INVESTMENTSTEWARDSHIPREPORT
2023

Contents
2023 milestones and highlights

4What comes next

5

looking ahead

1. Russell Investments

Who we are7

1.1 Our purpose

7

1.2 Culture8

1.3 Value8

1.4 Investment philosophy

8

1.5 Our responsible investing framework9

1.6 Our history of innovation

10

2. Russell Investments

Who we serve11

2.1 Our clients and assets under management

11

2.2 Client communications

13

2.3 Client training and development

16

2.4 Taking account of client preferences

17

2.5 Climate aware solutions

18

2.6 Addressing client needs in practice21

3. Governance of stewardship26

3.1 Global governance structure26

3.2 Investment governance structure27

3.3 Responsible investing governance structure29

3.4 Resourcing stewardship31

3.5 Alignment of incentives to integrate stewardship32

4. ESG Integration and responsible investing33

4.1 Our integrated approach to stewardship and investment

33

4.2 Our risk management programme

39

4.3 Addressing market-wide and systemic risks: climate change

42

4.4 Our approach to monitoring service providers

45

5. Active Ownership52

5.1 Our engagement approach

52

5.2 Proxy voting76

6. Policies, processes, and procedures supporting responsible investing87

6.1 Conflicts of interest policy

87

6.2 Diversity and inclusion

93

6.3 Policy advocacy and collaborations

95

6.4 Reviewing policies and processes

97

7. Appendix: Stewardship code mappings

99

Russell Investments / Investment Stewardship Report/2A letter from our President andChief Investment Officer
Last year was yet another chapter in the ongoing narrative that the 2020s will be a historic decade definedby inflation, global conflict, climate events, market volatility and uncertainty. The trajectory of 2024 is set to

While disruption brings its own set of challenges, it also paves the way for innovation and shifts in theinvestment landscape. Artificial intelligence, once a sci-fi notion, now revolutionises our decision-making
processes. The advent of remote work and digital economies has transformed business models, sparking
unparalleled innovation and growth.
se change - wedecision-making, which incorporates new sources of information and data, is driven by our belief that
responsible investing and good ste
dedication serves a singular goal: enhancing investment outcomes.
Given our scale and multi-manager platform, we have a differentiated dataset that can help drive thesolutions our clients are looking for across themes such as climate and sustainability. As a signatory to theprinciples for responsible investing since 2009, our investment approach has been informed by thoughtfulconsideration of sustainability-related risks and opportunities rooted in financial materiality and fiduciary
duty. This approach is supported by a robust stewardship strategy and an integrated active ownershipprogramme. As the world considers how to transition to a more sustainable economy, we believe this is
more important than ever.
At COP28, global leaders reaffirmed their commitment to urgent climate action, highlighting the imperativeof collaboration and innovation to mitigate the effects of climate change with an agreement signalling thecapabilities, we can better manage our risks, uncover new investment opportunities, and enhance theresilience of our portfolios. In order to meet client goals and expectations, we persistently refine ourpractices, expand our toolkit, and enhance our reporting capabilities. For example, in 2023 we refined our
process for evaluating private markets managers, launched a Net Zero Dashboard to support funds whichhave net zero targets, and expanded the metrics available on our portfolio management platform.
Our innovation is equally evident in our solutions design. In 2023, we launched bespoke active equity
strategy consisting of a diversified set of best-in-class managers that stand to gain from and contribute to
the transition economy. Additionally, we have introduced a newly launched global unlisted infrastructure
fund, which invests in assets providing essential services to enable, sustain or enhance economic activity
and standards of living, producing quantifiable sustainable outcomes.
More details on our responsible investing practices and client-centred approach are contained in this 2023
report. This report has been elaborated by the range of responsible investing experts embedded throughout
our organisation and reviewed and approved by me, as President and Chief Investment Officer, as well as
the Board of our UK entities. We welcome your feedback and questions.

Kate El-Hillow
President and Chief Investment Officer, Russell Investments

Russell Investments / Investment Stewardship Report/32023 milestones and highlights

Data as at 31 December 2023.

Russell Investments / Investment Stewardship Report/4What comes next

looking ahead

capital, we continue to advance our responsible investing capabilities;
integrating and evolving best practices to respond to changing market conditions. Our strategies are developed byexperienced practitioners in alignment with our larger purpose of improving financial security for clients. The key
pillars of our approach include:

Sustainable solutions
leverage innovation and industry leading insight to set total portfolio-level direction that aligns to targeted financial
and sustainable outcomes.
In 2023, we launched bespoke and commingled strategies, targeting both listed and private markets, with a rangeof sustainable and carbon-related goals, and we have laid the groundwork for additional solutions in 2024. Oursustainable multi-manager solutions will continue to leverage our market-leading overlay capabilities, while moving
beyond carbon-focused metrics to include forward-looking sustainability projections. In addition, we developed oursustainable transition stock universe and have begun work on evolving our decarbonisation strategies to meet the
rapidly evolving needs of our clients and the broader industry. These efforts support our global solutions platform
and underpin our ability to customise and deliver tailored outcomes for clients.

ESG Integration
We have put meaningful resources into improving the data and analytics available to our portfolio managers whoseek to monitor and manage material long-term risks. Among our achievements: streamlining the transmission ofideas and information from portfolio management to active ownership and using improved data and scenarios on
climate risk to enhance our asset allocation capabilities. We expect the use of data and the development ofanalytical tools to continue in 2024.
To deliver planned multi-manager funds with sustainable objectives, our analysts continue to expand our list ofrecommended products within our sustainable manager research universe. While investment opportunities remain
narrow, we are closely monitoring emerging themes such as natural capital efficiency and biodiversity.
Our work to strengthen responsible investing practices in fixed income, real assets, private markets, andalternatives also remains a priority. In 2023, we focused on strengthening our approach to sustainability risk
management and active ownership in fixed income while in private markets we capture the benefit of heightened
ESG-related due diligence. In 2024, we will continue to push for greater transparency and disclosures from ourmanagers, particularly with regard to sustainability risks and stewardship activity.

Climate risk management
Climate risk management remains an evolving area in financial markets. We are committed to working incollaboration with other leading industry participants to formulate best practice principles and frameworks. In
2024, we will continue to leverage our partnership with a specialist climate risk provider, adding incremental
climate risk metrics into our investment practice and extending our collaboration with industry peers. In addition,
we intend to expand our climate risk research to cover additional asset classes. We will continue to provide training
to our associates to keep them abreast of complex and emerging concepts and systems related to climate risk
management. Similarly, we will maintain outreach, consulting services, and education on climate risk for ourclients.

Active ownership
In 2024, our current three-year active ownership strategy cycle will conclude. We aim to review the results
achieved by our programme and update our approach to better align with market trends, client objectives, andambitions. As part of this review, we will closely examine our collaborative efforts and policy advocacy activities toamplify the impact of our active ownership efforts. Additionally, in 2024, we will start our active participation in
Nature Action 100, aiming to contribute to the transition towards a more sustainable and resilient global economy.

Russell Investments / Investment Stewardship Report/5Transparency and reporting
across all our portfolios, enabling total solution analysis for clients, supporting crosscutting multi-lens risk analysis
which encompasses multi-asset combinations. We will continue to enhance this dataset and analytic competence toimprove client reporting across the board including, but not limited to, ESG metrics and objectives. We can reportthat enhancing client transparency is well underway with more expected over the course of 2024.
While ESG data and metrics have improved considerably in recent years, we believe that gaps still exist. Continued
enhancements will contribute to helping clients further understand our stewardship efforts, as well as the risks andopportunities within their mandates.

Training and development
To stay at the forefront of sustainable investing, Russell Investments has provided training and development on
ESG matters to both clients and internal associates.
We have made training available to our clients through webinars, conferences, and whitepapers, enabling them tounderstand the significance of ESG factors in investment decisions. We have also greatly enhanced the internal
training provided to our associates. We have developed a comprehensive ESG curriculum that covers foundational
ESG principles, analysis, and integration into investment processes. We are fully committed to continuous
enhancements and updates of our training. We believe that by providing comprehensive education to both clientsand associates, we can continue to meet the changing needs of our clients, enhance our investment processes, andmaintain our position as a leader in the investment industry.

Russell Investments / Investment Stewardship Report/61. Russell Investments

Who we are✓✓✓

Principle 1

UK Stewardship Code Principle 1
Japan Principles for Responsible Institutional Investors
The New Zealand Stewardship Code Principle 1

1.1 Our purpose
Russell Investments is a global investment firm founded in 1936. Today, it is headquartered in Seattle, USA, with
operations in the EMEA, North America and Asia-Pacific regions. Russell Investments provides investment
management, advisory and implementation (execution) services. As of 31 December 2023, we had over 1,300
associates supporting this delivery and global assets under management (AUM) of ¥41,952.9bn JPY. Our businessis built on the partnerships we develop with our clients, helping them achieve their objectives.
Our organis
architecture outcome-oriented solutions and embedding efficient risk management techniques. This focus drives
our business growth and rapid innovation, and it is built on our combination of market-leading capabilities:

Manager Research

Portfolio Implementation

Asset Allocation

Total Solutions Management

Portfolio Construction

Since 1980, the primary business has served institutional and retail clients around the world. Russell Investments
works with clients of all sizes, from individuals to smaller organisations to large governmental entities, who desire
bespoke solutions and business plans that call for continued focus, investment growth, and innovation.

Russell Investments / Investment Stewardship Report/71.2 Culture
At Russell Investments, our culture is built on a commitment to a foundational set of beliefs and practices. These
provide a rich combination of real-world guidance and an overarching ethic within which we conduct ourbusiness. These are captured in the following four pillars:
1.

Corporate values: Russell Investments' people and values are the foundation of our company and the reason
for our long-term success.

2.

Sustainable work practices: Our mission is to identify and reduce our impact on the environment by ensuringthat our day-to-day procedures are carried out in the most sustainable manner.

3.

Diversity, equity, and inclusion: We believe that diversity, equity, and inclusion in the workplace drives better
performance. Diversity is integral to our long-term growth.

4.

Community involvement: We are committed to supporting the communities in which we live and work.

1.3 Values
Our core corporate values are summarised below:

We behave with non-negotiable integrity.

We value our people and are dedicated to fostering a meritocracy. Our pillars are inclusivity, humanity,
fairness, hard work, creativity, teamwork, fun and humility.

We play to win by exceeding client expectations and executing with a sense of urgency and purpose.

We are passionate investors who embrace intellectual curiosity and rigor.

high integrity, people-oriented culture of innovation, all driving our stewardship practices. Full details of ourcorporate values can be found here.
Sustainable work practices and community involvement have been central to our corporate practices from theto our culture and increases our ability to provide innovative solutions to our clients, while adding value for ourshareholders and community. Our efforts to promote diversity, equity and inclusion are detailed in section 7.2 andour corporate social responsibility web page, found here.
We recognise that staying committed to our purpose requires not only a strong culture but also disciplined andreinforcing processes focused on oversight and accountability. We provide a detailed description of thegovernance processes that are currently in place to deliver on this purpose as part of section 3.

1.4 Investment philosophy
the investment management industry lacked a robust standard of accountability for both institutional andindividual investors. As a pioneer of the investment consulting industry, we sought to bring objectivity andfiduciary responsibility to every aspect of building and managing an investment programme. As the architect of thefirst multi-manager funds, our objective was to bring resources, focus and a client-centric view to some of the mostimportant questions investors face - the informed selection and oversight of sub-advisers, cost-and risk-aware
portfolio implementation, and the creation of truly outcome-oriented investment solutions.
Multi-manager investing has risen in popularity over the years but not all follow the same approach. We believethat open architecture investing is optimally effective when done with appropriate care as it enables independent
oversight, drives innovation in stewardship practices, enforces greater transparency and accountability among
investment managers and service providers, and facilitates the appropriate incorporation of ESG considerations ininvestment decision making.

Russell Investments / Investment Stewardship Report/8

Russell Investments has established a set of investment beliefs to provide a transparent and objective frameworkthat facilitates an effective internal decision-making process and guides the delivery of all our investment
solutions.
1.

Outcome-orientated investing Investment decisions are more impactful when they directly serve theachievement of client objectives, respect for client preferences, and consideration of client circumstances.

2.

Open architecture Independent consideration, informed diversification and intelligent implementation of
the right asset classes, best investment strategies, and appropriate risk levels give investors the highest
chance of success. The ability to identify skill-based and differentiated processes is a critical edge.

3.

Investment discipline Investors require rigorous decision-making paradigms, excellent analyticalcapabilities, and an ability to think and act independently to deliver superior outcomes.

4.

Effective risk management Real-time measurement and management of risk must be integrated into the
management of portfolios and solutions to ensure well-informed decision-making.

5.

Dynamic portfolio management
investment success.

6.

