NIKKO ASSET MANAGEMENT LUXEMBOURG S.A.
SUSTAINABILITY RISK POLICY
August 2023
Last approved by the board of directors of the Company: 18 August 2023
Last acknowledged by the conducting officers of the Company: 31 July 2023
Previous version approved by the board of directors of the Company: 8 March 2021
Previous version approved by the conducting officers of the Company: 26 February 2021

Nikko Asset Management Luxembourg S.A.
Société Anonyme
Registered Office:32-36, Boulevard d’Avranches, L-1160, Luxembourg
Tel +352 264 979 2209
Email luxenquiries@nikkoam.comemea.nikkoam.com
RCS Number: B123103
VAT Number: LU 2204 2359

Authorised and Regulated by the Commission de Surveillance du Secteur Financier
Number S00000717 (SG 15), Number A00002630 (AIFM)

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NAML Sustainability Risks Policy

Scope of this Policy
Nikko Asset Management Luxembourg S.A (the "Company" or “NAML”) is a management company authorised
under Chapter 15 of the amended Law of 17 December 2010 on undertakings for collective investment (the"2010 Law"). It acts as the designated management company of Nikko AM Global Umbrella Fund, Nikko AM
Global Umbrella Trust and Nikko AM Global Investments (Luxembourg), three Luxembourg undertakings forcollective investment in transferable securities ("UCITS") within the meaning of Directive 2009/65/EC of theEuropean Parliament and of the Council on the coordination of laws, regulations and administrative provisions
relating to UCITS (the "UCITS Directive").
The Company is also authorised (i) as alternative investment fund manager (“AIFM”) in accordance with
Chapter 2 of the law of 12 July 2013 on alternative investment fund managers (the “2013 Law”) and (ii) to provide
management of portfolios of investments on a discretionary, client-by-client basis pursuant to Article 5, (4) (a)of the 2013 Law.
The Company intends to manage Luxembourg and foreign alternative investment funds (“AIFs”) and that arecontemplated to be marketed in EU member states and non-EU member states. It currently acts as thedesignated AIFM for Nikko AM Global Alternative Investment Trust, a Reserved Alternative Investment Fundcreated on 15 April 2021. NAML is also acting as Investment Manager to manage the assets of a segregatedmandate on a discretionary basis.
On 4 June 2020 a notification under freedom of establishment and freedom to provide services under to Article
17 of the Directive 2009/65/EC and Article 33 of the Directive 2011/61/EU in respect of the establishment of theGerman branch of the Company (the “German Branch”) to the CSSF. The German Branch, which commenced
its activities on the 1st of January 2021, is in scope of this policy.
This Policy applies to any undertakings for collective investment in transferable securities (the “UCITS”), any
alternative investment funds (“AIF”) and any discretionary portfolio management mandates (“Mandates”) for
which NAML acts as Authorized Fund Manager “AFM” (UCITS and AIFs will be later referred to as the “Funds”
or “UCIs” and UCITS, AIFs and Mandates as the “Products”).

Purpose of this Policy
In line with EU Regulation 2019/2088 of 27 November 2019 on sustainability related disclosures in the financial
services sector (“SFDR”), the purpose of this Sustainability Risk Policy (the “Policy”), is to establish NAML
principles about Sustainability Risk (‘SR’) and its consideration and integration across investments teams andthe investment decision making process.
This Policy describes:•The overview of the principles and commitment to responsible investing at the NIKKO AM Group level•

NAML Oversight of Integration of SRs in the Decision Making Process•

NAML criteria for evidencing the integration of Sustainability Risks.

