilton Point assigns Amgen Inc. a Sustainability Matrix classification of Good due to their strong environmental awareness and history of consistently creating energy efficiency programs and reaching their sustainability targets. The company has a commitment to better the environment and provides clear outlines of its plan and goals in detailed annual sustainability reports.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

11 Apple Inc.

Apple Inc. (AAPL), a multinational technology company based in Cupertino, California, designs, manufactures Key Statistics and markets mobile communication and media devices, personal computers and portable digital music players. As of FY ended 9/30/17 Apple also sells a variety of related software, services and third-party digital content and applications. Products 2017 Revenue: $229.2B and services include the iPhone, iPad, iPod, Mac, Apple Watch, Apple TV, a portfolio of consumer and profes- Net Income: $45.7B sional software applications, the iOS and OS X operating systems, iCloud and a variety of accessory, service and Business Segments: support offerings. Founded in 1976 by Steve Jobs, Steve Wozniak and Ronald Wayne, Apple’s products continue iPhone: $141.3 (62%) to be unique because of their integrated software and hardware, user-friendly nature and simple design. Services: $30B (13%) Macintosh: $25.9B (11%) Sustainability Accomplishments and Initiatives iPad: $19.2B (8%) Accomplishments New Initiatives Continuing Initiatives Other Products: $12.9B (6%) • Reached 100% renewable energy for all • In 2018, Apple pledged to use 100% recy- • Apple is creating and protecting sustainable company operations in 2018 cled materials in a closed supply loop for forests to cover all their product packaging future fabrication of its devices needs • Carbon emissions per product have de- Hamilton Point creased every year since 2011 • In 2017, Apple conducted a lighting and • Apple has a proven history of reducing the HVAC retro-commissioning program carbon footprint of its manufacturing process Sustainability Matrix • U.S. EPA Green Power Leadership Award throughout retail stores, leading to a savings and improving the energy efficiency of its (2014-2017) of 3.7 million kWh per year products • Acknowledged by Greenpeace as the

• Reduced energy footprint in fiscal year 2017 • Apple is engaging with 48 suppliers at 71 greenest tech company in the world (2014- by 14.7 million kWh facilities to implement energy efficiency 2016) measures, which saved 320,000 MT of CO2 • Total transportation emissions fell by 3 per- in 2017 • Apple’s VP of Environmental Initiatives cent in fiscal year 2017 served as the former head of the U.S. EPA Industry • Apple’s Clean Energy Portal helps suppliers and earned the Environmental Achievement • Solar projects now produce enough energy identify commercially viable renewable en- Award (2018) for greening Apple’s supply to power all offices and stores in China ergy solutions in regions around the world chain • Apple is offering a $1B bond to fund clean • Apple and their suppliers are working to Company • As of 2018, 23 manufactures have tech and environmental investment projects generate and procure more than 4 gigawatts committed to power their Apple operations in response to the U.S. government’s deci- of new clean power worldwide by 2020 with 100% renewable energy sion to leave the Paris climate agreement Alternative ESG Progress & Evaluation Scoring For years, Apple has adhered to its self-imposed high standards for energy efficiency, emission reductions and transparency. Apple is committed to rigorous self-evaluations and uses a three-pronged approach for sustainability, which comprises of displacement, materiality and accountability. Programs derived from this approach resulted in Apple reaching 100% renewable energy in 2017. Despite the recent controversy around Apple intentionally reducing the usage life of iPhones, the company set new bars in fiscal year 2017 by engaging with its supply chain 71.5% to increase energy efficiency and increasing their investment in renewable energy sources globally. Hamilton Point assigns Apple Inc. a Sustainability Matrix classification of Good for its continued efforts in environmental stewardship. Apple promotes transparency and responsibility by releasing thorough environmental sustainability reports every year.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

12 Applied Materials Inc.

Founded in 1967 and based in Santa Clara, Ca, Applied Materials, Inc. (AMAT) engages in the provi- Key Statistics sion of materials engineering solutions used to produce new chips and advanced display. Applied As of FY ended 10/31/17 Materials provides manufacturing equipment, services, and software to the semiconductor, display, and 2017 Revenue: $14.5B related industries worldwide. The company operates in three business segments: Semiconductor Net Income: $3.4B Systems, Applied Global Services (AGS) and Display and Adjacent Markets (DAM). Business Segments: Semiconductors: $9.5B (66%) AGS: $3.0B (21%) Sustainability Accomplishments and Initiatives DAM: $1.9B (13%)

Accomplishments New Initiatives Continuing Initiatives • Generated a total of 3.5 GWh of energy by • Supported urban gardening projects, tree • Offering employee discounts for the using solar panel arrays at facilities in planting activities and events encouraging purchase and installation of solar panels Sunnyvale, CA; Singapore; Xi’an, China; sustainable practices all over the globe in for their homes through the Employee Hamilton Point and Austin, TX in 2016 2016 Solar Program Sustainability Matrix • Green energy purchases supported 100% of • Partnered with Scoop, a mobile app for car- • Applied Materials offers a Work-From- the power demand of their two Santa Clara pooling, to give riders door-to-door Home (AppliedAnywhere) program with locations and approximately 28% of the transportation to the company’s Santa Clara 421 participants in 2016, and maintains 18

Austin location’s power needs in 2016 location for only $2 telepresence rooms for virtual meetings,

• Recycled approximately 32 tons of water at • Implemented an Industrial Waste helping to reduce carbon emissions from air and car travel the Santa Clara location in 2016, which Neutralization Program at its Austin location was an increase of 1,100% compared to in September of 2015 that led to a total of 6.3 • Supporting employee programs that reduce waste diversion in 2015 million gallons of water being successfully greenhouse gas emissions, including pub- Industry recycled during 2016 • Decreased the amount of non-hazardous lic and alternative transportation incentives for California employees, electric vehicle waste by 30% in 2016 due to the charging stations, and preferred parking implementation of additional recycling for carpools, hybrid and electrical vehicles Company programs Progress & Evaluation Alternative ESG In fiscal 2016, the year of their latest Citizenship Report, Applied Materials grew orders, revenue and earnings to the highest levels in the Scoring Company’s history. During this year of growth, they were able to keep direct energy use, water consumption, and greenhouse gas emissions relatively flat while making progress on other sustainability initiatives, like supporting urban gardening and work carpools. Applied Materials has not become lax on its commitment to environmental sustainability amid economic growth. Applied Materials’ proved that they were capable of reducing waste, increasing renewable energy sources, and expanding recycling efforts 67.5% during their successful fiscal 2016. While we look forward to reading their updated 2017 Citizenship Report as soon as it is published, Ap- plied Materials’ 2016 Citizenship Report demonstrated a clear commitment to preserving the environment over the long term. Hamilton Point assigns Applied Materials a Sustainability Matrix of Good for its commitment to adopting energy efficient methods and minimizing environmental impacts.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

13 Automatic Data Processing, Inc.

Automatic Data Processing, Inc. (ADP), based in Roseland, New Jersey, is one of the Key Statistics world’s largest providers of business process outsourcing products and services, serving As of FY ended 6/30/17 650,000 clients around the world. ADP offers a wide range of technology-enabled Human Capital Management (HCM) services including human resources, payroll, insurance, retire- 2017 Revenue: $12.4B ment, tax and compliance and benefits administration solutions. ADP was a leading provider Net Income: $1.7B of integrated computing solutions to auto, truck, motorcycle, marine, recreational vehicle and Business Segments: heavy equipment retailers and manufacturers until it spun off this business in 2014. The com- Employer Services: $9.5B (76.7%) pany’s reportable segments are: Employer Services, Professional Employer Organization PEO Services: $3.5B (28.2%) (PEO) Services and Other. Other: ($639)M (-4.9%)

Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives

• Offices in Augusta, GA, New York City, • ADP upgraded HVAC units and installed • ADP is leading the Turn Off Monitors Hamilton Point and Pasadena, California received Gold LED lighting in facilities and parking lots in energy-reduction campaign LEED certification, a rank which only one 2017 Sustainability Matrix of 1,144 buildings in the US have achieved • ADP is an active member of the Green • ADP’s entire North American sales fleet has Grid, a group dedicated to developing and • For the second consecutive year, ADP re- been replaced with eco-friendly vehicles, sav- promoting energy efficient data centers

ceived an A– rating by Carbon Disclosure ing the environment from 4,000 tons of CO2 Project for their global efforts • ADP installs bike racks and electric vehicle • ADP consolidated their data centers to 2 from charging stations and offers carpool- • Recycled 2,471 tons of paper and reduced 20, reducing 24k tons of carbon dioxide emis- preferred parking spaces at offices electrical energy usage by 12,592,039 kWh sions annually in 2016 • The company is striving to reduce carbon Industry • ADP uses fuel cell technology to provide for dioxide emissions by a minimum of 10% • Improved water treatment systems in two 80% of its La Palma building’s energy needs over the next 5 years locations for better efficiencies and cleaner water Company Progress & Evaluation As an industry leader, ADP is obligated to follow through when they say that they’re taking the necessary steps to demonstrate their commit- Alternative ESG ment to energy and environmental sustainability. ADP continues to initiate environmentally conscious programs that have positive effects for Scoring both their clients as well as their own business. Through data center consolidation, energy efficiency and active environmental awareness promotion, ADP has successfully made efforts to reduce their carbon footprint. Hamilton Point assigns Automatic Data Processing, Inc. a Sustainability Matrix classification of Good due to their successful recycling and energy efficiency programs and their continued commitment to developing sustainable workplace programs, like electric vehicle charging 17.9% stations and bike racks. ADP has succeeded in keeping up with current initiatives, but needs to set more long-term sustainable goals. Through their web page on corporate environmental responsibility that now provides quantitative measurement goals, ADP continues to set a good example in the field of sustainability.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