Specialisation leads to investment decisions at the point of greatest insight Informed and objective
assessment of investment excellence is foundational to the success of open architecture, both in selecting subadvisers and in evaluating and enhancing internal capabilities.

7.

Independent review and control support a strong investment process The best investment processes
incorporate objective analysis and feedback to identify opportunities to improve.

8.

Responsible investment
investment outcomes.

The ability to adapt to changing market conditions is critical to

Russell Investments believes ESG factors can have a material impact on

1.5 Our responsible investing framework
Responsible investing is at the heart of our investment beliefs. As a global investment solutions provider, we
believe that investing responsibly can help to deliver attractive investment returns and meet client objectives in thelong term. To this end, we execute an integrated responsible investing practice across the firm. This practice isfounded on the following set of four core beliefs, codified in 2015:

Exhibit 1: Responsible investing beliefs

Source: Russell Investments, for illustrative purposes only.

Russell Investments / Investment Stewardship Report/9Drawing on the core responsible investing beliefs outlined above, Russell Investments has developed formal
policies on responsible investing, climate change risk and sustainability risks, which are regularly reviewed toensure they develop in accordance with market best practice, as described in the Reviewing Policies andProcesses section of this report. These policies are the foundation of our efforts to efficiently integrate ESG
considerations into our investment manager evaluation process, our portfolio management, our advisory services,and when implementing proprietary solutions as desired by clients. Further information regarding how we
integrate stewardship and investments can be found in section 4.

1.6 Our history of innovation
At Russell Investments, our service and product set has evolved over time in response to the most pressing threats
services aimed at helping institutional and individual investors invest intelligently through an open architecture
investment approach. These have promoted better functioning in financial markets by raising standards around thequality and transparency of investment management, as well as the development of powerful tools for investors
everywhere.
This began more than half a century ago, in response to the difficulty pension plan sponsors had in monitoring and-weighted returns,
invented by Peter Deitz, the cthe practice of vetting and evaluating active asset managers on behalf of our clients - the manager research
practice that has been our most well-known capability for decades. As we introduced manager research to various
markets in Europe and Asia, we were able to establish and spread a de facto global standard of investment
excellence by evaluating their investment product according to common criteria and analytical tools. As majorclients around the world used our recommendations to determine allocations, this contributed to significant
improvements in quality standards and in investment practices across the industry.
When evaluating active asset managers, we detected gaps in the available benchmarks in the marketplace. This led
to industry-leading efforts to develop styles, style indexing, smart beta and, ultimately, factors. Our innovations instyle indexing have established practices, such as transparent selection, float-adjusted capitalisation weighting andcomprehensive market coverage, which have been subsequently adopted across index providers. This work wasfoundational to establishing factors and styles as fundamental to understanding market-wide risk and return.
In addition to these contributions, we were early adopters of global investing and multi-asset portfolios as methods
to balance risks and capture market opportunities. Our experience of managing multi-manager portfolios led to
new approaches to tackling trading inefficiencies associated with the use of multiple sub-advisers. These
innovations retained the benefit of using multiple best-in-class managers while lowering risk and cost andenabling substantial customisation. Our solutions have given Russell Investments a birds-eye view into the needsof our clients and consistently reinforced our commitment to improving financial outcomes on their behalf.
We have found many opportunities to protect investors against avoidable cost and implementation slippage. We
introduced commission recapture in the early 1990s, followed by transition management and the development of
the T-standard - a proprietary measure to transparently show the success of a manager transition and its costs. As
we continue to innovate our trading practices, we have been asked by our clients and industry partners to engage
with regulatory bodies to ensure that the business of investing can carry on with fewer roadblocks and detours,
while also assuring appropriate incentive structures and good outcomes for asset owners.
outcomes. Our manager research analysts began evaluating active money managers on ESG integration in 2014,
followed by researching decarbonisation data and quantitative methods in 2015, enabling the launch of our first
low carbon funds in 2017. We continue to evolve our understanding of climate risk, most notably through the useof climate models and scenario analysis, now facilitated by our partnership with the climate model provider
Planetrics.
These examples, which are core to our investment approach and services to clients, address clear and present
financial risks and have driven improvements in the function of the financial system overall. We hope that ourculture, responsible investing beliefs, policies, and practices enable effective processes which serve the bestinterests of our valued clients, who are described in the section below.

Russell Investments / Investment Stewardship Report/ 10

2. Russell Investments
serve
✓
✓
✓

Who weUK Stewardship Code - Principles 4, 5, 6
Japan Principles for Responsible Institutional Investors - Principle 6
The New Zealand Stewardship Code Principle 8, 9

2.1 Our clients and assets under management
client meetings.
The investment time horizon is a crucial consideration that plays into both the optimal investment solution and the approach to-term objectives. These clients include defined benefit
pension schemes, individual retirement savings plans, and insurance company assets, but even within broad groups of clients,
the time horizon may vary. For example, for defined benefit clients, the investment time horizon can range from around 10
years for more mature schemes to 30 years or more for younger schemes open to future accrual.
Our stewardship efforts cover both our retail and institutional client base, as well as all asset classes. For each client, we seek
to understand their overarching objectives, attitude to risk, limitations (i.e., liquidity requirements) and time horizon. Ourinvestment process is designed to tailor our products, solutions, and stewardship activities accordingly. This point is addressed
further in section 2.4 below.
Details of our global client base are provided in the charts below.

Exhibit 2: Assets under management split by retail vs institutional ($USD)

28%
Global (in $bn USD) Institutional $138.50

72%

Global (in $bn USD) Retail $54.10

Source: Russell Investments, data as at 31 December, 2023. AUM subject to exchange rate conversions and rounding to the neare st$USD.

Russell Investments / Investment Stewardship Report/ 11

Exhibit 3: Institutional assets breakdown by client type and asset class
Global: Institutional breakdown by asset class

4%

1%

Alternative Investments
Cash

20%

Equity52%

Fixed Income

12%

Multi-Asset
11%

CPS

Global: Institutional breakdown by client type ($USD bn)

Balance Sheet Assets (in $bn) $6.19
DB/Pension Public or Government (in $bn) $29.36

5%4%
17%
1%

DB Other (in $bn) $1.01

21%

DB Pension Corporate (in $bn) $48.94

2%
1%

7%

DC Corporate (in $bn) $9.23
DC Other (in $bn) $9.94

7%Distributor (in $bn) $3.27

35%

Insurance (in $bn) $0.99
Other (in $bn) $23.34
Tax Exempt/Charity/Endowment/Foundation (in $bn)
$6.31

Source: Russell Investments, data as at 31 December, 2023. AUM subject to exchange rate conversions and rounding to thenearest $USD.

Exhibit 4: Assets under management split by internally and externally managed ($USD bn) 1

43%
57%

Externally Managed AUM ($128.6bn)
Internally Managed AUM ($169.0bn)

Source: Russell Investments, data as at 31 December, 2023. AUM subject to exchange rate conversions and rounding to thenearest $USD.

1Externally manage assets relate to assets managed by third party investment managers. Internally managed assets related to assets managed in house includingthat of overlay services mandates.

Russell Investments / Investment Stewardship Report/ 12

Exhibit 5: Retail assets broken down by asset class ($USD bn)

9%

14%

Alts ($4.9bn)
Cash ($0bn)
Equity ($27.3bn)
27%

Fixed Income ($14.4bn)
50%

Multi-Asset ($7.4bn)

Source: Russell Investments, data as at 31 December, 2023. AUM subject to exchange rate conversions and rounding to
the nearest $USD.

Exhibit 6: Assets under management split by geographies ($USD bn)
2%
5%

USA ($156.9bn)

9%Canada ($8.2bn)
EMEA ($85.8bn)

53%
29%

Australia & New Zealand($25.7bn)
Japan ($14.5bn)
Asia ex Japan ($6.4bn)

3%

Source: Russell Investments, data as at 31 December, 2023. AUM subject to exchange rate conversions and rounding to
the nearest $USD.

2.2 Client communications
Once a client is onboarded, we ensure their assets are managed in line with their goals and expectations throughongoing due diligence updates and regular update meetings. In our experience, interest in stewardship and active
ownership matters is growing, and we have made various training sessions available to our client base. Our
process for client reporting combines information and knowledge from three separate groups.
•

Our globally integrated Investment Division (ID), which has a vast array of core data and analytics used forinvestment decision making, process monitoring, and regulatory body reporting.

•Business groups servicing our clients in each region who understand specific client reporting needs.

•

Our localised compliance and legal teams review client specific reporting before it is released to ensure eachreport is fair, accurate and in line with local regulatory disclosure requirements.

Russell Investments / Investment Stewardship Report/ 13

In practice, applicable data and analytics used by the investment division in its day-to-day decision making is madeavailable to our business teams servicing clients. Depending on the area of reporting, senior members of our ID
work closely with our client service teams and clients directly, to help determine the scope, frequency, detail, andformat of reporting for each client and how to efficiently pull that together from our core data set. Information isscrutinised at multiple levels by senior members of the ID, including the Investment Practice Team, client service
teams and by local compliance teams, before reports go to clients in specific regions.

Institutional client communication
We want our clients, at all times, to be well informed about the assets under our stewardship. We meet with ourinstitutional client base on a regular basis (quarterly in most cases) and where appropriate seek to incorporate
their views into our investment and stewardship policy. In addition, we provide our institutional client base withthe following sets of reports/statements:

Training
We provide our client base with both ad hoc and scheduled training. Ad hoc training typicallytakes place at trustee meetings, whereas scheduled training takes place in the form of inperson seminars or webinar sessions. Further details are provided below.

Quarterly performance reports
Bespoke client reports are produced on a quarterly basis and report on the performance of
the assets, liabilities and funding level. They also provide details of asset class allocation andperformance attribution. In addition, these reports provide details of portfolio positioning andthe rationale for any changes that have been made or are planned. Our reports include key
ESG metrics (where relevant) including ESG risk scores and carbon footprint and we haverecently enhanced these to provide clients with a breakdown over time, showing how theirportfolios are evolving moving forward.

Equity level ESG report
We offer a detailed ESG report for all equity allocations which sets out the ESG risk score andcarbon footprint metrics. Additionally, it provides a distribution of ESG risk scores and detailsof the highest and lowest ESG scores. Fixed income metrics are also available, and we aredeveloping systems to make these more readily accessible.

Active ownership disclosures
This annual Investment Stewardship Report provides an opportunity to showcase in detail ourcommitment to active ownership, our approach, annual proxy voting statistics and observed
trends. This detail includes engagement statistics and case studies as well as details of ourindustry collaborations.

Stewardship policies and procedures
All policies and procedures with regard to stewardship are available to our clients on our
webpage. These are updated on an annual basis as further detailed in section 7.4.

Annual implementation statement
We have worked with our UK institutional client base to produce an implementation
year-end. This statement reports on how the scheme has complied with the policies andobjectives set out in the Statement of Investment Principles.

Russell Investments / Investment Stewardship Report/ 14

Retail end-consumer communication
Communication with end-retail consumers of our products differs from the above. Information about our
stewardship practices, such as manager and investment research processes and ESG integration and operational
proficiency, is made available during the institutional clients and professional intermediaries RFP and due
diligence reviews. Once onboarded, the following pieces of information are also available to our professional
clients and (where relevant) their retail customers:

Training
We provide informative literature on our website and at periodic events we host to ensure ourclients are well informed about our investment products, their performance and how they
have been affected, or may be affected, by market influences. We also provide training andliterature in relation to broader investment outcomes associated with our products; thisincludes the impact of ESG issues.
.

Fund factsheets
Fund factsheets containing key information about the fund, including performance
objective, benchmark, portfolio statistics breakdown (country weighting, volatility, etc.),
are made publicly available on our website and via third-party data warehouses (e.g.,
Financial Express and Morningstar).

Key Investor Information Document (KIID)
In Europe, KIID documents are made available for all funds on our website and via thirdparty data warehouses and all appointed subobjective and investment policy, risk-reward profile, applicable charges and past
performance data.

Prospectus
The fund prospectus which contains all fundamental information about the fund, its
structure, any management restrictions and a list of available share classes, is madeavailable to all investors and potential investors on our website, third-party data providers
and all appointed sub-distributors.

Active ownership disclosures
We showcase our commitment to active ownership, our approach, annual proxy voting
statistics and observed trends this annual report. Readers will also find engagement
statistics, case studies and details of our industry collaborations.

Monthly and quarterly performance reports
In addition to the fund documentation mentioned above, live performance data is also madeavailable by a number of third parties, including Morningstar and Financial Express. We
provide further information around fund management and current holdings to supplement
this publicly available data. Clients with significant assets under management may also
request bespoke reporting, which we would provide on a monthly or quarterly basis.