NIKKO AM Group’s Commitment to Responsible Investing
Nikko Asset Management Group is a long term, global investor across multiple asset classes. We believe thatthe three core factors behind sustainable, responsible investing - environmental, social, and governance(“ESG”) - are inherent to long-term value creation. Incorporating them in the investment process is consistent
with our fiduciary duty.
Sustainability means managing the challenges and risks facing all organisations to meet the needs of thepresent, without compromising future generations. Nikko AM became a UN PRI signatory in 2007 (PRIrepresenting the Principles for Responsible Investment). This early commitment is testament to our dedication
to all six Principles, where consistent with our fiduciary responsibilities.
Based on the six PRI Principles, Nikko AM adheres to the following firm-wide policy:•Principle 1: Nikko AM incorporates ESG issues in investment analysis and decision-making

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NAML Sustainability Risks Policy•Principle 2: Nikko AM is an active owner through its proxy voting process and incorporates ESG issues
into its ownership policies and practices•Principle 3: Nikko AM seeks appropriate disclosure on ESG issues by the entities in which it invests•Principle 4: Nikko AM promotes the acceptance and implementation of the Principles within theinvestment industry•

Principle 5: Nikko AM collaborates with clients and members of the investment management industry
to enhance effectiveness in implementing the Principles•Principle 6: Nikko AM reports its activities and progress towards implementing the Principles

Nikko AM consistently updates and aligns its ESG approach with incoming regulation, such as the SFDR, as wellorganizational priorities and adherence to different industry wide initiatives.

NAML Oversight of the Integration of Sustainability Risks
NAML in its capacity as AFM to the Funds, provides independent oversight, as outlined within this policy, ofeach Investment Team’s approach to the integration of Sustainability Risks in the investment decision makingprocess. Specific responsibilities are defined below:-NAML defines SRs and criteria that each investment team may use to evidence its integration of SRs
into the investment decision making process-In line with wider NAM Group policy, individual investment teams maintain specific ESG policies andprocedures pertaining to their investment philosophy and process. These policies and procedures willreflect the SRs defined within this policy. Each investment team is also expected to provide detail aspart of the periodic SR monitoring process conducted by NAML

Both the definition of SRs and the criteria that each investment team must provide information against as partof the periodic SR monitoring process are detailed in the sections below.

NAML definition of Sustainability Risks
Sustainability Risks
The risks arising from any environmental, social or governance events or conditions that, were they to occur,
could cause material negative impact on the value of the investment.
Specific sustainability risks can vary for each product and asset class, and include but are not limited to:Transition Risk
The risk posed by the exposure to issuers that may potentially be negatively affected by the transition to a low
carbon economy due to their involvement in exploration, production, processing, trading and sale of fossil fuels,or their dependency upon carbon intensive materials, processes, products and services. Transition risk may
result to several factors, including rising costs and/or limitation of greenhouse gas emissions, energy-efficiency
requirements, reduction in fossil fuel demand or shift to alternative energy sources, due to policy, regulatory,
technological and market demand changes. Transition risk may negatively affect the value of investments by
impairing assets or by increasing liabilities, capital expenditures, operating and financing costs.

Physical Risk
The risk posed by the exposure to issuers that may potentially be negatively affected by the physical impactsof climate change. Physical risk includes acute risks arising from extreme weather events such as storms, floods,droughts, fires or heat waves, and chronic risks arising from gradual changes in the climate, such as changing
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rainfall patterns, rising sea levels, ocean acidification, and biodiversity loss. Physical risk may negatively affectthe value of investments by impairing assets, productivity or revenues or by increasing liabilities, capital
expenditures, operating and financing costs.

Environmental Risk
The risk posed by the exposure to issuers that may potentially be causing or affected by environmental
degradation and/or depletion of natural resources. Environmental risks may result from air pollution, waterpollution, waste generation, depletion of freshwater and marine resources, and loss of biodiversity or damages
to ecosystems. Environmental risk may negatively affect the value of investments by impairing assets,
productivity or revenues or by increasing liabilities, capital expenditures, operating and financing costs.

Social Risk
The risk posed by the exposure to issuers that may potentially be negatively affected by social factors such as
poor labour standards, human rights violations, damage to public health, data privacy breaches, or increasedinequalities. Social risk may negatively affect the value of investments by impairing assets, productivity orrevenues or by increasing liabilities, capital expenditures, operating and financing costs.

