Anheuser-Busch Inbev

Sustainability Guide 2013

Company and Sector Analysis of the STOXX® Europe 50 Index Featuring the new Inrate Sustainability Assessment Impact is at the heart of the Inrate Sustainability Analysis

Foreword

The publication of the 2013 Inrate Sustainability Guide of companies and sectors in the STOXX® EUROPE 50 index is an important step in the validation of our work. It is the outcome of a three year Research and Development project which has brought to fruition developments in our methodology we have long believed in.

Sustainability analysis is often criticized, for focusing too much on the facade erected by companies rather than on the Philippe Spicher, true impact of the building which lies behind it. This approach CEO Inrate was perhaps justified in the beginning, when sustainability initiatives reflected a genuine awareness and commitment on the part of companies. But as soon as environmental and so- first analyze and understand a company’s business activi- cial communication became fashionable it was often the case ties as well as the environmental and social issues at stake. the more the building was cracked, the more the facade was For example, child labor is a fundamental issue for clothing decorated. brands and chocolate manufacturers but it is marginal for many other companies. Global warming affects the entire The phenomenon of green washing is one reason why highly economy but not always to the same extent. To complicate controversial companies are sometimes found at the top of matters further, few companies are confined to a single busi- current sustainability rankings. Another reason is the im- ness activity and many companies have diversified their busi- proper application of best-in-class methodology which sim- ness over several industries. ply establishes industry rankings (and not true sustainability). A portfolio may include an oil company with a slightly higher The developments in our methodology, which form the back- ranking than its peers but exclude a software company with a bone to the 2013 Sustainability Guide, were not undertaken lower peer group ranking for purely sector allocation reasons. lightly and we are particularly proud of what we have achieved. But the software company is inherently more sustainable But our efforts will not stop here: we are committed to further than the oil company and any sustainability analysis needs to innovation and development so we can address the needs of reflect that fact. the broader investment industry by focusing on the issues of materiality and the financial risks related to sustainability. We That is why Inrate places the environmental and social impact look forward to sharing these developments with you in due at the heart of its sustainability analysis. It means we must course.

Inrate Sustainability Assessment 1 Table of contents

Interview with Tobias Jung: “Inrate identifies • Daimler ...... 39 market players which are on a sustainable path” ..... 4 • Deutsche Bank ...... 40

• Deutsche Telekom ...... 41 Overview of the STOXX® Europe 50 sectors ...... 7 • Diageo ...... 42

• E.ON ...... 43 • Chemical sector ...... 8 • ENI ...... 44 • Clothing sector ...... 9 • Ericsson ...... 45 • Communication sector ...... 10 • GlaxoSmithKline ...... 46 • Energy sector ...... 11 • Glencore Xstrata ...... 47 • Financial services sector ...... 12 • HSBC ...... 48 • Health sector ...... 13 • Imperial Tobacco Group ...... 49 • Household and personal products sector ...... 14 • ING Group ...... 50 • IT equipment and electronics sector ...... 15 • LVMH ...... 51 • Machinery and industrial equipment sector ...... 16 • National Grid ...... 52 • Nutrition sector ...... 17 • Nestlé ...... 53 • Resources sector ...... 18 • Novartis ...... 54 • Software sector ...... 19 • Reckitt Benckiser ...... 55 • Transportation sector ...... 20 • Rio Tinto ...... 56

• Roche ...... 57 Overview of the STOXX® Europe 50 • Royal Dutch - Shell ...... 58 companies ...... 21 • Sanofi-Aventis ...... 59

• SAP ...... 60 • ABB ...... 22 • Schneider Electric ...... 61 • Air Liquide ...... 23 • Siemens ...... 62 • Allianz ...... 24 • Standard Chartered ...... 63 • Anheuser-Busch InBev ...... 25 • Telefonica ...... 64 • AstraZeneca ...... 26 • Tesco ...... 65 • Banco Santander ...... 27 • Total ...... 66 • Barclays ...... 28 • UBS ...... 67 • BASF ...... 29 • Unilever ...... 68 • Bayer ...... 30 • Vodafone ...... 69 • BBVA ...... 31 • Zurich Insurance Group ...... 70 • BG Group ...... 32

• BHP Billiton ...... 33 Disclosures ...... 71 • BNP Paribas ...... 34

• BP ...... 35 Inrate analyst team • British American Tobacco ...... 36 and sector responsibilities ...... 72

• Compagnie Fin. Richemont ...... 37

• Credit Suisse Group ...... 38 Inrate contacts ...... 74

Inrate Sustainability Assessment 3 “Inrate identifies market players which are on a sustainable path”

Interview with Tobias Jung, Head of Research, on the methodology of the new Inrate Sustainability Assessment

Inrate assesses sectors and companies. What’s the conceptual basis for your company assessment?

Assessing the sustainability performance starts with a proper understanding of the company and its activities. For that, we categorize the various activities of a company according to a proprietary classification. Based on our analysis of sectors, we then identify the most relevant sustainability challenges that the company faces. Tobias Jung, Head of Research We assess the impact of the company on environment and society. This includes the impact of its operations, of its supply chain and of its products once they’re in the hands of consumers. Furthermore, we analyze what steps the company under- What’s the consequence of this? takes to monitor and mitigate those impacts. Our key question is which companies within a sector respond We also take into account the strategy followed by the com- to a specific consumer need in the most sustainable way. To pany for moving towards a sustainable economy, which can be this end, we identify the most relevant sustainability issues achieved in different ways. Generally speaking, it’s through a for each sector. Then we assess the way companies within this combination of technological gains, efficiency improvements peer group respond to those issues. By analyzing companies and behavioral changes. within the frame of our proprietary Inrate Sector, we widen the spectrum of solutions and take innovative approaches to sus- Can you give some concrete examples of your assessment? tainability into consideration.

Harmful products such as toxic toys can hardly be classified How do you measure a company’s sustainability as sustainable. The same can be said of a company that does performance? not respect the health of workers or uses business practices with detrimental effects on society, such as bribery or tax We focus on the company-specific sustainability issues iden- avoidance. Last but not least, governance of companies mat- tified as being important. For some of them we rely on metrics. ters, as was expensively illustrated by the financial crisis that For example, regarding climate change, which is a major chal- hit developed economies five years ago. lenge for most companies, we calculate the greenhouse gases generated by the operations and along the entire value chain Inrate has defined a specific sector concept. How does of products and services. it work? For other issues there are no metrics applicable. Here, we The concept of Inrate Sectors is a different way of focusing on need to come up with an analytical and consistent judgment, the purpose of the products and services provided by a com- based on qualitative information. In addition to the issues, we pany. Therefore, the allocation of a company to an Inrate Sec- apply an analysis grid with indicators selected according to a tor may differ from traditional classification systems used by company’s activities. stock exchange indexes. From the perspective of results, there is a trade-off between For example, a car manufacturer would be assigned to the consistency and relevance: When you apply a universal analy- Inrate Sector “Transportation”, because ultimately that is the sis grid, companies are treated in a consistent way across purpose of the company’s product. So car manufacturers are all sectors. And when you analyze a sector’s companies in a compared with other means of transportation such as rail- tailor-made way you gain more relevance while losing consis- ways or air transport. tency between sectors.

4 Inrate Sustainability Assessment How does Inrate deal with this trade-off? Can you explain the meaning of your grades? Is A+ the sustainability equivalent of the triple A’s awarded by rating This needs to be managed carefully. The social and environ- agencies? mental impacts, which are main pillars in our assessment, are analyzed consistently across sectors. The worst software If you want a financial analogy, you might say that A is a safe company is very likely to be more sustainable than the best oil asset. B is quite good, C is of concern and D is very problemat- company and our methodology takes that into account. ic. There are two major differences with financial analysis: the first one is that you can’t use that single and very convenient But sustainability is a multi-dimensional concept and com- metric called money. The second one is that you end up with panies are very diverse. Most companies conduct a mix of very few A’s because only few companies actively contribute activities, often spread across different industries. That’s why to a sustainable economy. using a universal analysis grid alone is not enough and why particular sector issues trigger a special focus in our assess- In your sector reports, you mainly speak about negative ment. ecological and social impacts. Isn’t this a rather negative perspective? Another important step of our process is the final layer laid down by our experienced analysts. They crosscheck the plau- Sustainability ratings map the risk situation in terms of sus- sibility of results with an in-depth qualitative assessment. tainability. We provide valuable additional insights for sus- It is this final step that ensures the relevance of our results: tainability-oriented investors. By assessing the negative im- our research becomes based less on corporate reporting and pacts and identifying those market players which are already more on our analysis of what a company actually does. on a sustainable path, Inrate builds the basis for redirecting investment flows toward a more sustainable economy. This is a very positive and future-oriented role.

The Inrate assessment scale

Category Grade Explanation A+ Through its practices, products or services, the company already contributes to the reduction of the social or environmental imbalances of the economy and makes A A possible the global transition towards a long-term sustainable economy. A–

B+ The activity of the company is compatible with a long-term sustainable economy, but its products, services or practices do not meet all the requirements of sustain- B B ability yet. The company demonstrates the willingness and ability to improve its B– sustainability performance.

C+ The activity of the company is currently not sustainable. Its products, services or practices exert a heavy social or environmental burden, but the company C C demonstrates the willingness and some ability to modify its products or practice C– in order to diminish that impact.

D+ The activity of the company is not sustainable. Its products, services or practices contribute to a rapid deterioration of environmental or social conditions. The D D company has no possibility or demonstrates no willingness to reduce its burden. D–

Inrate Sustainability Assessment 5 Overview of the STOXX® Europe 50 sectors

Sector Number of companies Number of Stoxx® Page in the MSCI World Index Europe 50 companies Chemical sector 59 3 8 Clothing sector 43 2 9 Communication sector 104 3 10 Energy sector 193 7 11 Financial services sector 231 12 12 Health care sector 119 5 13 Household and personal products sector 20 1 14 IT equipment and electronics sector 88 2 15 Machinery and industrial equipment sector 55 2 16 Nutrition sector 112 7 17 Resources sector 80 3 18 Software sector 23 1 19 Transportation sector 139 1 20

Inrate Sustainability Assessment 7 Chemical sector

Inrate Sustainability Assessment and market capitalization of companies in the chemical sector (59 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

20 250 18 sustainable not sustainable 16 200 14 12 150 Products made by companies in the chemical sector are om- 10 nipresent in our everyday life and considered a necessity in 8 100 many economic areas. More than 100,000 chemicals are used 6 worldwide. Some of them are known to be highly damaging 4 50 to ecosystems and human health. However, the extent of the 2 overall impact of chemicals on the environment has always 0 0 A+ A A- B+ B B- C+ CC–D+D D– been disputed, because many of their possible interactions Company grade and long-term toxicities still remain unknown.

The environmental impact of different chemical products 5 largest Grade Market cap MSCI companies (billion USD) varies according to tenuous differences in the production processes, the composition of the products, as well as their Bayer C– 98 application areas. In general, the production of chemicals is BASF C– 88 energy and resource-intensive and roughly 95 % of the raw 3M Company B 82 materials are found in the fossil sources of oil, gas and coal. Monsanto D+ 56 Dupont E.I. de Nemours & Co D+ 54 Safety requirements for the production and handling of chemicals are high and form an important aspect of good working conditions in the chemical industry. Furthermore, impacts on Stoxx Europe 50® Grade Market cap communities neighboring chemical production sites need to companies (billion USD) be considered when assessing the sustainability of companies in the chemical sector. Bayer C– 98 BASF C– 88 Air Liquide C+ 43

Key issues Engagement topics Sustainability challenges in the chemical sector: Investors should encourage companies to: • Impacts of products on ecosystems • Carefully assess and improve negative impacts of prod- • Energy consumption during production processes ucts along their entire life cycle • Health impact of products during application and if • Phase out substances when there are reasonable grounds released into the environment for concern • Health and safety of employees and contractors as well • Substitute certain substances if alternatives with lower as of communities neighboring chemical production units impact on ecosystems or human health are available

8 Inrate Sustainability Assessment Clothing sector

Inrate Sustainability Assessment and market capitalization of companies in the clothing sector (43 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

16 400

14 350 sustainable not sustainable 12 300

10 250 The clothing sector is characterized by long supply chains en- 8 200 compassing various production steps: the growing of cotton or 6 150 the manufacturing of synthetic fibers, the transformation of 4 100 fibers to yarns and fabrics and finally the production of a wide variety of clothing and luxury goods. Environmental impacts 2 50 can occur at any stage. The manufacture of synthetic fabrics 0 0 A+ A A- B+ B B- C+ CC–D+D D– from polyester-fibers, which are derived from crude-oil and Company grade are currently the most widely used manufactured fibers, is an energy-intensive process that contributes to global warming due to CO emissions. Furthermore, air pollutants includ- 5 largest Grade Market cap 2 MSCI companies (billion USD) ing volatile organic compounds are emitted, which can cause respiratory diseases. The cultivation of cotton in plantations LVMH B 100 can also impact the environment: for example, cotton produc- Inditex B– 96 tion accounts for a quarter of overall pesticide use in the U.S. Hennes & Mauritz B– 72 Nike, Inc. B– 65 The world textile market is huge and one of the most global- Compagnie Fin. Richemont B+ 58 ized sectors; it provides employment opportunities to more than 60 million people. These are predominantly unskilled workers such as young women, migrants or workers on short- Stoxx Europe 50® Grade Market cap term contracts in developing countries and emerging mar- companies (billion USD) kets. Unfair working conditions and unreasonable hours and demands are common issues of concern: there are numerous LVMH B 100 Compagnie Fin. Richemont B+ 58 reports of workers being forced to work long hours for low pay under dangerous and unhealthy working conditions. For companies selling luxury goods, such as gold and diamonds, responsible procurement is another major issue. Gold, silver and diamonds used in luxury goods are often mined in regions affected by conflicts or instability with insufficient safety standards for the miners.

Key issues Engagement topics Sustainability challenges in the clothing sector: Investors should encourage companies to: • Environmental impact of textile processing • Implement measures to reduce the use of water, pesti- • Working conditions in supply chain cides and fertilizers for cotton production Ecological impact of raw material sourcing • Responsible supply chain management: ensure working • conditions do respect basic human rights and guarantee at least minimal health and safety standards • Provide assurance regarding the procurement of gold and diamonds

Inrate Sustainability Assessment 9 Communication sector

Inrate Sustainability Assessment and market capitalization of companies in the communication sector (104 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

30 1200

25 1000 sustainable not sustainable 20 800

Using different types of communication technologies is an 15 600 indispensable part of modern business and private life. Over the past decades, communication networks and services 10 400 have become a vital element to create economic growth and a 5 200 prosperous society. The communication sector encompasses telephone, television and internet service providers, media 0 0 A+ A A- B+ B B- C+ CC–D+D D– and online companies as well as companies providing tele- Company grade communications infrastructure – such as fiber, cable, and satellites. However, companies engaged in the production of software or communication devices like computers and mo- 5 largest Grade Market cap MSCI companies (billion USD) bile phones belong to the software and electronics sectors respectively. Google Inc C+ 291 AT&T C+ 182 Communication services, for example broadband internet, Vodafone C+ 170 cloud computing or search engines, promote substitution Verizon C 133 processes leading to dematerialization or teleworking. Fur- Facebook Inc C+ 121 thermore, they enable the use of infrastructure such as smart buildings or smart grids, as well as new services such as

e-commerce, e-government and e-health. They thereby help Stoxx Europe 50® Grade Market cap to increase efficiency and the ability to innovate in many parts companies (billion USD) of business, public and private activities and also improve competitiveness. On the other hand, communication activi- Vodafone C+ 170 Telefonica B 71 ties are associated with a vast array of increased negative en- Deutsche Telekom C 63 vironmental and social impacts; well-known are greenhouse gas emissions resulting from energy consumption at data centers as well as inequalities in relation to access to communication services.

Key issues Engagement topics Sustainability challenges in the communication sector: Investors should encourage companies to: • Energy consumption at data centres and networks and • Reduce energy consumption of communication networks related greenhouse gas emissions • Enforce initiatives to reduce resource use of • Electromagnetic radiation from mobile antennas communication devices and to increase their recyclability and Wi-Fi • Foster ecological and efficient use of ICT (Green ICT) • Anti-competitive practices and abuse of market position • Enforce protection of personal data • Privacy of the individual – security of data and • Support initiatives to reduce negative social effects, information, cybercrime in particular against digital divide and social exclusion • Support of oppressive regimes (censorship, provision of user data)

10 Inrate Sustainability Assessment Energy sector

Inrate Sustainability Assessment and market capitalization of companies in the energy sector (193 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

60 1400 sustainable not sustainable 50 1200

1000 40 Energy, either in form of electricity or heat, is a fundamental 800 30 need for industry and consumers. Energy stems from fos- 600 20 sil sources like oil, gas and coal, from nuclear power plants 400 or from renewable sources like solar, wind, and hydropower. 10 200 The overall impact of the energy sector on the environment is rather high, caused by a large portion of “not sustainable” 0 0 A+ A A- B+ B B- C+ CC–D+D D– companies (see graph on the right): the majority of big com- Company grade panies in the energy sector are engaged in the extraction and provision of fossil energy carriers, i. e. coal, oil and gas. Their impact on the environment is caused mainly by CO emissions 5 largest Grade Market cap 2 MSCI companies (billion USD) from the combustion process, but also by pollution or landscape destruction when using controversial mining and un- ExxonMobil Corporation D 383 conventional extraction techniques. Chevron Corporation D 236 Royal Dutch - Shell D– 214 Companies involved in nuclear power production also face se- Total SA D 138 rious unresolved issues, related to radioactive waste from nu- BP PLC D 133 clear energy production and the enormous damage potential in case of accidents. Renewable energy production in general bears the least environmental impact. Stoxx Europe 50® Grade Market cap companies (billion USD) Considering the social dimension of sustainability, the benefits of the energy sector for society – providing fuels, elec- Royal Dutch - Shell D– 214 Total SA D 138 tricity and heat – are in contrast to the risks of energy proj- BP PLC D 133 ects and their often negative effects on the surrounding local ENI D+ 83 communities. These impacts can be offset by careful planning BG Group C+ 65 and implementing measures to minimize environmental and National Grid plc C+ 43 social risks. E.ON SE C+ 36

Key issues Engagement topics Sustainability challenges in the energy sector: Investors should encourage companies to: • Percentage of renewable energy in electricity mix of • Implement concrete action plans and strategies to en- electric utilities able the transition to a low carbon economy and foster the phasing out of nuclear energy Climate change: CO impact of products along their entire • 2 Communicate transparently about environmental impacts life-cycle • linked to unconventional extraction practices such as • Environmental pollution, e. g. oil spills, gas flaring, emis- deepwater drilling or gas fracking sions of chemicals to groundwater due to gas fracking and • Engage in fair discussion over health impacts on communi- controversial mining techniques ties neighbouring extraction operations Health and safety conditions for employees and contrac- • Improve health and safety standards and reduce fatality • rate tors • Improve business ethics standards and programs to avoid • Bribery and corruption bribery and corruption

Inrate Sustainability Assessment 11 Financial services sector

Inrate Sustainability Assessment and market capitalization of companies in the financial services sector (231 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

90 1800

80 1600 sustainable not sustainable 70 1400

60 1200 The major sustainability impacts of the financial services sec- 50 1000 tor occur mainly outside the activities of financial companies: 40 800 They are indirectly involved in sustainability impacts through 30 600 their finance and insurance activities. At the moment the 20 400 majority of companies in this sector cannot be regarded as 10 200 sustainable because they do not systematically assess, pre- 0 0 A+ A A- B+ B B- C+ CC–D+D D– vent and disclose sustainability risks. They are still involved in Company grade financing and insuring controversial activities – such as the production of fossil and nuclear energy or weapons – or infrastructure projects that violate human rights. 5 largest Grade Market cap MSCI companies (billion USD)

Some companies do lead the way and systematically exclude Wells Fargo & Company C– 219 these activities from their business. Other financial compa- HSBC C– 202 nies foster sustainability effectively by preventing conflicts J. P. Morgan Chase & Co. C 195 of interest and both managing and disclosing investment and Bank of America C– 149 Citigroup Inc. C– 148 insurance risks.

Sustainable investments in the financial services sector are Stoxx Europe 50® Grade Market cap still rare, with the exception of a few sustainability leaders companies (billion USD) specializing on Socially Responsible Investments (SRI). Al- though there is a trend towards increasingly integrating en- HSBC C– 202 Banco Santander C+ 91 vironmental, social and governance (ESG) criteria into invest- BNP Paribas C+ 84 ment and lending decisions, the importance of ESG criteria in UBS C 78 the decision process mostly remains unclear. Allianz B+ 72 Barclays C+ 69 BBVA B– 63 Standard Chartered B– 58 Credit Suisse Group C 48 Deutsche Bank C+ 47 ING Group C+ 43 Zurich Insurance Group AG B+ 38

Key issues Engagement topics Sustainability challenges in the financial services Investors should encourage companies to: sector: • Increase product responsibility by not financing and • Financing and insuring activities which cause harmful insuring controversial activities; improve monitoring of environmental or social impacts ESG impacts of project financing • Sustainability risks caused by company’s own investments • Increase share of assets under management invested • Business ethics behavior, especially regarding fiscal according to socially responsible principles and ESG- compliance, money laundering or conflicts of interest related proxy voting and engagement activities • Fair and transparent financial business practices, • Improve responsible marketing and transparency of finan- especially regarding customer consulting or fees cial services, especially disclosure of risks and fees

12 Inrate Sustainability Assessment Health care sector

Inrate Sustainability Assessment and market capitalization of companies in the health care sector (119 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

50 1400 45 sustainable not sustainable 1200 40 35 1000 30 The health care sector primarily includes pharmaceutical 800 25 600 companies as well as companies ranging from providers of 20 health insurance to biotech and medical equipment manu- 15 400 facturers. It is undisputable that the health care sector ben- 10 200 efits society by directly contributing to prolonging and mak- 5 ing people’s lives safer, but it is not easy to quantify the social 0 0 A+ A A- B+ B B- C+ CC–D+D D– benefit of health care products. In industrialized countries, Company grade aging populations and the wish for long and healthy lives are key triggers for the health care sector, whereas in developing countries unmet medical needs are more important. One 5 largest Grade Market cap MSCI companies (billion USD) of the key topics for sustainable development, therefore, is to grant access to basic medical treatment for broad sec- Johnson & Johnson B– 244 tions of society. Health care companies can support this goal Roche B 232 with appropriate pricing policies for their products and the Novartis B– 208 production and support of inexpensive generic versions of Pfizer C+ 188 well-known drugs, which are no longer protected by patents. Merck & Co C+ 144 Health care companies must also provide clear communication to consumers and other stakeholders in the event of un- expected side effects caused by their products. Stoxx Europe 50® Grade Market cap companies (billion USD) The environmental impact of health care products varies sub- stantially with the composition of the products, differences Roche B 232 Novartis B– 208 in the production processes, and their field of application. Sanofi-Aventis B– 134 For example, drugs washed out with the sewage which then GlaxoSmithKline B+ 124 contaminate surface waters in the natural environment are AstraZeneca B 65 sometimes of ecological concern.