Russell Investments / Investment Stewardship Report/ 15

2.3 Client training and development
As outlined above, we provide a range of training and development opportunities to our client base to ensure that ourclients are kept abreast of key industry developments. Our annual training schedule is informed through feedback
received through client surveys, as well as topics chosen by our in-house experts. We also provide timely insights andthought leadership content through our blog and regular LinkedIn updates.
In 2023, we hosted a range of webinars, some of which are highlighted below:

Summer Forum (EMEA)At this half-day event, Russell
Investments experts presented on thefollowing topics: private markets,
macro Environmental, Social andGovernance (ESG) themes andsustainable equity.

PMI Roundtable on ESG(EMEA)
After the turmoil of 2022, has youryou expect to alter your investment
approach over the next 1-2 years?
• How much emphasis are you
putting on;• Endgame planning and derisking• Incorporating ESG into Fixed
Income• Private markets and impact
investing• Investments aligned to what is

ENGAGE 2023 (Canada)
At these 2-day events hosted in
Toronto and Seattle, discussions
focused on the markets, productinnovations and business solutions.
Looking at how our institutional
heritage, proven investment process
and manager research work together
to help achieve client goals.

•
governance

Global Market Outlook
Quarterly updates sharing ourthroughout 2023.

ESG Survey webinar(North America)

Energy Transition webinar(North America)

In this panel session hosted byRussell Investments, invitedmanagers examined:• How are ESG trends reshaping
Japanese investor preferences
and affecting their dialogue withfund managers and internal
decision making?
• Major priorities andconsiderations when integrating
ESG into investments, from asset
allocation to portfolio
monitoring.
• How do institutional investors
think the priorities will change in
the next five years?

In this webinar, our experts
discussed a systematic approach torepositioning concentrated stock
positions in a custom, tax-efficientmanner by using separately managed
accounts, covering:• The risks and challenges ofconcentrated stock positions.
• A detailed case study of a taxefficient personalised portfoliotransition to direct indexed
strategies.
• How we work with advisers todevelop a custom transition planand implement ongoing taxmanagement.

Russell Investments / Investment Stewardship Report/ 16

2.4 Taking account of client preferences✓✓✓

UK Stewardship Code Principle 6, 7
Japan Principles for Responsible Institutional Investors
The New Zealand Stewardship Code Principle 3

Principle 6

We pursue integration of stewardship and investment through a process that ensures all key allocation decisions
aim to support client objectives, while incorporating an understanding of material ESG risks and other financial
factors over relevant time horizons. Every solution starts with an understanding and incorporation of client
preferences, and our approach to stewardship and responsible investing is globally consistent, integrated andapplied across funds and asset classes. All else equal, clients with the same objectives will be provided with thesame investment solution based on our best global investment ideas and insights. However, in creating solutions
for a diverse client base, all else is often not equal.
-step investment
approach referred to as Design, Construct, Manage (DCM). Our responsible investing beliefs and practices infuse
and inform each of these three steps through the building blocks of our strategic asset allocation, market andmanager research, portfolio management and active ownership capabilities.

Designwith investors to establish clear objectives and to fully understand their preferences, constraints, andcircumstances. We use this shared knowledge to develop an investment roadmap, or strategic asset allocation(SAA). This SAA is built around not only required investment returns, but also time horizons, risk appetite, feesensitivity, liquidity requirements and other critical conditioning factors that determine the most appropriate mixof asset classes and return drivers.
Time horizon, for example, may have a substantial impact on the mix of assets selected and their allocations,particularly allocations to illiquid assets or return sources whose payoff may be seen as most reliable over a longer
time-period (but less so over shorter horizons). Our forecasting engine supports this by providing a framework tocreate an array of scenarios which extend decades into the future and help model asset combinations and theliabilities they seek to meet.
A standard approach in the production of capital market assumptions (CMAs) is to assume key economic andfinancial variables will revert over time to their long-run trend or reach some sort of "equilibrium" level. However,incorporating climate change risk into these long-run assumptions is a more complex task requiring probabilities
around a range of future climate scenarios. To enhance our climate modelling toolkit, Russell Investments partners
with an external specialist climate risk provider. We produce baseline CMAs that use historical long-run economic
and financial data (referred to as "climate-agnostic CMAs"), and then "shock" the CMAs based on different climate
scenarios and their potential economic and financial impact to produce "climate-adjusted CMAs". This enables us
to compare the potential portfolio impact of different climate scenarios across asset classes and exposures.
We use our climate-adjusted CMAs to support clients who want to further understand the impact of various climate
requirements including the Task Force on Climate-Related Financial Disclosures (TCFD).
We continue to evolve our modelling and reporting capabilities and expect to re-evaluate climate vendors in 2024.

Construct
SAA exposures, while adding excess return through superior active management. We believe that best-in-classinvestment managers can identify idiosyncratic mispricing of individual securities and possess the ability tooutperform the market through their selection skill and dynamism. We maintain world-class teams of manager
due diligence analysts dedicated to identifying and recommending investment managers with an established edgein their area of focus.
In our open architecture approach, our manager research due diligence teams rigorously pit the best strategies
against each other in our efforts to find the very best. An evaluation of ESG considerations is an integrated
component of that process across as
their active managers from among those ranked highly by our manager research teams, using the ESG assessment
in balance with other key criteria, while staying mindful of return targets and profile and exposure data. When
constructing multi-manager portfolios with sustainable objectives from a combination of sustainable or thematic
sub-adviser strategies, portfolio managers use an additional framework to validate the sustainable credentials of
those products. This framework is referred to as I-P-O, for Intent, Process, and Outcome. Additional details can befound in section 4.1.

Russell Investments / Investment Stewardship Report/ 17

Managechanging market environments, effective risk management and attention to efficient implementation. We believethat the fear and greed cycle allows for a robust, process-driven, dynamic management approach, to both add
incremental return and to manage risk more effectively over the course of a market cycle. We dynamically manage
portfolios with this process by including both quantitative and qualitative analysis of material risks. When thisanalysis creates a high conviction short term view, we are able to take tactical positions. This is most common
when markets have moved to extremes of fear or greed.
Like market, credit, and other risks, portfolio managers seek to identify, assess, and manage financially-material
sustainability risks on an ongoing basis within portfolios. Potential risks are identified using available metrics,
proprietary scoring, manager reporting, and through communication with sub-advisers. As one means ofaddressing these risks, our portfolio managers work hand-in-hand with our active ownership team to ensurealignment with our proxy voting and engagement activity. We share more details on these practices in the section

2.5 Climate aware solutions
complications for institutional investors. While a decade ago a climate-aware portfolio may have revolved arounddivesting from fossil fuels, our approach today is much more nuanced. Now, we take a total-portfolio view within
our multi-manager framework.

techniques to enable outcomes such as:•

Reduced carbon intensity of the portfolio (emissions per unit of revenue)•

High carbon intensity but with increased investments in green technology or better alignment to the EU
taxonomy•High exposure to energy companies but with company engagement to encourage the adoption of sciencebased targets, an approach that has the advantage of promoting adaptability and supporting the energy
transition-manager, open architecture platform, we can provide transparency across thetotal portfolio, as well as the capability to manage exposures. Our portfolio managers assist clients to takeadvantage of this evolution in approaches, while still maintaining a focus on outcomes at the total portfolio level.

Carbon managed portfolios
While our process is cognizant of material climate-related risks and opportunities across all our funds, Russell
Investments has a history of collaborating with clients to build mandates that explicitly target climate-related
outcomes such as carbon emissions, fossil fuel reserves, and renewable energy exposure.
As of 31 December 2023, we had approximately $14.4bn (USD) in carbon-managed strategies. Our products arebuilt with proprietary carbon metrics and other relevant data, and currently we measure carbon footprint using
Scope 1 and 2 emissions and data from MSCI. These strategies are often built with a specific carbon reduction
target such as a 25% or 50% reduction in weighted average carbon intensity (WACI) or exposure to fossil fuelreserves.
In 2023, we saw the launch of three new sustainable funds across global markets and asset classes.

Russell Investments / Investment Stewardship Report/ 18

Case study

Sustainable fund launches in 2023

Sustainable Global
Equity FundThe Global Unlisted
Infrastructure Fund

Buy and Maintain Fixed
Income FundThis multi-manager fundbenefits from diversified
exposure to five highly-rated
specialist sustainable equity
managers. Thoughtful
portfolio implementation
targets sustainable and net
zero objectives and reduced
risk without lowering expected
return. The fund was launchedin separate account andcommingled structures in
EMEA and in Australia.

The Global Unlisted
Infrastructure Fund (GUI) is
designed to be a global andsector- diversified open-end,core-plus fund, investingexclusively in the infrastructure
asset class. The Global Unlisted
Infrastructure Fund invests inassets that provide essential
services to enable, sustain orenhance economic activity andstandards of living, producing
quantifiable ESG outcomes.

The Russell Investments Buy
and Maintain strategy uses ahighly customisable
approach to build
investment-grade credit
portfolios that aim to deliversmooth and predictable cash
flows to investors. The
flexibility of the strategy
enables investors to set andachieve sustainability
objectives, withoutcompromising desired cash
flows.

Target setting
Russell Investments recognises climate change as a challenge to the global economy and the financial well-beingof our clients. We collaborate with investors to address this challenge and achieve positive financial outcomes. In
2021, we joined the Net Zero Asset Manager initiative (NZAMi) to support the global goal of net zero GHG
emissions by 2050. As part of this commitment, we work in partnership with interested clients to develop aroadmap for portfolio alignment. So far, our activity has focused on:•

performing due diligence on target setting methodologies,•

continuously raising knowledge across teams through regular climate training,•building new capabilities for tracking progress against climate targets, and critically,•

defining our approach for determining whether portfolios are aligned to a net zero by 2050 objective.

Our initial targets were established in 2022, and we expect to provide an update on these in 2027. Below weprovide an outline of the learnings so far.

Update on our approach to net zero target setting
While the concept of net zero by 2050 is relatively clear (i.e., global greenhouse gases emitted should be less thangreenhouses gases captured or removed from the atmosphere by the year 2050), it is less clear what this means
for investment portfolios.
Useful frameworks from industry bodies can be leveraged for aligning a portfolio with net zero ambition, but
approaches vary considerably. As a starting point, we researched several methodologies, with a focus on thelogies: SBTi for Financial Institutions, the Net Zero Asset Owner Target
A consistent theme across alignment frameworks is the need for multiple levels of targets. In particular, there is
growing recognition that achieving an overall portfolio carbon reduction or temperature score alone is not
sufficient. Instead, most frameworks propose a combination of an overall portfolio target, for example a carbon
considered aligned. Engagement also has an important role, as a mechanism to encourage decarbonisation of thelargest emitters in the portfolio rather than simply divesting from them. This is because decarbonisation of thelargest emitters will be critical to achieving the global goal of net zero. Finally, increasing investments in climate
solutions is also consistently noted as an important consideration, and potentially another explicit target to be set.
For our own targets, we primarily leverage the PAII Net Zero Investment Framework (NZIF), supplemented with
our own insights. After reviewing a range of approaches, we found the NZIF to be reasonably constructed andsufficiently adaptable to our use case which covers many investment styles, geographies, and asset classes. As
noted above, this framework will include multiple levels of targets. The bottom-up asset alignment measures whatpercent of securities in the portfolio are aligned, aligning, committed to aligning, or not aligned. To date, we have

Russell Investments / Investment Stewardship Report/ 19completed a mapping of open data sources such as Climate Action 100+ Benchmark, Transition Pathway Initiative,
and the Science Based Target Initiative, as well as our proprietary data providers.
Over time, portfolios on a net zero trajectory need to increase the percentage of the portfolio in the higher
ambition buckets (aligned, aligning). We will also set targets to engage with companies in material sectors who
represent significant sources of GHGs and are lagging on these assessments.
The next type of target, the top-down portfolio level reference, acts as an accountability mechanism for ensuringthat the decarbonisation of the portfolio is consistent with a science-based net zero pathway. Portfolio-level carbon
emissions must decrease over time relative to a base year. For example, global absolute GHG emissions need todecrease by approximately 6.7% per year between now and 2030 to be on one of the commonly cited net zero
pathways, and this is a common starting reference for a portfolio decarbonisation objective over time. Global
emissions need to decrease by approximately 50% by 2030 relative to a 2019 baseline to be aligned to a limited or
no overshoot pathway in the IPCC Special Report on 1.5 degrees, and this serves as another common reference
point.
While these reference points serve as our guides, there is nuance around the selection of carbon metrics andaccounting for sector and regional exposures of a portfolio, given the economy will decarbonise at different rates.
In a diversified global portfolio, this may not be critical since the portfolio exposures largely align with the global
market on average. However, in an emerging markets fund, or a concentrated infrastructure fund, sectoral orregional decarbonisation considerations can be more meaningful.
Finally, the Net Zero Investment Framework highlights the critical need for increasing investment in climate
solutions. These investment opportunities can be identified and targeted via the EU taxonomy criteria, although
there may be a rationale for using less stringent definitions of climate solutions as well. We have already acquired
EU taxonomy data and have started to integrate it within our sustainable transition universe development.
However, this is still a relatively new area and one that will require more investigation before robust target setting
is possible.