14 Becton, Dickinson and Company

Becton, Dickinson and Company (BDX), headquartered in Franklin Lakes, New Jersey, is a Key Statistics global medical technology company committed to advancing the world of health through the As of FY ended 9/30/17 development, manufacture and sale of laboratory equipment, diagnostic products and medical 2017 Revenue: $12.1B supplies and devices. These products are used by healthcare institutions, life science research- ers, clinical laboratories, the pharmaceutical industry and the general public. Although over Net Income: $1.1B half of the company’s sales are generated in the U.S., BD has a global presence with over Business Segments: 40,000 people employed in 50 countries around the world. BD consists of two major business Medical: $8.1B (66.9%) segments: Medical Segments and Life Sciences. In 2017, BD completed its acquisition of Life Sciences: $4.0B (33.1%) C.R. Bard, Inc., creating a new health care industry leader. Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Ranked #10 on the U.S. EPA’s list of the • BD is combating antimicrobial resistance • BD invests in sustainability projects largest green power users within the Green through infection prevention and control, through their Sustainability Capital Fund Hamilton Point Power Partnership (2018) diagnostics, medication preparation, infor- and invested $7.5M in these projects across matics, and surveillance the company in FY17 Sustainability Matrix • BD participated in the Chemical Footprint Project (CFP) in 2017, working to trans- • In 2017, 45% of total energy came from re- • BD has a program where patients can find form global chemical use by measuring and newable sources and energy consumption the most convenient locations for safe needle disposal through SafeNeedleDis- disclosing data on safer chemicals was reduced by 20% posal.org • CR Magazine’s 100 Best Corporate Citi- • BD reduced total waste by 30%, increased zens List (2017) the recycling rate to over 66% and reduced • BD’s sustainability strategy and 2020 goals hazardous waste by 56% in FY17 include reducing GHG emissions, eliminat- • FORTUNE “Change the World” List (2015 Industry ing priority materials of concern and im- -2017) • In 2017, BD increased the landfill diversion proving life cycle impacts on current and rate to 79% and reduced water consumption future products • U.S. EPA Green Power Partner (2017) and by 35% U.S. EPA SmartWay Transport Partner • Requires suppliers to comply with BD’s Company (2017) • 30 BD sites have ISO 14001-certified envi- Expectations for Suppliers, which details ronmental management systems with 7 more BD’s social and environmental standards • DJSI North America Index (since 2005) pursuing certification through a pilot project Alternative ESG and FTSE4Good Index (since 2003) • BD is a member of the Healthcare Plastics Recycling Council and the Coalition for Scoring Sustainable Pharmaceuticals and Medical Devices Progress & Evaluation 38.6% Becton Dickinson continues to be a global health care leader in environmental sustainability. By investing in renewable energy, reducing waste, and building LEED certified buildings, BD leads the way in sustainability initiatives. BD is also bettering the world by working to address global health care concerns, like antimicrobial resistance and the opioid epidemic, by developing technologies and programs to combat these health crises. For these reasons, Hamilton Point assigns Becton, Dickinson and Company a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

15 Booking Holdings Inc.

Key Statistics Booking Holdings Inc. (BKNG), headquartered in Norwalk, Connecticut, is a leading provider of online travel and travel-related reservation and search services. Booking offers its customers As of FY ended 12/31/17 accommodation reservations for hotels, bed and breakfasts, hostels, apartments and vacation 2017 Revenue: $12.7B rentals, as well as comparisons of airline tickets and car rental services through its many busi- Net Income: $2.3B nesses. Booking provides its services through brands including Booking.com, priceline.com, Business Segments: agoda.com, KAYAK, rentalcars.com and OpenTable. The company serves customers in over 225 countries and territories and manages its Online Reservation and Related business through a single business segment: Online Reservation & Related Services. Services: $12.7B (100%)

Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Aside from acknowledging the need for • Booking released its 2018 Sustainable Travel • Booking implements a relatively strict new initiatives and a recent grant to GHE, Report, which revealed that global travelers code of ethics that specifically addresses Hamilton Point the company does not publicly release sus- are increasingly becoming more interested in environmental impacts Sustainability Matrix tainability information and therefore has no traveling sustainably awards or major achievements • Employees are required to report any ques- • Booking awarded $532,000 to Global tionable or harmful behavior committed by Himalayan Expedition (GHE), an organiza- those involved with the company, includ- tion that provides clean energy to mountain- ing harmful practices to the environment ous communities in the Himalayas • As more customers and travelers desire

greener accommodations, Booking is ex- Industry ploring new initiatives to not only cater to their customers’ wants, but to also lessen the impact they have on the environment and reduce the company’s carbon footprint Progress & Evaluation Company The internet and technology industries have relatively low impacts on the environment, with the majority of energy usage and GHG emissions coming from companies' data centers, and Booking does not stray from this norm. Though Booking has not publicly announced that they Alternative ESG have made any level of environmental or efficiency improvements to their data centers, many other companies in the same sector have and are reducing their carbon footprint drastically. Scoring Booking is in a prime position to introduce initiatives that capitalize off of the growing demand for sustainable travel, which 87% of global travelers say they want, according to Booking.com’s Sustainable Travel Report. For example, Booking could highlight eco-friendly properties or promote locations that feature electric vehicle charging stations in the search results. Additionally, Booking could promote greener transportation methods. By making their customers aware of more environmentally friendly airlines or alternative ways to travel, Booking has the n/a potential to have a massively positive impact on the environment. Not only does the company fail to produce any form of annual sustainability report, but it also neglects to publicly report any major measurement of their environmental impact. Booking is an innovative company within the travel reservation field, but it is lagging in regards to sustainability. Hamilton Point assigns Booking Holdings Inc. a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

16 Check Point Software Technologies Ltd.

Check Point Software Technologies Ltd. (CHKP), based in Tel Aviv, Israel, is an international pro- Key Statistics vider of hardware and software products for information technology security, with products that include threat prevention, next generation firewalls, mobile security and security management. Since 1993, As of FY ended 12/31/17 Check Point has dedicated itself to providing its customers with uncompromised protection against all 2017 Revenue: $1.9B types of threats, while reducing the complexity of cybersecurity and lowering the total cost of owner- Net Income: $803M ship. Check Point’s products and solutions provide increased security for point of sale systems, auto- Business Segments: mated teller machines, private and public cloud and telecommunications providers. Check Point’s reve- Network & Data Security nues primarily come from products and licenses, software updates and subscriptions. As of 2018, the Products: $1.9B (100%) company had approximately 4,300 employees worldwide. Check Point is the largest network cyber security vendor globally and protects over 100,000 organizations of all sizes.

Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives Hamilton Point • Selected by Silicon Review for its list of • Check Point has not launched any recent initi- • Check Point continues to work with suppli- Fifty Innovative Companies to Watch atives ers in identifying environmentally con- Sustainability Matrix (2016) scious components that increase efficiency,

lifecycle and energy efficiency

• The company continues to reduce its carbon footprint by creating reliable products and services that are cognizant of environmental impact throughout all phases of the life cycle Industry

• Check Point closely monitors compliance with local and international laws in all locations worldwide Company

Progress & Evaluation Alternative ESG Scoring The majority of Check Point’s impact on the environment occurs through its products, services and facilities. While Check Point develops environmentally friendly solutions, the company discloses little information regarding its sustainable practices and its goals for the future. Due to the lack of a sustainability report or any specific sustainability initiatives, Hamilton Point assigns Check Point Software Technologies Ltd. a Sustainability Matrix classification of Neutral. As the leading cyber security company in the world, Check Point should also lead the way in environmental sustainability. n/a

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

17 Church & Dwight Co., Inc.

Founded in 1846 and headquartered in Ewing, New Jersey, Church & Dwight Co., Inc. (CHD) develops, manufac- Key Statistics tures and markets a large range of household, personal care and specialty products. Church & Dwight includes notable As of FY ended 12/31/17 brands such as Arm & Hammer, Trojan, OxiClean, Nair and Spinbrush. The consumer product brands are sold through many different platforms such as supermarkets, mass merchandisers, drugstores and others. Church & Dwight 2017 Revenue: $3.8B also sells specialty products to clients that include industrial consumers and distributors. With approximately 4,700 em- Net Income: $743M ployees in 9 countries around the world, Church & Dwight is divided into three business segments: Consumer Domes- Business Segments: tic, Consumer International and Specialty Product Division. Consumer Domestic: $2.9B (76%) Consumer International: Sustainability Accomplishments and Initiatives $621M (16%) Accomplishments New Initiatives Continuing Initiatives Specialty Product Division: $300M (8%) • Recognized in EPA’s Green Power Leader- • In 2018, Church & Dwight plans to join the • Working to ensure that more than 95% of ship (2017) and ranks no. 53 on the EPA’s RSPO with a goal of sourcing 100% certified global product packaging is recyclable by national top 100 list of green power users sustainable palm oil 2025 Hamilton Point • Arm & Hammer’s BioEnzyme Power Liq- • In 2018, announced that the equivalent of • Working towards goals of reducing GHG uid Laundry Detergent earned the U.S. 100% of their global electricity needs come emissions an additional 20% and achieving Sustainability Matrix EPA’s Safer Choice Certification (2015) from renewable sources carbon neutral status by end of 2025

• Green River, WY plant received the • In 2017, Church and Dwight recycled 11,459 • Following Global Sustainable Packaging

Dwight C. Minton Environmental and tons of waste that would have ended up in Guidelines to evaluate future innovative Safety Excellence Award (2013) ; Lake- landfills designs on the basis of improving wood, NJ facility was recognized for its recyclability environmental performance and safety • In 2017, reduced absolute GHG emissions by

practices (2016) 3.7% compared to 2016 • Using the Product Stewardship approach, Industry which includes carefully assessing risks of • Upgraded a wastewater treatment plant to • Launched a 2017 program that will audit sup- ingredients, optimizing use of recycled, better control pH and elemental concentra- pliers to ensure their compliance with Church renewable and biodegradable materials and tions (2013) & Dwight’s Guiding Principles eliminating concerning chemicals to ensure Company product safety and effectiveness

Progress & Evaluation Alternative ESG

Church & Dwight operates in an industry that uses a lower amount of natural resources and energy than other manufacturing sectors. As a Scoring result of the company’s continued commitment to transparency and sustainability, it releases a thorough and descriptive sustainability report that includes quantitative data and specific goals. Compared to its competitors, Church & Dwight does a slightly better than average job of prioritizing environmental sustainability in its operations. Since 1846, the company has proven its commitment to people and the planet. However, their improvements and manufacturing practic- n/a es have only been slightly better than the industry standard. Though Church & Dwight has shown the ability to institute sustainable practices in their businesses, we believe they have the potential to set more aggressive short-term goals and release more updates on their sustainability initiatives throughout the year. Hamilton Point assigns Church & Dwight Co., Inc. a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