Key issues Engagement topics Sustainability challenges in the health care sector: Investors should encourage companies to: • Side effects of products on consumers • Improve disclosure over clinical testing results and • Prices and patents policies, notably in developing potential side effects economies • Engage in fair discussion with governments over pricing • Relationships with doctors and healthcare systems of health care products and services Business ethics behaviour in commercial operations • Improve business ethics guidelines and programs to • ensure transparent relations with national healthcare systems

Inrate Sustainability Assessment 13 Household and personal products sector

Inrate Sustainability Assessment and market capitalization of companies in the household and personal products sector (20 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

10 400 9 sustainable not sustainable 350 8 300 7 6 250 Household and personal products are present in everyday life. 5 200 They are used for different purposes, such as washing, clean- 4 150 ing and personal care. Household and personal products are 3 100 composed of a variety of ingredients, among them active in- 2 gredients and additives. Some commonly used raw materials 1 50 have negative impacts on the environment, for example petro- 0 0 A+ A A- B+ B B- C+ CC–D+D D– chemicals or uncertified pulp. Other ingredients such as sili- Company grade cones, which are widely used in shampoos and body lotions, are not biodegradable. Furthermore, there are human health concerns about certain active ingredients and additives, for 5 largest Grade Market cap MSCI companies (billion USD) example chemical UV filters used to make sunscreen products. These substances are commonly referred to as “chemi- Procter & Gamble Company B– 207 cals of concern”. L’Oreal B+ 104 Colgate Palmolive B 55 As far as working conditions in the household and personal Reckitt Benckiser Plc. B+ 53 products industry are concerned, most companies in the sec- Henkel KGaA B+ 41 tor are aware of their responsibility and have implemented comprehensive health and safety management systems.

Stoxx Europe 50® Grade Market cap companies (billion USD)

Reckitt Benckiser Plc. B+ 53

Key issues Engagement topics Sustainability challenges in the household and personal Investors should encourage companies to: products sector: • Work towards improved product declaration to enable • Environmental impact of products consumers to make informed choices regarding carbon • Responsible sourcing footprint, origin of raw materials or “chemicals of concern” • Health and safety conditions for employees and • Expand the range and market share of environmentally contractors friendly products • Health impact of products • Implement measures to phase out “chemicals of concern”

14 Inrate Sustainability Assessment IT equipment and electronics sector

Inrate Sustainability Assessment and market capitalization of companies in the IT equipment and electronics sector (88 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

45 600

40 sustainable not sustainable 500 35

30 400 Companies in the IT equipment and electronics sector pro- 25 300 vide products and services to industrial customers from vari- 20 ous sectors as well as to end consumers. During production, 15 200 10 a diverse range of raw materials are processed, among them 100 heavy metals such as lead, arsenic, cadmium, silver and mer- 5 cury, as well as rare earth metals. Many of these minerals are 0 0 A+ A A- B+ B B- C+ CC–D+D D– mined in developing countries where environmental protec- Company grade tion laws are weak and pollution of land and water adjacent to the mining sites is a common occurrence. Working conditions at mining sites are harsh and in the case of so-called “conflict 5 largest Grade Market cap MSCI companies (billion USD) minerals”, human rights violations are common. These minerals are mined under conditions of armed conflict, mostly in the Cisco Systems, Inc. C+ 125 eastern provinces of the Democratic Republic of the Congo. Qualcomm B 116 Intel C+ 114 IT equipment and electronic components may also contain Siemens C 106 substances hazardous to human health and the environment, Danaher Corporation C+ 48 such as poly-brominated biphenyls, PVC and halogenated di- oxins. Therefore, the major issues for the IT equipment and electronics industry are health and safety of workers at pro- Stoxx Europe 50® Grade Market cap duction and recycling sites as well as the phase out and re- companies (billion USD) placement of hazardous substances during production and in the end products. Siemens C 106 Ericsson C+ 44

Manufacturers of IT equipment and electronics can contribute to environmental protection if they assume responsibility for the products at the end of their life cycle and offer take-back programs to guarantee state-of-the-art recycling. Furthermore, they can reduce their environmental impact by designing energy-efficient products which reduce electricity consumption during their use.

Key issues Engagement topics Sustainability challenges in the IT equipment and Investors should encourage companies to: electronics sector: • Set quantitative targets to phase out hazardous sub- • Use of hazardous substances in products stances in products • End of life phase: recycling of products • Implement take-back programs and consciously recycle • Energy consumption of products during use products at their end-of-life • Working conditions in supply chain • Improve energy-efficiency of products during use Origin of mineral resources • Ensure working conditions in the supply chain respect • basic human rights • Implement a company-wide “conflict minerals” policy that applies to suppliers and contractors

Inrate Sustainability Assessment 15 Machinery and industrial equipment sector

Inrate Sustainability Assessment and market capitalization of companies in the machinery and industrial equipment sector (55 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

20 500 18 450 sustainable not sustainable 16 400 14 350 12 300 The machinery and industrial equipment sector acts as a 10 250 provider of virtually all intermediate inputs to other produc- 8 200 ing industries. It is highly dependent on energy and raw mate- 6 150 rial inputs, which cause environmental impacts during their 4 100 extraction and mining. Subsequently, efficiency of manufac- 2 50 turing processes is a priority. The end purpose of the final 0 0 A+ A A- B+ B B- C+ CC–D+D D– product is crucial when deciding whether there are additional Company grade environmental impacts. For example, if machines are used to produce aircraft parts the subsequent environment impacts – CO emissions of airplanes – will be worse than if machines 5 largest Grade Market cap 2 MSCI companies (billion USD) are used to produce parts for wind power plants leading to carbon neutral energy production. Caterpillar, Inc. C– 55 ABB B– 55 The machinery and industrial equipment industry has been Schneider Electric SA B 47 of historical importance for many OECD countries. However, Emerson Electric Co. C+ 47 cost pressures and increased product demand from outside Fanuc Ltd B– 40 OECD countries in recent years have caused some structural changes with the sector transferring many production sites to developing and emerging countries. Health and safety and la- Stoxx Europe 50® Grade Market cap bor conditions for employees and suppliers need to be closely companies (billion USD) monitored in these markets. ABB B– 55 Schneider Electric SA B 47

Key issues Engagement topics Sustainability challenges in the machinery and industrial Investors should encourage companies to: equipment sector: • Improve disclosure over environmental characteristics • Energy efficiency of manufacturing processes of machinery and industrial equipment, for example life- • Purpose of machinery and equipment as drivers of social cycle assessments and environmental impact • Implement programs and targets to reduce energy • Safety and reliance of products consumption and carbon footprint • Health and safety conditions for employees and con • Implement formal management systems for health and tractors safety issues • Restructuring of businesses with socially acceptable • Improve monitoring systems for suppliers to ensure fair terms, such as social plans or involvement of unions employment conditions

16 Inrate Sustainability Assessment Nutrition sector

Inrate Sustainability Assessment and market capitalization of companies in the nutrition sector (112 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

40 900

35 800 sustainable not sustainable 700 30 600 25 With the rapidly growing world population it has become in- 500 20 creasingly important to cultivate arable soils and fishing 400 15 grounds sustainably and to minimize the impacts of fertiliz- 300 10 ers and pesticides to the air and water. In recent years, com- 200 petition for arable soils initiated by the biofuels industry has 5 100 been an additional challenge to companies closely linked with 0 0 A+ A A- B+ B B- C+ CC–D+D D– agricultural production. Furthermore, they have to face the Company grade consequences of global warming: for example, in certain regions, agricultural practices need to be adapted because of a change in climate conditions. 5 largest Grade Market cap MSCI companies (billion USD) In industrialized countries, the effects of an unhealthy diet are of growing concern: for example, there are countries Wal-Mart Stores Inc. D+ 243 where more than half of the population is already overweight. Nestlé SA C– 226 Companies selling fast-food and unhealthy products push Coca-Cola Company C+ 169 Anheuser-Busch InBev C 160 that trend further. Companies manufacturing alcohol and to- Philip Morris International Inc. D+ 142 bacco products contribute to the social costs associated with unhealthy lifestyle and addiction also.

Recently, the topic of food waste gained public attention: Stoxx Europe 50® Grade Market cap one third of food produced worldwide gets lost before it even companies (billion USD) reaches the end consumer. Wholesale, processing industries and retail together account for more than a third of total food Nestlé SA C– 226 loss – and are encouraged to take action to rectify this situ- Anheuser-Busch InBev C 160 ation. British American Tobacco plc C– 102 Diageo Plc. C+ 80 Along the whole value chain of food production, working con- Unilever B+ 67 ditions and health and safety standards need to be closely Tesco C– 47 monitored. An appropriate supply chain management is re- Imperial Tobacco Group plc C 36 quired, too. Although widely condemned, child labor is still widespread in the nutrition sector’s supply chain, for example, in the production of cocoa.

Key issues Engagement topics Sustainability challenges in the nutrition sector: Investors should encourage companies to: • Impacts on ecosystem: pollution of soil, water and air • Increase share of organic and fair trade products • Recyclable packaging material • Inform in detail about composition of products • Working conditions and health and safety standards for • Implement formal management systems to guarantee employees and contractors high environmental and labour standards at own opera- • Supply chain management tions, and monitor working conditions in the supply chain • Reduce food waste

Inrate Sustainability Assessment 17 Resources sector

Inrate Sustainability Assessment and market capitalization of companies in the resources sector (80 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

18 900 sustainable not sustainable 16 800

14 700

12 600 The resources sector includes companies engaged in the 10 500 production of mineral resources encompassing metals (e. g., 8 400 copper, gold, silver, nickel), industrial minerals (e. g., salts, gyp- 6 300 sum), as well as rocks and soils. Companies engaged in the 4 200 production of wood and paper are included in the resources 2 100 sector also. Companies engaged in the exploitation of energy 0 0 A+ A A- B+ B B- C+ CC–D+D D– resources (crude oil, natural gas, coal and uranium), however, Company grade are considered to be part of the energy sector.

Extraction and processing of mineral resources often exert 5 largest Grade Market cap substantial impacts on the environment due to acid mine MSCI companies (billion USD) drainage, impacts on water resources, CO2 emissions, loss of biodiversity and landscape destruction. Furthermore, there BHP Billiton D+ 107 are many cases of bad labor conditions reported as well as Glencore Xstrata Plc D+ 72 controversies related to the situation of local communities Rio Tinto D+ 69 Freeport-McMoRan Copper & Gold D+ 34 near the mining sites. Mineral raw materials are often non- Anglo American D+ 34 renewable. Nevertheless, many metals (e. g., copper) are 100 % recyclable: their quality remains constant after they have been used and recycled. Recycling is less energy-inten- ® sive than processing the raw materials from ores: recycling Stoxx Europe 50 Grade Market cap companies (billion USD) aluminum, for example, requires only 5 % of the energy need- ed for extracting primary aluminum. However, recycling is not BHP Billiton D+ 107 always possible because a large portion of metals are used in Glencore Xstrata PLC D+ 72 infrastructure projects or incorporated into complex products Rio Tinto D+ 69 such as computers. The production of wood and paper products causes less harm to the environment but unsustainable forest plantations and illegal loggings can damage sensitive ecosystems. Environ- mental certification of timber plantations and paper recycling are two potential approaches towards greater sustainability.

Key issues Engagement topics Sustainability challenges in the resources sector: Investors should encourage companies to: • Damage to sensitive ecosystems by pollution of the air, • Implement measures to avoid pollution and transparently soil and water report on environmental incidents • Health and safety conditions of workers at mining • Improve health and safety standards and labor conditions operations, including contractors and suppliers at mining sites and urge suppliers and sub-contractors to follow suit • Social and environmental management of projects with • Systematically engage with communities before starting regards to local communities new projects including while the operation is being run • Transparency of royalties distribution and tax payments and closed down in countries where raw materials are exploited • Become a supporting company to the Extractive Industry Transparency Initiative and openly communicate on tax- related matters

18 Inrate Sustainability Assessment Software sector

Inrate Sustainability Assessment and market capitalization of companies in the software sector (23 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

10 500 9 450 sustainable not sustainable 8 400 7 350 6 300 The term “software” refers to all non-physical function com- 5 250 ponents of a technical subject that contains at least one 4 200 microprocessor. Because software works alongside the cor- 3 150 responding hardware, it is an essential part of any digital 2 100 technology and a driving force for positive development, for 1 50 example regarding production, accounting and management 0 0 A+ A A- B+ B B- C+ CC–D+D D– in many sectors. Company grade

However, software products can also exert negative impacts on society, such as defense-related software products or soft- 5 largest Grade Market cap MSCI companies (billion USD) ware products that are used by oppressive regimes to support censorship which prevents free access to information. Microsoft Corporation B 278 Oracle Corporation B 156 Another societal issue of concern influenced by the software SAP AG A 91 industry is the economic inequality in terms of access to and VMware, Inc. B– 35 knowledge of information and communication technologies, SALESFORCE.COM B+ 31 often referred to as the “digital divide”.

Software itself exerts a minimal impact on the environment; Stoxx Europe 50® Grade Market cap however, energy consumption by the corresponding hardware companies (billion USD) can be a concern. The amount of energy consumed depends on the system requirements of the software and the type and SAP AG A 91 quality of the hardware.

Key issues Engagement topics Sustainability challenges in the software sector: Investors should encourage companies to: • Contribution to eco-efficient products and processes • Use technological knowledge to find and foster solutions Contribution to reduction of digital divide for environmental and social topics such as products to • manage customers’ own sustainability activities • Production or development of defense-related software products • Reduce inequalities in relation to access to communication technologies and information • Trade with oppressive regimes and support of censorship • Enforce practices to improve privacy protection of personal data and on the internet

Inrate Sustainability Assessment 19 Transportation sector

Inrate Sustainability Assessment and market capitalization of companies in the transportation sector (139 companies)

Number of companies Market cap in the MSCI World Index (billion USD)

45 900

40 800 sustainable not sustainable 35 700

30 600 Companies in the transportation sector enable or support 25 500 mobility of passengers and freight. Most of them are asso- 20 400 ciated with road transportation, such as automotive or car 15 300 parts producers. The overall impact of the sector on the envi- 10 200 ronment is rather high because road transportation is a major 5 100 consumer of petroleum and hence an emitter of greenhouse 0 0 A+ A A- B+ B B- C+ CC–D+D D– gases and air pollutants which lead to global warming and Company grade health impacts. Shipping and aviation also rely almost entire- ly on oil leaving electric rail transportation as an exception. As a result, the fuel efficiency of transport vehicles is a major is- 5 largest Grade Market cap MSCI companies (billion USD) sue to evaluate the companies’ impacts on the environment. Toyota Motors Corporation C– 220 Beside the social benefits of transportation, this sector has Volkswagen C 107 severe negative impacts on society: every year about 1.24 mil- Boeing C– 89 lion people die and between 20 and 50 million more people United Parcel Service Inc. C+ 86 suffer non-fatal injuries as a result of traffic accidents (WHO Daimler C+ 83 2013). These impacts can be mitigated by implementing high safety and quality standards. Negative impacts on society are also exerted by companies making products for defense Stoxx Europe 50® Grade Market cap and military purposes. Another societal issue of concern is companies (billion USD) the outsourcing of various production steps to lower-income countries with a risk of poor working conditions. Daimler C+ 83

Key issues Engagement topics Sustainability challenges in the transportation sector: Investors should encourage companies to: • Greenhouse gas emissions per passenger kilometer • Demonstrate efforts to promote green technologies • Labor conditions for workers and contractors increasing fuel efficiency or reducing emissions Health and safety impact of the products • Implement a comprehensive and credible monitoring • system to ensure that working conditions in the supply chain do respect basic human rights • Transparently communicate about the results of product quality and safety tests

20 Inrate Sustainability Assessment Overview of the STOXX® Europe 50 companies

Company name ISIN Inrate grade Market cap (billion USD) Page ABB CH0012221716 B– 55 22 Air Liquide FR0000120073 C+ 43 23 Allianz DE0008404005 B+ 72 24 Anheuser-Busch InBev BE0003793107 C 160 25 AstraZeneca GB0009895292 B 65 26 Banco Santander ES0113900J37 C+ 91 27 Barclays GB0031348658 C+ 69 28 BASF DE000BASF111 C– 88 29 Bayer DE000BAY0017 C– 98 30 BBVA ES0113211835 B– 63 31 BG Group GB0008762899 C+ 65 32 BHP Billiton GB0000566504 D+ 107 33 BNP Paribas FR0000131104 C+ 84 34 BP GB0007980591 D 133 35 British American Tobacco GB0002875804 C– 102 36 Compagnie Fin. Richemont CH0045039655 B+ 58 37 Credit Suisse Group CH0012138530 C 48 38 Daimler DE0007100000 C+ 83 39 Deutsche Bank DE0005140008 C+ 47 40 Deutsche Telekom DE0005557508 C 63 41 Diageo GB0002374006 C+ 80 42 E.ON DE000ENAG999 C+ 36 43 ENI IT0003132476 D+ 83 44 Ericsson SE0000108656 C+ 44 45 GlaxoSmithKline GB0009252882 B+ 124 46 Glencore Xstrata JE00B4T3BW64 D+ 72 47 HSBC GB0005405286 C– 202 48 Imperial Tobacco Group GB0004544929 C 36 49 ING Group NL0000303600 C+ 43 50 LVMH FR0000121014 B 100 51 National Grid GB00B08SNH34 C+ 43 52 Nestlé SA CH0038863350 C– 226 53 Novartis CH0012005267 B– 208 54 Reckitt Benckiser GB00B24CGK77 B+ 53 55 Rio Tinto GB0007188757 D+ 69 56 Roche CH0012032048 B 232 57 Royal Dutch - Shell GB00B03MLX29 D– 214 58 Sanofi-Aventis FR0000120578 B– 134 59 SAP DE0007164600 A 91 60 Schneider Electric FR0000121972 B 47 61 Siemens DE0007236101 C 106 62 Standard Chartered GB0004082847 B– 58 63 Telefonica ES0178430E18 B 71 64 Tesco GB0008847096 C– 47 65 Total FR0000120271 D 138 66 UBS CH0024899483 C 78 67 Unilever GB00B10RZP78 B+ 67 68 Vodafone GB00B16GWD56 C+ 170 69 Zurich Insurance Group CH0011075394 B+ 38 70

Inrate Sustainability Assessment 21 ABB MachineryELECTRICAL and EQUIPMENTindustrial equipment - Switzerland sector

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C+ Stock information Governance Labour CH0012221716 ISIN 7108899 Sedol Society ABBN.VX RIC ABBN VX Bloomberg Ticker C-

Key figures Governance 146'100 Employees Society 39'336 Revenues (M USD) A-

Key sustainability issues concerning the company Business description  Environmental and social impact of purpose of the machinery / equipment ABB Ltd (ABB) is engaged in power  Energy consumption and energy sources used as well as energy efficiency during use and automation technologies phase committed to improving performance  and lowering the environmental Resources used for construction of machinery impact for utility and industry  Working conditions for employees and suppliers (health and safety) customers. The Company provides a  Anti-competitive practices broad range of products, systems, solutions and services that are Key considerations designed to power grid reliability boost industrial productivity and As an operator in robotics, in the power and in automation technologies areas, ABB is one enhance energy efficiency. The of the largest engineering companies as well as one of the largest conglomerates in the Companyʼs power businesses focus world. ABB develops and manufactures electricity grids and power technologies which are on power transmission, distribution the key components for the production, transmission and distribution of electricity. and power-plant automation, and Therefore, the company plays a crucial role in the optimization of performance with lower support electric, gas and water environmental impact. ABB is answering to this market opportunity and has become one of utilities, as well as industrial and commercial customers. Effective the leaders in the development of smart grid technologies, while global demand of September 27, 2013, ABB Ltd electricity is growing continuously. acquired Baldor Electric India Pvt Ltd.

ABB is also known for its energy-efficient turbines and generators, for hydropower plants Source : Reuters, updated 04.10.2013 or for gas turbines (as well as combined electricity/heat-coupled solutions, which could serve as a transition technology for a future energy system). The company provides a comprehensive porfolio of standard and customer-tailored products, solutions and services for increased productivity and energy efficiency among industrial, utility and building industry customers.

Companies like ABB have to pay particular attention to the safety of their employees as work on machineries and manufacturing facilities might be dangerous for workers. In that respect, the company has implemented the OHSAS 18001 certification for some of its sites. The company focuses on a health strategy to ensure an active management of occupational hygiene issues such as exposure to hazardous substances, noise and vibration. However, there is no formal safety management system on a group-wide level. An improvement could be made in that respect.

Although ABB's Code of Business Conduct addresses anticompetitive practices and bribery, and zero tolerance of illegal or unethical behavior is enforced, the company is involved in controversies regarding unfair business practices. For example, ABB is involved in price-fixing in Europe and Australia and corruption cases in Mexico and Iraq. Analyst: Fanny Sulmoni [email protected] Assessment date: 11.02.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B- Stock information Governance Labour FR0000120073 ISIN B1YXBJ7 Sedol Society AIRP.PA RIC AI FP Bloomberg Ticker C+

Key figures Governance 50'000 Employees Society 15'326.3 Revenues (M EUR) B+

Key sustainability issues concerning the company Business description  Health and safety of employees, contractors and surrounding communities Air Liquide SA is a France-based  Energy consumption of operational processes company engaged in the production  Health impact of products of oxygen, nitrogen, hydrogen and other industrial and medical gases.  Impacts of products on ecosystems The Company divides its activities  Business ethics behaviour in commercial operations between Gas and Services and Engineering and Construction. Gas Key considerations and Services activities are divided by customer segments: large industries, Air Liquide is a chemical company focusing on providing different types of gases and which manages production units for services related to these products. The impact of such activity occurs along the production customers in the steel, chemicals and line as the company needs to protect the health and safety of workers and of communities refining industries; industrial living around its sites. At the same time, it has to manage the heavy environmental impacts merchants, which supplies gases and of its production processes. Life cycle assessments of products are also important as they services to industries of all sizes might have serious consequences on the health and safety of users and on the requiring variable quantities; environment. healthcare, which supplies medical gases, hygiene products, equipment and services to hospitals and Among its products, it is worth highlighting that Air Liquide serves some sectors with a patients; and electronics, which positive environmental impact such as solar energy, water purification or air pollution supplies gas and services for the control. production of semi-conductors, flat panels and photovoltaic panels. In At the operational level, Air Liquide started to address some of the major social and May 17, 2013, it acquired a 73.3% environmental issues at stake for its activities. Regarding social aspects, main concerns share of Healthy Sleep Solutions. In relates to protection of employees during production. The company has taken this July 2013, the Company acquired challenge seriously and has a health and safety management. Some sites are OHSAS HELP! and Ventamed. In September 2013, it finalized acquisition of Voltaix 18001 certified. For a chemical company, the health impact of production process not only Inc, an electronics materials concern employees, but also communities living around its sites. Air Liquide has taken company. several steps to ensure that these communities are informed about these risks and their management. Source : Reuters, updated 02.10.2013

The company has an environmental management system partially certified according to ISO 14001. Air Liquide has implemented programs to manage its major challenges in that area and quantitative targets have been set to improve its performance, notably to improve energy efficiency.