Governance Risk
The risk posed by the exposure to issuers that may potentially be negatively affected by weak governancestructures. For companies, governance risk may result from malfunctioning boards, inadequate remuneration
structures, abuses of minority shareholders or bondholders rights, deficient controls, aggressive tax planningand accounting practices, or lack of business ethics. For countries, governance risk may include governmental
instability, bribery and corruption, privacy breaches and lack of judicial independence. Governance risk may
negatively affect the value of investments due to poor strategic decisions, conflict of interest, reputational
damages, increased liabilities or loss of investor confidence.

Investment Manager Integration of SRs into the investment decision making process
NAML defines the criteria, and related information, that it expects each investment team to be able to provide
in order to evidence its consideration of SRs in the investment decision making process. The level ofinformation provided will depend upon the outcomes of teams’ consideration of the extent to which SRs arerelevant to the funds that they manage. Based on the SFDR, there are two possible outcomes of thisconsideration:
1.

Teams deem that SRs are relevant to the fund and the investment decision making process: Teams
may deem that SRs are relevant based on the definitions above, their fund objectives and theprocesses they use to manage the funds, for example applying hard ESG limits or tracking specificmetrics in relation to ESG and SRs. In this case, each team is required to provide information in linewith the categories below to fully evidence the consideration of SRs in the investment decision makingprocess2.

Teams deem that SRs are not relevant: Teams may deem that SRs are not relevant based on thedefinitions above, for example as a result of the investable universe not aligning to ESG considerations.
In this scenario, teams are required to provide a clear and concise explanation of the reasons why SRs
are not relevant to the fund

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NAML Sustainability Risks Policy

NAML Criteria for Evidencing the Integration of SRs
Below, NAML outlines the set of criteria that it requires Investment Managers to provide for each in-scope fundwhich they manage. The information provided is retained by NAML to evidence the integration of SRs acrossfunds and to be used as part of the SR review process. Criteria are detailed in the table below:
Criteria

Description

Overview

Investment teams must include a general description of how sustainability risks (as definedby NAML) and their potential impact on returns are embedded in the investment process.
Responses typically include:•Portfolio Construction &Assessment of Likely
Impact of SRs on returns

A summary of the investment philosophy of the team and ways in which SRs areembedded in the investment process

Description of how ESG considerations and specific sustainability risks are identified,
documented and monitored throughout the portfolio construction process. Responses
typically include:•Results of the assessment of the likely impacts of sustainability risks on the returnof the financial products•Company/security scoring processes that systematically takes ESG factors ormetrics into account as part of the investment decision making process

Limits/Exclusion Criteria

Description of application of hard ESG limits or specific exclusion criteria relating to theproduct if applicable

ESG Metrics

Detail on any metrics used to assess, track and monitor SRs on an ongoing basis.

Engagement

Portfolio Review Process

Description of any approach the investment team takes to engaging with investee
companies on material ESG issues/sustainability risks. Responses typically include:•Brief description of engagement approach and how this is influenced by theinvestment philosophy and consideration of ESG

Description of how ESG risks / factors / metrics are included in regular portfolio reviews
performed separately to NAML monitoring and oversight described within this policy

SR monitoring is conducted as part of the periodic Due Diligence which frequency is determined by NAML risk
assessment of its various IM delegates. The monitoring/review process is broken down into the following steps
1.

Questionnaire/data request: the periodic DDQ sent to the IMs as part of the Portfolio Management
Due Diligence process includes questions related to the criteria defined here above.

2.

Review of response by Conducting Officer

3.

Additional data requested by the Conducting Officer if required

4.

Review of the Institutional Marketing Material and SRFP on the Group Intranet by the ConductingOfficer.

5.

Conclusions reported in the periodic Due Diligence report written by the Conducting Officer andpresented to the Management Committee and Board of Directors of NAML

Quarterly reporting is requested to the IMs for:
•Proxy Voting Statistics•ESG Scoring of the portfolios
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NAML Sustainability Risks Policy