Case study

Net Zero Dashboard

While acknowledging that the complexity of transition cannot be reduced to a single metric, we believe it isimportant to provide clear and transparent data points to measure progress. To this end, we invested in building aninternal dashboard that monitors our progress across the three primary net zero sub-targets identified above.

Exhibit 7: Snapshot of sample net zero dashboard

Source: Russell Investments, for illustrative purposes.

OutcomeThe dashboard tracks progress for each underlying fund or account in scope for net zero alignment, as well as anaggregated Russell Investments portfolio. This aggregated portfolio only represents the 25% of Russell Investments
AUM currently in scope for net zero alignment. Above, we report progress for 2023 against the interim targets forthe aggregated portfolio.

Russell Investments / Investment Stewardship Report/ 20

2.6 Addressing client needs in practice
We recognise the importance of regular communication and engagement with clients to understand their goals,
objectives, preferences, and any constraints they may have expressed in their portfolios. We also understand thatsuch as client satisfaction surveys, periodic reviews, and ongoing discussions. Whilst our approach does varyslightly from region to region, our methods are summarised below.

Ongoing dialogue
We believe that the best way to understand our clients' needs is through clear and constant dialogue. This stems
from an understanding that each of our clients are different and have unique needs. Therefore, having an open
dialogue with each of them ensures that we are aligned on what they are trying to achieve. This form ofengagement typically takes place at quarterly meetings and intra-quarterly as needed. This allows us to havedetailed discussions of their goals, objectives, preferences and any constraints they may wish to have expressed intheir portfolios. In certain jurisdictions, we measure the effectiveness of the relationship through the use of key
performance indicators (KPIs), such as:•

Client satisfaction: We ask for performance review feedback from our clients throughout our relationships.

•

Client retention: We place a strong focus on the tenure of our clients.

•

Investment performance: Clear articulation and setting of investment objectives based on both ourunderstanding of, and our discussions with, clients.

•

Bespoke KPIs: We often work with our clients to agree bespoke KPIs around other value-adding services thatare of importance (e.g., number of face-to-face meetings).

Client satisfaction survey
We also conduct annual client satisfaction surveys where we engage our clients to provide feedback against theobjectives they have set for us. This serves as a useful formal summary of quarterly discussions, and allows for
additional comments to be added, which have fed into both our recent product and reporting enhancements.

Third party survey
We conduct periodic thirdexpectations and provide an option for clients to submit anonymous feedback and input on how they would like us
to evolve our solutions to meet their changing needs. The latest in-depth client survey was carried out over thecourse of 2023. For illustrative purposes, an example graphic of client survey result received in EMEA has been
included in Exhibit 8 below.

Exhibit 8: Example client feedback results

Russell Investments / Investment Stewardship Report/ 21

Case studies
Through the feedback mentioned above, as well as the ongoing internal review of our practices, we have identified
the following requirements/areas of improvement. We provide details of the actions we have taken in the casestudies below.

Case study: market insights

Case study

Bi-annual UK defined benefits market insights study

In 2023, we conducted a bi-annual UK Defined Benefits Market Insights Study. This was based on responses of
107 UK defined benefit schemes, representing a total of over $318bn (USD) of assets under management.
Around half of respondents were responsible for more than $1.2 billion (USD) of assets. Russell Investments also
conducted interviews with 12 leading independent trustees to provide additional context to the survey findings.
The intention of this Study was to understand the key priorities and concerns facing stakeholders, including
to increase their focus on climate change related issues in the next twelve months, and as shown in Exhibit 9
below, over half of respondents have already set a net zero target by 2050 or earlier, an increase from 36% in
our 2022 Study.

15%

10%

2030
13%

2040
2050

32%

Still to be decided30%
We are not setting a net zero emissions target

Source: Russell Investments, December 2023.

OutcomeThe UK Defined Benefits Market Insights Study is conducted on a bi-annual basis, designed to allow us to gather
feedback and trends from both our client base and wider market. This includes, how our focus on Stewardship canhelp them to reach their goals. Based on the results received, climate change and net zero in particular willcontinue to be a key feature of our responsible investing agenda for 2024.

Russell Investments / Investment Stewardship Report/ 22

Case studies: Solution development

Case study

Development of Sustainable Global Equity Solution

In 2023, we partnered with a UK client to develop and launch a bespoke Sustainable Global Active Equity
Solution. This partnership involved understanding, guiding, and developing a set of sustainability criteria which
met the objectives of the client. Following multiple discussions with the client we agreed on various
sustainability parameters including a level of required ESG objectives, climate related elements, risk and returntolerances, non-climate sustainability considerations, exclusion requirements and reporting considerations.

Outcome
We were able to draw from our manager research capabilities to identify and access five world-class, global
equity specialist managers, which in combination met the various sustainability objectives that had been
identified.
Enhanced Portfolio Implementation capabilities. This infrastructure enables customised changes to the sub-fundunder a centralised portfolio management process.

Note: Diagram for illustrative purposes.

Russell Investments / Investment Stewardship Report/ 23

Case study

Focused ESG strategy for an APAC OCIO client

Through ongoing discussion culminating in an annual investment strategy review with a non-profit OCIO client,
we helped define both new investment objectives and a more ESG-focused investment strategy across the
We recommended a move to a higher growth allocation to better meet the client's long-term horizon andenhance return potential, as well as the incorporation of passive oriented ESG solutions. To incorporate higher
levels of ESG considerations into the portfolio, three portfolio options were presented, each showcasing different
levels of active and passive management and varying degrees of ESG objectives. This allowed the client to tailor
their responsible investing approach while considering associated returns and risks. An iterative and phased
approach was utilised to pinpoint the optimal mix of active and passive exposures, aligning with the client's
desired ESG exposures.

OutcomeTwo active ESG options were launched as a result. In the Australian shares, an active ESG option called theCustom Active Australian Shares SMA was introduced. This enabled the client to exclude stocks that go against
their ESG policy without adopting other investors' socially responsible views in a pooled investment trust, as
well as positively tilting to stocks which offered renewable energy generation and improved ESG risk scores.
In global shares, an active Global Equity Fund was launched, constructed with best of breed sustainable-Process-Outcome approach.
The Fund utilised an approach previously designed for a UK client with similar objectives.

Case study
requests

Development of internal dashboard to meet US client

Clients are increasingly focused on understanding the diversity characteristics, policies, and practices of theirunderlying investment managers, and we are well-positioned to support their needs. We continue to enhance
our ability to recommend asset managers that have favourable DEI characteristics and to report on diversity
among hired managers.
Consistent DEI data can be hard to come by, so we leverage multiple data sources., In 2023, we developed aninternal dashboard to assist in monitoring and reporting fund-level sub-adviser DEI data. For Russell
Investments in aggregate, we measure diversity among managers in our research pipeline, on ourrecommended lists, and hired in funds on an annual basis. Furthermore, we provide custom reporting to clientson diversity among hired/funded managers upon request.

Outcome
Our annual Manager ESG Survey suggests that diversity remains an area of high concern for asset owners. The
new strategy allows us to meet the needs of clients looking for greater visibility into the DEI practices andcharacteristics of our underlying managers.

Russell Investments / Investment Stewardship Report/ 24

Case study

Private market development

Over the course of 2023, we discussed the development of private market solutions with one of our UK clients,
with a focus on providing solutions within private markets which can generate meaningful impact while
managing and mitigating climate-related risks. For this new solution, we worked closely with the client tosupport them in their long-term ambition to demonstrate leadership on responsible investing practices.
Together with the client, we developed a credit solution, which tracks sustainability and ESG metrics in-term climate goals. The solution has a focus on opportunities where private,
long-term capital can provide distinct advantages over other capital sources to mitigate climate-related risks.

OutcomeRussell Investments is working alongside the client to identify opportunities that meet the investment
parameters outlined for the mandate while simultaneously helping the client deliver their own responsible
investing and social impact policies. The solution also allows for the client to set specific ESG-related criteria,such as an exclusion of fund investments and co-investments into strategies that are directly related tocompanies they wish to exclude.

Case studies: Solution development

Case study

Granular ESG reporting

As clients are facing increasing regulatory requirements regarding their ESG reporting, Russell Investments has
been actively supporting clients in meeting these requirements by enhancing our ESG reporting and providing
more granular data and climate metrics. One such client was required to undertake their first TCFD report in
2023. As part of this process, the trustees identified four climate change metrics against which to measure theirasset portfolio and, as required, formally identified a target against which to measure progress for one of thosemetrics.
To enable the monitoring of the identified climate change metrics by the client, Russell Investments augmented
the ESG component of the quarterly investment performance report to directly report on these metrics.

Outcome
The enhanced ESG report received positive feedback and covered all the key metrics that had been set out by
the trustees, such as Financed Emissions and WACI-scores over time. Furthermore, the inclusion of theseshown below in Exhibit 10) enables the client to easily track the
metrics required in their TCFD reporting.

Exhibit 10: Evolution of quarterly client reporting

Russell Investments / Investment Stewardship Report/ 25

3. Governance of stewardship✓✓✓

UK Stewardship Code - Principles 2
Japan Principles for Responsible Institutional Investors
The New Zealand Stewardship Code Principle 1

Principle 7

effective stewardship across all our investments, at every level of our organisation. Our corporate and investment bodies
recognise that stewardship is central to investment management, and this has been the main organic driver of our evolution
structures and resources, and how they contribute to a consistent emphasis on high standards of fiduciary duties.

3.1 Global governance structure
At Russell Investments, global governance is headed by our Board of Directors and an Executive Committee (EC).
Leadership on stewardship starts at the top of the organisation and is expressed through the empowerment of a number ofglobal committees to establish practices and oversee their faithful execution. These committees ensure compliance with
global investment, risk, and stewardship standards across all regions, as well as being responsible for introducing
continuous enhancements to our approach, in line with our best thinking and industry practice.

Exhibit 11: Global governance committees

Source: Russell Investments, for illustrative purposes only.

Russell Investments / Investment Stewardship Report/ 26

The EC is the most senior management group at Russell Investments and is responsible for determining theset by the EC as part of investment strategy and corporate management. In recent years, the EC has strongly
supported increased integration and resourcing of stewardship activities.
The Global Risk Management Committee (GRMC) plays a critical role in our risk management and stewardshippractices. It provides an independent global authority over major areas of risk and control essential for effective
management of the company.
The GRMC, acting in its oversight capacity, is authorised and directed to review and evaluate investment, credit,
and operational risks. It provides guidance to the business units for the proper identification, assessment,
monitoring, and mitigation of these risks. It is authorised by the EC, and its responsibilities relate to all legal
entities and businesses operated by Russell Investments, worldwide. Global oversight by the committee for risk
management practices is supported by regional risk management subcurrent business regions. Further information on how Russell Investments identifies and responds to market-wide
and systemic risks is explained under section 2.

Board oversight of climate risk
and long-term stewardship of the firm. Climate-related risks and opportunities have been identified as a strategic
priority for the business. As a result, significant consideration has been put towards establishing the appropriate
governance frameworks to identify, assess and manage these risks and opportunities.

Board, through the Executive Committee (EC) and Audit and Risk Committee, has delegated oversight of the risks
associated with climate change to the Investment Strategy Committee and the Global Risk Management
Committee.

3.2 Investment governance structure
The Investment Division (ID) is responsible for undertaking all investment activities for clients. The ID is governedby the Investment Strategy Committee (ISC), which is authorised by the EC to oversee investment activities, review
investment performance, and establish investment policy and strategy. The ISC is responsible for processes andstandards of stewardship practice, with a focus on active ownership and creating long-term value throughappropriate decision making around allocations and risk management. As regulatory standards and industry
practices evolve, the ISC seeks to continually update investment processes, including stewardship practices.
and risk professionals. The ISC delegates to numerous sub-committees to review and recommend proposals tocreate new investment products, launch new funds and hire/terminate investment managers.

Russell Investments / Investment Stewardship Report/ 27

Exhibit 12: Investment Strategy Committee

Solutions
Sub-Committee(SSC)
Oversight of design
decisions including
new productlaunches andstrategic asset
allocations.
Evaluates suitability
to end client
requirements.

Proprietary
Strategies
Sub-Committee(PSSC)
Oversight of all
proprietary
strategies andmonitors
performance ofexisting strategies.

Implementation Review
Board (IRB)

Manager &Strategies SubCommittee (MSSC)
Oversight of
construct decisions
for equity fixedincome and mainasset activities.
Approve changes inmodel portfolio
positions. Establish
guardrails.