18 Cisco Systems, Inc.

Based in San Jose, California, Cisco Systems, Inc. (CSCO) has grown to be one of the world’s larg- Key Statistics est information technology companies. Cisco designs, manufactures and sells Internet Protocol based networking products and services related to the communications and information technology indus- As of FY ended 7/30/17 try. Cisco conducts its business in many areas of the globe, and the company’s business segments 2017 Revenue: $48.0B include Products and Services. The main company product offering areas are Switching, Next- Net Income: $9.6B Generation Network Routing, Collaboration, Data Center, Wireless, Service Provider Video, Security Business Segments: and Other. Since 1984, Cisco has been transforming the way that people connect, communicate and Products: $35.7B (74.4%) collaborate worldwide. Service: $12.3B (25.6%) Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Earned top spot of Barron’s 100 Most Sus- • 80% of electricity used worldwide came • Reduced GHG emissions by 41% in FY17 tainable Companies List (2018) and ranked from renewable sources in FY17 compared to FY07 baseline, keeping them #1 on Newsweek’s Green Rankings for the on track for a 60% reduction by 2022 Hamilton Point U.S. (2018) • The 2018 EnergyOps Program is estimated to save over 600,000 kWh and $85,000 per • Implementing 300 energy efficient and on- Sustainability Matrix • Ranked 7th on Corporate Knight’s Global year at two facilities in California site renewable energy projects across Cis- 100 Most Sustainable Companies (2018), co’s real-estate portfolio 3rd on Forbes’ list of the World’s Most Sus- • Cisco installed window film on 24 buildings, th resulting in 5.4M kWh of energy savings and • Increasing renewable energy procurement

tainable Companies (2017) and 8 on For- tune’s Change the World List (2016) $773,000 in utility cost savings per year through utility green energy programs, power purchase agreements and renewable • Awarded a Smart Energy Decisions Innova- • Returned 11,400 Metric tons of products for energy certificates tion Award (2018) for Global EnergyOps reuse, refurbishing and recycling in FY17 Program • Working to generate 85% of global Industry • Launched a partnership with Dimension Data electricity from renewable sources by 2022 • Included on DJSI World Index (2017) for that has resulted in a 96% reduction in rhino environmental sustainability initiatives poaching at a South Africa game reserve • Global Partner of the Ellen MacArthur Foundation Circular Economy program Company • Awarded U.S. EPA Climate Leadership for (since 2011) Supply Chain (2016) and Green Power Partner of the Year (2008, 2013, 2016) Alternative ESG Scoring Progress & Evaluation Both Cisco and the information technology industry have a history of environmental awareness and sustainability that includes many new initiatives and improvements in recent years. The industry’s main environmental impacts are the carbon emissions and energy usage associated with large data centers and the energy usage that occurs during the life cycle of their products. Cisco provides comprehensive reports of 83.7% corporate and social responsibility that specifically identify clear goals and measurements of their current environmental impact. Cisco has increased it usage of clean, renewable energy and is planning to invest more in renewables worldwide. Hamilton Point assigns Cisco Systems, Inc. a Sustainability Matrix classification of Good for their commitment to transparency and success with their aggressive goal setting strategy. The company has made impactful and decisive attempts to reduce their carbon footprint and lessen the environmental impact of their clients in addition to themselves

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

19 Colgate-Palmolive Company

Colgate-Palmolive Co. (CL), based in New York, NY and founded in 1806, is a leading con- Key Statistics sumer products company that includes many well-known brands sold worldwide. Colgate- As of FY ended 12/31/17 Palmolive produces many common household and personal care brands such as Colgate Total, 2017 Revenue: $15.5B Palmolive, Irish Spring, Speed Stick, Softsoap and Ajax. Colgate-Palmolive operates its business in two main product segments: Oral, Personal & Home Care and Pet Nutrition. Col- Net Income: $2.0B gate is a global leader in the Personal Care market with liquid hand-soap, in the Oral Care Business Segments: market with leading toothpaste and manual toothbrush brands as well as in the Home Care Oral, Personal & Home Care: market with fabric softeners and dishwashing liquids. $13.2B (85%) Pet Nutrition: $2.3B (15%) Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Featured on Barron’s 100 Most Sustainable • In 2017, Colgate reduced its water use per ton • Colgate continues to reach nearly 3 billion Companies List (2018) and Corporate of production by nearly 47% vs. 2002. people with its engaging message to “Turn Knight’s Global 100 Most Sustainable Off the Tap When Brushing” in over 70 Hamilton Point Companies (2017) • In 2017, Colgate reduced absolute GHG emis- countries sions from manufacturing by 27.5%, surpas- Sustainability Matrix • Named to Dow Jones Sustainability Indices sing its 2022 25% reduction target five years • Colgate remains committed to reaching its (2013-2017) and ranked in Newsweek in advance goal of using 100% sustainable palm oil Green Rankings (2015 - 2017) and also expects to disclose 100% of the • Endorsed the UN CEO Water Mandate to help

mills that supply palm oil by end of 2018 • U.S. EPA ENERGY STAR Partner of the advance water stewardship, sanitation and the Year 2017 for the 7th year in a row, with UN Sustainable Development Goals • Colgate has committed to 100% recyclabil- recognition for Sustained Excellence; U.S. ity of plastics in packaging across all prod- • As of 2017, 98% of its packaging is PVC-free uct categories by 2025 EPA Green Power Partnership National Industry Top 100 (2016-2018) • In 2017, achieved six Zero Landfill Waste • Making progress on its commitment to • 81% of Colgate’s manufacturing facilities sites based on internal criteria developed from achieve zero net deforestation by 2020 worldwide have achieved U.S. EPA ENER- industry best practices Company GY STAR Challenge for Industry • Named to the Carbon Disclosure Project’s (CDP’s) Climate Disclosure Leadership Alternative ESG Index (2017), the CDP Climate A list (2016 -2017) and the CDP Water A list (2015- Scoring 2017) Progress & Evaluation With products and brands in over 200 countries and territories around the world, Colgate-Palmolive has encouraged billions of people to save water by turning off their faucets when brushing their teeth. The company provides clear goals and measurements of their progress, which are 59.2% available to the public. Not only have they surpassed many goals set for water and energy use efficiency, but Colgate-Palmolive has also consistently outlined future goals as they exceed their earlier benchmarks. Hamilton Point assigns Colgate-Palmolive Company a Sustainability Matrix classification of Good for their commitment to lessening their carbon footprint and engaging with their large consumer base to act sustainably. The company is responsible, sustainable and transparent in their business expansion and growth of environmental awareness. Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

20 CVS Health Corporation

CVS Health Corporation (CVS), based in Woonsocket, Rhode Island, is a pharmacy innova- Key Statistics tion company devoted to helping people on their path to better health. CVS is currently the largest integrated pharmacy healthcare company in the United States, with the ability to impact As of FY ended 12/31/17 consumers, payers and providers through innovative solutions. These solutions fulfill CVS’s 2017 Revenue: $184.8B mission by increasing access to quality care, delivering better health outcomes and lowering Net Income: $6.6B overall healthcare costs. The company has over 9,800 retail locations, 1,100+ walk-in medical Business Segments: clinics and 94 million pharmacy benefits plan members. CVS functions through three reporta- Pharmacy Services: ble business segments: Pharmacy Services, Retail Pharmacy and Corporate. $130.6B (62.2%) Retail/LTC: $79.4B (37.8%) Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Germantown, Maryland store is the 13th • Submitted science-based emissions reduction • Incorporating design and construction char- CVS location to be LEED Certified target for approval from the Science Based acteristics of LEED– certified buildings, Targets initiative such as energy and water efficiency fea- Hamilton Point • Company fleet was named an EPA Smart- tures or the use of sustainable materials Way Carrier Partner (2017) for the 8th year • Announced removal of parabens, phthalates Sustainability Matrix in a row and the most prevalent formaldehyde donors • Requiring all suppliers of palm oil to across nearly 600 store brand beauty and per- demonstrate proof of a recognized certifi- • Named to Fortune’s Most Admired Compa- sonal care products cation and to disclose the palm oil content nies List and Change the World List (2016, of their products 2017) • In 2018, CVS plans to install LED exterior lighting at all existing retail locations in ef- • Closing in on 2020 goal of reducing water • Acknowledged by Corporate Responsibil- forts to significantly reduce lighting con- use by 20 percent, having achieved an 18

ity Magazine as one of the 100 Best Corpo- sumption percent reduction in 2018 Industry rate Citizens (2016) • In 2018, CVS became a member of the UN • Working with real estate team to launch • Named to Newsweek’s Rankings of Ameri- Global Compact, an initiative that encourages more smaller-footprint stores that use on ca’s Greenest Companies (2017) other companies to adopt sustainable practices average 25 percent less energy than larger Company stores • Achieved a position on the Carbon Disclo- • In 2018, CVS plans to open a new distribu- sure Project S&P 500 Climate Performance tion center in Kansas City, MO that will sig- • Using enhanced routing software for fleets Leadership Index (2014), the Dow Jones nificantly reduce their mileage by hundreds of of delivery trucks to continue reducing Alternative ESG Sustainability Index (2016, 2017) and the thousands of miles annually GHG emissions FTSE4Good Index (2016) Scoring Progress & Evaluation The most significant environmental impacts and contributors to CVS’s carbon footprint are by far the energy usage and GHG emissions that result from the company’s large retail footprint and their vast distribution and transportation network. In order to reduce the carbon footprint of their fleet, CVS plans to complete construction of a new distribution center in Kansas City in 2018, helping to reduce GHG emissions sig- 59.3% nificantly. While CVS has taken measures to improve energy efficiency of their retail locations, the company could invest more in renewable energy. CVS is a socially responsible company that has a solid track record of reducing their environmental impact, which is documented in their 11 annual corporate social responsibility reports. The company understands what aspects of its business are the most damaging and has focused on improvements in those areas. Hamilton Point assigns CVS Health Corporation a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

21 Danaher Corporation

Danaher Corp. (DHR), based in Washington, D.C., designs, manufactures and markets professional, medi- Key Statistics cal, industrial and commercial products and services. Danaher is a science and technology innovator dedicat- As of FY ended 12/31/17 ed to helping their customers solve complex challenges and improve their quality of life. With research and development, manufacturing, sales, distribution, service and administration facilities located in more than 60 2017 Revenue: $18.3B countries, Danaher has a wide influence on the environment in which it conducts its business. The company Net Income: $2.5B consists of four segments: Life Sciences, Diagnostics, Dental and Environmental & Applied Solutions. Business Segments: Life Sciences: $5.7B (31.1%) Diagnostics: $5.8B (31.7%) Environmental & Applied Sustainability Accomplishments and Initiatives Solutions: $4.0B (21.9%) Accomplishments New Initiatives Continuing Initiatives Dental: $2.8B (15.3%) • Designed Shanghai office complex with • Danaher is devoted to reducing packaging • Continual improvement in EHS perfor- environmental sensitivity and health in waste, protecting the water supply and de- mance, waste minimization, and prevention mind, including advanced air filtration sys- fending fragile ecosystems of pollution Hamilton Point tems that purify, sanitize and ionize the internal air, removing airborne pollutants • Promoting Environmental Employee Aware- • Continuing Environmental, Health and Sustainability Matrix like smog, smoke and viruses (2016) ness through the “Stop, Think and Speak Up” Safety (EHS) Programs, which engage em- program, which requires employees to com- ployees with environmental issues • Leica Microsystems’ packaging for the plete an EHS training course annually • Conducting regular internal audits to en- SPIDER stereomicroscope reduced pack- • Videojet’s Wood Dale, Illinois facility is sure company-wide compliance with envi- age volume by 50% and reduced the carbon footprint by 60 tons/year, winning the Sin- working towards Zero Landfill status, having ronmental principles reduced solid waste going to landfill by 92% gapore Packaging Star Award and Asia • Water Quality Platform provides precision

since 2013 Industry Star Award (2015) instrumentation and advanced purification

• The Beckman Coulter Diagnostics facility • Has 60,000 environmental monitoring sta- technology to analyze, treat and manage in Mishima, Japan has a 99% recycling rate tions in operation, which provide real-time, the quality of the world’s water, from mu- early warnings of approaching floods nicipal and wastewater treatment facilities to lakes, streams and oceans Company