The chemical industry has also been hit in the past years by investigations and fines for controversial business ethics practices. Behaviour in commercial operations is therefore also a topic for a company operating in such sector. Air Liquide has a Code of Conduct addressing, among others, controversial behaviour such as bribery and corruption or anti- Analyst: Vanessa Ardenti competition. It ensures implementation by providing channels for employees wishing to [email protected] report cases not complying with the code. Assessment date: 27.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A Stock information Governance Labour DE0008404005 ISIN 5231485 Sedol Society ALVG.DE RIC ALV GR Bloomberg Ticker B-

Key figures Governance 145'538 Employees Society 101'760 Revenues (M EUR) A

Key sustainability issues concerning the company Business description  Sustainability impacts of company's own investments Allianz SE is a Germany-based  Fairness and transparency of insurance contracts and consulting services financial services provider and the  Fair and transparent financial business practice holding company of the Allianz Group. It has two main business operations:  Sustainability impacts of insurance products Insurance Operations and Asset Management. Within the Insurance Key considerations Operations include a portfolio of Allianz is an international financial service company offering insurance solutions and asset property/casualty and life/health insurance products for both private management services to customers in more than 70 countries. As such, the company is and corporate customers. The core more and more involved in both financial and reputational sustainability risks. markets for insurance operations are Germany, France, Italy and the United Allianz is a member of the Insurance Working Group (IWG) working on the Principles for States. Within the Asset Management Sustainable Insurance (PSI). The IWG's aim is to create an effective framework for operations, the Company manages changes in the development of international insurance standards concerning sustainability. mainly PIMCO and AllianzGI under According to the company, the group conducted a global survey on the integration of ESG Allianz Asset Management (AAM). considerations into underwriting and product development. Allianz also co-chairs the Furthermore, it has also banking and Climate Change Working Group (CCWG). Additionally, Allianz manages part of its funds alternative investments operations, which support the its insurance according to socially responsible principles and provides micro-finance services. business and includes the operations of Oldenburgische Landesbank AG On the operational level, the company has taken measures to reduce its direct ecological (OLB). The banking products are impacts by reducing energy consumption and introducing green procurement measures. offered in Germany, Italy, France, the Even if Allianz is not active in a sensitive sector regarding employees, the company has Netherlands and Bulgaria. The implemented relevant programs to ensure proper working conditions. Comprehensive banking operations are part of employee programs have been adopted, such as regular surveys to monitor employee Corporate and Other segment that satisfaction, part-time working hours and integration programs for minorities. engages central holding functions. It operates in approximately 70 countries with major operations in Allianz consciousness for customer needs is translated into an efficient and effective Europe. customer relationship management tool. Moreover, formal and systematic customer satisfaction surveys are carried out regularly. Unfortunately, these measures still show Source : Reuters, updated 20.06.2013 some deficiencies as controversies over irregular practices in relation with products and services (e.g. on irregular contract practices) were raised in the past years.

Despite the implementation of a code of conduct addressing bribery, corruption and anti- competition rules, the company was involved in business ethics-related controversies. In fact, Allianz reached a USD 12.4 million settlement in 2012 with the US Securities and Exchange Commission for having bribed governmental officials in Indonesia between 2001 and 2008. No other business-ethics related breach was reported since, which is a positive sign in an industry that repeatedly hit the news in recent years. Analyst: Daniela Perito [email protected] Assessment date: 18.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C Stock information Governance Labour BE0003793107 ISIN 4755317 Sedol Society ABI.BR RIC ABI BB Bloomberg Ticker C-

Key figures Governance 150'000 Employees Society 39'758 Revenues (M USD) B

Key sustainability issues concerning the company Business description  Energy consumption and greenhouse gas emissions Anheuser-Busch InBev SA, formerly  Management of water and waste water during production Anheuser-Busch InBev SA/NV, is a  Information on health impact of products brewing company. The Company produces, markets, distributes and  Health and safety management for workers and suppliers sells a balanced portfolio of  Anti-competitive practices and price-fixing approximately 200 beer brands. These include global flagship brands Key considerations Budweiser, Stella Artois and Beckʼs; multi-country brands, such as Leffe As one of the main Belgium brewers, Anheuser-Busch Inbev is a key actor of the alcoholic and Hoegaarden, and many local beverage industry and has many issues to tackle. On the environmental side, the major champions, such as Bud Light, Skol, contributors to beer carbon footprint are related to the production of malt, the brewery Brahma, Quilmes, Michelob, Harbin, greenhouse gases emissions and the packaging. Anheuser-Busch Inbev is aware of these Sedrin, Klinskoye, Sibirskaya Korona, challenges and has set up measures to address them. On its malt plant in Brazil, the Chernigivske and Jupiler. The company has started to implement more sustainable agricultural practices including the Company also produces and donation of tree saplings to barley growers to help create a green belt in the fields and in distributes soft drinks, particularly in Latin America. The Company unexplored areas. The plantings help to increase biodiversity, reduce CO2 emissions and operates in seven segments: North buffer crops from wind damage. On its production sites, the company has also started to America, Latin America North, Latin use renewable energy alternatives (solar, wind and other biomass sources) and plans to America South, Western Europe, reduce its energy use per hectoliter by 10% in two years. Finally, water consumption is Central & Eastern Europe, Asia also a big concern for the company who has implemented programs and targets to Pacific and Global Export & Holding contribute to water preservation. Companies.

However, despite these efforts, a formal environmental management system reinforced by Source : Reuters, updated 29.08.2013 a certification would be more than welcome. The same is valid for employees and suppliers. For a company with more than 100ʼ000 employees, more formalization around sensitive issues such as health and safety and employment conditions would be expected.

The social impact of breweries is not to be neglected. Crucial issues are at stake, such as the impact on health of alcoholic beverages and the communication to consumers, especially the young ones. In that respect, Anheuser-Busch Inbev has developed a comprehensive policy on marketing practices addressing responsible drinking and underage drinking in particular. To be effective, its responsible drinking initiatives require a significant commitment. Since 1982, the company has invested more than 875 million USD toward these efforts in the United States. In 2010, the company more than tripled its media placement investment globally in responsible drinking advertising.

Finally, the company has also been involved in some price-fixing schemes, in Brazil in particular. A strong policy on anti-competitive practices would be expected to complete the Analyst: Fanny Sulmoni actual declaration of compliance with legislation. [email protected] Assessment date: 27.02.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour GB0009895292 ISIN 989529 Sedol Society AZN.L RIC AZN LN Bloomberg Ticker C

Key figures Governance 51'700 Employees Society 27'973 Revenues (M USD) A

Key sustainability issues concerning the company Business description  Relations with doctors and health care systems AstraZeneca PLC (AstraZeneca) is a  Business ethics behaviour in commercial operations global biopharmaceutical company.  Side effects of products on customers AstraZeneca discovers, develops and commercializes prescription  Accuracy and objectivity of information provided to customers medicines for six areas of healthcare:  Clinical trials on humans (notably in emerging markets) Cardiovascular, Gastrointestinal,  Health and safety for workers and contractors Infection, Neuroscience, Oncology, and Respiratory and Inflammation. It  Environmental contamination through product residuals has a range of medicines that  Water consumption in the production process includes treatments for illnesses, such  Hazardous waste management as its antibiotic, Merrem/Meronem and Losec/Prilosec for acid related Key considerations diseases. AstraZenecaʼs products include Crestor, As a global pharmaceutical company, AstraZeneca has a positive social impact as its Atacand,Seloken/Toprol-XL, Plendil, products cure and might save peopleʼs lives, but it also has challenging sustainability Onglyza, Zestril, Symbicort and issues to address. In that context, AstraZeneca has been managing most of its potential Zoladex. The Company owns and negative effects for several years now and does it in a competent manner with the operates a range of research and development (R&D), production and exception of business ethics where the company has been mentioned in some important marketing facilities worldwide. controversies. AstraZeneca operates in over 100 countries, including China, Mexico, Ethical behaviour in commercial operations is a major topic in the health sector, which has Brazil and Russia. In July 2013, been hit by several scandals, notably for pricing or promotion of products or for its AstraZeneca PLC has sold its fraudulent relations with national healthcare systems. In that respect, AstraZeneca has toxicological laboratory in Gartuna to developed a comprehensive code of conduct and provides employees with clear channels Acturum. On July 18, 2013, the to report irregularities. This good initiative is nevertheless overshadowed by the company's Company acquired Omthera involvement in important controversies in relation to illegal marketing of drugs for off-label Pharmaceuticals. In October 2013, AstraZeneca Plc completed its use and in relation to bribery practices in some countries. This highlights that the group still acquisition of Amplimmune. needs to improve its management of business ethics in commercial operations. Source : Reuters, updated 07.10.2013 Regarding its social impact, AstraZeneca offers its employees good working conditions: the group has comprehensive health and safety programs and has set targets to improve its performance. Employee satisfaction is measured regularly with a survey. Environmental impacts of the company's production processes are also taken care of seriously as shown by the different programs and targets implemented.

Overall, AstraZeneca has a good management of its major sustainable impacts, but should still improve its performance related to business ethics. Analyst: Vanessa Ardenti [email protected] Assessment date: 04.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B Stock information Governance Labour ES0113900J37 ISIN 5705946 Sedol Society SAN.MC RIC SAN SM Bloomberg Ticker C-

Key figures Governance 186'785 Employees Society 47'285 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products Banco Santander SA is a Spain-  Sustainability impacts of company's own investments based commercial bank. The Bank  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) operates principally in Spain, the United Kingdom, Portugal, the Latin  Transparent and fair customer counseling American countries and the United  Adequate and transparent service fees States. It operates four segments: Continental Europe, the United Key considerations Kingdom, Latin America and Sovereign. Continental Europe Present in more than 40 countries, Banco Santander serves several millions of clients in segment covers all retail banking developed and emerging markets. Thus, Banco Santander is regularly confronted with the business, wholesale banking and sustainability issues of its industry, such as the sustainability impacts of its financial asset management and insurance products and its own investments. conducted in Europe, under such Banco Santander has voluntarily adopted the Equator Principles, which shows the names as Santander Totta, Santander company's awareness for sustainability topics. The principles are a set of standards for Consumer Bank and Bank Zachodni assessing and managing social and environmental risks in project finance. Moreover, WBK, among others. The United Kingdom includes retail and Banco Santander has developed guidelines to identify environmental and social risks in wholesale banking, asset lending practices and has microfinance activities. management and insurance. Latin America includes the specialized units However, the bankʼs involvement in numerous controversies in relation with controversial in Santander Private Banking, as an project financing (e.g. the Jaitapur nuclear power plant and the HydroAysen hydropower independent globally managed unit. project) could be a sign that the good intentions that Banco Santander has taken, are not Sovereign includes all the financial yet fully implemented. activities of its subsidiary Sovereign Bank in the United States, which Besides, even though Banco Santander has policies on bribery, corruption and money includes retail and wholesale banking, asset management and insurance. In laundering, the companyʼs involvement in money laundering, tax evasion investigations, June 2013, the Bank created its Retail and terrorist financing could be an indication of weaknesses in its business ethics Banking division. management system. Source : Reuters, updated 21.06.2013 Like most big financial institutions, Banco Santander has implemented some employee and environmental programs at the operational level. Climate change and green procurement are at the heart of the attention the company pays to the environment. Employee satisfaction monitoring systems are in place. Unfortunately, the company's health and safety programs do not address ergonomics or psychic conditions, which are sensitive themes for banks.

Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour GB0031348658 ISIN 3134865 Sedol Society BARC.L RIC BARC LN Bloomberg Ticker C-

Key figures Governance 139'900 Employees Society 25'522 Revenues (M GBP) B-

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products and own investments Barclays PLC (Barclays) is a global  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) financial services provider engaged in  Transparent and fair customer counseling retail banking, credit cards, wholesale banking, investment banking, wealth  Adequate and transparent service fees management and investment management services. The Companyʼ Key considerations s operations include its overseas Barclays is a global investment bank with international presence. As for most financial offices, subsidiaries and associates. The Company operates in eight companies, its main environmental and social impacts arise indirectly from the company's segments: UK Retail and Business banking activities, i.e. the impacts of investments that are either directly financed by the Banking (UK RBB), Europe Retail and company or that it facilitates as a financial intermediary. Thus it is crucial that Business Banking (Europe RBB), environmental and social criteria are taken into account in lending and investment Africa Retail and Business Banking decisions. (Africa RBB), Barclaycard, Barclays Investment Bank, Barclays Corporate Barclays has recognized this responsibility by signing the Equator Principles, a set of Banking, Wealth and Investment standards for assessing and managing social and environmental risks in project finance. Management, and Head Office and Moreover, Barclays has developed guidelines to identify environmental and social risks in Other Operations. its lending practices and has incorporated microfinance activities. Source : Reuters, updated 17.06.2013 However, the bank is involved in numerous controversies in relation with controversial financing, e.g. the Sakhalin II Oil and Gas projects the Bauxite mine Niyamgiri Hills, as well as the nuclear and cluster munitions industries. This could be a sign that the good resolutions Barclays has taken, are not yet fully implemented.

Moreover, Barclays faces numerous controversies over business ethics issues. Even if there are tools in place like business ethics policies and codes of conducts, the company is involved in cases over bribery, improper payments, tax avoidance, money laundering, the manipulation of banking rates (LIBOR) and the misrepresentation in sale of mortgage securities in the US. This indicates among others, the company's insufficient prudence toward fair customer counseling.

On the other hand, Barclaysʼ operational level is backed by numerous programs and policies in relation to environmental protection and employee issues. Climate change and green procurement are at the heart of the attention the company pays to environment. For example, the company has implemented energy management programs and embraced energy efficient design for its buildings. Employee satisfaction monitoring systems are in place, and most employees are represented by collective labour agreements and take part in work councils. Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C- Stock information Governance Labour DE000BASF111 ISIN 5086577 Sedol Society BASFn.DE RIC BAS GR Bloomberg Ticker C-

Key figures Governance 111'614 Employees Society 78'729 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Health and safety of employees, contractors and surrounding communities BASF SE is a German chemical  Energy consumption of operational processes company. It diversifies its activities  Health impact of products into five business segments: Chemicals, providing basic products  Impacts of products on ecosystems and specialties including nitric acid  Business ethics behaviour in commercial operations and methanol, basic chemicals including ethylene and butadiene and Key considerations intermediates, among others; Performance Products, providing BASF is a diversified chemical company offering various products and services to several products for the coatings and paints sectors. The impact of such activity occurs along the value chain: in fact, the company industry, cosmetics, detergents, needs to protect the health and safety of workers and of communities living around its cleaners industry, vitamins, enzymes, sites, but also to manage and reduce the heavy environmental impact of its production products for the paper industry and processes. Life cycle assessments of products are also important as they might have performance chemicals, among serious consequences on the health and safety of users and on the environment. In that others; Functional Materials & respect, it is important to highlight that BASF has developed some products with a clear Solutions that develops coating products, catalysts and construction environmental benefit as, for example, products to develop energy-efficient housing such chemicals, among others; Agricultural as insulation materials or products for the solar industry. The company also offers catalytic Solutions, providing active ingredients converters that are key detoxification of private and industrial emissions. and formulations for the improvement of crop health and yields, and Oil & As usual for a company of this size, BASF provides a comprehensive reporting on its Gas segment (exploration, production sustainability initiatives. The company has a comprehensive Code of Conduct addressing and natural gas trade). The segment business ethics issues, but also labour and environmental issues. It also has set the Plastics (producing engineering relevant programs and targets to mitigate its main operational impacts, notably in relation plastics, polyamides and to health and safety. Their implementation through the group is ensured with the support of polyurethane solutions), divested as of January 1, 2013, is since then the Sustainability Council reporting directly to the Board of Executive Directors. incorporated into segments Chemicals and Functional Materials & However, this good performance on the operational management framework is Solutions. overshadowed by the numerous controversies related to labour or environmental issues. For example, its activities at two sites in the Netherlands were suspended due to failure in Source : Reuters, updated 05.03.2013 safety systems. In the US, BASF was already fined several times for violations of pollution regulations. Such examples show that the company still needs to improve the implementation of its guidelines and programs. Then, some products promoted by the company are clearly not in line with a sustainable business model. In fact, BASF, mainly through its subsidiary BASF Plant Science, is one of the few major global contributors to an industrialized agriculture based on genetically modified seeds and plants.

Analyst: Vanessa Ardenti [email protected] Assessment date: 27.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour DE000BAY0017 ISIN 5069211 Sedol Society BAYGn.DE RIC BAYN GR Bloomberg Ticker C-

Key figures Governance 113'000 Employees Society 39'760 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Health and safety of employees, contractors and of surrounding communities Bayer AG is a German management  Energy consumption of operational processes holding company with core  Health impact of products competencies in the field of health care, nutrition and high-tech  Impacts of products on ecosystems materials. It's business operations are  Business ethics behaviour in commercial operations organized into three subgroups:  Relations with doctors and health care systems HealthCare, involved in the research, development and manufacture of  Accuracy and objectivity of information provided to customers health products for people and animals, CropScience, engaged in the Key considerations crop protection and non-agricultural Bayer is a diversified chemical company offering various products and services to several pest control, and MaterialScience, that provides polymers, and develops sectors. The impact of such activity occurs along the production line as the company solution for a range of applications, needs to protect the health and safety of workers and of communities living around its supported by the service companies sites, but also to manage the heavy environmental impacts of its production processes. Bayer Business Services, Bayer Life cycle assessments of products are also important as they might have serious Technology Services and Currenta. It consequences on the health and safety of users and on the environment. Among its operates through numerous different business lines, one is dedicated to health care: this activity has a positive social subsidiaries, affiliated companies as impact as it cures and might save peopleʼs lives, but it also has challenging sustainability well as joint ventures located in issues to address. Europe, Latin America, Africa, Middle East, North America as well as the Asia/Pacific region, such as Bayer As usual for a company of this size, Bayer addresses most of the sustainability challenges Chemicals AG in Germany, Cotton at stake considering its activities. Management of such issues is dealt with at group level Growers Services Pty. Limited in with the Chief Sustainability Officer being a member of the Board of Management. The Australia and Bayer Israel Ltd in companyʼs principles and policies are spread through the group with the Corporate Israel, among others. In July 2013, it Compliance Policy that addresses, in a comprehensive way, business ethics issues, but acquired Steigerwald Arzneimittelwerk also environmental and labour issues. Bayer has the relevant programs and targets to GmbH. reduce its major environment impacts. Source : Reuters, updated 01.07.2013 However, this good record is overshadowed by two main aspects. First, Bayer is criticized for some of its chemical products and its business model to promote them: this is particularly the case for the genetically modified organisms even if the company operates within regulatory requirements. Then, the company is too often involved in controversies related to the way it manages its business. Regarding employees, Bayer was still criticized in 2010 for using child labour in India and for not trying to solve the problem. Since then, the company has taken action to tackle the issue. However, such cases tend to show that the different policies and programs of the company are not working efficiently yet and that the group still needs to improve their implementation in order to reach a better Analyst: Vanessa Ardenti sustainability performance. [email protected] Assessment date: 27.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour ES0113211835 ISIN 5501906 Sedol Society BBVA.MC RIC BBVA SM Bloomberg Ticker C-

Key figures Governance 112'786 Employees Society 24'887 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Sustainability impacts of financial products Banco Bilbao Vizcaya Argentaria SA  Sustainability impacts of company's own investments (BBVA) is a Spain-based international  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) financial group with presence in 32 countries. The Companyʼs activities  Transparent and fair customer counseling are focused in such business units as  Adequate and transparent service fees banking, pension and insurance in Spain and Portugal, Mexico and Key considerations South America. In the USA and Puerto Rico, the Bank only comprises BBVA is among Spainʼs main financial institutions. The company has business activities in banking business. In addition The over 30 countries, with a strong presence in Central and South America. Serving over 50 Company has two cross-sectorial million customers, BBVA has a major responsibility for the sustainability impacts of its business units, Corporate and financial products and own investments. Investment Banking and Global Retail & Business Banking, which includes BBVA takes ESG criteria into account within its lending and project financing decisions. In retail banking, commercial and small fact, it has adopted the Equator Principles (a set of standards for assessing and managing and medium enterprises (SMEs) banking, payment systems, consumer social and environmental risks in project finance). Moreover, in 2009, it has implemented a finance and private banking, among manual integrating environmental tools and procedures in the credit risk decision-making others. BBVA is a parent company of process. Grupo Banco Bilbao Vizcaya Argentaria, which comprises such Unfortunately, BBVA is involved in financing environmentally and socially controversial entities as BBVA Banco Frances SA projects such as the Ilisu dam project and the Angra 3 nuclear power plant. This indicates, and BBVA International Limited, that companyʼs measures in relation to the among others. In October, 2013, the environmental assessment of its projects investments and loans, are still insufficient. Company announced that it has completed the sale of its entire 64.3% stake in Administradora de Fondos de The company is aware of the importance of customer relations, as it has a customer Pensiones Privadas SA (AFP satisfaction monitoring system in place at group level. However, customer relations were Provida) to MetLife Inc's subsidiaries. overshadowed by a lawsuit BBVA faced in 2012, charging it for fraudulently manipulating customersʼ checking-account transactions in order to get overdraft fees. Source : Reuters, updated 02.10.2013

Like all financial companies, BBVA is confronted with the risk of bribery, corruption and money laundering. These risks are faced through the implementation of a code of conduct and the adoption of channels to report business ethics related breaches.

On the operational side, BBVA addresses environmental and employee issues. For example, it has set up programs to reduce CO2 emissions, and regular employee satisfaction surveys provide management with information to build up positive working relations. Moreover, collective labour agreements and close relationship with unions help ensure favorable exchange with employees. Analyst: Daniela Perito [email protected] Assessment date: 28.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B- Stock information Governance Labour GB0008762899 ISIN 876289 Sedol Society BG.L RIC BG/ LN Bloomberg Ticker B+

Key figures Governance 5'713 Employees Society 18'933 Revenues (M USD) A+

Key sustainability issues concerning the company Business description  CO2 impact of final product BG Group plc (BG Group) is a natural  Environmental pollution (spills, including flaring) gas company. The Company is  Health and safety conditions of workers(incl. contractors and suppliers) engaged in the exploration, development and production of  Labour conditions of workers (incl. Contractors and suppliers) natural gas and oil. It operates in  Share of turnover from gas on the overall fossil fuel business three business segments: Exploration  Unconventional extraction practices and Production (E&P), Liquefied Natural Gas (LNG) and Transmission  Involvement in controversial (pipeline) projects / controversies over local communities and Distribution (T&D). Effective  Corruption and anti-competitive practices January 1, 2012, the Company was  Royalties distribution transparency managed across three regions: Americas and Europe; Africa, Central Key considerations and South Asia, and Australia and East Asia, supported by Global By being active in the fossil-based energy industry, BG Group is obviously facing many Energy Marketing and Shipping significant environmental issues. The company has nevertheless a smaller impact on (GEMS) and BG Advance. The climate change than most of its industry peers because its core business is related to Company has interests in 25 natural gas, which emits during combustion less CO2 per unit than other fossil fuels. countries on five continents. During the year ended December 31, 2011, the Company acquired an interest in, From an environmental perspective, the activity of the company is still considered as not and operatorship of, offshore blocks sustainable. The involvement of the company in unconventional extraction operations in L10A (BG Group 40%) and L10B (BG the USA and Australia and the USD 21 million fine it had in 2010 in western Kazakhstan for Group 45%) in Kenya. During 2011, excessive waste dumping reinforce this assessment. the Company acquired additional Marcellus shale properties in Labour related issues are well managed by the company which has implemented credible partnership with EXCO Resources, health & safety programs for its employees. BG Group provides clear and comprehensive Inc. (EXCO). In June 2013, BG Group health and safety data regarding its employees and contractors. It also launched a system PLC announced that it has completed the sale of its 65.12% holding in to screen contractor companies in order to reduce the risk of a breach of its Business Gujarat Gas Company Limited Principles (for example about bribery and corruption). (GGCL).