Investment
Strategy
Committee (ISC)
Responsible for oversight of all
investment activities, including
delegation of key investment
oversight roles and standards.
Creates standards and guidelines
for all investment decision
making, including sources ofreturn, risk budgeting, investor
discretion, andmeasures/monitoring of success.
Final approval of all new
products, processes, andcapabilities.

Alternatives
Sub-Committee(Alts SC)
Oversight of hedge
fund and private
equity fundactivities.
Approves changes
in model portfolio
positions.
Establish
guardrails.
AffiliatedBusiness
Oversight
Committee(ABOC)

Trade
Management
Oversight
Committee(TMOC)

ActiveOwnership
Committee(AOC)

Investments
Division
Editorial
Board(IDEB)

Reviews and makes
recommendations to the
ISC and appropriate subcommittees on preferred
instruments andpreferred
implementation
techniques.
Recommends andmonitors implementation
guidelines.

Investment Model
Review Board (IMRB)
Reviews and makes
recommendations to the
ISC and PSSC on all new
investment models used
to manage portfolios,
either as separate
strategies or tools.

Investment
Division
Responsible
InvestingCouncil(IDRIC)

Source: Russell Investments, for illustrative purposes only.

The groups reporting to the ISC have written charters outlining their documentation requirements, such as records
of approvals, decisions, and oversight activities. Each of these groups has delegated responsibilities from the ISC,
relating to the faithful execution of stewardship responsibilities and the continuous development of investment
practices for the management of client assets. Whether those duties relate to ensuring sound investment decisions
on behalf of clients, verifying the rigor and appropriateness of investment analysis, or guarding against potential
risks or conflicts, they all feed into the broader mission of improving financial security for people.
Our governance process features performance measurement, with much focus placed on metrics that assign
accountability and reflect the outcomes our clients seek. We formally review these metrics and outcomes with theaccountable parties on an annual cycle (and informally more frequently), and we continually revisit mandates,
objectives, and performance metrics for their alignment with the mission of each group.
Every ISC sub-committee is responsible for embedding good stewardship practices into its governance anddecision-making processes. For example, the Manager and Strategies Sub-Committee ensures that proposed
portfolio structures are well-constructed to meet investment targets within risk guidelines. As part of thatoversight, the committee must confirm that sub-advisers have sufficient ESG capabilities embedded in their overall
evaluation and will consider available metrics on ESG factors when approving portfolio structures.
Within the ID, our Active Ownership Committee (AOC) oversees a globally consistent and rigorous approach toproxy voting and engagement activities. Under this oversight, the Active Ownership Team executes the day-to-day
process, maintaining proxy voting policies, procedures and guidelines, while implementing voting decisions andevolving our processes as needed to meet client needs and expectations. The AOC is made up of tenured andexperienced Russell Investments professionals from a variety of roles around the world, including portfolio
management, manager research and investment strategy. All proxy voting and engagement activities are advised

Russell Investments / Investment Stewardship Report/ 28

Within the Active Ownership Committee, our Guideline Sub-Committee meets regularly to review and propose
adjustments that ensure our guidelines are aligned with current best practices. Meanwhile, dedicated personnel
work alongside our portfolio managers to direct and coordinate our engagements with public companies, our subadvisers and other market participants. This organisational structure, and the diverse set of participating
investment professionals, ensures our active ownership function is integrated within our investment process.

Exhibit 13: Active Ownership Committee structure

Source: Russell Investments. For illustrative purposes only.

3.3 Responsible investing governance structure
We favour an integrated approach to responsible investing and have subject matter experts embedded throughout
our organisation. Our responsible investing teams and initiatives are led by an executive sponsor, our Global CIO
Kate Else initiatives. Two councils provide
governance and coordination for our responsible investing practices and initiatives, namely the Go-to-Market
Responsible Investing Council (GTMRIC) and the Investment Division Responsible Investing Council (IDRIC).

GTM Responsible Investing Councildeliverables and Go-To-Market (GTM) activity on responsible investing, as well as charged with ensuring wedeliver the best possible responsible investing solutions and outcomes to our clients globally.
The council consists of representatives from across the business including the investment division as well as
product, marketing, legal, compliance, and client-facing teams. Jihan Diolosa, Head of Global ESG Strategy, chairs
this council.

Russell Investments / Investment Stewardship Report/ 29

Exhibit 14: GTM Responsible Investing Council structure

GTM Responsible Investing Council (GTM RIC)
Chair: Jihan Diolosa (Head of Global ESG Strategy)

SolutionsSales
strategy

GTMstrategy

Legal andcomplianceMarketing

Investment
Division

Investment Division Responsible Investing Council
responsible investing experts at our firm. The council is responsible for devising and leading the Investment
sustainable investing challenges and requirements emanating from ourclients, our business strategy, and a changing regulatory environment - typically prioritised and delivered to the ID
via the firm-wide GTMRIC. Importantly, the IDRIC, which reports to t
investment practice across our investment process.
Specifically, this group ensures that the data, infrastructure, and processes are in place to support effective active
ownership and an integrated approach to incorporating financially material ESG factors and risk mitigation into
investment decision making. These responsible investing experts from across our research and portfolio
management teams are empowered to propose improvements in stewardship and investment practice, to beapproved by the ISC. The council is chaired by Kris Tomasovic Nelson, Head of ESG Investment Management.

Exhibit 15: Investment Division Responsible Investing Council structure

ID Responsible Investing Council (IDRIC)
Chair: Kris Tomasovic Nelson (Head of ESG Investment Management)

Activeownership

ESG research

Russell Investments / Investment Stewardship Report

Privatemarkets

Portfolio
management

Manager
research/ 30

3.4 Resourcing stewardship
The ID is organised around three core strengths: research, portfolio management, and implementation services.
Some of the key investment functions most central to stewardship practices include:
Manager Research Analysts Specialists responsible for gaining a thorough understanding of the universe ofinvestable managers and products and for making recommendations which they believe offer our clients thebest opportunities.
Portfolio Managers

Professionals tasked with the strategic asset allocation, manager and strategy selection

Portfolio Analysts These professionals work closely with our portfolio managers and provide them with thenecessary analytical tools and research reports to aid their decision making.
Implementation Portfolio Managers These specialists execute the investment decisions of the portfolio
managers, ensuring the timeliness and efficiency of any changes.
Research and Development This team is responsible for research of the capital markets and creation of
forecasts and investment strategies that identify and capture key sources of return. Additionally, the teamenables the development of supporting technologies and tools to effectively deliver our investment insights toclients. Our R&D professionals have the quantitative capabilities to apply the tools of data science andadvanced computing to a wide range of investment challenges.
Asset Allocation & Investment Solutions Members of this group lead our efforts in asset allocation issues,
including all forecasting and modelling. They also participate in research of institutional matters, such as
reviewing and understanding the implications of pending legislation, or the role of potential new asset classes,
such as portable alpha and overlay strategies and evaluation of less traditional asset classes.
Active Ownership: The dedicated professionals on our Active Ownership Team enable our proxy voting
policies, procedures, guidelines and voting decisions. This team also leads our engagement process withparticipation from a wider group of investment professionals.
Service Providers: The extent to which service providers are used and the service they provide from a
stewardship perspective is covered in Section 4.4 of this report.
The collective efforts of these functions help to create and maintain solutions that are not only tailored toprojected market behaviour. This division of roles and responsibilities is designed to create clear ownership of
key decisions matched with appropriate expertise and experience. We value specialisation and clear
accountability in these roles, even as we seek to effectively guide all investment
of investment professionals. We believe that this is an effective combination of subject matter experts andqualifications for meeting our stewardship requirements.

Exhibit 16: Total number of investment professionals
TOTAL NUMBER OFINVESTMENT
PROFESSIONALS

Total Investment
Professionals

NUMBER OF
INVESTMENT
PROFESSIONALS WITH
CFAS

NUMBER OF
INVESTMENT
PROFESSIONALS WITH
PHDS

AVERAGE RUSSELL
INVESTMENTS YEARS’TENUREAVERAGE INDUSTRYYEARS’ EXPERIENCE

320

155

9

11.1

Source: Russell Investments, data as at 31 December 2023.

Associates are encouraged to pursue educational opportunities to develop skills and meet their career goals.
direct reports to create a development plan with the goal of growing existing and developing new skill sets.
Furthermore, we encourage participation in continuing education opportunities, such as the Chartered
Financial Analyst programme, to enhance knowledge through job-related areas of study, or pursuing licenses
and professional designations applicable to their positions. To further encourage associates, a generous tuition
reimbursement programme for qualified programmes and areas of study is in place.

Russell Investments / Investment Stewardship Report/ 31

Specific to responsible investing, both broad and role-specific training is required for key investment
professionals, ensuring an appropriate understanding of ESG concepts and topics as they seek to deliver strong
investment outcomes and stewardship to clients. In addition, client-facing teams have continual access toregular training on capital markets, investment strategy, asset class behaviour, and portfolio management
innovations.

Case study

Rotational proxy analyst programme

guidelines, but some categories of proposals require more careful review and assessment. The first step inthis process is conducted by an internal proxy analyst who evaluates the proposal and prepares a
recommendation for our Active Ownership Committee on whether to support or reject it. As the number ofshareholder proposals requiring a deeper review has increased, Russell Investments has in turn expanded
our ranks of proxy analysts.
Our internal proxy analysts, who serve on a two-year rotation, are members of the investment division,
typically portfolio or manager research analysts, globally distributed and from different asset classes. The
Active Ownership Team provides training to the analysts on an annual basis and oversees the voterecommendation process.

OutcomeThis programme provides training on active ownership to an expanded number of our investment
associates, while supporting the evaluation of a significant number of complex proxy decisions.

3.5 Alignment of incentives to integrate stewardshipAs a global organisation, we have made the consideration of ESG and effective stewardship across all
investment decisions a key objective. Senior portfolio managers are compensated based upon a combination offactors which encompass their success in delivering desired investment outcomes to clients, while effectively
contributing to investment processes and providing suitable levels of stewardship of client assets. Within that
overarching evaluation framework, portfolio managers are required to consider ESG factors and stewardship inevaluating and selecting sub-advisers, as well as evaluating ESG risks and exposures at the total portfolio level
explicitly measured, included in annual assessments, and linked to compensation.
In addition to senior portfolio managers, all associates with specific responsibilities for ESG, stewardship andclimate change have annual performance goals aligned with the success of the integration of these topics.
These goals include evolving our responsible investing and stewardship practices to be in line with global
standards; collaborating with leading industry bodies to advance industry frameworks; driving our engagement
practices; and research and development. All these items are aimed at delivering robust stewardship practices-related performancegoals is linked to remuneration.

Russell Investments / Investment Stewardship Report/ 32

4. ESG Integration and Responsible
Investing✓✓✓

UK Stewardship Code - Principle 2, 7
Japan Principles for Responsible Institutional Investors - Principle 7
The New Zealand Stewardship Code - Principle 3

4.1 Our integrated approach to stewardship and investment
As a function of our integrated approach, material ESG considerations and stewardship are woven into our standard
investment practice at all stages of our investment process. Subject matter experts are embedded within our
research, risk, analytics, quantitative and portfolio management teams, and work in close coordination withdedicated responsible investing and active ownership personnel. Our professionals understand the ways in whichsustainability issues manifest in the financial performance of various investments across asset classes, and their aim
is to identify and act on material financial risks and opportunities.
Below, we describe how our responsible investing beliefs and policies, detailed in section 1, translate into practicewithin our key investment capabilities.

Exhibit 17: Responsible Investing in practice

Source: Russell Investments. For illustrative purposes only.

Russell Investments / Investment Stewardship Report/ 33

Belief 1

ESG factors can impact security prices

Portfolio Management Process
Responsible investing is integrated throughout our investment process, including our manager research, portfolio
management and portfolio construction activities. We believe that material ESG considerations should sit
alongside traditional assessments as a part of the overall strategy evaluation. Since 2014, our manager researchanalysts have evaluated how effectively investment managers assess and manage ESG issues within theirinvestment process as a standard component of our diligence across all asset classes. Analysts leverage bothquantitative and qualitative information in conducting each review, drawing on external data and research fromfor each sub-adviser strategy we monitor via proprietary tools and ESG reporting. Our analysts also utilise
information gathered from our Annual ESG Survey, which broadly polls active equity, fixed income, and private
markets managers to measure the state of ESG integration across the industry investment practice. We arecontinually evaluating and working to incorporate additional data sets for all asset classes.
Our ESG-related due diligence covers a wide set of subfour sub-categories in Exhibit 18 below. The ESG sub-rank, which is shared with clients alongside our other subranks, ranges from one to five, with a ranking of three considered consistent with the peer group average.