Alternative ESG Progress & Evaluation Scoring In regards to environmental sustainability, Danaher loosely regulates its business segments through its Environmental, Health and Safety Pro- grams. Regular sustainability audits are conducted for each business, including those that operate in the environmental protection industry. As a result, some of these sub-companies publish their own sustainability reports. Danaher implements strict standards, known as the Danaher Business System (DBS), which apply to all of their business segments. After 10% receiving demands from shareholders, Danaher finally began publishing information on sustainability two years ago. With the release of new, basic sustainability reports and the fact that many of Danaher’s businesses have positive environmental impacts, we feel comfortable assign- ing Danaher a Sustainability Matrix classification of Neutral, but a specific company-wide report would do much more to accurately track progress and set attainable goals.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

22 Deere & Company

Deere & Company (DE), based in Moline, Illinois, is a worldwide manufacturer of agricultural, construc- Key Statistics tion, forestry and turf care equipment. Deere & Co. is also currently the world’s largest producer of farm As of FY ended 10/31/17 tractors. With over 60,500 employees working in factories, offices and other facilities in more than 30 countries, Deere & Co. is a truly global company. Its operations are categorized into three major business seg- 2017 Revenue: $29.7B ments: Agriculture and Turf, Construction and Forestry and Financial Services. Net Income: $2.2B Business Segments: Agricultural & Turf: $20.2B (68.0%) Sustainability Accomplishments and Initiatives Construction & Forestry: $5.7B (19.2%) Accomplishments New Initiatives Financial Services: $2.9B (9.8%) Other Revenue: $918M (3.0%) • Recognized by Ethisphere as one of the • Released a set of new 2022 Sustainability • Committed to reaching new 2022 Sustaina- World’s Most Ethical Companies and by Goals bility goals of reducing GHG emissions by Fortune Magazine as one of the Top 50 • John Deere Electronic Solutions in Fargo, 15% through 50% renewable electricity Hamilton Point Most Admired Companies (2017) North Dakota prevented more than 51 tons of supply and recycling 85% of total waste • Recognized by Forbes in the Just 100: garbage from being dumped into a land fill • Implementing water best management Sustainability Matrix America's Top 100 Corporate Citizens • Every manufacturing facility has an environ- practices in 100% of water scarce manufac- (2016) mental management system based on the ISO- turing locations

• Member of the U.S. EPA Leadership Pro- 14001 standard in place and has the technolo- • Working to reduce environmental impact, gy to track and collect water-usage data gram since 2007 including CO2 emissions on 90% of new • Deere & Co. promotes electrical vehicle use products and increase the use of sustainable • Reduced GHG Emissions 26% per dollar of materials by increasing recyclable, renewa-

among employees to reduce GHG emissions Industry adjusted revenue from 2005 until 2014 ble and recycled content in places like Des Moines, Iowa and Germany

• At a Montenegro facility, employees created strategies to minimize the number of trips required to transport goods, lowering GHG Company emissions and using 45% less diesel fuel than other fleets Alternative ESG Progress & Evaluation Scoring Due to the nature of their industry, John Deere conducts business that is inherently harmful to the environment. Its machinery and equipment requires large amounts of non-renewable resources to operate while emitting harmful pollutants into the air over the products’ life cycles. Though Deere & Co. produces harmful products, the company has made strides to improve their environmental impact. Deere & Company recently established aggressive eco-efficiency goals and outlined a new 2022 sustainability plan for their water and energy 25.1% usage, as well as for their GHG emissions. This plan hopes to reduce the company’s carbon footprint and promote safer environmental practices in the industry in which Deere & Co. operates. Outside of Deere & Co.’s five-year plan, which is to be completed by 2022, the company lacks transparency in regards to their environmental impact and continues to measure its own progress through more general, qualitative assessments. Therefore, Hamilton Point assigns Deere & Company a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

23 eBay Inc.

eBay Inc. (EBAY), headquartered in San Jose, California, is an American multinational corporation Key Statistics and technology company enabling global commerce for buyers and sellers through online platforms, As of FY ended 12/31/17 including the eBay Marketplace, StubHub and Classifieds platforms. eBay currently serves 160 million buyers from more than 190 markets, providing them with access to over a billion items they may 2017 Revenue: $9.6B not otherwise be able to find or afford. The company’s vision for commerce is that it will be enabled Net Income: ($1.0B) by people, powered by technology and open to everyone. eBay has continued to expand its addressa- Business Segments: ble ecommerce market as the way in which people interact with each other, brands and services dra- Marketplaces: $9.6B (100%) matically changes. The company operates in a single reportable segment known as Marketplaces.

Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives

• With over $100 billion in used goods trad- • Invested significantly in technology and video • Conserving energy and lowering carbon ed since 1998, eBay is the largest online conferencing services to enable employees to emissions by striving for radical efficiency Hamilton Point marketplace for reuse on the planet collaborate with their teammates, customers, in facilities and processes, generating on- site clean energy when and where appropri- Sustainability Matrix • 1.2 million tons of carbon emissions have and partners while minimizing their travel footprint ate and procuring additional clean energy been avoided as a result of people selling from off-site sources their pre-owned electronics and apparel on • eBay signed on the Climate Declaration, a call eBay • Working on 2025 goal of having 100% to action from leading American businesses urging policymakers to tackle climate change renewable energy in the electricity supply • eBay is a member of the Business for Inno- at eBay-controlled data centers and offices vative Climate and Energy Policy, which • eBay joined the Global Coalition to End works with Congress to pass meaningful • Advancing United Nations Sustainable

Wildlife Trafficking Online in 2018 Industry energy and climate change legislation Development Goals in fighting climate

• 48% of electricity supply currently comes change • eBay is a founding member of Business for from renewable sources, as of 2017 Social Responsibility’s Future of Internet • Practicing responsible water management Power working group and the Rocky by placing major data centers in locations Company Mountain Institute's Business Renewables that enable them to take advantage of “free Center, for companies seeking to expand cooling” from outside air and reduce the their use of renewable energy amount of water used for equipment Alternative ESG Progress & Evaluation Scoring Since its founding, eBay has been driving a circular economy. Due to greater energy consumption at their data centers, eBay increased its usage of water and electricity and produced more GHG emissions, while decreasing its usage of renewable energy sources in 2017 compared to 2016. However, eBay is working to lessen its footprint by investing in more renewable energy sources in hopes of using 100% renewable energy by 2025. 44.1% The company launched new initiatives and goals in 2017 to promote more sustainable practices. For example, by practicing responsible water management, eBay is reducing its usage of water at data centers. Hamilton Point assigns eBay Inc. a Sustainability Matrix classification of Good as a result of the company’s degree of awareness, transparency and commitment to these issues.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

24 EMCOR Group, Inc.

EMCOR Group, Inc. (EME), based in Norwalk, Connecticut, is one of the largest electrical and Key Statistics mechanical construction and facilities services firms in the United States. They specialize in providing construction services relating to electrical and mechanical systems in all types of facilities and in As of FY ended 12/31/2017 providing various services relating to the operation, maintenance, and management of facilities. EM- 2017 Revenue: $7.7B COR operates in five business segments: U.S. Mechanical, U.S. Electrical, U.S. Building, U.S. In- Net Income: $228.1M dustrial, and U.K. Building. Business Segments: U.S. Mechanical: $3.0B (39%) Sustainability Accomplishments and Initiatives U.S. Electrical: $1.82B (24%) U.S. Building: $1.80B (23%) Accomplishments New Initiatives Continuing Initiatives U.S. Industrial: $799.0M (10%) • EMCOR has been a Gold Member of the • In 2017, EMCOR partnered with a firm to • EMCOR employs hundreds of LEED certi- U.K. Building: $340.7M (4%) U.S. Green Building Council since 2005 help them measure their sustainability efforts fied engineers to design, construct and ret- and 625 EMCOR employees are members rofit buildings to make them energy- of this organization • EMCOR UK introduced eight electronically efficient and sustainable powered vehicles which emit zero emissions Hamilton Point • EMCOR subsidiary Shambaugh and Son to their fleet • Equipping service vans with GPS systems designed and built Dairy Farmers of Amer- to find most direct route to clients in order Sustainability Matrix ica Garden City plant, which was named • EMCOR companies have developed a number to save fuel consumption and installing Sustainable Plant of the Year by Food of systems for extracting, cleaning, and con- solar panels in their shop operations Engineering magazine (2018) centrating methane gas to serve the transpor-

tation and wholesale natural gas markets • EMCOR provides its employees with clear • EMCOR has reduced their fleet gasoline guidelines to identify and comply with consumption by more than 840,500 gallons • Design, build, and provide ongoing mainte- environmental regulatory requirements, in per year and prevented more than 8 million nance for alternative energy installations the form of the Environmental Overview

pounds of carbon dioxide from entering the across North America Handbook Industry atmosphere

Company

Alternative ESG Scoring Progress & Evaluation By performing over 13,000 projects in the U.S. and U.K., EMCOR has a significant opportunity to impact their clients’ carbon footprint and sustainability efforts through the implementation of energy efficient design and renewable energy system installations. EMCOR’s Sustaina- 7.0% bility Report discusses the ways they have improved the environmental impact of their clients’ facilities. While EMCOR lacks quantitative and fully transparent goals in regards to its own sustainable practices, the company has demonstrated the ability to lessen the carbon footprint of its clients. Due to EMCOR’s actions to implement LEED engineering standards and promote alternative energy, Hamilton Point assigns EMCOR Group Inc. a sustainability matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