Most relevant societal issues are also addressed by BG Group. For example, it Source : Reuters, updated 12.06.2013 acknowledged that revenue transparency is an increasingly important issue for its stakeholders. Therefore, the company discloses in its public reporting payments made to countries it is active in as recommended by the Extractive Industries Transparency Initiative (EITI).

Analyst: Alexandre Messerli [email protected] Assessment date: 10.10.2012 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour GB0000566504 ISIN 56650 Sedol Society BLT.L RIC BLT LN Bloomberg Ticker D+

Key figures Governance 49'496 Employees Society 65'968 Revenues (M USD) A+

Key sustainability issues concerning the company Business description  Environmental management of mining operations BHP Billiton plc is diversified natural  Labour conditions of workers at mining operations (incl. contractors and suppliers) resources company. The Company  Health and safety conditions of workers (incl. contractors and suppliers) generally operates through customer sector groups (CSGs). The Company  Tax payment practices in resources-producing countries operates in nine segments:  Traceability of origin of precious metals Petroleum, Aluminium, Base Metals,  Fair practices in business acquisition Diamonds and Specialty Products, Stainless Steel Materials, Iron Ore,  Social and enviromental management of projects Manganese, Metallurgical Coal and Energy Coal. As of June 30, 2012, the Key considerations Company was working in more than Mining extraction has strong environmental and social impacts. BHP Billiton rightly 100 locations worldwide. During the fiscal year ended June 30, 2012 recognized important issues such as pollution prevention, climate change and biodiversity (fiscal 2012), the Company total and therefore implemented detailed environmental performance reporting tools and petroleum production was 222.3 mitigation measures. Nevertheless, several water pollution incidents occurred during the millions of barrels of oil equivalent. last years. For example in Peru in 2012, more than 200 local people including children, During fiscal 2012, its aluminium had suffered from headaches, vomiting and other symptoms after coming into contact with a total production in 1.2 million tones water polluted with copper concentrates . (Mt) of aluminium. In August 2011, the Company acquired Petrohawk Energy By being a significant provider of fossil fuels such as coal (about 20% all sales) oil and Corporation. On September 30, 2011, heavily controversial uranium (an estimated 1.5% of all sales), the company not only it acquired HWE Mining Subsidiaries from Leighton Holdings. On contributes to the deterioration of the environment but also supports an unsafe nuclear September 7, 2012, the Company industry. announced the sale of its 37.8 % non- operated interest in Richards Bay On the social level, the company has implemented policies and programs regarding health Minerals. and safety, and communicates directly with its employees through trade unions. However, several fatal accidents occurred during last years. BHP Billiton also faced many Source : Reuters, updated 10.10.2012 controversies regarding employment conditions that often resulted in strikes. In February 2012, about 3ʼ000 workers in Queensland State (Australia) decided to down tools to uphold their safety and working conditions.

BHP Billiton supports the Extractive Industries Transparency Initiative (EITI), a global initiative to improve governance in resource-rich countries through the verification and full publication of company payments and government revenues from oil, gas and mining activities. This is a progressive step, but some important countries of operations such as Chile, South Africa, Algeria and Pakistan are not covered by this initiative yet.

The company has undertaken many initiatives to address most sensitive issues with better Analyst: Alexandre Messerli practices but a gap still remains between the companyʼs rhetoric and the reality on the [email protected] ground. Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B Stock information Governance Labour FR0000131104 ISIN 7309681 Sedol Society BNPP.PA RIC BNP FP Bloomberg Ticker C-

Key figures Governance 190'000 Employees Society 41'353 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products BNP Paribas SA is a France-based  Sustainability impacts of company's own investments bank group with four core businesses:  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) Retail Banking, Corporate & Investment Banking, Investment  Transparent and fair customer counseling Solutions and Other Activities. Retail  Adequate and transparent service fees Banking comprises the French retail banking division, Banca Nazionale del Key considerations Lavoro in Italy, BeLux Retail Banking, Europe-Mediterranean, all BNP Even if BNP Paribas shows the willingness and the ability to diminish its impact, its Paribas Group retail banking practices exert an important burden on the environment and on the society. businesses out of Euro Zone: in the United States, in Asia, in the As a financial institution with a worldwide presence, the social and environmental effects of Mediterranean Basin and Africa, in its investments and loans have a key role to support progress toward sustainable Turkey, Central and Eastern Europe, development. personal finance and equipment solutions. The Corporate & Investment Banking business Actually, the bank offers SRI funds to its clients (accounting for 2.2% of assets under provides to its clients financing, management) as well as green loans to promote the use of energy-efficient equipment and advisory and capital markets services. materials in the construction sector. However, BNP Paribas is among the world`s major The Investment Solutions division provider of nuclear energy financing. It also finances coal mining, the oil & gas sector and offers private banking, asset tar sand projects. management, securities services, real estate and insurance services. In In addition, BNP Paribas is involved in financing several socially damaging projects, such November 2012, Euronet Worldwide as the HydroAysen hydrpower project in Chile. Furthermore the company is involved in Inc through its Ukrainian subsidiary, financing companies which are active in Burma, such as Petrochina or DongPheng, which Euronet Ukraine LLC, announced the acquisition of automated teller penalizes the sustainable assessment of the company. machines (ATMs) from UkrSibbank, a subsidiary of BNP Paribas. On the other hand, BNP Paribas adopted requirements that forbids investment into companies that conflicts with its proper values as investor. In fact, it does not provide Source : Reuters, updated 14.03.2013 financial services to companies involved in « controversial weapons » (cluster munitions, antipersonnel mines, chemical/biological weapons).

The company is aware of its impacts on the operational level and implemented relevant programs to ensure proper working conditions. Comprehensive employee programs were adopted (as for example regular surveys to monitor employee satisfaction, part-time working hours and integration of disabled employees). Moreover, the company has collective labor agreements in place in most countries and implemented a comprehensive sustainable purchasing program. Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D Stock information Governance Labour GB0007980591 ISIN 798059 Sedol Society BP.L RIC BP/ LN Bloomberg Ticker D-

Key figures Governance 85'700 Employees Society 388'285 Revenues (M USD) B-

Key sustainability issues concerning the company Business description  CO2 impact of final product BP p.l.c. (BP) is an integrated oil and  Environmental pollution and spills (including flaring) gas company. The Company provides  Health and safety conditions of workers (incl. contractors and suppliers) its customers with fuel for transportation, energy for heat and  Labour conditions of workers (incl. Contractors and suppliers) light, lubricants and the  Share of turnover from gas on the overall fossil fuel business petrochemicals products used to  Unconventional extraction practices make everyday items as diverse as paints, clothes and packaging. The  Environmental and social management of projects Company operates in two business  Corruption and anti-competitive practices segments: Exploration and  Royalties distribution transparency Production, and Refining and Marketing. The segment comprises Key considerations three main businesses: fuels, lubricants and petrochemicals. As an Integrated Oil & Gas company, BP is active in a very sensitive industry, whose Effective March 21, 2013, the products and services are based on non-renewable energy sources, and therefore are Company acquired a 5.66% interest in emitting large quantities of CO2 during their combustion. The company indeed decided to OAO Neftyanaya Kompaniya Rosneft. increase its production of natural gas, a resource that release less CO2 than other fossil In September 2013, UGI Corp announced that its subsidiary, Flaga fuel during combustion but regrettably plans to sell its wind energy business in the US in GmbH, has completed the acquisition the near future. of the liquefied petroleum gas (LPG) distribution business of BP in Poland. Production practices in the Oil & Gas industry also have a strong environmental impact. BP is pursuing deep-water drilling and unconventional oil & gas exploration. The risks of deep- Source : Reuters, updated 04.09.2013 water drilling clearly came to light by the Deepwater Horizon disaster in 2010 that turned out to be one of the worst oil spills in history. Shale gas and tar sands exploitation not only emits more greenhouse gases than conventional extraction methods, but it also uses a lot of water and potentially pollutes it with chemicals used in the extraction process. BP however recognizes that climate change is a major global challenge and has taken many initiatives to reduce the impact of its activities on this pressing issue. It has established a detailed environmental policy addressing most relevant issues and implemented programs to improve the efficiency of its operations. Despite all that, the company faced a huge amount of significant controversies in recent years.

On the social level, BP has implemented policies and programs regarding health & safety, which is a major issue in the Oil & Gas industry. Nevertheless, some accidents with fatalities occurred during the last years resulting sometimes in controversies regarding the respect of safety standards. For example, in July 2012, BP agreed to pay USD 13 million in fines to settle more than 400 safety violations at its Texas City refinery. Finally, the numerous positive initiatives taken by BP in order to engage with local communities Analyst: Alexandre Messerli impacted by its projects are overshadowed by many severe controversies affecting the [email protected] company. As such, in May 2010, Colombian indigenous communities submitted a Assessment date: 10.10.2012 complaint against BP for allegedly having forced them off their land through illegal acts. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D+ Stock information Governance Labour GB0002875804 ISIN 287580 Sedol Society BATS.L RIC BATS LN Bloomberg Ticker D

Governance Society Business description A+ British American Tobacco p.l.c. (British American Tobacco) is a Key sustainability issues concerning the company holding company. The Companyʼs four principal brands include Dunhill,  Land and resources used (notably in relation with deforestation) Kent, Lucky Strike and Pall Mall. The  Water consumption and waste water Company has many other famous  international and local brands, Child labour in the production process including Rothmans, Vogue, Viceroy,  Health and safety management among employees and suppliers Kool, Peter Stuyvesant and Benson &  Business ethics practices (in relation with lobbying and black market) Hedges. The Companyʼs brands are  sold in over 180 markets. The Information on health impact of products Companyʼs products include Cigarettes, Smokeless snus and Key considerations Cigars. The Company has over 44 As one of the main company of the tobacco Iidustry, British American Tobacco (BAT) has cigarette factories in 39 countries. In to be aware of the major issues environmantal and social issues of tobacco production. addition to cigarettes, the Company makes cigarillos, roll your own and pipe tobacco. From beginning to end, the process used by manufacturers to turn tobacco seeds into packaged cigarettes is energy intensive. Furthermore, the improper disposal of cigarettes Source : Reuters, updated 09.06.2013 has serious environmental consequences. BAT, through its comprehensive Environment, Health & Safety (EHS) management system which has been in place for many years, shows awareness on its main environmental issues. It also has an internal reporting system that monitors group-wide performance on its key environmental measures. BAT has also taken several measures to address its increasing environmental challenges such as climate change and deforestation. Such measures were implemented following accusations in August 2010 of deforestation in Uganda. Water use is also a major concern for tobacco production and in that respect BAT shows an exemplary behavior with strong programs and targets to reduce its consumption.

On the labor side, the company has an exemplary reporting on labour issues for employees and contractors with strong measures to improve employment conditions. However, controversies over poor employment conditions of illegal workers in Uganda or over child labour in Brazil highlights that programs are not fully spread through the group.

Finally, the impact of smoking cigarettes on human health is the major issue of tobacco companies. Even though, the company cannot change its product, it can try to manage this effect with truthful information to consumers and fair business practices. Despite standard measures such as a policy on responsible marketing, the company has been repeatedly criticized for its wrongful practices such as illegal advertising or unscrupulous marketing. Analyst: Fanny Sulmoni [email protected] Assessment date: 27.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour CH0045039655 ISIN B3DCZF3 Sedol Society CFR.VX RIC CFR VX Bloomberg Ticker B-

Key figures Governance 27'666 Employees Society 10'150 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  Origin of animal products Compagnie Financiere Richemont SA  Textile processing is a Switzerland-based luxury goods  Water and energy consumption for production company. The Company operates, along with its subsidiaries, in three  Sourcing of raw materials (notably gold and diamonds) segments: Jewellery Maisons,  Working conditions in supply chain Specialist Watchmakers and Montblanc Maison. The Jewellery Key considerations Maisons segment engages the design, manufacture and distribution As a company active in the luxury industry, Richemont needs to tackle several of jewellery products, which comprise environmental impacts, notably in relation to its supply chain. Cartier and Van Cleef & Arpels. The Specialist Watchmakers segment As a member of the Responsible Jewelry Council (RJC), the company is aware that it covers the design, manufacture and needs to source raw materials in a responsible manner. In fact, gold and diamonds are distribution of precision timepieces, often mined in regions affected by conflict or instability. Thus, Richemont Model Supplier and the segment comprises Piaget, A. Code of Conduct ensures that its suppliers provide assurance regarding the origin of such Lange & Soehne, Jaeger-Lecoultre, Vacheron Constantin, Officine materials. Moreover, the company expects that its Maisons, which account for 86% of the Panerai, IWC, Baume & Mercier and Group sales, will be RJC certified by end of 2013. Roger Dubuis. The Montblanc Maison segment engages the design, Endangered species and leather products manufacturing are also formally addressed by manufacture and distribution of writing Richemont, which fully complies with the Convention on International Trade in Endangered instruments. The Companyʼs other Species (CITES). Furthermore, efforts are taken to manage its resourcesʼuse, such as operating segments include Alfred water and energy consumption. Dunhill, Lancel, Chloe, Net-a-Porter, Purdey, textile brands and other Working conditions in supply chain can be considered as the companyʼs main issue on the manufacturing entities. The Company operates in Europe, the United States social. Indeed, the luxury industry reputation cannot be damaged with sweatshop scandals and Asia, among others. and thus, needs imperatively to produce its goods in a fair and responsible way. Richemont Model Supplier Code of Conduct regulates the working conditions, which must Source : Reuters, updated 02.10.2013 respect fundamental human rights. In addition, systems have been implemented to ensure that the Code is really put into practice. However, it is unfortunate that the company is not certified according to the SA 8000 standard. In addition, there is room for improvement on the monitoring systemsʼ side as they actually do not apply to the whole supply chain.

Overall, Richemont shows a strong awareness of its social and environmental responsibilities and is considered as a leader within its industry. This fact is even worth mentioning that the companyʼs approach towards CSR has been developed in an efficient way within these past three years.

Analyst: Isabelle Reine [email protected] Assessment date: 05.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C Stock information Governance Labour CH0012138530 ISIN 7171589 Sedol Society CSGN.VX RIC CSGN VX Bloomberg Ticker D+

Key figures Governance 46'300 Employees Society 22'191 Revenues (M CHF) B-

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products Credit Suisse Group AG (Credit  Sustainability impacts of company's own investments Suisse) is a global financial services  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) company. The Company operates in three segments: Private Banking,  Transparent and fair customer counseling Investment Banking and Asset  Adequate and transparent service fees Management. In Private Banking, it offers advice and a range of financial Key considerations solutions to private, corporate and institutional clients. Investment Credit Suisse Group is an international company offering financial services in over 50 Banking provides a range of financial countries. As such, the bank accepts the link between banking activities and their products and services, with a focus environmental and social impacts. on businesses that are client-driven, flow-based and capital-efficient. Asset In fact, the bank's lending decisions are not only based on financial criteria but also on Management offers products across a environmental and social principles and the integration of the Equator Principles in its range of asset classes, including project financing decision process is systematic. With the voluntary adoption of this alternative investments such as hedge funds, private equity, real international industry standard, project finance at Credit Suisse Group is subject to estate and credit, and multi-asset environmental and social assessment before providing financial support. Moreover, the class solutions, which includes bank has some of its assets under management invested according to socially responsible equities and fixed income products. principles. On April 30, 2011, Credit Suisse completed the acquisition of ABN However, these measures are undermined by the company's involvement in financing AMRO Bankʼs (formerly Fortis Bank controversial projects like the Sakhalin II gas project in Russia or the Phulbari coal mine in Nederland) hedge fund administration Bangladesh. Furthermore, Credit Suisse Group is among the top providers of financial business. In February 2012, the services to the nuclear and to the coal industry. Company sold an interest in Aberdeen. On March 24, 2011, Credit Suisse Group AG owned 100% Additionally, the respect of business ethical practices is also a matter of concern at Credit interest in Neue Aargauer Bank AG. Suisse Group. Actually, the bank is involved in numerous cases, such as the LIBOR rate conspiracy case, tax evasion investigations in Germany and the US, fraudulent business Source : Reuters, updated 16.04.2012 practices, and predatory lending cases in connection with the controversial sub-prime mortgages in the US. The adoption of a code of conduct as well as the implementation of channels to report business ethics related breaches seem not to be sufficient measures to prevent the company from such concerns.

On the other hand, the operational level is backed by numerous programs and policies in relation with environmental protection and employee issues. Climate change and green procurement are at the center of the attention the company pays to the environment and all company sites are certified according to the ISO 14001 standard. Employee satisfaction monitoring systems are in place and regular customer satisfaction surveys show Credit Analyst: Daniela Perito Suisse Group's attention for customer needs. [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour DE0007100000 ISIN 5529027 Sedol Society DAIGn.DE RIC DAI GR Bloomberg Ticker C-

Key figures Governance 276'044 Employees Society 114'297 Revenues (M EUR) A

Key sustainability issues concerning the company Business description  Fuel efficiency of the product Daimler AG is a Germany-based  Health and safety impacts of the product company that develops, manufactures  Labour conditions for workers and contractors and distributes a range of automotive products, mainly passenger cars,  Anti-competitive practices and price-fixing trucks, vans and buses, as well as  Bribery and corruption manages the Daimler Group. It also provides financial and other services Key considerations relating to its automotive businesses. It operates in five segments: With its divisions Mercedes-Benz Cars, Daimler Trucks, Mercedes-Benz Vans, Daimler Mercedes-Benz Cars, Daimler Trucks, Buses and Daimler Financial Services, the Daimler Group is one of the biggest producers Mercedes-Benz Vans, Daimler Buses of premium cars and the worldʼs biggest manufacturer of commercial vehicles with a global and Daimler Financial Services, which reach. includes a range of automotive financial services including financing, The automotive industry carries major environmental risks, mainly through their products. leasing, insurance and fleet Road transport is one of the biggest consumer of petroleum and hence emitter of air management. The Company offers its products and services under such pollutants and greenhouse gas emissions. For that reason, emissions reduction through brand names as Mercedes-Benz, improved fuel efficiency is a major issue. Daimler is conscious of this challenge and strives Smart, Maybach, Fuso, Western Star, to develop fuel-efficient, and environmentally compatible drive technologies for all of its Setra, Mercedes-Benz Bank and automotive divisions. In addition, Daimler is contributing to research alternative fuels. Mercedes-Benz Financial, among Among them, Daimler is contributing research and development of vehicles that consume others. The Company has production purified biomethane as fuel. Furthermore, the company has set the target to reduce the facilities throughout the world and CO2 emissions of its new-vehicle fleet in Europe to 125 grams per kilometer by 2016. distributes its automotive products However, in the United States, Daimler paid between 2005 and 2007 several fines for and related financial services through violating fuel efficiency requirements. its own sales network of German sales-and-service centers, foreign sales subsidiaries and through third Regarding its social challenges, the company has taken good efforts and addresses for parties. example the theme health & safety, for which Daimler has implemented policies for both, its own employees and its contractors. However, health and safety certifications for Source : Reuters, updated 04.03.2013 contractors are missing. Furthermore, the company fails to collect and publish data on accidents at its contractor's sites.

Actually, Daimler displays public commitment to business ethics issues. The company's integrity code addresses the main issues within this area, which is of vital importance in an industry sensitive to ethical issues, such as bribery and corruption or anti-competitive practices. Nevertheless, Daimler is currently under investigation being involved in a fraud case in Nigeria. Additionally, it has been accused of bribing Nigerian officials to supply vehicles and tools between 1998 and 2005. Furthermore, Daimler is accused of corruption in Russia, and other bribery allegations coming from Turkmenistan. Analyst: Gina Spescha [email protected] Assessment date: 22.02.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C+ Stock information Governance Labour DE0005140008 ISIN 5750355 Sedol Society DBKGn.DE RIC DBK GR Bloomberg Ticker C-

Key figures Governance 97'158 Employees Society 33'700 Revenues (M EUR) B+

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products Deutsche Bank AG is a global  Sustainability impacts of company's own investments investment bank. The Company offers  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) a variety of investment, financial and related products and services to  Transparent and fair customer counseling private individuals, corporate entities  Adequate and transparent service fees and institutional clients around the world. The Company divisions include Key considerations Corporate & Investment Bank (CIB ), Private Clients and Asset Deutsche Bank is Germany's biggest financial institution. The company is present in over Management ( PCAM ) and Corporate 70 developed countries and emerging markets. Thus, Deutsche Bank is confronted with Investments ( CI ). As of December the sustainability issues of its industries, such as the sustainability impacts of its products 31, 2010, the Company operated in and its own investments. 74 countries out of 3,083 branches worldwide, of which 68 % were in The bank has reacted to these topics. In fact, it has adopted a "Green Filter" tool to include Germany. In March 2010, the the carbon impacts into its lending and investment decision-making processes. Moreover, Company closed the acquisition of Sal. Oppenheim Group. In April 2010, it has incorporated microfinance activities, and a small percentage of its assets under the Company acquired commercial management are invested according to socially responsible criteria. bank business in Holland from ABN AMRO Bank N.V. (ABN AMRO). In However, Deutsche Bank's sustainable performance is overshadowed by its involvement in November 2010, the Company numerous controversies. The company finances controversial projects (e.g. HidroAysén acquired 51.98% interest in Deutsche dam project, Canadian tar sands) and provides funds to the nuclear and the cluster Postbank AG. In February 2011, the munitions industry. Moreover, employee relations are dimmed by discrimination cases. Company sold its 9% stake in RTS Furthermore, there are numerous business ethics breaches, such as the LIBOR rate OAO. Effective March 4, 2013, the conspiracy case, tax evasion, bribery, and sub-prime predatory lending cases. Company acquired a 4.561% interest in JC Penney Co Inc.

Numerous programs have been implemented at the operational level addressing for Source : Reuters, updated 13.03.2013 example environmental protection, human resources or business ethics issues. As a matter of fact, Deutsche Bank has implemented energy reduction programs and has set up CO2-emission reduction targets at group level, notably to achieve carbon neutrality in 2013. To achieve this goal, Deutsche Bank procures electricity from renewable sources and compensates GHG emissions through purchasing Certified Emission Reductions (CERs), issued through the UN Clean Development Mechanism (CDM).