Exhibit 18: ESG sub scores

Source: Russell Investments, for illustrative purposes only.

-ranks on nearly 1,750 strategies across all asset classes
and geographies. In addition, more than 400 manager strategies researched by analysts have been identified ashaving a specific ESG outcome intent as part of their investment process. In 2023, 55 of those products had theirassessment ranks updated following research meetings that included more than 100 of these strategies. Greater
visibility into the drivers of the ESG rank has prompted greater understanding of how ESG factors influence aanalysts assign an ESG rank to all high interest and recommended strategies, and it is just one of several areas ofstrategies which aim to deliver explicit sustainable objectives.
For mandates with explicit sustainable objectives, we ensure that portfolio managers select strategies with strong
ESG integration through a framework at Russell Investments known as Intent, Process, Outcome (I-P-O). Productintegration of ESG and responsible investing practices at the fund level. Finally, a sustainable or ESG outcome isevidenced through product characteristics. These will differ by asset class but may include the target investment
type, low ESG risk, revenue alignment, or low carbon emissions. Through close collaboration and clear

Russell Investments / Investment Stewardship Report/ 34

documentation, research analysts and portfolio managers use I-P-O to validate the sustainable objectives andcapabilities of a strategy prior to inclusion in our multi manager sustainable funds.
Analysts record their analysis and conclusions, including ranks, in our global proprietary database, RADAR(Russell Investments Analysis, Data, and Ranks). Further details about RADAR and the way we hold managers
accountable through due diligence are provided under section 4.4.
research teams. The Investment Strategy Committee and its delegate committees confirm that sub-advisers
selected by portfolio managers for client solutions have sufficient and appropriate ESG capabilities for each fundassignment.

Case study Manager change to enhance ESG
integration in the Global Credit FundESG integration in the fixed income market is rapidly evolving, and our open architecture platform allows us
to partner with leading asset managers who have superior investment frameworks. Among other capabilities,
compelling managers are able to consistently and effectively identify ESG-related risk and return
opportunities. In the fixed income space, our manager research team sought to enhance the manager line-up
in the Global Credit Fund where the client was looking to improve the overall profile of sustainability in theFund.

OutcomeAfter conducting numerous due diligence meetings, our manager research team identified a sub-adviser who
offers a compelling performance expectation with a convincing practice of assessing ESG-related risk andreturn opportunities in their investment process. As a result of hiring the newly identified manager, theaverage ESG assessment rank for the Fund improved, and there was a material improvement in the carbon
footprint intensity measure. Furthermore, engagement activities in the Fund are expected to improve after
this manager change.
Portfolio managers manage sustainability risks in our investment solutions through our quarterly and annual
manager review process and through implementing proprietary solutions. Through a process known at Russell
portfolio management teams assess sustainability risks in funds andexplain how those risks are being monitored and managed. EO is designed to provide sufficiently granular insights
into fund/portfolio exposures hat would fail to recognise the breadth,complexity, and relevance of sustainability issues. EO focuses on broad ESG themes as well as specific securities
identified from:•

Our own quantitative analysis, where we monitor the highest and most material sustainability risks at the totalportfolio level•Sub-adviser insights, whom we explicitly direct to highlight financially-material sustainability issues•

Other third-party sources including those who provide company and thematic ESG research

Quantitative analysis is used wherever data is available and robust, particularly in equities where our primary dataterial ESG Score is designed to highlight sustainability issues that are relevant andMateriality Map, corporate governance scores and environmental data from multiple providers with an emphasis
on forward-looking information where available.

Russell Investments / Investment Stewardship Report/ 35

Case study

ESG module development for portfolio analytics

Outcomeplatform. The project enabled real time calculation of ESG-related exposures at the fund, manager/sleeve, andsecurity level while incorporating informat
delivers data from vendors such as MSCI, Sustainalytics, and Planetrics to enable portfolio managers tomonitor ESG objectives and constraints at a portfolio level across the suite of funds and client accounts. This
includes equity, fixed income, and multi-asset strategies.

To share ESG-related insights across teams, Russell Investments uses an internal platform called ENACT. The
name ENACT was drawn from the combination of two of our critical responsible investing practices: Enhanced
Oversight and Active Ownership. ENACT allows investment team members to record and access the insights thatare gathered during sub-adviser oversight (including EO) and from engagement activity.

experts, and it serves as a timeline and progress marker for our engagement objectives. We believe that setting
and tracking explicit engagement objectives is key to an effective programme, and we were early in implementing
process and tool for this. We continue to evolve ENACT by adding data and enhancing its functionality. For
example, in 2023 we made changes that promoted complementarity between ENACT and our Net Zero Dashboard
with the aim of streamlining our net zero engagement planning. Russell Investments is pleased to be operating
according to best practices in this area.

Case study Enhanced oversight within an emerging
market fundESG-related data is notoriously scarce for emerging market companies as many firms do not disclose the same
information as their developed market counterparts. Enhanced Oversight allows our teams to overcome thishurdle and more accurately assess holding companies in these regions. Where our portfolio management teams
have the opportunity to gather risk and opportunity information from the EO process, it can lead to engagementwith the identified company.
An example of this process is shown through our exposure to a Mexican construction materials company.
Russell Investments holds both equity and debt in the company across multiple portfolios. Through EO, it was
identified by our public equity emerging markets team and our fixed income team as having high risk. Eachteam subsequently requested manager insight into how the specific ESG risks for this holding are assessed andmanaged.
Both managers shared that they were actively engaging with the company due to its global leadership in the
cement industry and long-term risks and opportunities around sustainability issues. However, our fixed income
manager noted the potential risks to the cement producer of being overtaken by peers who are also
demonstrating strong sustainability progress. Continued monitoring of the company by Russell Investments was
flagged by our investment teams.

OutcomeAfter integrating our managers comments into our engagement selection criteria, the Active Ownership Teamin partnership with both the fixed income and emerging markets listed equity team determined this materials
company to be a strong candidate for engagement. We explore this engagement and its outcomes in the
Engagement section of this report.
While EO was first developed and deployed as a tool for sustainably focused equity funds, in 2023 we worked toadapt and extend its application across all asset classes and portfolios, with a particular focus on fixed income
enhancements. Our fixed income portfolio managers assess bond-specific characteristics (e.g., our total marketvalue exposure, the duration remaining to maturity, and credit rating) alongside traditional ESG risk metrics

Russell Investments / Investment Stewardship Report/ 36

(Sustainalytics ESG Rating, ESG controversies, and MSCI Carbon score) and work with sub-advisers to integrate
the risks highlighted.
Meanwhile, our Private Markets Teams source proprietary ESG reporting and data directly from our sub-advisers.
Materials can include our completed ESG DDQ (Due Diligence questionnaire), the subany other ESG reporting, such as the Institutional Limited Partners Association (ILPA) or Data Convergence
Project templates. If ESG risks are identified, our private markets portfolio managers encourage improved ESG
practices and/or reporting.
For each Russell Investments managed fund or segregated portfolio, enhanced oversight may result in thefollowing actions for certain holdings, with consideration of the impact of risks at the total portfolio level:•

Reviewing of metrics and the research behind the metrics•

Discussion with the sub-adviser supporting the holding•

Discussion with the Active Ownership Team to consider engagement options

Given that we have built proprietary ESG models and undertake our own ESG research, we are not wholly reliant
on third-party providers. We subscribe to a wide variety of data sets from the different providers outlined above,
which provide raw performance data, drawing on analysis of the data and materials produced by our sub-advisers
to inform our models and research. Further information on the processes in place to ensure service providers
support integration of stewardship and investments is provided under section 4.4.

Belief 2 - A deep understanding of ESG factors is value adding
Insight and research
We tailor our research to evolve our understanding of sustainability risks and opportunities, and this is reflected inour strategy development, metrics, and reporting. The research agenda is tailored to address challenges faced byclients as well as an ongoing commitment to enhance our proprietary ESG strategies. For example, we refined offthe-shelf ESG scores built for a wide range of uses, to focus on financially material ESG issues for use in our
proprietary ESG strategy. While managing low carbon strategies, we found that several unintended consequencessuch as reduced exposure to renewable energy and overall increase in ESG-related risk were prevalent among
simplistic approaches to carbon reduction, so we researched and implemented enhancements that better aligned
pressure to introduce climate scenario analysis, we performed detailed due diligence on a dozen climate risk
model providers, and onboarded our preferred provider to enable clients across our platform to meet thisemerging obligation. All of these capabilities have been implemented to deliver comprehensive sustainable
solutions.

Case study

Enhancing physical climate risk modelling capabilities

To further our work in providing climate-aware solutions, we identified the need to enhance our capabilities inassessing and incorporating physical climate risks into overall financial risk analysis. The assessment of physicalclimate risk poses a significant challenge due to its complexity and the lack of standardised methodologies. Thus,
we initiated a comprehensive review process to evaluate physical climate risk providers. The process involved
assessing multiple providers based on criteria such as the sophistication of their methodologies, data quality,
track record, and alignment with industry standards. As well, we launched a project to develop in house GIS
expertise and began to develop
estate portfolio.

OutcomeAfter thorough evaluation and due diligence, we engaged a specialist data provider to help us complete a casestudy for a large institutional client. The chosen provider offered advanced modelling capabilities and robust data
analytics, enabling us to enha
portfolio.
Furthermore, recognising the importance of physical risk exposures from a geographic perspective, we invested
in developing GIS and spatial analysis capabilities. This involved leveraging advanced geospatial technologies tomap and analyse the distribution of physical climate-related hazards such as flooding, sea-level rise, and extreme

Russell Investments / Investment Stewardship Report/ 37

Building a sustainable transition universe
Russell Investments began developing decarbonisation overlays in 2015. However, our investment professionals
recognised that investing in a way that actively contributes to a more sustainable future requires a deeper level ofscrutiny and a more careful application of ESG data than a simple de-risking approach. For clients desiring asystematic overlay, strategies must be tailored to pinpoint and support businesses and sectors actively progressing
towards more sustainable practices, technologies, and operations.
Thus, we designed a systematic approach to identifying investments that captures a company's positive impact on
the environment and society while acknowledging the trade-offs between positive and negative outcomes. This
vigates the complexity of sustainable transformation by applying a multi-faceted
criteria set. The high-level criteria include:•

Positive Impact Today: We evaluate companies based on their revenues or services linked to Sustainable
Development Goals (SDGs) and other positive impact themes.

•

Emerging Technologies: We consider technologies in development, measured by capital expenditure andpatents held. These technologies are critical for driving sustainable change in the future.

•

Negative Impact Assessment: We assess companies based on the significance of their negative impact. This
isn't about excluding all companies with negative impacts, as all companies have some level of negative
impact. Instead, we focus on those with a substantial overall negative impact that hinders their potential tocontribute positively to sustainability.

The Sustainable Transition Universe truly shines in its ability to be used within multi manager portfolios throughour Completion Portfolio framework. We build sustainability-focused funds while controlling for the potential
factor and sector biases that may materialise at the total portfolio level - all while ensuring that each name held
within the portfolio still meets our rigorous sustainability standards.

Belief 3 - Active ownership is an effective tool for improving investment
outcomes
Active OwnershipAs part of our stewardship activities, we aim to engage with companies on overall business strategy, capital
allocation, and ESG practices, while encouraging appropriate levels of risk mitigation in line with our engagement
policy. In addition, we promote transparency to support informed decision making and well-functioning financial
markets by engaging specifically on ESG disclosures. While a number of criteria guide our selection ofis couched in its industry context,
through the use of peer-relative metrics and qualitative comparisons.
Additional information regarding our proxy voting and engagement actions during 2023, as well as our plans to
Ownership segment, section 5 below.

Belief 4 prolonged success
Culture and processes
At Russell Investments, our culture is built on a commitment to a foundational set of beliefs and practices which
provide a rich combination of real-world guidance and an over-arching ethic within which we conduct ourbusiness. We believe that the effective integration of diverse ideas and perspectives brings richness to our culture
and increases our ability to provide innovative solutions to our clients, while adding value to our shareholders andcommunity. Please refer to section 1 to learn more about our purpose and values.

Russell Investments / Investment Stewardship Report/ 38

4.2 Our risk management programme✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors✓

The New Zealand Stewardship CodePrinciple 4
Principle 1

Principle 3

In order to identify threats to financial security and manage them for the benefit of investors and the broader
market, we have developed a robust, multi-layered approach to risk identification and response. This approachseeks to stay vigilant to all sorts of risks, both operational and financial, as well as formulate careful responses tothreats that impact our business, our clients and the broader market and society.

Identifying and responding to systemic risks: Framework and key elements
At Russell Investments, we operate an independent risk management programme through an organisational unit
called Global Risk Management (GRM). Consistent with best practices and regulatory requirements, GRM is
independent from both manufacturing and go-to-market functions.

