A New Perspective ESG ARABESQUE S-RAY® Contents III. II. I. Group Information Arabesque S Arabesque S - - Ray Services Ray Introduction Group Information ARABESQUE S-RAY® Our Group sustainable and transparent financial solutions financial transparent and sustainable cutting utilise we Group, the Across Arabesque • • • • • • • • • • Calculation ofsignals generated and utilizedby AIengine the in investment products proprietary consistingour oftechnologymillionbuilt using 255 million 750 nodes and edges, Development ofEnginethe proprietary AI 2019 in outManagement Ltd. of Arabesque spun Asset Arabesque AI® measurementsScore, (GC ESG Score, Preferences FilterTemperature and c a ie e f a ce ai abili A e i g de performance of global7,000+ publicly listed companies S Arabesque S implementation ofa quantitative investment process Investment philosophy byintegration the defined ofnon Global presenceAsia Europe, with MENA, clientsUSA, in Va i a ailable SMA , ) i e e al f d , c e (e.g. ofinvestment Construction of strategies and management investment products - Ray Ray quantitativeis a data and - Ray® spun out of Arabesque Asset Management Ltd. of Ltd. in 2017 out Management spun AssetRay® Arabesque - - edge research to to deliver edge research driven technology developed the sustainability to assess a massivelya computationaldistributed graph four distinct foursustainability distinct - financial financial the and data ™ Score) 4 ARABESQUE S-RAY® Our Board Our non Our Compact Compact UN Global Director of the Executive founding Group and Arabesque Chairman of the Georg Kell - executive Board is comprised of global leaders in corporate sustainability in corporate is global leaders of Board comprised executive Investments Calvert President of Former CEO and Krumsiek Barbara Services Catholic Relief President of Former CEO and Woo Dr Carolyn Kennedy School Affairs, Harvard and International Human Rights Professor in Berthold John Ruggie Beitz International of WWF Former President Kakabadse Yolanda member Committee Management Börse and Deutsche Executive Board 360T G and member of Founding partner Carlo Group Kölzer Gates Foundation and Melinda Officer at the Bill Communications Former Kate James Chief 5 ARABESQUE S-RAY® Our Journey A imeline of A abe e jo ne ince ince jo ne of A abe e imeline A and and Barclays Bank buyout from Management Arabesque establishment of 2013 Systematic Arabesque UCITSfirst fund: Launch of the 2014 Oxford University of the with he S akeh lde to Stockholder he F e A abe e Publication of 2015 and Bloomberg York Times, FT Newincluding Arabesque coverage on Global media in Malaysia BIMB Investment with partnership Strategic 2016 Accenture agreementwith distribution Large Arabesque Chairman of announced as Georg Kell Ray® Arabesque S Launch of 2017 - scale - Ray on researchS publishes JP Morgan S&P Global Street and State BNY Mellon, launched with partnerships S of Directors expandsBoard Arabesque established GmbH Arabesque S (40 Fund) Act SystematicUSA Arabesque Launch of - Ray 2018 - Ray - Score released Temperature S Arabesque AI Launch of Hessen Digital and Land HelebaGroup, Real AG, DWS X, Commerz investors Allianz newwith SeriesGmbH A Arabesque S - Ray 2019 - ™ Ray Arabesque Koelzer Carlo Berger, Goldbeck Arabesque S Accenture invests in Arabesque AI invests in DWS Group 2020 invest invest into , Roland Roland H - olding Ray 6 Introduction
7 ARABESQUE S-RAY® Introduction The challenges of sustainability sustainability data of The challenges ESG ESG data Our products solutionsbeen have developed and to help overcome common challenges around ESG ESG Data Challenges of quantity,quality and transparency Data Data Human Human Analysts creating biased information ESG ESG reporteddata on Slow Slow Reporting an annual an basis throughanecdotal CSR Greenwashing reports 8 ARABESQUE S-RAY® Introduction Com anie ainabili Com anie e fo mance S Arabesque investors, and impact The self performance Arabesque - learning services quantitative of corporations sustainability, S quantitative - are Ray of over - used technology Ray® leverages big data and artificial intelligence to to intelligence assess artificial big data and leverages Ray® is a 7 quantitative by , 000 and and models some consultants of of our the S of and - Ray dynamic, data the ld data enables ld . tool scores largest daily that clients leading . frequency analyses listed to financial corporations evaluate the data sustainability institutions, the products alpha using 9 ARABESQUE S-RAY® S-Ray Scores Arabesque S Arabesque and of the The corporate create an Covering Four unique ways to assess ESG ways Four to assessESG performance unique companies, ever constant competitive quantitative quantitative - expanding over performance addition 90 more pricing % methodology - Ray is a transparency tool tool to sustainability assess corporate is atransparency Ray of metrics and of comprehensive global . . inputs diverse for market for of the range S greater - cap, Ray assessment ESG of S allows - coverage Ray data scoring, uses for to of temperature through emissions.their GHG temperaturethrough contributing are the to rise in global Athat metric quantifies how corporations Temperature Score Global Compact. based of the on the principles UN A normative assessmentof