Comprehensive employee programs have been adopted, such as regular surveys to monitor employee satisfaction, part-time working hours and integration programs for minorities. Most employees are represented by collective labour agreements and take part in work councils. Analyst: Daniela Perito Like all financial institutions, Deutsche Bank is confronted with the risk of bribery and [email protected] money laundering. The company addresses these topics in its code of conduct and has Assessment date: 20.03.2013 made reporting channels available to report business ethics related breaches. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D+ Stock information Governance Labour DE0005557508 ISIN 5842359 Sedol Society DTEGn.DE RIC DTE GR Bloomberg Ticker C-

Key figures Governance 229'997 Employees Society 58'183 Revenues (M EUR) B-

Key sustainability issues concerning the company Business description  Competition practices Deutsche Telekom AG is a Germany-  Transparency of pricing structure based integrated telecommunications  Impact of radio frequency radiations provider offering its customers around the world a portfolio of services in the  Customer relations areas of telecommunications and  Working conditions of employees information technology (IT). The  Digital divide Company diversifies its activities into three geographical segments:  Health & safety of employees Germany, Europe and USA; as well as operates the Systems Solutions, Key considerations and Group Headquarters & Shared As a provider of telecommunication and IT services, Deutsche Telekom has to address Services operating segments. The Systems Solutions operating segment and manage several issues, particularly social concerns related to its customers, provides customized ICT (Information employees and local communities adjacent to its facilities. and Communication Technology) solutions for corporate customers Deutsche Telekom takes care of client relations with regular customer satisfaction surveys, through T-Systems, which include which are carried out four times a year to evaluate the customer loyalty. Moreover, it seeks Computing & Desktop Services and to acquire new customers by expanding mobile broadband networks to remote areas in Systems Integration. The Group Germany, which also enables those regions to keep up with technological developments. Headquarters & Shared Services The companyʼs social reporting is therefore quite good, leaving aside the fact that operating segment comprises Deutsche Telekom does not address the potential impact of its operations and services on management functions, among others. The Company's product communities (e.g. waves and antennas; use of Internet by children). However, rather portfolio comprises fixed-network problematic are the numerous anti-competition disputes that the company had to face in lines, broadband lines, as well as recent years, despite a code of ethics covering all the fair business practices. mobile communication networks. The Company's USA segment provides A comprehensive range of policies and programs are dedicated to health and safety of mobile network services in the United employees. The company also promotes labour relations between management and States. employees, mostly covered by collective bargaining agreements. It is however regrettable that Deutsche Telekom does not address in its reporting the minimum living wages and Source : Reuters, updated 07.03.2013 maximum working hours of employees. In addition, the company recurrently encountered controversies related to freedom of association. Deutsche Telekom would be therefore expected to improve the management of the labour relations issue.

Considering the environment, the company strives to mitigate its impact by having implemented policies and action plans such as CO2 emission reduction programs and recycling collection of used devices.

In summary, Deutsche Telekom commits to corporate social responsibility issues in its Analyst: Gael Kyriakidis reporting and takes measures to preserve its employees, customers and communities. [email protected] However, to take a step towards more sustainability, the company should make efforts to improve labour relations in its daily business. Assessment date: 29.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour GB0002374006 ISIN 237400 Sedol Society DGE.L RIC DGE LN Bloomberg Ticker D+

Key figures Governance 28'470 Employees Society 11'433 Revenues (M GBP) A+

Key sustainability issues concerning the company Business description  Energy consumption and greenhouse gas emissions Diageo plc (Diageo) is engaged in  Management water and waste water drinks business. The Companyʼs  Information on health impact of products business is organized under the business areas of North America,  Health and safety management for workers and suppliers Europe, Africa, Latin America and  Anti-competitive practices and price-fixing Caribbean, Asia Pacific and global Supply. Diageo sells products in more Key considerations than 180 markets around the world. On July 5, 2011, Diageo completed As one of the major world distiller, Diageo has a major role to play in the alcoholic the acquisition of a 50% equity beverages industry regarding social and environmental concerns. controlling stake in Rum Creations Products Inc. On July 14, 2011, On the environmental side, Diageo seems to have embraced its responsibility by having Diageo acquired an additional 4% set up strong programs with targets to reduce its major environmental impact, meaning equity stake in Sichuan Chengdu water and energy use. For example, regarding water, the company is working actively to Quanxing Group Company Ltd. On reduce its impact on water in its productions facilities and its supply chains. This involves November 25, 2011, Diageo completed the acquisition of improving water efficiency in its facilities, absolute reduction of water use in water-stressed SABMiller Africa BV's 20% interest. In from its accommodations and reducing the polluting power of wastewater from its facilities December 2011, Diageo completed and finally engaging directly with suppliers in water-stressed countries where it operates to the acquisition of Carlos Palanca encourage more sustainable strategies for agriculture. According to the company all these Group's 49% non-controlling equity measures would lead to an improvement of water efficiency by 30%. stake in Diageo Philippines Inc. On 9, August 2012, Diageo completed the Regarding its employees and contractors, Diageo also shows an exemplary behavior by acquisition of 100% of the equity of having implemented different measures to improve employeesʼ well-being and safety. As Ypioca Bebidas S.A. In May 2013, the manufacturing environment includes working with machinery, chemicals, flammable Relay BV a wholly owned subsidiary of Diageo Plc acquired a 27.142% vapors and high pressure steam, it offers a wide range of hazards to which employees can stake in United Spirits Ltd. be exposed, therefore safety might be an important concern. Diageo has understood that and is aiming to reduce by 50% its lost-time accident frequency rate and to achieve this Source : Reuters, updated 17.05.2013 goal, a number of initiatives have been taken by the company such as developing a model for measuring, understanding and improving the prevailing safety standards at every site.

One of the biggest concerns of a company involved in the production of alcoholic beverages is the impact of its products on customers. In that respect, Diageo recognizes that alcohol beverages may be consumed irresponsibly creating problems for the individual and for society and publishes a policy on responsible marketing.

However, all efforts made by the company towards sustainability are tainted with major recent controversies in particular over price fixing allegations in Turkey and bribery accusation in India. Analyst: Fanny Sulmoni [email protected] Assessment date: 27.02.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C- Stock information Governance Labour DE000ENAG999 ISIN 4942904 Sedol Society EONGn.DE RIC EOAN GR Bloomberg Ticker B-

Key figures Governance 66'466 Employees Society 142'938 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  CO2 intensity of electricity mix & renewable energy development E.ON SE is a Germany-based  Environmental pollution of production provider of energy solutions. It  Health and safety of neighboring communities manages the E.ON Group, which consists of five global units and 12  Health and safety conditions of workers regional units. Global units consist of  Fairness and transparency of business practices Generation, Renewables, Gas,  Social and environmental management of projects Trading (which are also Company's business segments) and New Key considerations Building & Technology that comprises project management and engineering As a one major European energy utilities company, E.ON is not only an important related to construction of power plants electricity supplier, but also a significant natural gas producer, transporter and distributor. and the operation of existing plants The company owns a 15.5% stake in Nord Stream pipeline that connects the large gas across the Group, and research and reserves of Russia to Germany through the Baltic Sea. development projects for the E.ON Innovation Centers. Generation segment consists of the Group's Conventional electricity generation still constitutes the most significant part of the companyʼ conventional (fossil and nuclear) s energy mix and accounts for 88% of the companyʼs own generation in 2012. In this same generation assets in Europe. year, a third of all electricity produced by E.ON was generated by CO2-intensive coalbased Renewables segment comprises the power plants. The company has undertaken efforts in order to enhance the efficiency and carbon-sourcing and renewables flexibility of conventional generation by converting former coal generating units to biomass businesses. Gas segment is and by investing in the development of carbon capture and storage (CCS) pilot projects in responsible for gas procurement, Wilhelmshaven, Germany. However, both technologies remain extremely controversial at including its gas production, and for the moment. While nuclear based electricity still accounted for 22% of the companyʼs own project and product development in gas storage, gas transport, liquefied production 2012, it tends to decrease since. Nuclear industry is more criticized than ever natural gas and technical asset since the Fukushima Daiichi disaster in 2011. E.ON actually decided to withdraw from new support. Trading segment comprises nuclear-power projects, which is an encouraging choice in terms of sustainability. It is also the trading activities on energy worth to note that wind and other renewables account for an increasing share of the exchanges. In June 2013, it started companyʼs energy mix, representing already 5% of all electricity generated in 2012. venture capital activities.

The prevention of health & safety risks, is a major issue on the workersʻ side. E.ON has Source : Reuters, updated 15.07.2013 adopted a relevant Responsible Procurement Policy addressing working condition rules to be respected by employees and suppliers and has implemented health and safety programs for employees. However, some controversial event that happened in Colombia may be a hint that some of the companyʼs contractors have been neglected. In July 2010, DanWatch alleged that the Cerrojon coal mine – which is one of the companyʼs providers – produces high concentrations of particulate matter, which is causing respiratory diseases among mine workers and local people.

Analyst: Alexandre Messerli [email protected] Assessment date: 02.04.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C- Stock information Governance Labour IT0003132476 ISIN 7145056 Sedol Society ENI.MI RIC ENI IM Bloomberg Ticker D-

Key figures Governance 81'084 Employees Society 128'766 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  CO2 impact of final product Eni SpA is an Italy-based  Environmental pollution (spills, including flaring) multinational oil and gas company. It  Health and safety conditions of workers (incl. contractors and suppliers) operates though seven segments. The Refining & Marketing segment  Labour conditions of workers (incl. Contractors and suppliers) focuses on refining and marketing of  Share of turnover from gas on the overall fossil fuel business petroleum products. The Eni Trading  Unconventional extraction practices segment covers group services in commodity trading, shipping and  Environmental and social management of projects derivatives. The Chemicals segment  Corruption and anti-competitive practices covers the production and sale of  Royalties distribution transparency petrochemical products. The Engineering & Construction segment Key considerations includes the services for the oil and gas industry. The Exploration & As an Integrated Oil & Gas company, ENI is active in a very sensitive industry whose Production segment focuses on products and services are based on non-renewable energy sources. Most of the products exploration, development and offered by the company cannot be considered as sustainable because they emit large production of oil and natural gas. The quantities of CO2-emissions in the use-phase (combustion of fossil fuels). Gas & Power segment covers the supply, regasification, transport, storage, distribution and marketing of Considering the companyʼs production processes, ENI has nevertheless undertaken some natural gas, power generation and efforts and developed policies, programs and innovations in order to mitigate the negative electricity sales. The Other Activities impact of its activities. By promoting the use of natural gas and developing a network of segment handles the corporate, efficient combined-cycle power plants in Italy, the company offers a solution for the financial and service components. On transition from fossil energy production to renewable energy systems. Operational energy September 30, 2013, it sold a 20% efficiency, including a relevant gas flaring reduction program, is also addressed by the stake in Isontina Reti Gas; as a result company. However, these positivie initiatives are undermined by strategic choices that of the transaction it holds a 50% stake lead to climate damages such as investing in tar sands oil exploration in Congo. in Isontina Reti Gas. Source : Reuters, updated 01.10.2013 On the social level, ENI has implemented a system to closely monitor the implementation of its labour policies for contractors. However, it faced a controversy in Nigeria in 2012 for not having employed local youths while the company had pledged to do so.

Finally, the sustainability performance of ENI is also overshadowed by its involvement in important controversies related to the main societal issues at stake for the sector. In the last few years, the company has for example been investigated over bribery and corruption cases in Italy, Kazakhstan, Algeria, Lybia and Nigeria.

Analyst: Alexandre Messerli [email protected] Assessment date: 10.10.2012 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour SE0000108656 ISIN 5959378 Sedol Society ERICb.ST RIC ERICB SS Bloomberg Ticker B-

Key figures Governance 111'805 Employees Society 227'779 Revenues (M SEK) A-

Key sustainability issues concerning the company Business description  Origin of resources (conflict minerals, rare earth elements) Telefonaktiebolaget LM Ericsson  Use of hazardous substances in products (Ericsson) is a supplier of equipment,  Working conditions in supply chain integrated solutions, multimedia applications and services to operators  Anti-competitive practices worldwide. The Company is a provider of communications networks, Key considerations related services and multimedia As a provider and operator of telecommunications networks, television and video systems, solutions. Through its joint ventures ST-Ericsson and Sony Ericsson, it and related services, Ericsson needs to tackle major sustainability issues. also provides handsets. It offers a portfolio of telecommunication and Ericsson has taken formal steps to reduce the environmental footprint of its products at all data communication systems, life cycle stages, e.g. during R&D, production, product use and end-of-life phases. A group multimedia solutions and professional carbon footprint reduction objective was set for in-house activities and life-time operations services, covering a range of of delivered products. The company also complies with the EU RoHS and REACH technologies. The Company operates directives in order to reduce the use of hazardous substances in its products. Free take- in five segments: Networks, back equipment at the end of productsʻ life is also offered. Nevertheless, in 2010, Ericsson Professional Services, Multimedia, Chinese suppliers were accused of being heavy polluters through their release of heavy Sony Ericsson and ST-Ericsson. During the year ended December 31, metals. 2009, the Company acquired Nortelʼs code division multiple access (CDMA) Working conditions in the supply chain are a sensitive issue as many Ericsson components and long-term evolution (LTE) are produced in countries where violations of workersʼ rights are a common practice. A operations in North America. In Code of Conduct addressing labor standards has been adopted and monitoring systems September 2013, it completed the have been implemented to ensure the respect of its suppliersʼ policies. Nevertheless, the acquisitions of Microsoft's Mediaroom company has been criticized for the poor working conditions at its suppliers, particularly at business and television solution, and Foxconn, known for its severe human rights violations. This tends to show that initiatives Airvana Network Solutions' EVDO taken by the company are still not sufficient. business. Source : Reuters, updated 09.09.2013 The use of « conflict minerals » in Ericsson products is another important issue as such minerals are often mined in countries where human rights violations occur. Although it has a specific policy banning such minerals, NGOʼs criticized the company in 2010 for not ensuring more transparency within its supply chain.

The respect of ethical business practices is also a matter of concern. The companyʼs Code of Business Conduct and Ethics addresses bribery and corruption as well as competition. Monitoring systems are available to ensure the respect of the code.

Analyst: Isabelle Reine [email protected] Assessment date: 28.08.2012 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour GB0009252882 ISIN 925288 Sedol Society GSK.L RIC GSK LN Bloomberg Ticker C

Key figures Governance 98'681 Employees Society 26'431 Revenues (M GBP) A-

Key sustainability issues concerning the company Business description  Relations with doctors and health care systems GlaxoSmithKline plc (GSK) is global  Business ethics behaviour in commercial operations healthcare group, which is engaged in  Side effects of products on customers the creation and discovery, development, manufacture and  Accuracy and objectivity of information provided to customers marketing of pharmaceutical  Clinical trials on humans (notably in emerging markets) products, including vaccines, over-the  Health and safety for workers and contractors -counter (OTC) medicines and health- related consumer products. GSKʼs  Environmental contamination through product residuals principal pharmaceutical products  Water consumption in the production process include medicines in therapeutic  Hazardous waste management areas: respiratory, anti-virals, central nervous system, cardiovascular and Key considerations urogenital, metabolic, antibacterials, oncology and emesis, dermatology, As a company active in the pharmaceutical industry, GlaxoSmithKline has a positive social rare diseases, immuno-inflammation, impact as its products cure and might save peopleʼs lives. Nevertheless, the vaccines and human pharmaceutical sector has important sustainability issues to tackle as products might also immunodeficiency virus (HIV). The have negative impacts either on society with the questions of pricing or promotion or on Company operates in three primary areas of business: Pharmaceuticals, the environment. GlaxoSmithKline has a comprehensive approach of the various Vaccines and Consumer Healthcare. challenges it has to face, but is still the target of criticisms or lawsuits that show its On January 30, 2013, GSK acquired performance still needs to be improved. additional 29.3% interest in GlaxoSmithKline Consumer GlaxoSmithKline has developed a comprehensive code of conduct that include, among Healthcare Ltd. In May 2013, others, guidelines related to promotion of pharmaceutical products. The group has GlaxoSmithKline PLC acquired implemented channels to allow employees to report irregularities. Despite these efforts, it Okairos AG. has been involved in important lawsuits over its practices: it notably agreed to pay USD 3 billion in July 2012 to settle a US lawsuit over illegal medication marketing. Such Source : Reuters, updated 31.05.2013 behaviours stress that GlaxoSmithKline still needs to improve the implementation of its guidelines.

GlaxoSmithKline offers good working conditions that include, among others, comprehensive health and safety programs and targets, flexible working arrangements or regular employee surveys. In relation to environmental management, the company also has an encompassing approach with most of its major impacts being addressed through programs.

Finally, it is worth mentioning that sustainability issues are dealt with at the highest level within the company as the Board of Directors has a Corporate Responsibility Committee. Such initiative shows the companyʼs seriousness in addressing these topics. Nevertheless, Analyst: Vanessa Ardenti the involvement in several controversies indicate that GlaxoSmithKline still needs to [email protected] improve its performance and that its commitments are not well spread through the Assessment date: 04.03.2013 organization yet. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour JE00B4T3BW64 ISIN B4T3BW6 Sedol Society GLEN.L RIC GLEN LN Bloomberg Ticker D

Key figures Governance 57'656 Employees Society 214'436 Revenues (M USD) B+

Key sustainability issues concerning the company Business description  Environmental management of mining operations Glencore Xstrata Plc is a diversified  Labour conditions of workers at mining operations (incl. contractors and suppliers) natural resource company. The  Health and safety conditions of workers at mining operations (incl. contractors and Company operates in three segments: Metals and Minerals, suppliers) which includes copper, nickel,  Tax payment practices in resources-producing countries zinc/lead, alloys, alumina/aluminum  Traceability of origin of precious metals and iron ore; Energy Products, which  includes controlled and non-controlled Bribery and corruption coal mining and oil production  Social and environmental management of projects operations and investments in  Royalties distribution transparency strategic handling, storage and freight equipment and facilities, and Key considerations Agricultural Products, which focuses on grains, oils/oilseeds, cotton and As a multinational commodity trading and mining company, Glencore Xstrata produces and sugar. The Companyʼs operations supplies metals, minerals, oil, coal, natural gas and agricultural products to industrial consist of over 150 mining and customers. Mining extraction and commodities trading are both very controversial activities metallurgical sites, offshore oil as they often have strong environmental and social impacts. production assets, farms and agricultural facilities. The Company is Glencore Xstrata rightly recognizes that its global operations, including exploration, a producer and marketer of over 90 commodities, such as mobile phones, production, processing, transportation or marketing of natural resources, have significant bicycles, cutlery, plastics and impacts on the environment, notably on climate change and water consumption. It has electricity, to customers in industries therefore implemented environmental performance reporting tools and mitigation ranging from automotive to food measures. However, the companyʼs willingness to modify its practices was marred by processing and power. In July 2013, recent conclusions by a team from the U.N. Development Program sent to Loma Miranda the Company announced that it has (Dominican Republic) in order to provide a sustainability assessment of one of the completed the merger of Mutanda companyʼs nickel mining projects. According to those experts, the companyʼs study at this Mining Sarl (Mutanda) and Kansuki site failed to consider the social and environmental impact of extraction at the mine. Sarl (Kansuki). Source : Reuters, updated 25.07.2013 Labour conditions of workers are generally a big concern for most companies in the mining industry. Tensions are extremely high between workers and management, notably in South Africa and in Colombia where many strikes occurred in the past years. While 18 fatal accidents happened worldwide in 2010, Glencore Xstrata recently also faced severe child labour accusations in the Democratic Republic of Congo.

The company supports the Extraction Industry Transparency Initiative (EITI), a global initiative to improve governance in resource-rich countries through the verification and full publication of company payments and government revenues from such activities. It however does not provide any details on a country by country basis. Finally, controversial Analyst: Alexandre Messerli statements from the Glencore's director of agriculture trading saying that the global food [email protected] crisis was a "good business opportunity" contribute to undermine the companyʼs Assessment date: 20.03.2013 statements related to sustainability management. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour GB0005405286 ISIN 540528 Sedol Society HSBA.L RIC HSBA LN Bloomberg Ticker C-

Key figures Governance 260'591 Employees Society 75'606 Revenues (M USD) A

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products HSBC Holdings plc (HSBC) is a  Sustainability impacts of company's own investments global banking and financial services  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) organizations. As of December 31, 2012, it provided a range of financial  Transparent and fair customer counseling services to around 58 million  Adequate and transparent service fees customers through four global businesses: Retail Banking and Key considerations Wealth Management, Commercial Banking, Global Banking and Present in more than 80 countries, HSBC serves millions of clients in established and Markets, and Global Private Banking. emerging markets. Thus, HSBC is regularly confronted with sustainability issues of its In June 2012, the Companyʼs indirect industry, like the impacts of its products and its own investments. The fact that HSBC has wholly owned subsidiary, HSBC Iris developed guidelines to identify environmental and social risks in lending practices and Investments (Mauritius) Ltd, sold its offers microfinance services shows the company's awareness for these topics. Moreover, 4.73% interest in Axis Bank Limited HSBC has adopted the Equator Principles. and 4.74% interest in Yes Bank Limited. In July 2012, its subsidiary, HSBC Europe (Netherlands B.V.), However, the companyʼs involvement in numerous controversies in relation with sold its 100% interest in HSBC Credit controversial project financing (e.g. the Belene nuclear power plant or the HydroAysen Zrt, to CentralFund Kockazati hydropower project) and the fact that HSBC is among the top 10 providers of financial Tokealap. On March 31, 2013, Enstar services to the nuclear industry could be a sign that HSBCʼs good purpose is not yet fully Group Ltdʼs subsidiary completed the implemented. acquisition from Household Insurance Group Holding Company of HSBC Besides, even though HSBC has set up (un-published) policies on bribery, corruption and Insurance Company of Delaware and money laundering, the companyʼs involvement in a money laundering case in Angola, Household Life Insurance Company terrorist financing, tax evasion investigations, price-fixing and anticompetitive behaviour of Delaware, as well as its three subsidiary insurers. could be an indication of weaknesses in its business ethics management system. Source : Reuters, updated 21.06.2013 Like most big financial institutes, HSBC has implemented some employee and environmental programs at operational level. Climate change and green procurement are at the heart of the attention the company pays to environment. Employee satisfaction monitoring systems are in place, but unfortunately the company's health and safety programs do not address ergonomics or psychic conditions, which are sensitive issues for banks. Moreover, HSBC faced some concerns in relation with employment conditions (wrongful termination, employee data handed over to US authorities).

Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B Stock information Governance Labour GB0004544929 ISIN 454492 Sedol Society IMT.L RIC IMT LN Bloomberg Ticker D

Key figures Governance 37'200 Employees Society 28'574 Revenues (M GBP) A

Key sustainability issues concerning the company Business description  Land and resources used (deforestation) Imperial Tobacco Group PLC  Water consumption and waste water (Imperial Tobacco) is a tobacco  Child labour in the production process company. Through the Companyʼs total tobacco portfolio it provides  Health and safety management among employees and suppliers consumers a range of brands and  Business ethics: lobbying and black market products, including cigarettes, fine cut  Information on health impact of products tobacco, cigars and snus. Its total tobacco portfolio includes fine cut Key considerations tobacco, cigars, rolling papers and tubes. Its non-European Union (EU) As one of the main actor of the Tobacco industry, Imperial Tobacco Group has several markets consist of Eastern Europe, issues to tackle on both environmental and social sides. Africa and the Middle East and Asia and markets of the United States and From beginning to end, the process used by manufacturers to turn tobacco seeds into Australasia. Its international cigarette brands include Davidoff, Gauloises packaged cigarettes is energy intensive. Furthermore, the improper disposal of cigarettes Blondes and West. It offers services has serious environmental consequences. The company is aware of its burden and has a across the whole logistics value chain strong environmental management system in place with an ISO 14001 certification for to its customers, including order more than 65% of its production. In addition, the company requires its suppliers to have an reception, storage and stock environmental management and has taken different measures to reduce its main impact management, order preparation, on the environment, in particular regarding energy and water. However, packaging transport and distribution, invoicing material and disposal of cigarettes are also major environmental issues of the tobacco and collection and customer services. industry which are unfortunately not addressed by Imperial Tobacco. Its business has two aspects: tobacco logistics and non-tobacco logistics.