•

Risk matrix:
businesses, along with the drivers of these risks.

•

Risk measurement:•

Five lines of defence:
Internal Audit, (4) Risk Management and Compliance and (5) Business Units. Each of these have establishedand reinforced responsibilities for the identification and management of risk.

•

Risk governance: GRM has implemented a risk governance structure which has been integrated into other
Russell Investments governance structures.

•

Risk appetite: The idea of a risk appetite must be considered from multiple perspectives because some risks
are borne by Russell Investments and others by its clients. Key dimensions of this are principal versus agency
risk and buy versus sell side exposures .

•Risk assessment: GRM conducts formal assessments via its annual Enterprise Risk Assessment and targetedrisk reviews. Informal assessments occur continuously. These assessments are used for multiple purposes suchas escalation when appropriate, development of remediation plans and input to the annual audit plan.

•

Organisation and specialisation:organisational arrangements includes three specialised risk teams:
credit, investment/market, and operational risk. The Operational Risk Team is also responsible for the
insurance programme and business continuity. Functional teams are supported by several regional associates.

Key risk categories and response mechanisms
Different categories of risk require discrete tools and processes to identify, examine and respond to risks in thecourse of an evolving market and operating environment. The GRM function is organised around the managementof Investment Risk, Credit Risk, and Operational Risk with appropriate tools, expertise, and attention applied toeach, the details of which are explained below.

Investment risk
The Investment Risk Management (IRM) team measures and monitors market and liquidity risks. IRM operates a
granular multi-asset enterprise risk system consisting of internally developed, as well as industry leading thirdparty, market risk models with IRM-developed proprietary components which extend and enhance the capabilities.
Investment Risk is always modelled at the total portfolio level and not by individual asset classes.
The investment risk process is rooted in risk identification and measurement. Effective evaluation of investment
risks involves assessment across three key pillars:
1. Market risk: The risk of change in the market value of investments and/or level of earnings due to movements
in market prices. Market risk calculations must consider changes in equity and commodity prices, interest
rates, exchange rates, implied volatilities, and inflation.
2. Exposure measurement: Quantifying exposures across key investment risk dimensions (i.e., country, currency,
asset type, GICS and credit rating) provides a non-model-based view into investment strategy. Investment riskarises when there is a mismatch between stated strategy and actual exposures taken.

Russell Investments / Investment Stewardship Report/ 39

3. Liquidity risk: Arises when assets cannot be readily converted into cash and/or without an onerous discount invalue to meet liabilities or other cash needs. Two types of liquidity risks need to be considered:a.

Market liquidity risk is the potential adverse price impact due to illiquidity on a particular security.

b.

Funding liquidity risk is the potential for adverse impacts due to portfolio dealing terms and/or redemption
activity (behaviour) of an investor.

Credit risk
performs on-going monitoring of their financial strength. A Rating Committee assigns an internal credit rating toeach issuer and counterparty.
•

Exposure monitoring: Credit Risk Management applies a risk-based approach to monitoring credit exposures.
bears primary responsibility formonitoring and managing credit exposures.

•

Governance: An approved list of counterparties and their corresponding internal ratings is maintained andupdated as needed. The results of both the initial and periodic reviews are presented to the Rating Committee.
tee (sub-•Approved list: Russell Investments portfolio managers and traders may only use issuers and counterparties on
the approved list maintained by Credit Risk Management.

Material ESG criteria inform our credit evaluation. For example, our opinion on the fundamental strength of aadvent of a severe shock due to environmental related issues. We also consider how well a company manages its
relationships with its workforce, the society in which it operates, and its political environment. Lastly, in scoring acounterand its effectiveness of decision making and oversight, and we address any regulatory, tax or legal violations,among other disclosures. We score more favourably companies that are taking a proactive role when incorporating
sustainable practices.

Operational Risk
Operational Risk Management (ORM) focuses on identifying, assessing, and monitoring operational risks.
Russell Investments uses a multi-element risk identification approach which operates on the premise that therecognition and measurement of risk needs to occur on both a proactive and reactive basis. Our long-standing
formal escalation protocol promotes timely communication to senior management, enabling changes (i.e.,enhancements to controls) to be made when necessary. Russell Investments employs a disciplined event capture
approach with results reported through the risk governance structure. Ongoing monitoring, as well as targeted risk
reviews and risk profiling, provide a basis for insights as to how risks are changing in response to market
conditions and the evolution of strategy and portfolio composition.
•

Governance: Russell Investments maintains an Operational Risk Committee which is a sub-committee of the
Global Risk Management Committee. Chaired by the Global Head of Operational Risk, the Operational Risk
businesses and legal entities - including people, process, technology, third party, regulatory and reputationalrisks. The Operational Risk Committee and Regional Risk Committees assist the Global Risk Management
erational risk
management framework and policies, and operational risk exposure.

•

Event Escalation:
policy. Depending on the severity and type of event, theescalation process could include the Global Head of Operational Risk, the Chief Legal Officer, Global Chief
Compliance Officer, Chief Operating Officer, and other Executive Committee members, as well as the CEO.
Regulatory and compliance breaches are reported to the relevant regional compliance officer and regulatory
authority, if necessary.

•Business Continuity: The Business Continuity (BC) team works closely with global and regional business units
to develop appropriate plans. Each business continuity plan documents key processes and applications andcovers recovery time objectives and alternative procedures in the event of a loss or outage. Each business unit
validates its business continuity plan periodically through a combination of annual review, tabletop scenarios
and integrated disaster recovery exercises. The Business Continuity group provides periodic programme status
updates to the Operational Risk Committee.

Russell Investments / Investment Stewardship Report/ 40

Enterprise risk assessment
On an annual basis, Russell Investments updates its Enterprise Risk Assessment, which includes a list of market-wide
rating across two dimensions namely likelihood and severity. At year-end 2023 as compared to the prior year, there
was no change in the top risks as identified by the GRMT:
•
•
•
•
•
•
•
•
•

Illiquidity Risk
Policy Exhaustion
Pandemic
Factor crowding investing
Trade-and currency wars
Technological advances
Cold War 2.0
Correlation shock
Climate risk including transition risk and physical risk

Notably, while life feels post-pandemic for many, the contagion remains on the risk list due to the continued mutations inthe spike protein, which current vaccines target.
We continue to improve our understanding of climate change at the enterprise level. In 2023, we expanded our review
under the categories of physical risk and climate risk. Further information in relation to our approach to tackling climate
risk is provided in section 4.3.
Once risks/events are identified, steps are taken to evaluate whether these risks should be monitored and/or mitigated.
Where required, this may include recommending new risk monitoring procedures or changes in portfolios to track oraddress the potential impact of the risk.
Climate change is acknowledged as a risk that needs to be considered at the total portfolio/client level and, as such, will be
implementation will include exposure
information (e.g., carbon footprint) as well as climate scenario analytics capabilities. Further information in relation to ourapproach to tackling climate risk is provided in section 4.3.

Sustainability Risks Policy
evaluating and managing relevant risks in our investment manager review process, portfolio management and throughimplementing proprietary solutions. We believe sustainability risks are most relevant to investment outcomes when they
exhibit financial materiality and, like all investment risks, are incorporated by balancing expected risk with expected
reward. In managing investment solutions, we consider financially-material sustainability risks in the context of expected
rewards using a blend of inputs from sources including, but not limited to, investment managers, third-party data sources,
thermore, we incorporate bespoke sustainability risk management andclients to consider, monitor and manage sustainability risk priorities in their portfolios.
-material sustainability risks and how they are identified is an-adviser review cycles,
including annual due diligence, quarterly reviews and other meetings throughout the year, in this process. We also
address sustainability risks throughout our investment practices, including our manager research rankings which
explicitly assess their ESG capabilities and active ownership as well as via investment committee governance, which is
described in section 3.

Russell Investments / Investment Stewardship Report/ 414.3 Addressing market-wide and systemic risks: climate change✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 1✓

The New Zealand Stewardship Code - Principle 3

Principle 7

The challenge
Russell Investments formally endorsed the Task Force on Climate-related Financial Disclosure (TCFD) in2019 in recognition that climate change is a monumental challenge to the global economy and thatwithout reliable climate-related financial information, markets cannot accurately price climate risks andopportunities. Incorporating climate-related risk management strategies into the financial system is a
crucial first step to pricing risk and directing capital flows needed to meet global ambitions for the energy
transition. The recommendations provide a useful and common framework to increase transparency
within financial markets. Our 2022 TCFD Report is available on our website.

Our vision
We pride ourselves on partnering with clients to meet their climate objectives. Through our stewardshipeffective climate-related disclosures that enable more informed financial decision making. We advocate
for companies to have board-level oversight and governance of climate change impacts. We also holdourselves accountable for providing transparency around our own investments and operations. We arecommitted to driving progress.

Progress to date
We have made considerable progress incorporating climate change considerations into our business. In
our TCFD Report, we outline key climate-related risks and opportunities and assess them using metrics
and scenario analysis in accordance with the recommendations of the TCFD. We share policies developed
for formally and systematically addressing sustainability risks and describe the evolving practices bywhich we integrate climate awareness into our investment process. We believe that active ownership is an
important lever for delivering investment outcomes and is also one of the most effective tools at our
disposal to effect change.
Progress to date has included enhancing processes for climate risk and opportunity identification,assessment, and management in the following ways:•

Establishing appropriate governance Establishing governance around climate risks, including
development of a climate change policy, addition of climate risk metrics to our risk management
dashboard, and identification of individuals responsible for our climate response.

•

Extending quantitative research Expanding the depth of our quantitative risk assessment
capabilities for transition and physical risk, including breakdown by channel through a partnershipwith a climate model specialist.

•

Policy development Enhancing the process through which climate risk is managed in portfolios, asdetailed in our Sustainability Risk Policy, which was reviewed and approved by the IDRIC in July 2023
with no material changes. The key elements of this policy direct investment professionals to leveragedata, sub-adviser insights and in-house expertise to identify and manage sustainability risks.

•

Active ownership Engaging with investee companies on the topic of climate change risk and natural
capital with over 50% of our corporate engagements covering environmental issues in 2023.

•

Solution development Managing carbon reduction portfolios, as we have done since first launching
low carbon strategies in 2015, with a track record of enhancements to our approach as best practices
and data evolve.

In recognition that tackling climate change requires global coordination, we emphasise collaborative
action including:•

Aligning with other investors to encourage comparable disclosures and consistent regulatory
frameworks, which is a necessary step to improving the availability and quality of data.

•

Engaging collectively with systemically important emitters as a powerful tool for addressing systemicrisk. This includes our support for Climate Action 100+ and other collective engagement channels, asdetailed in section 5.1 of this report.

Russell Investments / Investment Stewardship Report

/ 42

•

Sharing best practices across industry practitioners to facilitate information sharing and collective
knowledge building. This includes collaborations with, and support for, the Institutional Investors
Group on Climate Change (IIGCC) and the Transition Pathway Initiative (TPI), among others. These aredescribed in section 6.3.

Identification of climate-related risks and opportunities
The first step in managing climate-related risks in investments is identifying them. There are manymechanisms through which climate-related factors impact security prices, but these risks can be broadly
categorised as transition or physical risks. We recognise that different risks are likely to manifest overdifferent time horizons and that they require different tools to assess, as outlined below.

Exhibit 19: Snapshot of the climate risk identification and assessment
process
RISK OR OPPORTUNITYIDENTIFIEDDESCRIPTION

EXAMPLES OF ASSESSMENTTOOLSMOST RELEVANT TIMEHORIZON

Transition Risks &opportunities

Risks arising from shift to low
carbon economy

Scenario analysis (esp. transition
scenarios), metrics

Medium term

Changes in cost

Price on carbon, costs ofabatement

Carbon footprint metrics

Short and medium term

Changes in demand

Demand destruction andcreation arising from shifts indemandScenario analysis (esp. transition
scenarios), metrics on green
revenues or climate solutions,
exposure to potentially stranded
assetsShort and medium term

Physical risks can be event
driven (acute) or longer-term
shifts (chronic) in climate
patterns

Scenario analysis, (esp. hot house
world scenarios)Long term

AcuteIncreased severity of extreme
weather events

Scenario analysis (esp. hot house
world scenarios), asset-level risk
mapping

All but increasing severity
long term

Chronic

Changes in weather patterns,
rising temperatures, rising sea
levelsScenario analysis (esp. hot house
world scenarios), estimatedsensitivity to productivity impacts,
heating/cooling days

Medium and long term

Physical Risks

Climate risk is characterised by a longer time horizon than many traditionally managed risks. To make this more
explicit, we refer to short-to-medium-term horizons, in the climate context, as a three-to-ten-year horizon, and along-term horizon as the period out to 2050, although we note these are rough approximations only.