companies GC Score those involved activities. in certain involvements of companies, and flags A search tool checks business the that Preferences Filter Score ESG financially financially material to its business. on that arethe topics performance ESG A e al a i f ac a 10 ARABESQUE S-RAY® Differentiators • • • • • • • • action Temperature Filter Preferencesalignswith investments values e al a e a age e c a ie ESG Sc e GC tracks Score reputational risk 7,300+ companiesglobal7,300+ public signals News & NGOof sources30,000 ESG long250+ million150 daily data processedpoints MultipleLenses DailyScoring ™ - term metrics term Score assesses climate climate Score assesses and impact • • • • • • • • inputs Scalable as it allows foraddition constantof humananalysts tobehavioral biasesNo avoid data setsources ofDiverse Algorithmicapproach indicatorAlphainvestors for ESG materiality sustainabilityacross 22 features trillions dollars undermanagementofassetsof S i e e ce A abe e f De el ed Investors Perspective Investors - Ray scores are accessed by global investorswithglobal by are scoresRay accessed Quantitative Methodology Quantitative 11 The Global Compact Score is used to exclude companies with increased reputational risk
A normative assessment of corporates based on the United Nations Global Compact Non-Compensatory Approach Every GC principle starts with a 1 weight of 25%, but gets more weight allocated as the score starts dropping below 50. With over 9,000 corporate signatories from over 160 countries, the UN Global Compact is the ld largest Normative Assessment corporate sustainability initiative. The GC Score provides a The score analyses the behavior of normative assessment of companies based on the four 2 companies against UNGC principles, independently of their core principles of the UN Global Compact: Human Rights, sector. Labour Rights, the Environment and Anti-Corruption.
Reputation & Controversy RAY® - The score serves as an indication 3 of the reputational risk companies are exposed to due to
controversies. GC GC Score ARABESQUE ARABESQUE S
12 The ESG Score is measuring how well companies are managed
Our ESG Score helps to identify long-term outperformance
22 Sustainability Topics
We measure and combine 1 c a ie e f a ce relative to a variety of The ESG Score identifies sustainable companies that are sustainability issues. better positioned to outperform over the long term, based on the principles of financial materiality. When Materiality Analysis computing the ESG Score of a company, our algorithms 2 We assign higher importance to the will only use information that significantly helps explain sustainability topics that better explain financial performance of a company. future risk-adjusted performance. Materiality is applied by over-weighting features with higher materiality and Investment Upside
RAY® rebalancing these weights on a rolling quarterly basis. - Considering the principle of financial 3 materiality, it is possible to assess which companies may outperform in
the long run. ESG Score ARABESQUE ARABESQUE S
13 The Preference Filter permits the alignment of investments with your values
A toolkit that enables a flexible approach to screening
Business Involvement Flags 13 standard and 2 specialised controversial business involvements of companies in the At S-Ray we acknowledge that there is no one definition of form of revenue stream. sustainability it means different things to different people, corporations, and countries. To that end, the Preference Filter takes a flexible approach to screening that allows investors to fine-tune Transparent It does not penalize companies the filter and align it with their values. The Preference Filter is the based on their involvement, just provides a binary signal. perfect complement to the S-Ray ESG and GC scores, providing individuals with a full toolkit to incorporate both exclusionary screening and ESG integration into their responsible investing RAY® -
process. Customized Used to tailor an investment
portfolio to your personal values. Preferences Filter ARABESQUE ARABESQUE S
14 Coverage
Our clients have access to the sustainability performance of over 90% of global market cap
Region # Companies
North America 2,794
Asia 1,923
Europe 1,614
Australasia 390
South America. 195 RAY® - Africa 169
Middle East 95
Others 60 Coverage ARABESQUE ARABESQUE S
15 The Temperature Score quantifies the extent to which companies contribute to global temperature rise
E al a ing a compan s con rib ion o he clima e crisis Score
Climate Impact Target
™ Companies receive a near-term and long-term Has the company set a target with the Science temperature score reflecting the temperature Based Target Initiative to reduce GHG pathways they are on given their current emissions to a level compatible with 2°C? behaviour.
Incomplete Disclosure Trend Companies that do not publicly disclose their Have recent emissions changes followed the emissions following GHG protocol are given an pathways that are required to reach net zero incomplete disclosure score of 3°C. emissions by mid-century and limit global temperature rise to 1.5°C?
Temperature Score Scope 3 RAY® - The temperature score is calculated using Does the company report some part of their sector-specific benchmarks and using emissions scope 3 emissions?