On the labour side, the company has understood the major concerns of its industry and Source : Reuters, updated 05.06.2012 has implemented a health and safety management system in place for its employees and a monitoring system for its suppliers with audits and requirements. Unlike other companies of its sector, Imperial Tobacco Group was not involved in any controversies over labour issues.

Finally, the major impact of a tobacco company is public health. According to WHO, Tobacco use kills more than 5 million people per year. It is responsible for 1 in 10 adult deaths. The WHO considers tobacco use among the five greatest risk factors for mortality, it is the single most preventable cause of death. The company has a code of conduct addressing marketing and advertising requirements. However, evidence of controversies in particular over unscrupulous marketing in Quebec and smuggled cigarettes in Canada and United States shows that the company still has some lacks in addressing these issues.

Analyst: Fanny Sulmoni [email protected] Assessment date: 27.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour NL0000303600 ISIN 7154182 Sedol Society ING.AS RIC INGA NA Bloomberg Ticker C-

Key figures Governance 86'648 Employees Society 42'644 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Sustainability impacts of financial products ING Groep N.V. (ING) is a global  Sustainability impacts of company's own investments financial institution offering banking,  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) investments, life insurance and retirement services to meet the needs  Transparent and fair customer counseling of the customers. The Companyʼs  Adequate and transparent service fees segments include banking and insurance. Banking segment includes Key considerations retail Netherlands, retail Belgium, Retail Germany, Retail Rest of World, ING Group serves over 61 million individual and institutional clients in more than 40 and Commercial Banking. Insurance countries and has a worldwide workforce of over 80,000 employees. As a company with segment includes insurance Benelux, such dimensions, its investment decisions and loan procedures potentially have insurance central and rest of Europe considerable effects on the environmental and social dimension. (CRE), insurance United States (US), Insurance US closed block VA, and ING Group recognizes this responsibility. It has adopted a "Defence Policy" that prohibits ING investment management and investments in companies producing, maintaining or trading controversial weapons like corporate line insurance. In March 2013, it completed the sale of its life personnel landmines, cluster munitions or biological weapons. Thanks to this policy, ING insurance units in Hong Kong, Macau Group decided in 2005 to end business relationships with a major weapon producer and and Thailand to Pacific Century Group since then, several dozens of companies breaching the "Defence Policy" have been fully (PCG). In April 2013, the Company restricted from investments and loans. The adoption of the Equator Principles (standard for completed the sale of its 70%-stake in assessing and managing social and environmental risks in project finance), micro-finance ING Funds Berhad. In May 2013, it activities and some assets under management invested according to socially responsible completed the sale of its investment principles, complete the framework of major steps ING Group has introduced to take care management business in Thailand. of the sustainability impact of its products or investments. Source : Reuters, updated 25.07.2013 The company has also taken measures to improve its environmental and social impacts on the operational level. It has implemented programs to reduce its GHG emissions and green procurement measures. Comprehensive employee programs have been adopted, such as regular surveys to monitor employee satisfaction, part-time working hours and integration programs for minorities. As it is the case for all financial institutions, ING Group may be confronted with the risk of bribery and money laundering. The company addresses these topics through the adoption of policies and has made reporting channels available to report business ethics related breaches.

However, ING Group is involved in several controversies in relation with the financing of controversial projects such as the HidroAysén dam, the Grasberg mine in Indonesia or the Nam Theun 2 Hydropower project. Furthermore, the violation of US economic sanctions against Cuba and Iran or anti-competitive behaviour in Turkey are further events penalizing the sustainable assessment of the bank. Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour FR0000121014 ISIN 4061412 Sedol Society LVMH.PA RIC MC FP Bloomberg Ticker C

Key figures Governance 106'348 Employees Society 28'103 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  Origin of animal products LVMH Moet Hennessy Louis Vuitton  Textile processing SA, (LVMH), is a France-based luxury  Resources' use in production goods company. It owns a portfolio of luxury brands and its business  Sourcing of raw materials activities are divided into five  Working conditions in supply chain segments: Wines and Spirits, Fashion and Leather Goods, Perfumes and Key considerations Cosmetics, Watches and Jewelry, and Selective Retailing. The activities The luxury goods industry has some environmental issues to address, including the use of of the wines and spirits sector include animal products of non-sustainable origin, the resourcesʼ use, textile processing and the the Champagne and Wines branch, sourcing of raw materials. and the Cognac and Spirits branch. The Fashion and Leather Goods As a group with many diverse brands, environmental programs are not implemented at group includes Louis Vuitton, Kenzo group level but at brand level. Most of LVMH brands have programs to reduce their carbon and Rossimoda among others. LVMH footprint and some have even set quantitative targets in this regard. Even if some brands is present in the perfume and cosmetics sector through the French developed waste-water treatment processes, there is no information on water reduction Houses Christian Dior and other programs. brands. Watches and Jewelry sells such products as TAG Heuer, Zenith, At group level, LVMH is a member of the Responsible Jewellery Council, which Dior Watches, Chaumet and Fred, encourages responsible practices throughout the diamond, gold and platinum supply among others. Selective Retailing chain. As these metals are often mined in regions affected by conflict or instability, the RJC businesses operate in two segments: has developed a certification system. Some of LVMH jewellery brands such as Bulgari, travel retail and the seleLVMH ctive TAG Heuer and Chaumet have received such certification. retail concepts represented by Sephora and Le Bon Marche. In September 2013, the Company Leather tanning is another major environmental issue as it is a process using many acquired majority stake in Nicholas hazardous chemicals as well as high levels of water and energy. Even if LVMH has a joint Kirkwood, a British shoe designer venture with a leather tannery that supplies the company with hides and leathers tanned company. with vegetable products, more environmental awareness about leather tanning would be expected. Source : Reuters, updated 29.09.2013

On the social side, as most of the goods are manufactured in emerging countries often known for their human rights violations, the working conditions at suppliers need a particular care. LVMH has adopted a Supplier Code of Conduct which includes social requirements. Supplier audits based on the SA8000 social accountability standard are conducted by most of LVMH brands. Nevertheless, there is still room for improvement as the company is not actually certified according to the SA 8000 standard.

However, several controversies overshadow LVMHʼs good ESG performance : an Analyst: Isabelle Reine executive is under investigation in an inquiry into alleged kickbacks paid to French [email protected] politicians from arms sales to Pakistan. In addition, Sephora, a LVMH brand, was fined Assessment date: 05.03.2013 EUR 9.4 million for price-fixing of perfumes in France. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C+ Stock information Governance Labour GB00B08SNH34 ISIN B08SNH3 Sedol Society NG.L RIC NG/ LN Bloomberg Ticker C-

Key figures Governance 25'224 Employees Society 14'359 Revenues (M GBP) A+

Key sustainability issues concerning the company Business description  Environmental management of operations National Grid Plc is an international  Health and safety conditions of workers (incl. contractors and suppliers) electricity and gas company. The  Type of power grid managed and developed (conventional or smart grid) Companyʼs segments include UK Transmission, UK Gas Distribution,  Greenhouse gas emissions US Regulated and Other activities. The Company owns the electricity Key considerations transmission system in England and As an electric utility mainly active in the transmission and distribution of gas and electricity, Wales and is the national electricity transmission system operator, National Grid faces environmental issues mostly related to the long-term impacts of its responsible for both the England and operations on climate change and more direct impacts on neighbouring communities. The Wales transmission system, and the company is well aware of the role it can play in reducing the amount of greenhouse gases two high voltage transmission released by the use of CO2-intensive energy sources. The nets need to provide for the networks in Scotland, which the societyʼs increasing demand for renewable energy that usually cannot be fed into the Company does not own. The electricity grids at constant rates. However, the companyʼs investment to develop smart Company owns and operates grids is so far limited to pilot projects. Despite the exploitation of a 4.6 MW solar generation electricity distribution networks in asset in Massachusetts, the company still heavily relies on fossil sources (mostly gas but upstate New York, Massachusetts, also CO2-intensive coal) as well as nuclear sources to supply electricity to its US Rhode Island and New Hampshire. Through these networks the Company customers. The environmental impacts of the company cannot therefore be considered as serves approximately 3.5 million compatible with a long-term sustainable economy. electricity consumers in New England and upstate New York. On July 3, National Grid chiefly faced several controversies due to the management of its operations. 2012, the Company sold its New In December 2011, it was for example fined GBP 4.3 million by British regulators for having Hampshire electric and gas failed to meet the targets of getting to potentially dangerous, uncontrolled gas leaks within distribution businesses (Granite State an hour. Electric Company and Energy North Natural Gas Inc.) to Liberty Energy Labour issues are rather well managed by National Grid that has implemented relevant Utilities (New Hampshire) Corp., a subsidiary of Algonquin Power & programs to improve health and safety conditions of its employees. However, some recent Utilities Corp. controversies regarding an accident at London Power Tunnels and a change in final-salary pension schemes of 5ʼ600 workers negatively affect the companyʼs rating. Source : Reuters, updated 12.07.2012

Finally, there is still much room for improvement on the society level. Although National Grid is aware of the impacts of its activities on local communities, it has nevertheless not implemented a systematic program for engagement or consultation with communities. Despite companyʼs recognition that its networks have to be resilient to various possible extreme weather events, its management of crisis caused by the tropical storms “Irene” and “Sandy” was widely criticized by its customers

Analyst: Alexandre Messerli [email protected] Assessment date: 27.02.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour CH0038863350 ISIN 7123870 Sedol Society NESN.VX RIC NESN VX Bloomberg Ticker C-

Key figures Governance 339'000 Employees Society 92'186 Revenues (M CHF) A

Key sustainability issues concerning the company Business description  Purchase and use of palm oil Nestle SA is a Switzerland-based  Health and safety management for workers and suppliers holding company of the Nestle Group  Buying practices among supply chain (the Group) and is principally engaged in the development and  Pollution of air, soil or water production of food and beverage. The  Water consumption during production Group manages its Food and  Energy-efficiency in the production process Beverages business through three geographic zones (Zone Europe,  Animal welfare Zone Americas and Zone Asia,  Information on health impact of products Oceania and Africa) and globally for  Anti-competitive practices and price-fixing Nestle Waters, Nestle Nutrition and Other Food and Beverages (Others). Key considerations The Others segment includes activities of Nestle Professional, As one of the biggest food producer in the world, Nestlé faces several major issues, Nespresso, Nestle Health Science particularly on the sourcing side, with cocoa, palm oil and coffee. and the Joint Ventures in both Food and Beverages and Pharmaceutical First, in 2001, Nestlé, among other chocolate producers, was criticized because it activities. The Group's products are diversified into seven product groups: purchased cocoa from international markets, and cocoa plantations in Ivory Coast Powdered and Liquid Beverages; supplying beans to those markets used forced and child labour. The company said it could Water; Milk products and Ice Cream; not be held responsible because it relies on its wholesalers to provide cocoa untainted by Nutrition and HealthCare; Prepared slave labour. In that respect, Nestlé has set up the Responsible Sourcing program which dishes and cooking aids; includes guidelines, external and internal audits as well as assistance for improvement. Confectionery and PetCare. In However, in July 2012, the Fair Labor Association released a report accusing Nestle of addition, the Group manages a violating its own supplier code in relation to child labour, safety and working hours in Ivory number of brands diversified into Coast in particular. specific product groups like Baby foods, bottled water, coffee, drinks, food service, sport nutrition and Palm oil sourcing is also a key issue of the industry as cultivation of oil palm is contributing weight management, among others. to deforestation and climate change. Nestlé is member of RSPO (Roundtable on Sustainable Palm Oil) since 2009 and is committed that its products will not be associated Source : Reuters, updated 21.02.2013 with deforestation; this commitment is enforced by guidelines and programs. Nestlé shows other strengths in environmental management both from production and products perspective even if it faces sensitive challenges such as greenhouse gases emissions in food production and reduction of packaging materials.

Anti-competitive practices are also of particular concern for Nestlé as the company was fined more than once for price-fixing in the past. Even though it seems that Nestlé has embraced this issue by setting up an anti-competitive policy, recent occurrence of such controversies shows that these measures are not fully implemented yet. Despite a Analyst: Fanny Sulmoni comprehensive reporting on sustainability, Nestlé keeps being criticized for its unfair [email protected] practices both on ethics and employment practices which shows that its management of Assessment date: 20.03.2013 such issues still needs improvements. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C- Stock information Governance Labour CH0012005267 ISIN 7103065 Sedol Society NOVN.VX RIC NOVN VX Bloomberg Ticker C

Key figures Governance 131'000 Employees Society 57'561 Revenues (M USD) C+

Key sustainability issues concerning the company Business description  Relations with doctors and health care systems Novartis AG provides healthcare  Business ethics behaviour in commercial operations solutions. The Company is a  Side effects of products on customers multinational group of companies specializing in the research,  Accuracy and objectivity of information provided to customers development, manufacturing and  Clinical trials on humans (notably in emerging markets) marketing of a range of healthcare  Health and safety for workers and contractors products led by pharmaceuticals. Its portfolio includes medicines, eye  Environmental contamination through product residuals care, cost-saving generic  Water consumption in the production process pharmaceuticals, preventive vaccines  Hazardous waste management and diagnostic tools, over-the-counter and animal health products. The Key considerations Company has five segments: Pharmaceuticals, which include Novartis is a Swiss company developing and marketing health products. The patent-protected prescription pharmaceutical sector has a positive social impact as it cures and might save peopleʼs medicines; Alcon, which include lives. In that respect, producing generics is even more positive as products are then surgical, ophthalmic pharmaceutical available at a cheaper price. The company also has a division, Sandoz, dedicated to and vision care products; Sandoz, which include generic generic products. Nevertheless, the health sector also has challenging sustainability issues pharmaceuticals; vaccines and to address. In that context, Novartis has been managing its potential negative effects for diagnostics, which include human several years now and does it in a competent manner. This good performance is vaccines and blood-testing nevertheless overshadowed by some important controversies, mainly related to business diagnostics, and consumer health, ethics, labour and governance. which include over-the-counter medicines (OTC) and Animal Health. Regarding business ethics, Novartis has the relevant policies and programs in place to On April 8, 2011, the Company guarantee its employees have a correct behaviour in commercial operations. However, the acquired the remaining non- company has been criticized and sued in some cases for its controversial practices, as for controlling interest in Alcon, Inc. example, in the US, for cheating the US Medicaid program. Novartis has also been Source : Reuters, updated 02.02.2012 strongly criticized by several NGOs in past years for its position regarding patents, notably in relation to its decision to challenge a decision by an Indian Court rejecting a patent application done by the company for a cancer drug, Glivec, and, therefore allowing the generic version to be used.

Novartis offers its employees good working conditions: the group has comprehensive health and safety programs and employee satisfaction is measured annually through a survey. Nevertheless, the company was also sued for not having paid overtime to some of its employees in the US.

Finally, remuneration of top management is a topic that was heavily debated over the past Analyst: Vanessa Ardenti years by the shareholders of the company as remuneration paid to former Chairman and [email protected] CEO, Daniel Vasella, drew considerable criticisms. This once again downgrades the Assessment date: 04.03.2013 companyʼs good performance in relation to governance. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour GB00B24CGK77 ISIN B24CGK7 Sedol Society RB.L RIC RB/ LN Bloomberg Ticker B+

Key figures Governance 35'900 Employees Society 9'567 Revenues (M GBP) A-

Key sustainability issues concerning the company Business description  Greenhouse gases emissions & carbon footprint Reckitt Benckiser Group Plc is  Responsible sourcing of raw materials manufacturer and marketer of  Resource protection (e.g. water) branded products in household, health and personal care, selling a  Environmental impact of products range through over 60 operating  Health & safety of employees companies into nearly 200 countries.  Health impact of products The Company analyses its revenue based on health, hygiene, home and Key considerations portfolio brands together with RB Pharmaceuticals and Food. The As a manufacturer of household and personal care products, Reckitt Benckiser has to Companyʼs geographical segments tackle several major concerns related to its environment impact as well as the health of include: Europe and North America employees and consumers. (ENA); Latin America, North Asia, South East Asia and Australia and New Zealand (LAPAC); and Russia Reckitt strives to mitigate its impact on the environment with a range of comprehensive and CIS, Middle East, North Africa, policies and action plans covering the main concerns of its industry, such as responsible Turkey and Sub-Saharan Africa sourcing of materials and protection of resources. Concerning the procurement of (RUMEA).The Companyʼs key brands ingredients, Reckitt Benckiser set programs addressing the application of REACH by include Durex, Gaviscon, Mucinex, suppliers and the sourcing of palm oil, among others. Furthermore, the company offers Nurofen, Scholl, Strepsils, Airborne, products with non-polluting ingredients, such as safe surfactants (cleaning agents that MegaRed, Move Free, Bang, break down into non-polluting compounds) with no danger for aquatic life. Reckitt also Clearasil, Dettol, Finish, Harpic, Lysol, launched electrical plug-in air care devices using less packaging and plastic materials. Mortein, Veet Air Wick, Calgon, Vanish, Woolite and Frenchʼs.

Considering the health impact of its products, Reckitt does not report any relevant Source : Reuters, updated 04.06.2013 information about it. But a subsidiary of Reckitt Benckiser in Korea was fined for misleading information to consumers after a woman died because of sterilizers. The company had mentioned on the label that the product did not contain any harmful substances, without conducting prior research to establish this fact.

In addition of a labour policy addressing among others the health and safety of employees, Reckitt Benckiser set up programs at all sites, which are also covering psychic conditions. These programs include quantitative targets concerning accident reduction and the targets are regularly monitored for a follow up action. Moreover, all companyʼs manufacturing facilities are guided by OHS management systems and more than 30% of them are externally OHSAS 18001 certified.

In conclusion, Reckitt Benckiser has showed a great commitment to CSR issues for several years. Given the kind of activities in which Reckitt Benckiser is engaged, its reporting is above expectations. Analyst: Gael Kyriakidis [email protected] Assessment date: 29.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour GB0007188757 ISIN 6220103 Sedol Society RIO.AX RIC RIO AU Bloomberg Ticker D+

Key figures Governance 71'219 Employees Society 50'967 Revenues (M USD) A-

Key sustainability issues concerning the company Business description  Environmental management of mining operations Rio Tinto Limited (Rio Tinto) is  Labour conditions of workers at mining operations (incl. contractors and suppliers) engaged in finding, mining and  Health and safety conditions of workers at mining operations (incl. contractors and processing mineral resources. The Companyʼs product group includes suppliers) aluminium product group, copper  Tax payment practices in resources-producing countries product group, diamonds and  Traceability of origin of precious metals minerals group, energy product group  and iron ore products group. Its Bribery and corruption products are iron ore, aluminium,  Social and environmental management of projects copper, diamonds, coal, uranium,  Royalties distribution transparency gold and industrial minerals (borax, titanium dioxide and salt). Its iron ore Key considerations businesses delivered record production and shipments, and its As a multinational metals and mining corporation, Rio Tinto focuses not only on the copper business showed a second extraction of minerals but also on aluminum production, which is energy-intensive. The half recovery in copper volumes. In company addresses most pressing issues of that sensitive industry in its reporting that was January 2012, it acquired 2% of externally checked according to the Global Reporting Initiative requirements. Ivanhoe Mines Ltd. In August 2012, Orocobre Ltd acquired Borax Rio Tinto has implemented programs to mitigate the impact of its operations on the Argentina S.A. from Rio Tinto Ltd entities, Rio Tinto Minerals environment, notably it improved the water management, and took steps to reduce the Development Limited and Borax CO2-intensity of processes. Furthermore, the company powers most of its aluminum Europe Limited. In September 2012, it production plants with low carbon electricity from sources such as hydropower, in order to sold the North American portion of its contribute to the companyʼs target to reduce its greenhouse gas emissions by 6% between Alcan Cable business to General 2008 and 2013. Such initiatives have not prevented Rio Tinto from being associated with a Cable Corporation. As of December significant number of important environmental controversies at some of its production sites. 31, 2012, the Company had 51% Since 1981, Rio Tinto's Australian uranium mine for example has had more than 150 spills interest in Turquoise Hill Resources of millions of liters of radioactive water, leaks and license breaches, polluting the world Ltd.,formerly known as Ivanhoe heritage Kakad National Park. The company is also facing legal actions for alleged Mines. environmental damages in Papua New Guinea and in British Columbia. Source : Reuters, updated 29.04.2013 Considering labour relations, the company is much criticized and was sometimes condemned for its poor respect of the principles of freedom of association and of collective bargaining. For example in July 2011, an Australian Federal Court ruled invalid a 2008 non -union collective agreement covering workers put in place by Rio Tinto in the Pilbara site. More recently, Blair Athol mine union members went on strike to protest against the difference of redundancy payments between union and non-union workers.