25 First Republic Bank

First Republic Bank (FRC), a regional bank headquartered in San Francisco, California, of- Key Statistics fers private banking, private business banking and private wealth management services to its As of FY ended 12/31/17 diverse set of customers. First Republic Bank prides itself on its commitment to client service 2017 Revenue: $2.61B through its core values of integrity, collaboration, respect, accountability, positivity, innovation and growth. The company operates in two business segments: Commercial Banking and Net Income: $758M Wealth Management. Business Segments: Commercial Banking: $2.25B (86.3%) Wealth Management: Sustainability Accomplishments and Initiatives $356.4M (13.7%) Accomplishments New Initiatives Continuing Initiatives • From January 2016 to September 2017, • Funded a Corporate Work Study Program that • Provides funding for La Cocina, which First Republic employees volunteered al- employs students from low-income families provides local, subsidized commercial Hamilton Point most 13,000 hours as part of Employee to work one day a week in entry-level posi- kitchen space, hands on technical assis- Volunteer Program tions to gain firsthand work experience and tance and retail opportunities to low- Sustainability Matrix learn the value of hard work, responsibility income individuals to enter the food busi- • Over 1/3 of business loans have supported and ambition ness as entrepreneurs the expansion and growth of nonprofit organizations • Launched an Employee Volunteer Program in • Actively invests in organizations such as 2015 that provides employees with 16 hours Operation HOPE, a premier financial litera- • Community Youth Center named First Re- of paid time to volunteer with charitable or- cy provider, the Central Park Conservan- public their 2015 Corporate Partner of the ganizations of their choice cy’s “Keeping it Green” program and Fam- Year for the bank’s work in improving fi-

ily-Linc at the Lincoln Center Industry nancial literacy among youth in under- • Appointed five local leaders to a Community

served areas of San Francisco Advisory Board with a mission to strengthen • Offers clients access to an ESG investing First Republic’s current approach to commu- team that designs socially responsible port- nity outreach and reinvestment initiatives folios for clients Company • “Spotlights” clients who are making a positive impact in the world with their wealth Alternative ESG Progress & Evaluation Scoring

The financial services industry in which First Republic conducts business is relatively environmentally-friendly in nature, with its largest environmental impact occurring from the operations of different office branches. Despite their relatively low environmental impact, First Republic Bank continues to lack an annual sustainability report that clearly outlines their goals and initiatives oriented toward environmental responsibility. n/a Despite the company’s failure to report on environmental metrics, First Republic actively involves itself with community organizations and nationwide nonprofits, making the company a socially active corporate citizen. Also, First Republic continues to offer its clients access to ESG investing strategies and has an active employee volunteer program. For these reasons, Hamilton Point assigns First Republic Bank a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

26 Fortive Corporation

Fortive Corporation (FTV), headquartered in Everett, Washington, is an industrial growth Key Statistics company that spun out of Danaher in 2016. The company designs, develops, manufactures As of FY ended 12/31/17 and markets professional and engineered products, software and services for a diverse set of end markets in fields like software development, robotics, transportation, energy and 2017 Revenue: $6.6B healthcare. Fortive focuses on innovation in two segments: Industrial Technologies and Pro- Net Income: $1.0B fessional Instrumentation. The Industrial Technologies segment focuses primarily on tech- Business Segments: nology relating to transportation and automation. However, the Professional Instrumenta- Industrial Technologies: tion segment focuses more on instrumentation and solutions, as well as sensing technologies. $3.5B (53.0%) Professional Instrumentation: $3.1B (47.0%)

Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives Hamilton Point • Fortive was featured on Newsweek’s Green • Fortive’s Portescap team served its communi- • Attempting to meet or exceed the require- Rankings (2017) for the first time ty in India by supporting innovation at local ments of all environmental laws, regula- Sustainability Matrix technology nonprofits, providing career guid- tions, and permit conditions that apply to

• Awarded the Premier Partner Award (2017) ance to young people, and protecting the envi- their work by United Way ronment with cleanups, tree planting and edu- • Integrating sound environmental practices • Thomson, a part of Fortive’s (then Dana- cation during 2017 into applicable business functions, includ- her’s) automation platform, earned recogni- • Announced commitment to improving envi- ing procurement, product design, testing tion as a Partner-level supplier in the John ronmental performance, waste minimization, and manufacturing Deere Achieving Excellence Program, the and prevention of pollution Industry highest available supplier rating (2015) • In compliance with the Dodd-Frank Act, • Design, operate, and maintain their facilities Fortive commits itself to sourcing materi- in a manner that minimizes emissions and als from companies that share their values waste in regards to human rights, integrity and Company environmental responsibility Progress & Evaluation Alternative ESG Similar to its former parent company’s “Danaher Business System,” Fortive adheres to its own specific business philosophy outlining its guiding principles and values and known as the Fortive Business System (FBS). In addition to FBS, Fortive’s commitment to Kaizen, the Jap- Scoring anese concept of continuous improvement, suggests that the company could someday be just as innovative in their sustainability initiatives as they are in their technological advancements as an industry leader in many fields. It's been over two years since Fortive’s leave from Danaher and they still have yet to publish a sustainability report or release any formal announcements about specific environmental sustainability initiatives. Fortive has made progress on their sustainability practices since break- 18.7% ing off from Danaher, as indicated by their new position on Newsweek’s Green Rankings. Because they are still a young company and have room for improvement, Hamilton Point assigns Fortive Corporation a sustainability Matrix classification of Neutral. As a leader in its industry, Fortive needs to abide by Kaizen and work to develop concrete and transparent environmental sustainability goals.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

27 Johnson & Johnson

Johnson & Johnson (JNJ), based in New Brunswick, NJ, is a multinational medical device, Key Statistics pharmaceutical and consumer packaged goods company that has approximately 134,000 employ- As of FY ended 12/31/17 ees worldwide. The company’s primary focus is developing products that relate to human health and well-being. Though Johnson & Johnson is a holding company that has more than 230 operat- 2017 Revenue: $76.5B ing companies, they operate under three segments: Consumer (which includes over-the-counter Net Income: $1.3B pharmaceuticals), Pharmaceutical and Medical Devices. Business Segments: Pharmaceutical: $36.3B (47.4%) Sustainability Accomplishments and Initiatives Medical Devices: $26.6B (34.8%) Accomplishments New Initiatives Continuing Initiatives Consumer: $13.6B (17.8%)

• Achieved a Top 10 ranking on Newsweek’s • Since 2005, the CO2 Capital Relief program • Johnson & Johnson is on track to produce Green Rankings (2017) has resulted in 201 completed projects and an 35% of electricity from renewable sources avoidance of 268,023 MT of Co2 emissions by 2020 and aspires to power all facilities • Reduced absolute carbon emissions by 21% annually, as of 2017 with renewable energy by 2050 since 2010 (Scope 1 and Scope 2) • In 2017, launched their Waste-to-Value pro- • On track to reduce absolute carbon emis- Hamilton Point • Member of the Carbon Disclosure Project’s gram which provides internal and external sions 20% by 2020, and 80% by 2050 Sustainability Matrix Leadership Index (2010-2017) best practices for recycling and reuse solutions to manufacturing sites • Encouraging suppliers to disclose environ- • 25% of total electrical consumption is gen- mental sustainability goals and initiatives erated by renewable sources • By the end of 2017, the company’s installed

• On track to have 20% of products achieve • In 2017, Johnson and Johnson joined the on-site clean energy technology capacity reached 54.7 megawatts EARTHWARDS recognition for sustaina- Climate Leadership Council, a policy insti- ble innovation improvements by 2020 tute created to promote a carbon dividends • In 2017, 13 new sites earned LEED certifica-

framework in the U.S. tion, bringing the total number of LEED certi- • Requiring all new buildings and renova- Industry fied buildings to 44 tions with a cost of at least $5M to be • Awarded the U.S. EPA’s SmartWay Excel- LEED Certified and all manufacturing and lence Award (2017) in recognition of their • In 2017, 24 products earned EARTHWARDS R&D sites to have ISO-14001 Certification environmental performance recognition, bringing the total number of Company • Recognized by Practice Green Health as a products to 118 that have passed sustainable Champion for Change, received Sustaina- assessments bility and Social Responsibility Award Alternative ESG from CVS Health and received two Envi- ronmental Leader Products & Projects Scoring Progress & Evaluation

Johnson & Johnson sets environmental sustainability targets and proactively accesses their sustainability initiatives to ensure that they are on track to reach their goals. The company is committed to lessening its carbon footprint and reducing water and electricity use across all opera- 68.1% tions. Through the sustainable packaging and design of its products and increasing their usage of renewable energy, Johnson and Johnson has demonstrated that they take environmental sustainability seriously. As a result of these initiatives, Hamilton Point assigns Johnson & Johnson a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

28 Littelfuse, Inc.

Littelfuse Inc. (LFUS), based in Chicago, Illinois, is a multinational electronic manufacturing Key Statistics company that primarily produces circuit protection products, which are vital components in As of FY ended 12/31/17 virtually every market that uses electrical energy, including consumer electronics, automo- 2017 Revenue: $1.22B biles, commercial vehicles and industrial equipment. The company is expanding into adjacent markets including power distribution centers for mining operations, generator controls and Net Income: $119.5M protection for marine applications, heavy-duty switches for commercial vehicles and electro- Business Segments: mechanical sensors used in the automotive industry. Littelfuse operates within three business Electronics: $661.9M (54.2%) segments: Electronic, Automotive and Industrial. Automotive: $453.2M (37.1%) Industrial: $106.4M (8.7%) Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives

• Received the TTI Americas Supplier Excel- • Littelfuse employed a chemical engineer to • Littelfuse continues to monitor and control lence Award (2017) monitor environmental regulatory matters and wastewater and solid waste generated from Hamilton Point believe the company is in compliance with operations, industrial processes and sanita- Sustainability Matrix • Littelfuse’s Wuxi, China plant won the applicable environmental laws and regula- tion facilities Excellence Award from the Association for tions Manufacturing Excellence as a result of a • Controlling and treating air emissions of comprehensive safety program, marking • Reducing or eliminating wastes by modifying volatile organic chemicals, aerosols, corro- the first time the award was given to a plant production, maintenance, facility processes, sives, particulates and ozone depleting outside of North America (2016) materials substitution, conservation, recycling chemicals and re-using materials • Reducing the amount of raw materials used in operations, reusing, rather than disposing Industry of materials whenever possible and promoting recycling and the use of recycled materials Company • Continuing to monitor environmental performance on a regular basis and communicate progress to all interested parties Alternative ESG Scoring

Progress & Evaluation Littelfuse does not publish clear and measureable environmental sustainability goals, but does discuss general ways to mitigate its impact on n/a the environment. The company discloses little information about the environmental footprint of its products and manufacturing processes. As a leader in electrical energy market, Littelfuse could use its powerful role to promote solar power to its large client base. For these reasons, Hamilton Point assigns Littelfuse, Inc. a Sustainability Matrix classification of Neutral. .