Temperature pathways from the International Energy
ARABESQUE ARABESQUE S Agency. 16
The Temperature Score covers 2,900 companies representing 76% of global market-cap ™
+ RAY®
-
Score Temperature ARABESQUE ARABESQUE S
17 Services
*The image of the report within this slide is indicative of how data is represented. 18 ARABESQUE S-RAY® *The image of the report within this slide is indicative of how represented. is ofdata indicative is of report the within slide*The this image Services An integrated suite of ESG solutions to support your unique requirements unique solutions to your ESGsupport integrated suite of An method A daily data delivery your all A of EnterpriseLicense daily S - delivery Ray feed preferred . updated scores of Enterprise LicenseEnterprise . all sent data method S - Ray through feed scores of of delivered via your preferred short A abe e reports bespoke on sustainability Feature Feature Overview service performance for investors . looking for ad hoc 19 ARABESQUE S-RAY® *The image of the report within this slide is indicative of how represented. is ofdata indicative is of report the within slide*The this image Services An integrated suite of ESG solutions to support your unique requirements unique solutions to your ESGsupport integrated suite of An report The S - Ray on delivery your all A their EnterpriseLicense daily screening S - Ray preferred . updated portfolio's scores PortfolioScreening service sent data method performance through feed for of of licensees on aiming the S - to Ray gain scores insight . and company A 360 degrees against Company Snapshot analysis its selected of the peers sustainability . performance of a 20 ARABESQUE S-RAY® Partnerships A Snapshot of Arabesque S of Arabesque Snapshot A Socially Responsible Index. S&P 500 Environmental & sustainability data forthe ArabesqueS over time. against relevant benchmarks accountlevel comparedand analyse equitiesat the its Scores to BNY Mellon to ArabesqueS - - Ray Ray provides Ray Ray provides - Ra a ne hi o a ne hi Ra investing. standardizationto ESG helpbring transparency and S ee ESGXSM l sets data forState the ArabesqueS Journal. Score withThe Wall Street developedbespokea ESG Arabesque S - - Ray Ray delivers Ray has - date and opportunities at itsopportunities and core. places ESG considerations benchmark indexfamily that forthedata an ESG fordata ArabesqueS throughoutthefirm. andanalyticsRay data integrateS theArabesque S A shareholderof Arabesque - Ray Ray with the aim to - Citi which use Ray delivers equity - 22 ARABESQUE S-RAY® Our Clients A Snapshot of Arabesque S of Arabesque Snapshot A - Ra clien o clien Ra - date 23 Thank you
Disclaimer The Arabesque group of companies (the A abe e G ) is a provider of data, advisory, technology and financial services. Arabesque S-Ray® is a service provided by Arabesque S-Ray GmbH ( A abe e S-Ra ) and its branch and subsidiary companies. Arabesque S-Ray is a limited liability company (Gesellschaft mit beschränkter Haftung) incorporated in Frankfurt am Main and organised under the laws of Germany with registered number HRB 113087 in the commercial register of the local court with its seat and business address at Zeppelinallee 15, 60325 Frankfurt am Main, Germany. The asset management activities referred to herein are provided by Arabesque Asset Management Limited ( AAML ) and its branch and subsidiary companies. AAML is a private limited company incorporated under the laws of England and Wales, with company number 08636689 and with its registered address at Second Floor, Victoria House, Bloomsbury Square, London, WC1B 4DA. AAML is authorised and regulated by the Financial Conduct Authority in the United Kingdom and is a registered with the United S a e Securities and Exchange Commission as an investment adviser. The artificial intelligence products and services referred to herein are provided by Arabesque AI Limited ( AAIL ). AAIL is an Appointed Representative of AAML which is authorised and regulated by the Financial Conduct Authority. AAIL is a private limited company incorporated under the laws of England and Wales, with company number 12180670 and with its registered address at Second Floor, Victoria House, Bloomsbury Square, London, WC1B 4DA. This document is provided on a confidential basis by Arabesque S-Ray and is for information purposes only; accordingly, it is not a solicitation or an offer to buy any security or instrument or to participate in any trading activities. NOT AN OFFER. This document does not constitute an offer to sell or solicitation to purchase any shares in any Fund to any person, and shall not be construed as a recommendation or advice on the merits of investing in a fund. THIRD PARTY INFORMATION. Certain information contained in this document has been obtained from sources outside Arabesque. While such information is believed to be reliable for the purposes used herein, no representations are made as to the accuracy or completeness thereof and none of the Arabesque Group nor its affiliates takes any responsibility for such information. RELIANCE the Arabesque Group makes no representation or warranty, express or implied, as to the accuracy or completeness of the information contained herein, and accepts no liability for any loss, of whatever kind, howsoever arising, in relation thereto, and nothing contained herein should be relied upon. CONFIDENTIALITY. This document contains highly confidential information regarding A abe e investments, strategy, and organization. Your acceptance of this document constitutes your agreement to keep confidential all the information contained in this document, as well as any information derived by you from the information contained in this document and not disclose any such information to any other person. This document may not be copied, reproduced, in any way used or disclosed or transmitted, in whole or in part, to any other person. ENQUIRIES Any enquiries in respect of this document should be addressed to the Arabesque Group. 24