Despite the implementation of programs for engagement with local communities, NGOs Analyst: Alexandre Messerli often criticized Rio Tinto for not properly undergoing adequate social and environmental [email protected] studies before starting a project (open diamond mine in India for example). In the past Assessment date: 20.03.2013 years, local communities protested for unsatisfactory reimbursement for relocating people to make room for the mines, as it was recently the case in Madagascar. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B- Stock information Governance Labour CH0012032048 ISIN 7110388 Sedol Society ROG.VX RIC ROG VX Bloomberg Ticker C

Key figures Governance 82'089 Employees Society 45'499 Revenues (M CHF) A+

Key sustainability issues concerning the company Business description  Relations with doctors and health care systems Roche Holding AG is a Swiss  Business ethics behaviour in commercial operations pharmaceuticals and diagnostics  Side effects of products on customers holding company. It belongs to the Roche Group that operates through  Accuracy and objectivity of information provided to customers subsidiaries and associated  Clinical trials on humans (notably in emerging markets) companies around the world. It  Health and Safety for workers and contractors discovers, develops and provides diagnostic and therapeutic products  Environmental contamination through product residuals and services from early detection and  Water consumption in the production process prevention of diseases to diagnosis,  Hazardous waste management treatment and treatment monitoring. The Company has two divisions: Key considerations Pharmaceuticals and Diagnostics. Pharmaceuticals are divided into two Roche is a company developing and marketing drugs and diagnostic tests. The sub-divisions: Roche Pharmaceuticals pharmaceutical sector has a positive social impact as it cures and might save peopleʼs and Chugai. It operates in the United lives, but it also has some important sustainability issues to address. In general, the States, Western Europe, Japan, company has a comprehensive management of the major challenges the industry needs to CEMAI (Central and Eastern Europe, Middle East, Africa, Central Asia, tackle. However, this good performance is still undermined by some controversies in the Indian Subcontinent), Latin America, areas of ethics. Asia-Pacific and Other regions. Diagnostics include five business Ethics in commercial operations is a major topic in the health sector, which has been hit by areas: Applied Science, Diabetes several scandals, notably for its fraudulent relations with national healthcare systems. Care, Molecular Diagnostics, Tissue Roche has a Code of Conduct and specific guides related to integrity of business Diagnosis and Professional transactions and fair competition. The company has implemented mechanisms allowing Diagnostics. It operates in five employees to report irregularities. Nevertheless, as several other pharmaceuticals, the geographical regions: Europe, Middle company has been fined in the US for having illegally inflated prices of drug costs and East and Africa (EMEA); North America; Asia-Pacific; Latin America, having, therefore, defrauded the Medicaid program. Roche is also under investigation in and Japan. Serbia for possible bribery of doctors. Such investigations show that the company still has some progress to do to behave in an ethical way. Source : Reuters, updated 06.02.2013

Regarding labour relations, Roche offers its employees good working conditions: the group has comprehensive health and safety programs and has also implemented measures to increase diversity in its workforce providing, among others, several flexible working arrangements to balance work and life. Since 2011, employee satisfaction is measured every 18 months with a survey. Environmental impacts of the company's production processes are also taken care of in a competent manner as shown by the different programs implemented. Analyst: Vanessa Ardenti Finally, the approach of its environmental impact by the company is against quite [email protected] encompassing, the company having implemented an environmental management system Assessment date: 04.03.2013 and major programs to manage its negative effects. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour GB00B03MLX29 ISIN B03MLX2 Sedol Society RDSa.L RIC RDSA LN Bloomberg Ticker D-

Key figures Governance 87'000 Employees Society 467'153 Revenues (M USD) B-

Key sustainability issues concerning the company Business description  CO2 impact of final product Royal Dutch Shell plc (Shell),  Environmental pollution and spills (including flaring) incorporated on February 5, 2002, is  Health and safety conditions of workers (incl. contractors and suppliers) an independent oil and gas company. The Company operates in three  Labour conditions of workers (incl. Contractors and suppliers) segments: Upstream, Downstream  Share of turnover from gas on the overall fossil fuel business and Corporate. Upstream combines  Unconventional extraction practices the operating segments Upstream International and Upstream Americas,  Environmental and social management of projects which are engaged in searching for  Corruption and anti-competitive practices and recovering crude oil and natural  Royalties distribution transparency gas; the liquefaction and transportation of gas; the extraction of Key considerations bitumen from oil sands. Downstream is engaged in manufacturing; As a major global oil company, Shell is concerned with all the pressing issues of that distribution and marketing activities industry, and on several accounts, its record is worse than that of its peers. The biggest for oil products and chemicals, in area of concern is its strategy regarding renewable energies. Shell used to be a precursor alternative energy (excluding wind), and a significant investor in that area. It is now stopping its investments in that branch of and carbon dioxide (CO2) management. Corporate represents activity and focuses instead on the debatable biofuels in Brazil. Through Raízen, a $12 the key support functions. In October billion joint venture between Shell and the Brazilian firm Cosan, the company is now one of 2011, the Company bought a marine the worldʼs largest biofuel producer and distributor. Environmental groups blame such terminal on Canada's Pacific Coast as initiative for driving up food prices and deforestation. Shell recognizes these negative a possible site for a liquefied natural impacts and took measures to mitigate them by buying biofuels covered by environmental gas export terminal. In January 2012, and sustainability clauses. Finally, Shell is also investing in other products and the Company's 50% owned, Australia technologies such as natural gas and Carbon Capture and Storage. Arrow Energy Holdings Pty Ltd acquired all of the shares in Bow The company rightly recognized harmful environmental impacts caused by e.g. flaring and Energy Ltd. spills and therefore implemented detailed environmental performance reporting tools and Source : Reuters, updated 22.08.2013 mitigation measures. Nevertheless, several major environmental pollutions and spills occurred in the last years. Besides being the most involved company in Arctic drilling, Shell increases its investments in unconventional oil & gas production methods such as high- volume gas fracking, tar sands and deep sea drilling in several countries. Those practices not only threaten biodiversity, but also use, and potentially pollute, large amount of water.

Shell also faced several severe controversies regarding employment conditions. For example, in January 2011, Shell Malaysia was accused of having fired and sued employees who denounced the companyʼs supposedly unethical practice. Besides, Shellʼs involvement in the Brazilian sugarcane industry is raising many questions about subcontracted cane cutters' working conditions, denounced in the past as close to slavery Analyst: Alexandre Messerli by some Brazilian government inspectors. [email protected] Assessment date: 10.10.2012 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour FR0000120578 ISIN 5671735 Sedol Society SASY.PA RIC SAN FP Bloomberg Ticker C

Key figures Governance 111'974 Employees Society 35'957 Revenues (M EUR) B-

Key sustainability issues concerning the company Business description  Relations with doctors and health care systems Sanofi SA, formerly Sanofi-Aventis, is  Business ethics behaviour in commercial operations a global and diversified healthcare  Side effects of products on customers company based in France. The Company discovers, develops and  Accuracy and objectivity of information provided to customers distributes therapeutic solutions  Clinical trials on humans (notably in emerging markets) focused on patients' needs. The  Health and safety for workers and contractors Company focuses on the field of healthcare with six growth platforms:  Environmental contamination through product residuals diabetes solutions, human vaccines,  Water consumption in the production process innovative drugs, consumer  Hazardous waste management healthcare, emerging markets and animal health. The Company has a Key considerations portfolio of prescription drugs, vaccines, generics and consumer The pharmaceutical sector Sanofi-Aventis is active in has a positive social impact as it healthcare products. The Company is cures and might save peopleʼs lives. In that respect, producing generics is even more active domestically and abroad, positive as products are then available at a cheaper price. Sanofi-Aventis has a division including other European countries, offering generic pharmaceutical products. Nevertheless, the health sector also has North and Latin Americas, Asia, Africa and Middle East. In December 2012, challenging sustainability issues to address. The company has good performances in Sanofi announced that it completed areas like environmental management and ethical behavior concerning clinical trials on the divestiture of its dermatology humans, which are nevertheless overshadowed by some important controversies, mainly business, Dermik, to Valeant related to business ethics breaches and side-effects of products on consumers. Pharmaceuticals International, Inc. In April 2013, the Company inaugurated Regarding business ethics, Sanofi-Aventis has the relevant policies and programs in place its logistics platform in Casablanca, that specify how its employees should correctly behave in commercial operations. Morocco. However, the company has been criticized and sued in some cases for its controversial practices, such as the controversial selling practices of vaccines to paediatricians in the Source : Reuters, updated 18.04.2013 US.

Regarding employees, Sanofi-Aventis offers good working conditions with, among others, comprehensive health and safety programs for employees and contractors. Despite these efforts, the company has been involved in controversies related to health and safety and employment conditions, notably in relation to employees being contaminated by asbestos. It has been recently criticized in France for its restructuring practices. As a possible next step to improve, Sanofi-Aventis could set quantitative targets : this would foster further measures and show the companyʼs willingness to really improve its sustainability performance.

Finally, Sanofi-Aventis has a good performance in relation to environmental management. Analyst: Vanessa Ardenti More than half of its production sites are certified according to the international standard [email protected] for environmental management ISO 14001. The company has implemented programs to Assessment date: 04.03.2013 reduce its main impacts, notably its water consumption and pollution. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE A Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A+ Stock information Governance Labour DE0007164600 ISIN 4846288 Sedol Society SAPG.DE RIC SAP GR Bloomberg Ticker B+

Key figures Governance 64'937 Employees Society 16'223 Revenues (M EUR) A-

Key sustainability issues concerning the company Business description  Contribution to eco-efficient processes Sap AG is engaged in enterprise  Contribution to reduction of digital divide applications in terms of software and software-related service revenue. The Key considerations Companyʼs core business is selling licenses for software solutions and As a worldwide provider of enterprise software, SAP AG is active in an industry where related services to deliver a range of availability of information and data generation is steadily growing and technology-driven choices fitting the varying functional knowledge is more and more requested. Even if not active in a material-intensive or highly needs of its customers. Its solutions polluting sector, products and practices do not systematically meet sustainability cover business applications and requirements. technologies, as well as specific industry applications. In-memory The company is engaged to corporate social responsibility. SAP AG adopted several technology across its data management offerings enables commitments (e.g. a Human Rights Commitment) and CSR policies (e.g. Environmental customers to access the data, which Policy, Health & Safety Management Policy). Furthermore it introduced a supplier as well they need, where they need it, when as a partner Code of Conduct to support its sustainability vision. they need it. The Company is structured along Technology & SAP AG has taken measures to reduce its direct ecological impacts, for example by Innovation Platform, Products & implementing programs to reduce its greenhouse gas emissions and by adopting green Solutions, Global Customer procurement measures. Comprehensive employee programs have been adopted, such as Operations, Chief Operations Office, regular surveys to monitor employee satisfaction, part-time working hours and integration Global Finance & Administration, programs for minorities. Most employees are represented by collective labour agreements Human Resources, and On Device & Sybase. On December 1, 2011, the or take part in work councils. Company sold Steeb Anwendungssysteme GmbH. In With locations in over 130 countries, SAP AG deals with the risk of business ethics February 2012, the Company breaches. This risk is managed through the adoption of a Code of Business Conduct for acquired SuccessFactors, Inc. In Employees, where topics such as bribery and corruption and insider trading are October 2012, it acquired Ariba, Inc. addressed. Moreover, anonymous reporting channels are available for business ethics In August 2013, it acquired Hybris AG. related breaches. Source : Reuters, updated 07.08.2013 Finally, it is worth mentioning that SAP AG fosters responsible and sustainable business growth in emerging markets through its investments in emerging entrepreneurs for example in Brazil and India. Selected companies receive comprehensive support and grants from SAP AG to facilitate growth and development in their communities.

Analyst: Daniela Perito [email protected] Assessment date: 31.07.2012 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour FR0000121972 ISIN 4834108 Sedol Society SCHN.PA RIC SU FP Bloomberg Ticker C

Key figures Governance 140'000 Employees Society 23'946 Revenues (M EUR) A

Key sustainability issues concerning the company Business description  Environmental and social impact of purpose of the machinery / equipment Schneider Electric SA is a France-  Energy consumption and energy sources used as well as energy efficiency during use based company that specializes in phase electricity distribution, automation  management and produces Resources used for construction of machinery installation components for energy  Working conditions for employees and suppliers (health and safety) management. The Company has five  Anti-competitive practices divisions organized by business: Energy and Infrastructure, which Key considerations includes medium and low voltage, installation systems and control, Schneider Electric is a global provider of solutions and components in the area of renewable energies and includes automation as well as electricity distribution and grid-management. Its integrated solutions customer segments in Utilities, play an important role in the increase of energy efficiency across the energy chain, Marine, residential and oil & gas industrial applications, buildings, transportation, data centers, etc. Moreover, it offers sector; Industry, which includes energy optimization audits. Many of the businesses served (such as the building segment, automation & control which includes electricity production, transportation) contribute significantly to the worldʼs energy water treatment and mining, minerals & metals industries; Buildings, which consumption and addressing the environmental issues here is key. Schneider Electric includes building automation and plays an important role in the optimization of performance in term of energy consumption. security, whose customers are hotels, However, the company also offers solutions applied in nuclear power plants, defense hospitals, office and retail buildings; products and other sectors with high environmental and social impact. Data centres and networks, and Residential which is engaged in Schneider Electric is aware of the environmental issues at stake of its own production and solutions for saving electricity bills by addresses them with a comprehensive action plan comprising programs and targets based combining lighting and heating control on an ISO 14001-certified management system. Its main focus is to lower its greenhouse features, among others. In March 29, gas emissions for reducing its impact on climate change. It is worth underlying that 2013, it acquired Electroshield TM Samara. Schneider Electric has set up two Sustainability Committees, one being at executive management level, to monitor and steer the groupʼs action plan. Source : Reuters, updated 29.03.2013 Industrial companies like Schneider Electric have to pay particular attention to the safety of their employees as work on machineries and automation manufacturing facilities might be dangerous for workers. In this respect, the company has implemented an OHSAS 18001 certified management system for most of its sites. Emphasis is placed on anticipating professional risks and on integrating preventing measures into company projects to enhance the health and safety of its employees.

It is worth mentioning that the company has adopted “Principles of Responsibility” addressing anti-competitive practices and other business practices. The measures taken seem to show their effect as the company has not been involved in any major controversies recently, while there were several such cases in the past. Analyst: Fanny Sulmoni [email protected] Assessment date: 25.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour C+ Stock information Governance Labour DE0007236101 ISIN 5727973 Sedol Society SIEGn.DE RIC SIE GR Bloomberg Ticker D+

Key figures Governance 368'000 Employees Society 78'296 Revenues (M EUR) B

Key sustainability issues concerning the company Business description  Origin of resources (conflict minerals, rare earth elements) Siemens AG is an integrated  Environmental impact of products technology company with activities in  Working conditions in supply chain the fields of industry, energy and healthcare. Siemens operates in six  Business ethics behaviour in commercial operations segments: Industry, Energy, Healthcare, Equity Investments, Key considerations Siemens IT Solutions and Services As a provider of high technologies to the energy, industrial and healthcare sectors, and Siemens Financial Services (SFS). Industry, Energy and Siemens faces major sustainability challenges, mainly regarding the environmental Healthcare are reported along with 14 protection and the respect of fair business ethics practices. divisions, which comprise the divisions, Industry Automation, Drive Siemens offers a range of products and solutions with a positive environmental impact, Technologies, Building Technologies, such as wind turbines and environmental technologies for cleaner water and air, to help OSRAM, Industry Solutions and customers reduce their environmental footprint and combat climate change. Specific Mobility, belonging to the Industry quantitative targets and initiatives to reduce the companyʼs carbon footprint have also Sector, the Divisions, Fossil Power been adopted. Generation, Renewable Energy, Oil Nevertheless, although it might divest the nuclear market, Siemens provides technology for and Gas, Power Transmission and Power Distribution, belonging to the nuclear plants, such as turbines and conventional islands. Energy Sector and the Divisions, Imaging and Information Technology Regarding production, 81% of Siemensʼ sites are certified according to the ISO 14001 (IT), Workflow and Solutions and standard. In addition, through a specific policy, Siemens requires its suppliers to ensure Diagnostics, belonging to the that purchased metals do not originate from armed conflict regions. Healthcare Sector. In July 2012, it divested a portfolio of over 40 patents To ensure that fundamental human rights are not violated, Siemensʼ suppliers must adopt and applications related to a specific policy, addressing relevant labor standards. Formal monitoring systems are in telecommunication network place to ensure the respect of the Code. However, in 2010, a company supplier in China management and mobile multimedia. In August 2013, it divested its stake in was criticized for its bad working conditions. Siemens also faced protests of its employees. Nokia Siemens Networks. For example, in 2012, Siemens employees massively criticized the companyʼs plans to close down its headquarters in Germany. In addition, in 2012, employees organized a Source : Reuters, updated 07.08.2013 strike over unionising rights in India.

Finally, the prevention of corruption is the greatest matter of concern for Siemens as it has been accused of bribery in many countries these past years. The company is also the subject of several protests over its involvement in controversial projects, such as the construction of windmills in Western Sahara and a power plant in Slovakia. In addition, Siemens has been suspected of anti-competitive practices in Pakistan and Europe.

Globally, although Siemensʼ sustainability reporting is consistent, its involvement in severe Analyst: Isabelle Reine controversies tends to show that the initiatives taken by the company are no sufficient. The [email protected] fact that the company derives a small percentage of revenues from the sale of automation, Assessment date: 17.10.2012 control and power systems for military navy vessels and submarines is worth mentioning. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A Stock information Governance Labour GB0004082847 ISIN 408284 Sedol Society STAN.L RIC STAN LN Bloomberg Ticker C-

Key figures Governance 88'190 Employees Society 19'187 Revenues (M USD) A+

Key sustainability issues concerning the company Business description  Sustainability impacts of financial products Standard Chartered PLC is the  Sustainability impacts of company's own investments holding company. The Company  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) operates globally and is principally engaged in the business of retail and  Transparent and fair customer counseling commercial banking and the provision  Adequate and transparent service fees of other financial services. The Company operates in two business Key considerations segments: Consumer Banking, which meets the needs of private, small and Standard Chartered is among UK's major financial institutions and provides products and medium-sized enterprises (SMEs), services across 68 markets. As for all financial institutions, Standard Chartered's primary priority and personal banking impact on the environmental and social dimension happens through its lending and customers across its franchise and investment decisions. Thus, the integration of such aspects is a key issue for banks. Wholesale Banking, which includes lending and portfolio management; Standard Chartered addresses these topics by systematically assessing the ecological and transaction banking, including trade social risks in credit granting and investment decisions. Moreover, all project finance and cash management and custody; global markets, including financial transactions are assessed according to the Equator Principles. With the voluntary adoption markets, asset and liability of these internationally recognized principles, the company assesses and management, corporate finance and manages social and environmental risks in project finance. At Standard Chartered, principal finance. As of December 31, microfinance activities are fostered through the support of monetary financial institutions in 2011, it comprised a network of more countries such as Kenya, India or Bangladesh and through the expansion of business than 1,500 branches and outlets in 71 activities into microfinance markets (e.g. Indonesia, Pakistan, Philippines). markets. On April 8, 2011, the Company acquired GE Money Pte However, the implementation of these measures has not prevented the company from Limited, a specialist in auto and engaging in financing controversial projects. Actually, Standard Chartered is subject of unsecured personal loans in Singapore. On September 2, 2011, it protests over its involvement in controversial projects such as the Sakhalin II oil and gas acquired Gryphon Partners Advisory project and the bauxite mine in Niyamgiry Hills. Moreover, some involvements in business Pty Ltd and Gryphon Partners ethics cases like deficient money laundering controls in India or the collusion of rate Canada Inc. settings in Korea show that Standard Chartered has still room to improve its business ethics practices. Source : Reuters, updated 26.07.2013

Standard Chartered has implemented some employee and environmental programs at the operational level. Climate change and green procurement are at the center of the attention that the company pays to environment. Employee diversity programs are in place and employee policies show awareness for employee well-being. Moreover, collective labour agreements and close relationship with unions should ensure favorable exchange with employees.

Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour ES0178430E18 ISIN 5732524 Sedol Society TEF.MC RIC TEF SM Bloomberg Ticker C-

Key figures Governance 131'882 Employees Society 62'933 Revenues (M EUR) A+

Key sustainability issues concerning the company Business description  Competition practices Telefonica SA is a Spain-based  Transparency of pricing structure company active in the  Impact of radio frequency radiations telecommunications and digital services sectors. The Company  Customer relations operates through three business  Working conditions of employees segments: Telefonica Latin America,  Digital divide Tefonica Europa, and Others. It provides public and private  Health & safety of employees telecommunication, media and entertainment services; under such Key considerations brands as Telefonica, Movistar, O2 As a provider of telecommunication services, Telefonica has to address primarily social and Vivo, among others. It offers fixed telephony accesses, Internet and data issues related to customer relations, competition concerns, health impact of waves and accesses, mobile accesses and pay working conditions of employees. Generally speaking, the company has a very television .With presence in Europe comprehensive corporate social responsibility (CSR) reporting covering all the industry- and Latin America, it operates in 25 expected topics. countries through such subsidiaries as Telefonica Emisiones SAU, For the last couple of years, the company deployed a customer satisfaction monitoring that Telefonica Brasil SA, Telefonica Chile enabled it to identify how their cutomers are and how the customer friendliness of products SA, Colombia Telecomunicationes could be improved. Moreover, Telefonica strives to protect its customers, notably the SA, Telefonica Europe BV, and children by offering their parents tools to prevent access to inappropriate content. Despite MMO2 Plc, among others. The Company acquired infrastructure from a strong commitment to customers and quality of services, the company was accused of Nokia Oys's Nokia Solutions and insufficient protection of UK customersʼ data. In 2012, Telefonica was criticized for not Networks. doing enough to protect customers in case their mobile phones were stolen or lost. In addition, the same year, the company was fined for a huge service outage in Argentina. Source : Reuters, updated 09.09.2013

Considering the health & safety of its employees and the employment conditions, Telefonica shows a serious commitment. The company implemented health and safety program that includes support in case of psychic problems and for management of stress. It also recognized the freedom of association of its employees. Most of them are covered by collective bargaining agreements.

In the environmental field, Telefonica has a very comprehensive policy, covering all relevant topics. In addition to CO2 emissions reduction action plan, it offers customers a recycling collection program for used devices.

Moreover, Telefonica commits to reduce the digital divide within its activities. Analyst: Gael Kyriakidis The different elements mentioned above testify the serious engagement of Telefonica [email protected] concerning CSR issues and make this company rather sustainable. Assessment date: 29.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C- Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D- Stock information Governance Labour GB0008847096 ISIN 884709 Sedol Society TSCO.L RIC TSCO LN Bloomberg Ticker D+

Key figures Governance 537'784 Employees Society 64'826 Revenues (M GBP) B+

Key sustainability issues concerning the company Business description  Energy efficiency of operations (notably refrigeration process) Tesco PLC is an international retailer.  Management of waste and recycling The activity of the Company is  Selling of labelled products retailing and associated activities in the United Kingdom, the Peopleʼs  Working conditions for employees (notably in relation to hours and wages) Republic of China, the Czech  Supply chain management (working conditions for suppliers) Republic, Hungary, the Republic of  Anti-competitive practices Ireland, India, Malaysia, Poland, Slovakia, South Korea, Thailand, Key considerations Turkey and the United States. The Company also provides retail banking As an international food retailer, Tesco has major issues to tackles, both on environmental and insurance services through its and social sides. subsidiary, Tesco Bank. The services it offers in store, such as optician, The company has understood its environmental challenges by having implemented pharmacy, phone shop or customer restaurant. As of February 25, 2012, it programs to reduce its impact. For example, the refrigerant gases used in almost all had over 180 opticians. Click & refrigeration systems – known as hydrofluorocarbons (HFCs) – are a potential greenhouse Collect is a component of its multi- gas. Tesco has managed to reduce refrigerant emissions across the group. This was channel offering. Its store and mostly achieved through minimizing refrigeration gas leakage. Moreover, the company is distribution networks give customers starting to use alternative refrigeration systems, known as natural refrigeration systems, the opportunity to pick products across the business. Its store in Shanghai was the first in China to use a natural whenever it suits them from over 770 refrigeration system and it opened its second store with CO2 refrigeration in Beijing. stores, close to where they live or However, despite several isolated measures to improve its environmental fooprint, the work. As of February 25, 2012, it had company has not yet adopted a formal environmental management system based on an 45 stores, which offers grocery Click & Collect. In September 2012, it environmental certification which would be more than welcome for an important company acquired Mobcast. In March 2013, the such as Tesco. Moreover, the company has been involved in controversies over its Company acquired Restaurant Group damage on the ecosystem. Giraffe.

Regarding working conditions, the company seems aware of its major challenges Source : Reuters, updated 13.03.2013 regarding its employees and contractors by having implemented several measures. For example, Tesco has set up a strong auditing system to ensure compliance of labour policies for its contractors based on the ETI (Ethical Trading Initiative) base code. Contractors are then followed and trained on labour issues. However, some important processes are missing such as a formal health and safety management system based on a certification. Finally, to underline these lacks, the company has been involved in labour related controversies over the past years.