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

29 NIKE, Inc.

NIKE, Inc. (NKE), headquartered in Beaverton, Oregon, designs, develops and markets Key Statistics sports and lifestyle footwear, apparel, equipment, accessories and services. Nike is the largest As of FY ended 5/31/17

seller of athletic footwear and athletic apparel in the world. Most of the company’s products 2017 Revenue: $34.4B are made by third-party manufacturers, and these products are then sold through retail ac- Net Income: $4.2B counts, NIKE-owned retail stores, websites and independent distributors. Popular Nike brands Business Segments: include Hurley, Jordan and Converse. Footwear: $21.1B (61.3%) Apparel: $9.7B (28.2%) Converse: $2.0B (5.8%) Equipment: $1.4B (4.1%) Sustainability Accomplishments and Initiatives Corporate: $75M (.22%) Global Brand Divisions: Accomplishments New Initiatives Continuing Initiatives $73M (0.21%) • Footwear and apparel have seen a 2.5 per- • 75% of all NIKE shoes and apparel now con- • NIKE is on track to reach 100% renewable cent decrease in average carbon footprint tain some recycled material energy across North America locations by Hamilton Point since FY15 2019 and worldwide locations by 2025 • The NIKE Air Max 270 Air sole contains Sustainability Matrix • In FY17, NIKE Air Manufacturing Innova- more than 70% recycled manufacturing waste • Contract with only the best material suppli-

tion facilities diverted more than 95% of ers to ensure that 100% of their materials manufacturing waste from landfills, which • A dye-coloring process for Air soles allows are sourced responsibly and sustainably was 51 million pounds of materials 99% of recoverable dye water to be recycled • NIKE evaluates the sustainability of its • In 2017, NIKE was recognized as using the • In 2017, NIKE signed power purchase agree- products through their Material Sustaina- most recycled polyester in the industry for ments that will allow them to source 100 per- bility Index, Apparel Sustainability Index, the fourth straight year cent renewable energy in North America in and Footwear Sustainability Index Industry 2019 • In FY17, more than one-half of NIKE foot- • 2020 goal of reducing the amount of fresh wear finished goods manufacturing waste • In 2017, NIKE started utilizing Flyleather in water used in dying process by 20 percent was recycled its footwear in order to use less water, have Company less of a carbon footprint, and produce less • Working towards goal of sourcing 100 waste percent of their cotton more sustainably by end of FY20 Alternative ESG Scoring Progress & Evaluation

While Hamilton Point was disappointed to hear about the allegations of inappropriate behavior at the company, we were pleased to hear that NIKE has recently promoted two women to senior leadership roles and those responsible for the unacceptable behavior have stepped down. NIKE has been a pioneer in sustainability for nearly 30 years. The company is committed to lessening its carbon footprint by developing sus- 58.6% tainable innovations like Flyleather and air soles. In their detailed sustainability reports, NIKE discusses their sustainability initiatives and provides progress updates on their measurable goals of increasing recycling, decreasing water usage and waste, and adopting renewable energy use. Hamilton Point assigns NIKE, Inc. a Sustainability Matrix classification of Good as a result of their measurable progress towards improving their environmental impact.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

30 Phillips 66

Phillips 66 (PSX), headquartered in Houston, Texas, became an independent, publicly traded company as a result Key Statistics of the restructuring of ConocoPhillips in 2012. The company is currently organized into four operating segments: As of FY ended 12/31/17 Midstream (gathers, processes, transports and markets natural gas), Chemicals (manufactures and markets petro- chemicals and plastics), Refining (buys, sells and refines crude oil) and Marketing & Specialties (purchases, re- 2017 Revenue: $102.4B sells and markets refined petroleum products; manufactures and markets specialty products). Net Income: $5.2B Business Segments: Marketing & Specialties: $72.3B (70.6%) Sustainability Accomplishments and Initiatives Refining: $25.2B (24.6%) Midstream: $4.8B (4.7%) Accomplishments New Initiatives Continuing Initiatives Chemicals: $5M (0%) • In 2017 alone, Phillip 66 employees volun- • At the 2017 “Operation Clean House” event, • The Phillips 66 Research Center is using teered 73,000 hours for organizations like 75 employee volunteers collected and safely technology to find ways to use less energy Habitat for Humanity and Trees for Hou- disposed of 12,570 pounds of hazardous and water and is developing alternative ston waste energy systems like solar and fuel cells Hamilton Point • Phillips 66 donated $400,000 to the Gulf • The company has invested more than $6 bil- • Monitoring GHG emissions from their op- Sustainability Matrix Coast Initiative that will support conserva- lion in environmental projects and sustaining erations and lowering emissions by increas-

tion efforts in the wetlands of Texas and capital ing energy efficiency Louisiana • All refineries have Environmental Operation • Midstream business applies pipeline integ- • In 2017, environmental giving helped pre- Limits, and upgrades are being made to at- rity management to assess and mitigate serve 21,000 acres of habitat mospheric relief vents and valves to achieve a pipeline risks, thereby reducing the likeli- higher standard of atmospheric venting hood and consequence of an incident

• Over 1/3 of U.S. refineries earned an EN- Industry ERGY STAR certification from the U.S. • Implemented a $200 million project to replace • Regularly auditing energy usage and envi- EPA, recognizing their voluntary efforts to electricity poles with metal stanchions to im- ronmental impact for each of its business reduce GHG emissions through energy prove power supply reliability to the facility units efficiency; the certification signifies that and local community at the Wood River Re- Company the refinery performed in the top 25% of finery in Illinois • Humber refinery in the U.K. has a 120-acre similar facilities nationwide woodland planted with more than 67,000 native species of trees and shrubs Alternative ESG Scoring

Progress & Evaluation Similar to other companies within this typically less-environmentally friendly industry, Phillips 66 struggles with achieving substantial envi- 10.0% ronmentally sustainable practices. Along with a lack of detailed reporting and monitoring, it appears that Phillips 66 has at least one major environmental issue per year, ranging from underground leakage to emissions permit violations. Within the information that Phillips 66 does provide, many of the goals and objectives are broad and not quantifiable or clearly measurable. Hamilton Point assigns Phillips 66 a Sustainability Matrix classification of Poor for their lack of transparency on specific goals or targets.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

31 Raytheon Company

Raytheon Company (RTN), headquartered in Waltham, Massachusetts, is a technology Key Statistics and innovation leader specializing in defense, civil government and cybersecurity solutions As of FY ended 12/31/17 throughout the world. The company develops technologically advanced and integrated prod- 2017 Revenue: $25.3B ucts, services and solutions. Their core markets are: sensing; effects; command, control, communications, computers, cyber and intelligence; mission support; and cyber security. Raytheon serves domestically and internationally Net Income: $2.0B as a prime contractor and subcontractor on a broad portfolio of defense and other related programs primarily for government customers. Business Segments: Missile Systems: $7.8B (30.8%) Sustainability Accomplishments and Initiatives Space & Airborne Systems: $6.4B (25.3%) Intelligence, Information & Accomplishments New Initiatives Continuing Initiatives Services: $6.2B (24.5%) Integrated Defense Systems: $5.8B (22.9%) • Raytheon was named the most community- • Raytheon is integrating a network of sensors, • Working to decrease energy consumption Forcepoint: $608M (2.4%) minded company in the U.S. Industrials meters, data loggers, and controls at facilities and water use by 10%, obtain zero waste Sector in Point of Light’s Civic 50 ranking to conserve energy, reduce maintenance costs, certification at 20 sites, increase solid waste Elminitations: ($1.5)B (-5.9%) (2017) and placed into the Top 25 of improve productivity, and minimize each diversion rate to 82%, reduce GHG emis- Newsweek’s Green Rankings of U.S. com- building’s environmental footprint sions by 12% Hamilton Point panies (2017) • In 2017, Raytheon rolled out cloud-based • Obtain sustainability commitment from Sustainability Matrix • In 2017, Raytheon pledged more than integrated collaboration services globally and 90% of key preferred suppliers and reduce $600,000 to help hurricane victims and upgraded the reliability and performance of the environmental impact of supplier pack- brought much-needed supplies to Puerto their global videoconferencing service, sup- aging by 10% Rico porting greater collaboration and reducing the need for employee travel • Deploy next-generation virtual collabora- • Raytheon has seven sites earning TRUE tion environment to 100% of locations Zero Waste Certification • At the end of 2017, 94% of materials and

parts in Raytheon’s standard parts/materials • Switching to energy-efficient LED lighting, Industry • Received ENERGY STAR Partner of the list were free of cadmium and hexavalent installing state-of-the-art building automa- Year Sustained Excellence Award from the chromium, which are hazardous compounds tion systems, and implementing Smart U.S. EPA for the 11th consecutive year Campus technologies • In 2017, Raytheon completed the construction Company • Raytheon was named on the EPA’s Green of a major energy efficient data center • Energy team analyzes monthly data, con- Power Partnership List (2017) and was ducts energy audits, shares best practices, featured on CR Magazine’s 100 Best Cor- • In 2017, 3% of their electricity came from and identifies candidate energy projects in porate Citizens list (2017) renewable sources, including their three on- order to reduce energy consumption Alternative ESG site solar projects and wind farms in Texas Scoring • In 2017, Raytheon’s headquarters in Wal- and the Midwest tham, Massachusetts earned the ENERGY STAR certification, becoming the company’s first facility to earn this honor Progress & Evaluation 62.9% Raytheon recognizes the importance of instituting environmentally safe practices and continues to make steady progress on achieving their sustainability goals and objectives by 2020. Because more than 90% of the company’s GHG emissions derive from energy consumption, Ray- theon has leveraged its technology expertise to develop systems that recognize and correct energy inefficiencies. As a result of their sustainability efforts, Hamilton Point assigns Raytheon Company a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

32 Roper Technologies, Inc.

Roper Technologies, Inc. (ROP), based in Sarasota, Florida, is a diversified technology company that Key Statistics designs and develops software and engineered products and solutions. The company serves a variety of niche end markets that include healthcare, transportation, commercial construction, food, energy, water, As of FY ended 12/31/17 education and academic research. Roper Technologies’ four reportable segments include: Medical & 2017 Revenue: $4.6B Scientific Imaging, Radio Frequency Technology, Industrial Technology and Energy Systems & Net Income: $972M Controls. Business Segments: Radio Frequency Technology: $1.9B (41.3%) Sustainability Accomplishments and Initiatives Medical & Scientific Imaging: $1.4B Accomplishments New Initiatives Continuing Initiatives (30.4%) Industrial Technology: $784M (17%) • TransCore facility in New Mexico partici- • Improving water management by developing • Reducing emissions from transportation by Energy Systems & Controls: pated in a 2011 water conservation pro- more timely leak identification and improving reducing idle time, congestion, fuel con- $551M (12%) gram by converting from traditional land- water flow management sumption and using EPA-approved vehicle scaping to xeriscaping, a method developed emissions measurement systems Hamilton Point for arid or semiarid climates using drought- • Working to increase the amount of house- tolerant plants and efficient irrigation, sav- holds with access to drinking water by purify- • Supporting diverse research fields– from Sustainability Matrix ing 750,000 gallons of water per year ing municipal drinking water with low energy improving the efficiency of the internal consumption combustion engine to studying aerosols and • Freight Match operation matches empty common air pollutants

trucks with goods that need to be shipped, • Reducing the number of customers experienc-

minimizing the number of empty miles and ing intermittent water supply • Following comprehensive recycling, com- post and water reduction programs saving 2,500 gallons of fuel per year • 2010 Energy Savers Award from the U.S. • Continuing to engineer production facilities Department of Energy’s Industrial Tech- to reduce or eliminate the discharge of pol- Industry

nologies Program lutants, to install energy efficient lighting and equipment and to seal building leaks to • Horizon operation leases space in an EN- help reduce GHG emissions ERGY STAR certified building; Northern Company Digital operation is a member of Sustaina- bility Waterloo, an organization dedicated to reducing its members’ carbon footprint Alternative ESG Progress & Evaluation Scoring

Roper’s operations have the ability to improve the environment and the lives of people. For example, they are working to improve the availa- bility and quality of drinking water in areas where people lack access. However, Roper continues to lack a full environmental sustainability report that could provide detailed measurements of their environmental impact. n/a While Roper does have a brief document about their sustainability operations on their website, the company fails to provide any quantitative details about its carbon footprint and does not currently have any specific and measurable goals relating to environmental sustainability. For these reasons, Hamilton Point assigns Roper Technologies, Inc. a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

33 Schlumberger Limited

Schlumberger Limited (SLB), based in Houston, Texas, is the world's leading provider of Key Statistics technology for reservoir characterization, drilling, production and processing to the oil and As of FY ended 12/31/17 gas industry. Working in more than 85 countries and employing approximately 100,000 people, Schlumberger supplies the industry's most comprehensive range of products and services, 2017 Revenue: $30.4B from exploration through production and integrated pore-to-pipeline solutions that optimize Net Income (Loss): ($1.5B) hydrocarbon recovery. Its main segment of business is Oilfield Services, including Drilling, Business Segments: Reservoir Production and Reservoir Characterization. Production: $10.6B (34.9%) Drilling: $8.4B (27.6%) Reservoir Characterization: $6.8B (22.4%) Sustainability Accomplishments and Initiatives Cameron: $5.2B (17.1%) Accomplishments New Initiatives Continuing Initiatives • Schlumberger has 40 carbon capture and • In 2017, the company improved their ability • The Schlumberger Stewardship Tool is a storage projects around the world to manage water use by designing a new software that incorporates sustainability into Hamilton Point water-modeling software their engineering by modeling efficiency Sustainability Matrix • The Cheyenne facility is saving more than gains at the wellsite that yield a lower envi- three million gallons of water annually af- • In 2017, Schlumberger became a member of ronmental footprint ter fixing inefficiencies IPIECA– the global oil and gas industry association for environmental and social issues • Continue to report to the Carbon Disclosure • Schlumberger’s industry-leading rate of Project disclosure for chemical constituents is • Schlumberger Carbon Services helps compa- 99.96% nies avoid emissions through the provision of • Aligning with the United Nations Sustaina- services and technologies for long-term geo- ble Development Goals of reducing envi-

• In 2017, Schlumberger recycled 80 tons of Industry logical CO2 storage ronmental impacts and fostering technology lithium metal batteries innovation • In 2017, Schlumberger directed significant • Received IR Magazine’s Best in Sector: effort at increasing the accuracy of their emis- • Continue to develop technologies that can Energy Award (2016); ranked 4th in the th sions measurements by adding more data help their customers optimize production Company energy sector (US) and 10 in the energy sources, implementing more accurate meas- and reduce their environmental impacts sector (World) in the Newsweek 2016 urement systems, and expanding the geo- Green Rankings graphic scope of their emissions scrutiny Alternative ESG Scoring Progress & Evaluation As a global technology and industry leader, Schlumberger extends their expertise to developing systems that mitigate their environmental impact and decrease their usage of water. The company has demonstrated that they are committed to reducing their carbon footprint and improving the sustainability of their industry through the commercialization of new technologies, better data collection, and more accurate 50% measurement. The company releases updated and detailed sustainability reports that describe their environmental initiatives and provide quantitative measurements of their carbon footprint. Although Schlumberger has made efforts to reduce its environmental impacts, its industry is inherently harmful for the environment. Hamilton Point assigns Schlumberger Limited a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

34 The Charles Schwab Corporation

The Charles Schwab Corporation (SCHW), based in San Francisco, California, is an American financial services Key Statistics company that provides wealth management, securities brokerage, banking, asset management, custody and financial As of FY ended 12/31/17 advisory services. The company serves nearly 7,000 RIAs and has 10.8 million active brokerage accounts, 1.6 mil- 2017 Revenue: $8.6B lion corporate retirement plan participants and 1.2 million banking accounts (as of December 31, 2017). As of June 30, 2018 Charles Schwab has over $3.36 trillion in client assets and operates over 345 branches in the U.S, Puerto Net Income: $2.4B Rico and London. Schwab operates within two segments: Investor Services and Advisor Services. Business Segments: Investor Services: $6.2B (72.1%) Advisor Services: $2.4B (27.9%) Sustainability Accomplishments and Initiatives Accomplishments New Initiatives Continuing Initiatives • Selected as one of FORTUNE “World’s • Schwab’s exchange traded fund screener and • Schwab Corporate Real Estate tracks and Most Admired Companies” (2017) mutual fund screener both have a “socially manages performance data such as carbon conscious” filter that allows clients to search emissions, energy and water consumption, Hamilton Point • New campus in Austin, Texas incorporates for and compare Socially Responsible Invest- Energy Star scores, and volume of environ- sustainable materials and systems, designed ing (SRI) funds mentally favorable purchases Sustainability Matrix to meet LEED Gold standard certification • Cell phones, computers, office equipment and • Continues to pursue a “paperless” work • Named to the Civic 50 by Points of Light all other electronic equipment are recycled environment by using paper with recycled

(2017) appropriately through recyclers when they content and encouraging their clients to go • From 2011 to 2016, increased energy effi- cannot be donated sign up for electronic trade confirmations, ciency by 28%, consuming 8% less energy account statements and tax reporting docu- • Each major site is benchmarked using the ments

in 2016 compared to 2011, while increasing U.S. EPA Energy Star program Industry their real estate footprint • Environmental performance disclosed an- • Offers a Commuter Tax Savings Plan that nually to the Carbon Disclosure Project • From 2011 to 2016, reduced carbon emis- allows employees to pay for public transport sions by 12% (roughly equivalent to reusing pre-tax dollars, provides preferential • Offering bike and preferential parking for Company moving 2,000 passenger cars from the parking for carpools and promotes telecom- carpools and vanpools roads), while increasing their real estate muting opportunities for qualified employees footprint and employing more people • Promoting a Socially Conscious Funds list of ETFs and Mutual Funds Alternative ESG Scoring Progress & Evaluation

Schwab employs environmentally friendly practices in order to have as small an environmental footprint as possible. The company has a brief Environmental Stewardship Report that outlines general sustainability objectives and initiatives, but fails to publish any specific goals relating to environmental sustainability. Although Charles Schwab has taken actions to increase recycling efforts and decrease energy usage, 10.5% the company fails to incorporate any measureable goals into their Environmental Stewardship Report. For these reasons, Hamilton Point assigns The Charles Schwab Corporation a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

35 The TJX Companies, Inc.

The TJX Companies, Inc. (TJX), headquartered in Framingham, Massachusetts, is a world- Key Statistics wide leading retailer for off-price apparel and home fashions. The company has over 4,000 As of FY ended 2/3/2018 stores that offer value propositions of brand, fashion, quality and prices that are generally 20% 2018 Revenue: $35.9B to 60% below department and specialty store regular prices on comparable merchandise. TJX employs synergistic strategies across all of its business operations and differentiates itself from Net Income: $2.6B traditional retailers with opportunistic buying strategies and a flexible business model. The Business Segments: company operates in four major business divisions: Marmaxx and HomeGoods, which are Marmaxx: $22.2B (61.8%) both in the United States, TJX International and TJX Canada. HomeGoods: $5.1B (14.2%) TJX International: $4.9B (13.6%) Sustainability Accomplishments and Initiatives TJX Canada: $3.6B (10%) Accomplishments New Initiatives Continuing Initiatives • In 2017, TJX received the New England • In 2016, purchased Green-e certified renew- • TJX has a Global Environmental Sustaina- Environmental Merit Award from the U.S. able energy certificates in Canada, avoiding bility Committee that seeks to understand EPA over 18,000 metric tons of CO2 the environmental impacts of business Hamilton Point operations and provide guidance on how to • Over the past five years, TJX has imple- • Implemented emissions reduction initiatives best conserve resources Sustainability Matrix mented emissions reduction projects that that, on a global basis, reduced their carbon have helped reduce their global carbon footprint by more than 17,500 metric tons of • On track to achieve their 2020 goal to re- footprint by over 50,000 metric tons of CO2 duce global GHG emissions per dollar of

carbon dioxide and saved the Company an revenue by 30% against a 2020 baseline estimated $15 million • In Canada, in 2016, the wind energy generation TJX supported helped avoid over • Continue to improve the efficiency of the • In 2016, achieved Carbon Disclosure Pro- 18,000 metric tons of CO2 emissions — the lighting, heating, ventilation and air condi-

ject score of A– and was included on the equivalent to taking over 3,800 cars off the tioning technologies within their stores, Industry FTSE4Good Index for the 16th consecutive road for one year or planting 17,000 acres of home offices, and distribution centers year trees • Active member of the U.S. EPA Smart- • Bergheim, Germany center received the • In 2016, TJX installed solar panels on two Way Transport Partnership, a program that Company Silver Award for Best Sustainable Design distribution centers and purchased more than seeks to find innovative ways to reduce by German Sustainable Building Associa- 27 million kilowatt-hours of renewable ener- both fuel consumption and GHG emissions tion gy Alternative ESG • TJX has six LEED-certified buildings Progress & Evaluation Scoring TJX has long been committed to pursuing initiatives that are smart for business and good for the environment. As a result of their increasing global store count in 2016, the company has launched initiatives to reduce their environmental impacts. Because the majority of the company’s carbon footprint is from store electricity usage and fuel burned for product transportation, TJX has launched projects to increase the energy efficiency of buildings and reduce fuel consumption. 27.7% TJX has a detailed and thorough environmental sustainability report that outlines goals and sustainability initiatives. However, the report fails to provide quantitative measurements of the company’s overall carbon footprint, including GHG emissions and electricity usage. Due to its environmental consciousness and commitment to lessening its carbon footprint, Hamilton Point assigns The TJX Companies, Inc. a Sustaina- bility Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