Finally, Tesco is starting to ride the wave of the organic and fair-trade by selling a small range of such products. However, this remains too marginal to be considered as a change by the company towards a more sustainable business model. Analyst: Fanny Sulmoni [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE D Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion D about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour D Stock information Governance Labour FR0000120271 ISIN B15C557 Sedol Society TOTF.PA RIC FP FP Bloomberg Ticker D-

Key figures Governance 97'126 Employees Society 182'299 Revenues (M EUR) B+

Key sustainability issues concerning the company Business description  CO2 impact of final product Total SA is a France-based integrated  Environmental pollution and spills (including flaring) international oil and gas company. It  Health and safety conditions of workers (incl. contractors and suppliers) is an integrated international oil and gas company and a chemicals  Labour conditions of workers (incl. Contractors and suppliers) manufacturer. Total engages in all  Share of turnover from gas on the overall fossil fuel business aspects of the petroleum industry,  Unconventional extraction practices including Upstream operations (oil exploration and production, together  Environmental and social management of projects with activities related to natural gas),  Corruption and anti-competitive practices Refining & Chemicals (refining,  Royalties distribution transparency petrochemicals, speciality chemicals, crude oil trading and shipping) and Key considerations Marketing & Services (focused on the supply and sale of petroleum As an integrated Oil & Gas company, Total SA is active in a very sensitive industry as its products, together with activities business is based on non-renewable energy sources. related to renewable energy). In April 12, 2013, it inaugurated the Basically, most of the products offered by the company cannot be considered as partnership with Veolia Environnement SA the Osilub plant. In sustainable because they are directly derived from polluting fossil fuels. Even if the July 2013, it sold its TIGF (Transport company is acquiring stakes in renewable energies companies (investment of USD 1.4 et Infrastructures Gaz France), gas billion in Sunpower in 2011), it remains marginal in comparison with investments in fossil transport and storage business. In fuels. Production practices (notably for the extraction) in the Oil & Gas industry also have a September 2013, it announced the strong environmental impact. Total SA made some efforts to address important issues transfer to The National Gas such as flaring: it has developed relevant technical solutions and has set clear quantitative Company of Trinidad &Tobago of all targets. However, notably through its Canadian subsidiary Total E&P Canada (TEPCA), of its E&P assets in Trinidad through the company is involved in unconventional extraction practices, such as oil sands. In the the sale of Total E&P Trinidad B.V USA, Denmark, Poland and Argentina Total SA uses highly controversial hydraulic and Elf Exploration Trinidad B.V. fracturing techniques to extract shale gas. Both of those practices not only use and Source : Reuters, updated 01.10.2013 potentially pollute water but also emits more GHG than conventional extraction.

On the social level, the company has implemented programs regarding health & safety which is a major issue in the Oil & Gas industry. Nevertheless, several severe accidents, sometimes with fatalities, occurred during last years resulting in controversies regarding the respect of safety standards. Finally, Total SA distinguishes itself by having an especially high rate of employees covered by a collective bargaining agreement.

Lastly, the companyʼs sustainable performance is overshadowed by its involvement in controversies related to the main societal issues at stake for the sector such as royaltiesʼ distribution. In 2012 only, the company has been investigated over tax evasion in Nigeria Analyst: Alexandre Messerli and agreed to pay the American Justice Department USD 15 million to settle a claim as it [email protected] knowingly underpaid royalties owed in relation to the natural gas produced from federal Assessment date: 27.03.2013 and Indian land. Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE C Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion C- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B+ Stock information Governance Labour CH0024899483 ISIN B18YFJ4 Sedol Society UBSN.VX RIC UBSN VX Bloomberg Ticker D+

Key figures Governance 60'754 Employees Society 25'653 Revenues (M CHF) D+

Key sustainability issues concerning the company Business description  Sustainability impacts of investment products UBS AG is a client-focused financial  Sustainability impacts of company's own investments services company that offers a  Business ethics behaviour (fiscal compliance, money laundering, conflicts of interest) combination of wealth management, asset management and investment  Transparent and fair customer counseling banking services on a global and  Adequate and transparent service fees regional basis. UBS AG is the parent company of the UBS Group Key considerations (Group).The operational structure of the Company consists of the UBS serves institutional and private clients worldwide through its offices in 50 countries Corporate Center and four business and its 61,000 employees. Social and environmental considerations are thus part of the divisions: Wealth Management & company's daily business as the bank is confronted with the growing expansion of Swiss Bank, Wealth Management customers' sustainability awareness. Americas, Global Asset Management and the Investment Bank. As of UBS integrates environmental and social aspects into all of its business activities as it has December 31, 2011, the Company implemented an environmental and social risk screening process for all of its transactions. operated about 877 business and banking locations worldwide, of which Moreover, 11% of its assets under management invested according to socially responsible about 42% were in Switzerland, 42% principles. In addition, it has adopted an exclusion policy prohibiting investments in in the Americas, 11% in the rest of companies involved in cluster munitions. Europe, Middle East and Africa, and 5% in Asia-Pacific. During the year However, UBS faces numerous concerns in relation with the respect of business ethics ended December 31, 2011, it practices and its support of controversial projects. In fact, UBS is criticized over its completed acquisitions in Global involvement in projects like the Woodside Petroleum's gas refinery or gold mines in Papua Asset Management and in the New Guinea. Furthermore, UBS is one of the top 20 providers of financial services to the equities business of the Investment nuclear industry and among the top 10 providers of financial services to the coal industry. Bank. Despite the implementation of a Code of Business Conduct, the involvement in Source : Reuters, updated 26.03.2012 controversies on issues like money laundering or predatory lending shows the company's weakness in its business ethics management system. Moreover, UBS is involved in the LIBOR rate conspiracy case and in tax evasion investigations in France, India and the US.

On the operational level, UBS addresses environmental and employee issues: its commitment to climate change is underlined with a position statement, and programs to reduce CO2 emissions are implemented at company level. Comprehensive employee training programs promote human resources development and employee health and safety programs address psychic conditions.

Analyst: Daniela Perito [email protected] Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion A- about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour B- Stock information Governance Labour GB00B10RZP78 ISIN B10RZP7 Sedol Society ULVR.L RIC ULVR LN Bloomberg Ticker B-

Key figures Governance 172'000 Employees Society 51'324 Revenues (M EUR) A

Key sustainability issues concerning the company Business description  Purchase and use of palm oil Unilever PLC (PLC) is a supplier of  Pollution of air, soil and water fast moving consumer goods. The two  Water consumption parent companies, Unilever N.V. (NV) and PLC, together with their group  Energy efficiency in the production process companies, operate as the Unilever  Animal welfare Group (Unilever). The Companyʼs four  Buying practices (green procurement, social requirements for suppliers) product areas are Personal Care, Foods, Refreshment and Home Care.  Health and safety management among employees and suppliers The Company's personal care, which  Production of organic and fair-trade products includes sales of skincare and  Anti-competitive practices haircare products, deodorants and oral care products; foods, which Key considerations includes sales of soups, bouillons, sauces, snacks, mayonnaise, salad As one of the biggest food and personal care producers in the world with more than dressings, margarines and spreads; 150'000 employees, Unilever faces several major issues, particularly on the sourcing side. refreshment, which includes sales of In particular, there have been many concerns surrounding the sourcing of palm oil. Indeed ice cream, tea-based beverages, cultivation of oil palm is contributing to deforestation and climate change. Vast areas of weight-management products and nutritionally enhanced staples sold in pristine rainforest is slashed and burned each year in order to make space for oil palm developing markets and home care, plantations which is catastrophic for the biodiversity and releases large amounts of CO2 which includes sales of home care into the atmosphere. Many orangutans and other wildlife are killed in the process, so that products. Effective July 4, 2013, this one vegetable oil can be used in many of our everyday foods. Unilever is member of Unilever PLC raised its interest to the Roundtable for Sustainable Palm Oil (RSPO) member since the beginning and shows 51.55% from 36.75%, by acquiring a proactive measures such as setting targets to purchase all its palm oil from certified 14.784% interest in Hindustan sustainable sources by 2015. Unilever Ltd. In October 2013, Pinnacle Foods Inc completed the The working conditions at the suppliers are also a sensitive issue of Unilever as some raw acquisition of the Wish-Bone salad dressings business from Unilever materials, such as cocoa and sugar, are sourced from countries where poor working PLC. conditions are almost the norm. Ethical and social criteria are fully part of the companyʼs procurement policy. Unilever also conducts internal and external on-site inspections with Source : Reuters, updated 01.10.2013 regards to human rights, such as health and safety and child labour.

Anti-competitive practices are also of particular concern for Unilever as the company was fined more than once for price-fixing in Europe (for laundry products and powder detergents in particular) in the past. However, it seems than Unilever has embraced this issue by setting up an anti-competitive policy and not being involved in such cases anymore.

We can conclude that despite some minor controversies - compared to its peers - the Analyst: Fanny Sulmoni company is a leader of the industry regarding sustainability issues by addressing most of [email protected] them in a comprehensive way, with concretes steps. Assessment date: 20.03.2013 Report generated on: 17.10.2013

Inrate | Sustainability Assessment | © Copyright 2013 68 Inrate Sustainability Assessment VodafoneVodafone WIRELESSWIRELESS TELECOMMUNICATION TELECOMMUNICATION SERVICES SERVICESCommunication - United- United Kingdom Kingdom sector

InrateInrate Sustainability Sustainability Assessment Assessment COMPANYCOMPANY EvaluatingEvaluating company company products products and and services services along along the the whole whole value value chain chain GRADEGRADE C+C+ Environment EnvironmentEnvironment TheThe Inrate Inrate Sustainability Sustainability Assessment Assessment is isa measurementa measurement of ofand and an an opinion opinion B-B- aboutabout the the environmental environmental and and social social impactimpact of ofan an issuer. issuer. It ratesIt rates companiescompanies on on a scalea scale from from A+ A+ to toD-. D-. LabourLabour CC StockStock information information Governance Labour GB00B16GWD56GB00B16GWD56ISINISIN B16GWD5B16GWD5SedolSedol SocietySociety VOD.LVOD.LRICRIC VODVOD LN LNBloombergBloomberg Ticker Ticker C-C-

KeyKey figures figures GovernanceGovernance 91'27291'272EmployeesEmployees Society 44'44544'445RevenuesRevenues (M (M GBP) GBP) A+A+

KeyKey sustainability sustainability issues issues concerning concerning the the company company BusinessBusiness description description  CompetitionCompetition practices practices VodafoneVodafone Group Group Plc Plc (Vodafone) (Vodafone) is isa a  TransparencyTransparency of of pricing pricing structure structure mobilemobile communications communications company company operating across the globe providing  CustomerCustomer relations relations operating across the globe providing a rangea range of ofcommunications communications services. services.  ImpactImpact of of radio radio frequency frequency radiations radiations It offersIt offers a rangea range of ofproducts products and and  WorkingWorking conditions conditions of of employees employees services,services, including including voice, voice, messaging, messaging, data and fixed-line solutions and  DigitalDigital divide divide data and fixed-line solutions and devicesdevices to toassist assist customers customers in in  HealthHealth & &safety safety of of employees employees meetingmeeting their their total total communications communications needs.needs. It hasIt has a globala global presence, presence, with with KeyKey considerations considerations equityequity interests interests in inover over 30 30 countries countries and over 40 partner markets VodafoneVodafone is isthe the worldʼs worldʼs second-largest second-largest mobile mobile operator operator in innumbe number ofr of subscribers subscribers and and has has and over 40 partner markets worldwide.worldwide. It operatesIt operates in inthree three worldwideworldwide operations. operations. For For years, years, the the company company has has implemented implemented comprehensive comprehensive policies policies geographic regions: Europe, Africa and programs to tackle CSR issues inherent in the telecom industry. Notwithstanding these geographic regions: Europe, Africa and programs to tackle CSR issues inherent in the telecom industry. Notwithstanding these andand Central Central Europe; Europe; Asia Asia Pacific, Pacific, and and measures,measures, Vodafone Vodafone has has been been involved involved in innumerous numerous and and major major controversies controversies related related to to thethe Middle Middle East, East, and and has has an an employmentemployment conditions, conditions, business business ethics ethics and and customer customer relations. relations. investmentinvestment in inVerizon Verizon Wireless Wireless in inthe the UnitedUnited States. States. In InMarch March 2012 2012, Verizon, Verizon ConsideringConsidering employment employment conditions, conditions, strikes strikes and and criticims criticims from from unions unions in inthe the UK UK resulted resulted by by Wireless,Wireless, which which is isa jointa joint venture venture of of thethe company's company's decision decision to to relocate relocate and and outsource outsource jobs jobs in inlow low cost cost countries. countries. In In Ghana, Ghana, VerizonVerizon Communications Communications Inc. Inc. and and VodafoneVodafone had had also also to to deal deal with with other other disputes disputes related related to to poor poor working working conditions, conditions, low low Vodafone,Vodafone, purchased purchased the the operating operating assets of Cellular One of Northeast salariessalaries and and mass mass termination termination of of call call center center operators. operators. assets of Cellular One of Northeast PennsylvaniaPennsylvania from from the the Company. Company. In In May 2013, Vodafone Group Plc Regarding business ethics issues, Vodafone was repeatedly accused of violating anti- May 2013, Vodafone Group Plc Regarding business ethics issues, Vodafone was repeatedly accused of violating anti- announcedannounced launch launch of ofits its carrier carrier competitioncompetition laws laws in inEurope Europe and and was was fined fined on on several several occasion, occasion, although although the the company company servicesservices business business unit. unit. deployeddeployed a acomplete complete code code of of ethics ethics covering covering all all business business ethics ethics topics. topics. It Italso also faced faced an an importantimportant corruption corruption case case related related to to mobile mobile phones phones licenses licenses in inIndia. India. Moreover, Moreover, Vodafone Vodafone SourceSource : Reuters, : Reuters, updated updated 13.05.2013 13.05.2013 hashas been been involved involved in innumerous numerous controversies controversies related related to to tax tax avoidance, avoidance, notably notably in inUK UK wherewhere it wasit was revealed revealed that that the the company company did did not not pay pay any any corporation corporation tax tax in in2011 2011 despite despite earningsearnings of of several several hundred hundred million million pounds. pounds.

InIn the the matter matter of of customer customer relations, relations, Vodafone Vodafone implemented implemented a aclient client satisfaction satisfaction motoring motoring systemsystem to to get get direct direct feedback feedback from from customers. customers. But But the the company company faced faced numerous numerous criticisms criticisms fromfrom consumer consumer watchdogs, watchdogs, such such as as Consumidores Consumidores en en Accion Accion in inSpain. Spain. In In addition, addition, the the telecomtelecom operator operator was was recurrently recurrently sued sued for for misleading misleading customers customers about about the the cost cost of of its its services.services.

VodafoneVodafone acts acts in ina aresponsible responsible way way according according to to its its policies policies and and action action plans. plans. But But the the disputes and controversies faced by the company in the last years show that substantial disputes and controversies faced by the company in the last years show that substantial Analyst:Analyst:GaelGaelKyriakidisKyriakidis effortsefforts remain remain to to be be done done for for sustainability. sustainability. [email protected]@inrate.com AssessmentAssessment date: date: 29.03.2013 29.03.2013 ReportReport generated generated on: on:17.10.201317.10.2013

InrateInrate| Sustainability| Sustainability Assessment Assessment | © | ©Copyright Copyright 2013 2013 Inrate Sustainability Assessment 69 Zurich Insurance Group AG INSURANCEFinancial services - Switzerland sector

Inrate Sustainability Assessment COMPANY Evaluating company products and services along the whole value chain GRADE B+ Environment Environment The Inrate Sustainability Assessment is a measurement of and an opinion B+ about the environmental and social impact of an issuer. It rates companies on a scale from A+ to D-. Labour A- Stock information Governance Labour CH0011075394 ISIN 5983816 Sedol Society ZURN.VX RIC ZURN VX Bloomberg Ticker B+

Key figures Governance 52'722 Employees Society 70'416 Revenues (M USD) B-

Key sustainability issues concerning the company Business description  Sustainability impacts of company's own investments Zurich Insurance Group Limited is a  Fairness and transparency of insurance contracts and consulting services Switzerland-based holding company  Fair and transparent financial business practice engaged in the insurance sector. The Company provides a range of general  Sustainability impacts of insurance products and life insurance products and services for individuals, small Key considerations business, mid-sized and large-sized Zurich Insurance Group is an internationally active multi-line insurer present in over 170 companies, and multinational corporations. The Company offers its countries and serving individuals as well as business customers of all sizes. As such, the products and services through three company is more and more confronted with sustainability risks. business segments, namely General Insurance, Global life and Farmers. To answer the sustainability issues of its industry, the company has developed tailor-made The General Insurance segment insurance products for ecologically favorable industries and projects and considers ESG offers motor, home and commercial criteria in its own investments. For example, the company offers electric vehicle insurance products and services for individuals, products and provides coverage for construction risks for renewable energy power plants as well as small and large business. such as for the "Desert Sunlight" project in California (one of the largest photovoltaic solar The Global life segment offers life farm projects in North America). insurance, savings, investment and pensions solutions. The Farmers segment includes farmers Zurich Financial Group is a signatory of the UN Principles for Responsible Investment management services, which (PRI) and integrates environmental, social and governance (ESG) factors into its provides non-claims management investment decision processes. Furthermore, the flood resilience program for communities services to the farmers exchange, as and the accident prevention programs for private customers are two examples of the well as Farmers Re business, which company's risk reduction efforts. includes reinsurance assumed from the Farmers Exchange by the The company has taken measures to reduce its direct ecological impacts, by reducing Company's group. Furthermore, the energy consumption and adopting green procurement measures. Some of its sites have Company provides reinsurance and insurance business considered as obtained the ISO 14001 certification for their environmental management system. non-core business. Moreover, it has developed a risk profiling methodology providing underwriting guidance and training in four areas of concerns (cluster munitions, dam construction projects, oil and Source : Reuters, updated 21.02.2013 gas construction projects and projects with human rights infringements).

Even if Zurich Insurance Group is not active in a sensitive sector regarding employees, the company has implemented relevant programs to ensure proper working conditions. Comprehensive employee programs have been adopted, such as regular surveys to monitor employee satisfaction and employees take part in work councils.

However, Zurich Insurance Group faced some concerns in 2012, especially in relation with the employees of its subsidiary Farmers Insurance Group (misclassification of employees Analyst: Daniela Perito to independent contractors to avoid tax obligations) and with the violation of Irish data [email protected] protection laws (possession of personal information of private people). Assessment date: 18.03.2013 Report generated on: 17.10.2013

Independence Inrate clients are mainly companies in the financial sector, some of them being part of the analysis coverage of Inrate. This interaction is regulated by Inrate corporate policies on conflict of interest and transparency. In the context of this publication, Inrate confirms it supplies sustainability research to two companies that are featured in this report, namely UBS and BNP Paribas. We do not consider that our independence is affected by this business relationship.

Disclaimer Inrate believes that the data, assessments and opinions reported in this publication reflect the best informed and fairest opinion that can be made by outside analysts. However, Inrate cannot in any way guarantee the full accuracy or exhaustive- ness of its analyses and cannot therefore accept any responsibility in case of reporting of false, inaccurate or incomplete information. Inrate accepts no liability for financial prejudice allegedly resulting from inaccuracy of assessments or data or from the misinterpretation of their scope. The assessments and data reported above are offered by Inrate for general in- formational purposes or for being used by financial profes- sionals. They are in no way recommendations to invest or dis- invest in any financial product or security. They must not be understood as a financial forecast of financial performance of underlying securities of researched companies.

Data used in this publication

Market capitalization as of September 30th, 2013

STOXX® Europe 50 as of September 30th, 2013

Inrate Sustainability Assessment 71 Inrate analyst team

Name Function Experience Contact (years) Vanessa Ardenti Head of Production 15 +41 (0)58 344 00 04 [email protected] Stéphane Genilloud Senior analyst 16 +41 (0)58 344 00 05 [email protected] Madeleine Guyer Senior analyst 6 +41 (0)58 344 00 24 [email protected] Tobias Jung Head of Research 11 +41 (0)58 344 00 25 [email protected] Gael Kyriakidis Senior analyst 6 +41 (0)58 344 00 07 [email protected] Alexandre Messerli Senior analyst 6 +41 (0)58 344 00 08 [email protected] Daniela Perito Senior analyst 14 +41 (0)58 344 00 09 [email protected] Isabelle Reine Senior analyst 15 +41 (0)58 344 00 10 [email protected] Judith Reutimann Senior analyst 6 +41 (0)58 344 00 27 [email protected] Bettina Rüegge Senior analyst 8 +41 (0)58 344 00 28 [email protected] Regina Schwegler Senior analyst 6 +41 (0)58 344 00 29 [email protected] Gina Spescha Senior analyst 4 +41 (0)58 344 00 32 [email protected] Myriam Steinemann Senior analyst 11 +41 (0)58 344 00 30 [email protected] Fanny Sulmoni Senior analyst 7 +41 (0)58 344 00 12 [email protected] Anna Vettori Senior analyst 13 +41 (0)58 344 00 31 [email protected]

72 Inrate Sustainability Assessment Sector responsibilities

Sector Responsible analyst Chemical sector Vanessa Ardenti, Tobias Jung Clothing sector Isabelle Reine, Bettina Rüegge Comfort and appliances sector Isabelle Reine, Bettina Rüegge Communication sector Gael Kyriakidis, Judith Reutimann, Anna Vettori Consulting and commercial services sector Isabelle Reine, Madeleine Guyer Disposal and recycling sector Alexandre Messerli, Tobias Jung Diversified companies sector Daniela Perito, Regina Schwegler Education sector Daniela Perito, Regina Schwegler Energy sector Alexandre Messerli, Judith Reutimann Financial services sector Daniela Perito, Regina Schwegler Health care sector Vanessa Ardenti, Judith Reutimann, Anna Vettori Household and personal products sector Gael Kyriakidis, Bettina Rüegge Housing sector Gina Spescha, Bettina Rüegge Infrastructure sector Isabelle Reine, Bettina Rüegge IT equipment and electronics sector Isabelle Reine, Bettina Rüegge Leisure sector Gina Spescha, Bettina Rüegge Machinery and industrial equipment sector Fanny Sulmoni, Tobias Jung Nutrition sector Fanny Sulmoni, Bettina Rüegge Resources sector Alexandre Messerli, Judith Reutimann Retail and distribution sector Gael Kyriakidis, Madeleine Guyer, Myriam Steinemann Security sector Daniela Perito, Bettina Rüegge Software sector Daniela Perito, Judith Reutimann Transportation sector Gina Spescha, Madeleine Guyer, Myriam Steinemann Water sector Daniela Perito, Judith Reutimann

Inrate Sustainability Assessment 73 Inrate contacts

Stefano Gilardi Head of Market Relations [email protected] +41 (0)58 344 00 06

Natalie Ernst Corporate Communications and Media Relations [email protected] +41 (0)58 344 00 23

74 Inrate Sustainability Assessment About Inrate

Inrate is a leading independent sustainability rating agency active in Europe. It is based in Switzerland and has more than 20 years of experience in linking its know-how on sustainability with the financial markets.

Inrate provides tailor-made solutions for investors who wish to consider ESG issues in their investments – either on the grounds of socially responsible investment or with the aim of minimizing extra-financial risks in traditional investment.

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T +41 (0)58 344 00 00 F +41 (0)58 344 00 01 [email protected] www.inrate.com