36 Unilever PLC

Unilever PLC (UL), based in London, United Kingdom, is a large, multinational consumer goods company. With Key Statistics 161,000 employees in over 190 countries, Unilever has a global impact and reaches 2.5 billion consumers on any As of FY ended 12/31/17 given day. The company is comprised of more than 400 brands, and some of its more popular brands include Axe, 2017 Revenue: $60.4B Ben & Jerry’s, Dove, Hellman’s, Lipton, Magnum, St. Ives, Vaseline and Wall’s. The Unilever Sustainable Living Plan (USLP) is central to the company’s mission and establishes the following three goals: 1) Help more than a bil- Net Income: $5.3B lion people take action to improve their health and well-being by 2020, 2) Halve the environmental impact of the Business Segments: making and use of Unilever products by 2030 and 3) Enhance the livelihoods of millions of people across the value Personal Care: $23.2B (38.4%) chain. Unilever operates in four segments: Personal Care, Foods, Home Care and Refreshment. Foods: $14.1B (23.4%) Home Care: $11.9B (19.7%) Sustainability Accomplishments and Initiatives Refreshment: $11.2B (18.5%) Accomplishments New Initiatives Continuing Initiatives • By the end of 2017, 33.6% of total energy • Pureit, their water purification business, has • Becoming carbon positive by sourcing use across manufacturing operations came provided 96 billion liters of safe drinking wa- 100% of their energy across all operations from renewable sources ter since 2005 through the sale of water puri- from renewable sources by 2030 and elimi- Hamilton Point fiers nating coal from their energy mix by 2020 • Since 2008, Unilever’s manufacturing op- Sustainability Matrix erations have seen a reduction in total • By the end of 2017, the total volume of their • Working to achieve zero net deforestation waste to landfill of around 98% per ton of agricultural raw materials that were sustaina- and eliminate deforestation from agricul- production bly sourced increased to 56% tural commodity supply chains like palm

oil • In 2017, Unilever made further commitments • During 2017, Unilever maintained zero non -hazardous waste to landfill across their on waste, ensuring that all their plastic pack- • Working to halve the water associated with global factory network aging will be fully reusable and recyclable by consumer use of products and the waste

2025 associated with the disposal of products by Industry • Awarded a place on the CDP’s A Lists for 2020 Climate, Water, Forests and Supplier En- • In 2017, invested in innovative technologies gagement (2017) that make it possible to recycle small, multi- • Making efforts to source 100% of agricul- layered sachets in which many of their prod- tural raw materials sustainably Company • Ranked the most sustainable food and bev- ucts are sold, especially in emerging markets erage company in Oxfam’s Behind the • Working to halve the GHG impact of prod- Brands Scorecard in both 2015 and 2016 • Unilever has reduced water usage by 2% ucts across the lifecycle by 2030 through innovations such as low rinse laundry Alternative ESG

products Scoring Progress & Evaluation Historically, the consumer goods industry has not posed much of a threat to the environment. In order to continue this, Unilever has invested significant resources toward ensuring that it does not contribute to climate change or pollution. The company has abided by the Paris Agree- ment through its efforts to increase the amount of energy purchased from renewable sources and decrease deforestation. Additionally, Unile- 42.9% ver has launched sustainable brands and products, like water purifiers. In fact, their “Sustainable Living” brands grew 50% faster than the rest of the business, delivering more than 60% of Unilever’s growth in 2016. Due to their detailed and transparent sustainability reports, Hamilton Point assigns Unilever PLC a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

37 United Technologies Corporation

United Technologies Corporation (UTX), headquartered in Farmington, Connecticut, pro- Key Statistics vides high technology products and services to building systems and aerospace industries worldwide. With products such as elevators, HVAC systems and escalators, the company aims As of FY ended 12/31/17 to promote integrated, high-performance buildings that are safer, smarter and more sustainable. 2017 Revenue: $59.8B UTC is divided into four business segments: UTC Climate, Controls & Security, Pratt & Net Income: $4.5B Whitney, UTC Aerospace Systems and Otis. Business Segments: UTC Climate, Controls & Security: $17.8B (29.6%) Sustainability Accomplishments and Initiatives Pratt & Whitney: $16.5B (27.4%) Accomplishments New Initiatives Continuing Initiatives UTC Aerospace Systems: $14.7B (24.4%) • In 2016, UTX partnered with National Ge- • UTX’s Pratt and Whitney’s Gear Turbofan jet • Developing energy-efficient solutions for Otis: $12.3B (20.4%) ographic to show how advocates, scientists, engines reduce fuel use by 16%, nitrogen ox- green buildings that can change how cities and businesses can develop technology to ide emissions by 50% to the regular standard urbanize protect the air, land, and water as the and noise footprint by 75% Hamilton Point world’s rising population reshapes cities • Requiring their preferred suppliers to annu- • UTX’s Otis’s Gen2 elevator uses as much as ally reduce their operational environmental Sustainability Matrix • UTX is a participant in the Product Sustain- 75 percent less energy than a traditional ele- impacts, including GHG emissions ability Roundtable, a group that works to vator when coupled with a regenerative drive address the environmental impacts of prod- • Setting the standard for fuel efficiency, • Announced goal of achieving a 15 percent emission reduction and lower noise with

ucts reduction in GHG emissions by 2020 their Geared Turbofan jet engine • Since 1997, tripled the size of their business while reducing their GHG emissions • 2020 commitment to a 10% reduction in the • Adhering to a goal of a 3% annual reduc- by 33% and water consumption by 62% amount of hazardous waste produced as com- tion in GHG emissions target, consistent pared to 2015 baseline performance with the UN Intergovernmental Panel on Industry • 35 LEED-certified buildings since 2008, Climate Change (IPCC) target of 80% low- including 22 factories, 10 offices, and 3 er GHG emissions by 2050 R&D facilities • Working to reduce water consumption by Company 25% by 2020 Progress & Evaluation Alternative ESG Scoring Since 1992, UTX has set environmental sustainability goals in efforts to reduce their GHG emissions and water usage, while also improving the sustainability practices of their supply chain. Every five years, UTX sets aggressive new sustainability goals for their environment, health, and safety performance. Their current 2020 goals challenge them to continue to build on their legacy to make improvements in the environmental performance of their operations, the sustainability of their products, and to make improvements in the sustainable practices of their supply chain. While UTX operates in multiple environmentally harmful industries, the company implements sustainable initiatives and practic- 44.8% es to mitigate its carbon footprint. Hamilton Point assigns United Technologies Corporation a Sustainability Matrix classification of Good.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39.

38 Waters Corporation

Waters Corporation (WAT), headquartered in Milford, Massachusetts, develops innovative Key Statistics analytical science solutions to support customer discoveries, operations, performance, and regulatory compliance. Specifically, the company designs, manufactures, sells and services ultra As of FY ended 12/31/17 performance liquid chromatography, high performance liquid chromatography. Chromatog- 2017 Revenue: $2.3B raphy columns and chemistry products, mass spectrometry systems, thermal analysis and rhe- Net Income: $20.3M ometry instruments. Waters operates in two segments: Waters Division and TA Instruments. Business Segments: Waters Division: $2.0B (89%) Sustainability Accomplishments and Initiatives TA Instruments: $262M (11%) Accomplishments New Initiatives Continuing Initiatives

• In 2013, the company achieved a 15 per- • Waters is using a sample and testing protocol • An internal sustainability group develops cent reduction in the amount of energy and that delivers continued quality assurance for increasingly robust data with respect to the solvents used in their products compared to customers while achieving sustainability Company’s utilization of carbon producing 2006 goals substances in an effort to reduce their car- Hamilton Point bon footprint • In 2013, Waters reduced their absolute en- • Implemented a change in testing process that Sustainability Matrix ergy use below that of 2008, achieving an reduces their reliance on Acetonitrile, a poten- • Actively pursuing pollution prevention, 18% reduction against their revenue tially toxic substance waste reduction and the conservation of natural resources in all of their operations

Industry

Company

Progress & Evaluation Alternative ESG Scoring The life science industry in which Waters operates does not pose much of a threat to the environment. Waters embraces the following defini- tion of sustainability: “development that meets the needs of the present without compromising the ability of future generation to meet their own needs.” The company claims that it is committed to addressing the challenges of today and tomorrow, including climate change. While the company does have a brief section on their website that outlines their general environmental initiatives, Waters has not updated its environmental sustainability report since 2014 and has not released any short term or long term sustainability goals since 2014. As a result of the com- n/a pany's lack of transparent and measurable goals, Hamilton Point assigns Waters Corporation a Sustainability Matrix classification of Neutral.

Hamilton Point’s commentary is for informational purposes only. For additional disclosures see page 39. 2018 Sustainability Report Disclosure 39

Our goal at Hamilton Point is to manage money for individuals and we believe that our company—like so many found in this report— institutions in a responsible manner that puts client goals at the fore- can be both environmentally conscientious and economically pros- front of all our decisions. Thus, the purpose of the 2018 Hamilton perous. Point Global Core Sustainability Report is first and foremost to in- Finally, this report reflects our current Global Core Equity Strategy form our clients of the impacts that we believe their investments had holdings as of June 30, 2018. It is not the goal of this report to evalu- on the environment and to showcase many of the ways that the com- ate all of the investment merits of a security. The information con- panies of Hamilton Point’s Global Core Equity Strategy are striving tained herein should not be construed as personalized investment ad- to become better citizens of our nation and our planet. This assess- vice. Past performance is no guarantee of future results. The views ment also serves as a way in which Hamilton Point can gain further and opinions expressed herein are those of Hamilton Point and are insight into the companies and industries in which we invest. We subject to change without notice. Companies identified above are believe this process helps us to identify companies that we believe holdings and are subject to change without notice and this report are of the highest quality. should not be considered a recommendation to purchase or sell any Assessing the impacts that all of our daily decisions have on the envi- particular security. It should not be assumed that any of the holdings ronment is becoming an increasingly important aspect of our culture, listed were or will be profitable, or that investment recommendations and we believe this is no less true for investing. Through passion, in- or decisions made in the future will be profitable. Hamilton Point uti- novation and commitment, our society can learn to live in a more sus- lizes its best efforts that content provided is compiled or derived from tainable equilibrium with the earth than we do today; however, we sources believed to be reliable and accurate, but makes no representa- must acknowledge that although we strive for sustainability, we do tions thereof and accepts no liability for any loss arising from the use not have all of the answers yet. People still need gasoline to drive or reliance on the contents herein. Hamilton Point Investment Advi- their cars to work, coal to heat their houses and fertilizer to help pro- sors, LLC (“Hamilton Point”) is a registered investment advisor. For duce enough food for approximately 7.5 billion mouths. Many of the additional information about Hamilton Point, including fees and ser- world’s largest companies, who use some of the largest portions of vices, contact us for our Form ADV disclosure statement. For a full natural resources, like Alphabet, are also the ones that we believe will list, free of charge, of all recommendations made by Hamilton Point create the solutions for the problems of tomorrow through their infor the investment strategy shown during the last year, please contact sight, engineering and research. We invest in these companies, not us. HP-18-58 only because they produce valuable goods and services for today, but because we believe their past success has proven their ability to antic- ipate the needs of tomorrow’s consumer. This analysis attempts to highlight the sustainability policies and accomplishments of our Global Core Equity Strategy companies as candidly as possible, while realistically assessing their environmental impacts. In doing so,