Assessment and management of climate-related risks and opportunities
On an annual basis we provide an assessment of our global portfolio against metrics and scenario analysis inaccordance with the recommendations of the TCFD. Following identification and assessment of climate-relatedrisks and opportunities, we turn to management. Portfolio managers are the first line of defence in managing
portfolio risks, and management of climate risk is no different. We believe embedding deep expertise andawareness of sustainability risk within investment teams is key to fully integrating climate management into ourprocess. This is formalised in our sustainability risk policy, as described in section 4.2. In addition to a formal
policy, our climate risk management practices continue to evolve. This includes our enhanced oversight and active
ownership programmes, where climate-related considerations play a pivotal role.
Supplementing these firm-wide practices, we continually enhance our approach to carbon-managed portfolios forclients and funds that want to build in more explicit climate-related outcomes. For a subset of clients and funds,
we set and manage to forward-looking net zero targets. Taken together, we adopt a multi-layered approach to
managing climate issues including formal policies, practices, engagement and carbon managed portfolios andtarget setting.
Despite considerable progress, we know this is the beginning of a long journey for our organisation and the global
investment community at large when it comes to tackling climate risk in portfolios. Most immediate on our horizon
remains our commitment to t
knowledge across teams, building new capabilities, and setting ambitious targets around what it means for our
portfolios to be aligned to a net zero by 2050 objective, always with a client-first, fiduciary focus. We are
expanding our coverage of active managers with a focus on climate considerations and sustainable strategies more
broadly, and we continue to seek out data sets that provide valuable insight into the climate exposures of ourportfolios.

Russell Investments / Investment Stewardship Report/ 43

Exhibit 20: A multi-layered approach to our climate response: key pillars

S

E

C

N

Source: Russell Investments.

Please refer to our annual TCFD report for additional details on how we identify, assess, and manage climaterelated risks and opportunities.

Russell Investments / Investment Stewardship Report/ 44

4.4 Our approach to monitoring service providers✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - UK Stewardship Code✓The New Zealand Stewardship Code - UK Stewardship CodePrinciple 2, 8
Principle 8

Principle 4

Our multi-manager business strategy requires the oversight and monitoring of external asset managers that we
employ in our investment portfolios. We also rely on third-party providers to support our active ownership
practices. Furthermore, we count on a host of additional third-party vendors to ensure the overall efficiency of ourcore services for clients. A description of how we hold each of these three categories of service providers
accountable is provided below.

External managers
Due diligence on external managers prior to their inclusion within our funds and portfolios is conducted at twolevels by specialist teams that are independent of each other:•Manager research analysts who sit within the Investment Division (ID) and evaluate and monitor from an
investment perspective, and•

The Global Manager Oversight and Due Diligence (GMODD) group within the Global Risk Management (GRM)
function, which is independent of the ID.

We believe that it is important from a risk and compliance perspective to separate the operational due diligence
function, which reports up to our Chief Operating Officer, from the investment due diligence function, which
reports up to our Global Chief Investment Officer. This separate, operational review is particularly pertinent withinalternative and unlisted asset classes, such as hedge funds and private market investment strategies, wheretransparency is lower.
The combination of our investment research and our operational due diligence research on managers aims toachieve objectives and minimise negative surprises for our clients. We have had success in avoiding managers thathave exposed investors to headline risks. A description of each type of research is provided below.

Manager research due diligence
Russell Investments has an experienced team of approximately 37 analysts engaged solely in the manager
research process. Each year, our research analysts conduct approximately 1,800 research meetings andconference calls with investment managers. These evaluation sessions are our primary means of gathering
information to arrive at an informed opinion about a manager's product(s). Our assessments, gained from multiple
sessions over time, allow us to establish an overall opinion of the organisation and its investment strategies. Our
analysts are responsible for pre-meeting analysis of the product (meeting preparation that includes a historicalreview of prior meetings and analysis of the strategy) and for conducting the research meetings. Analysts
supplement these meetings with regular contact with managers in their universe, through phone calls, emails andless formal update meetings as required.
As part of our evaluation process, we conduct a qualitative and quantitative assessment. We score managers
against a detailed framework that captures the key inputs to a robust investment process, and we undertake
erformance patterns, attribution and outcomes. A sampling of the inputs
can be described as the following:

Russell Investments / Investment Stewardship Report/ 45

Exhibit 21: A qualitative and quantitative evaluationQUALITATIVE ASSESSMENT
Organisation

Stability, ownership, and incentives

Team

Dynamics, diversity, and motivation

Experience

Skill and stability of personnel

Capital markets case

Conceptual basis for philosophy

Research

Depth and alignment

Decision making

Accountability and efficiency

Security Selection

Use of security-level characteristics

ESG

Insights, portfolio implementation, and active ownership

QUANTITATIVE METRICS
Portfolio construction

Effects of portfolio turnover

Consistency with philosophy

Magnitude of risk assumed/tracking error

Stability through time

Sources of relative performance

Ability to manage sizeable accounts

Liquidity analysis

Absolute and risk-adjusted performance vs. broad manager universe

Style indexes

Source: Russell Investments. For illustrative purposes only.

In addition to the above factors, we have identified a variety of proprietary attributes of successful managers thatare unique to given styles of management. Analysts are charged with making relative assessments of managers
within their respective styles, to better discriminate among manager choices. The results of our manager research
efforts are captured in our global proprietary database, RADAR, which we believe is one of the largest and mostcomprehensive manager tracking databases in the world. Developed in-house, RADAR is our primary repository
for research reports generated on the products of investment managers globally and includes over 14,000 current
manager products.

Russell Investments / Investment Stewardship Report/ 46

Case study

Annual manager ESG due diligence questionnaire

Since 2014, Russell Investments has requested information from high-interest external investment managers
on the integration of responsible investing practices into their investment processes. For calendar year 2023
and for our sub-adviser managers, this took the form of a Due Diligence Questionnaire (DDQ) with enhanced
emphasis on understanding and overseeing their stewardship activities. The ESG DDQ results provide a
supplementary source of information about how each asset manager approaches ESG issues and responsible
investing, serving as reference points for our research analysts when evaluating investment strategies.

OutcomeOur DDQ covered a range of topics from commitments including net zero target setting and the United
Nations Principles for Responsible Investing (UNPRI), to product trends, reporting, and stewardship outcomesfor both engagement and proxy voting. Responses represented 80% of our funded managers.
Throughout 2023, we saw the strengthening of reporting requirements in Europe, Canada, and Australia, as
well as the rise of a more contentious debate in the United States. For our managers, top challenges cited tointegrating sustainability information into investment decision making included 1) the missing or poor qualityof data received from corporates and 2) meeting diverse client needs and expectations.
Nevertheless, over half of our managers noted the dollar value of their sustainable investing AUM grew from2022 to 2023. Managers also responded that environmental issues continue to be the biggest concern voiced
by clients suggesting that sustainability will continue to be a lasting force in the investment landscape.
Additional key insights from the FY23 ESG DDQ are detailed below.

Manager Resourcing
Across our sub-advisers, 68% have full-time dedicated responsible investing professionals with mostresources being dedicated to a specific sustainability team, a stewardship team focusing on policy, proxyvoting, and engagement activities, or within an equity-specific team.

Manager Responsible Investing Commitments and Net Zero
Complementing our own commitments, many of our sub-advisers have also joined sustainability-relatedorganisations and initiatives with the majority (over 75%) having signed on to the UNPRI. When it comes toreporting specific initiatives, almost 50% support TCFD reporting, with 29% reporting via CDP, 20%
reporting to the International Financial Reporting Standards for Sustainability, and 16% reporting to the
Global Real Estate Sustainability Benchmark.
More than 30% of our managers are signatories to the Net Zero Asset Managers Initiative and have made thecommitment to support a net zero by 2050 goal. In line with this, we saw 27% of our sub-advisers engage
through the Climate Action 100+ network and over 5% engage with companies through the Nature Action 100
network.

Sustainability Products
Over the past 12 months, our sub-advisers saw the most growth and/or interest from clients in ESG-integrated
products followed by specific thematic mandates. Where our sub-advisers offer impact strategies, the majority
focus on the energy transition followed by strategies aligned to the Sustainable Development Goals (SDGs),
and lastly social impact strategies.

Sustainability Integration
In 2023, reducing risk was still the most cited driver of ESG-driven investment decision making. Governanceconcerns were reported as a driver 40% of the time, followed by climate risk and social risks at 35% and 33%
respectively. Of our sub-advisers, only 5% noted that ESG factors do not drive investment decisions, a steadyannual decline from the 22% who chose that answer in 2021.

Russell Investments / Investment Stewardship Report/ 47

Case study

Annual manager ESG due diligence questionnaire

Active OwnershipOver 80% of our sub-advisers actively engage with management of their corporate holdings to discusssustainability issues. Collaborative engagement remains an important tool for investors to utilise whenengaging with holding companies as over 60% of our subengagement with other investors.
When engaging with corporate holdings, governance topics were of highest importance for our sub-advisers inconversations followed by climate change specific risks or opportunities, and finally human capitalmanagement issues. Our sub-advisers did not limit their outreach to corporate holdings; over 40% engaged
with policy makers as part of their responsible investing approach.
After conducting engagements, 74% of managers established sustainability related objectives and outcomes
which were documented and monitored. If an engagement was deemed unsuccessful, over half of ourmanagers indicated that they have utilised adverse proxy voting (i.e., a vote against management or a vote for ashareholder resolution) and written communication as a tool for escalation with 37% divesting from companies
where the engagement had failed.

Global manager oversight and due diligencediligence (ODD) review
involves evaluating the business, compliance and operational risks and controls of third-party managers that may
materially impact Russell Investments, our funds and clients. A thorough ODD review is based upon discussions
with key principals and employees of the manager; observations of their business practices; and an appraisal ofvarious documentation and representations disclosed by the manager. When conditions allow, an on-site meetingin the office is also optimal. The key areas analysed include:•

Operational risks
oversight to settlement and reconciliation, along with guideline compliance, allocation policies, and crosstrades. This area also includes an analysis of the manaits
resolution process for trade and operational errors.

•

Business risks(including organisational growth)
infrastructure and business continuity planning.

•

Compliancepolicies, gifts and entertainments and conflict of interest policies, compliance with regulatory agencies,
personal information security, and record retention.

ODD involves a different skill set to that which is needed for performing investment due diligence. We believe that
it is best conducted by professionals with strong backgrounds in global regulations, trading, operations, andbusiness risks. The outcome of an ODD review can have clear Red or Green flags - but may in practice sit in an
Amber area. In formulating an opinion, the ODD reviewer will consider:•

Consistency were all the documents and verbal assertions consistent with each other and all the relationshipconfirmations consistent with expectations?

•

Transparency did the manager provide documents in a timely way and allow access to the key people andsystems during the onand referees?

•

Firm infrastructure does the firm have a tight control environment with sufficient systems andknowledgeable support staff to support the products they are managing?

•

Manager reputation

did all the background checks come back clean and with all references confirmed?

Absent clear Red flags where an ODD review will recommend that an investor avoid allocating funds to a specificmoney manager, an investor may still decide to invest with a manager with some deficiencies. The value of the
ODD report is that the investor is aware of these deficiencies and is able to monitor them and work with the money
manager to increase their controls in the areas where specific weaknesses have been identified.
ODD is not a new concept. We have built a global team of analysts dedicated to conducting reviews of the risks

Russell Investments / Investment Stewardship Report/ 48

Review (Manager CORE) process, helping shape the way Russell Investments ranks money managers and thedecisions for recommending, hiring, or terminating managers.

hiring a manager. We undertake

Case study

A 2023 operational due diligence review

In the second half of 2023, the GMODD team conducted an on-site operational due diligence review with a
private equity manager. Where deficiencies are found, based on tested ODD criteria, recommendations areprovided as well as assistance to address the identified issues.

OutcomeThis review identified two items which resulted in subpractices. First, the manager engages expert networks but had not implemented compliance oversight ofinteractions with the expert networks. The GMODD team recommended that the manager institute complianceoversight on a sample of these interactions to address material non-public information/insider trading risks.
identical to the Investment Committee. The GMODD team recommended making changes to the composition ofthis committee, as the Valuation Committee should include qualified non-investment personnel to offer somelevel of independence. The manager agreed to consider implementing these changes.

Active ownership
In order to deliver effective stewardship, Russell Investments relies on third-party data providers, including
Sustainalytics and proxy adviser Glass Lewis. The primary services we receive are detailed in the diagram below.

Exhibit 22: Details of service providers
SERVICE PROVIDERSERVICE RENDEREDHOW THIS SERVICE CONTRIBUTES TO RI'S ACTIVE OWNERSHIP

Glass, Lewis & Co

Viewpoint Voting Platform

Allows Russell Investments to monitor a very high volume of voting activity
and place manual votes when appropriate.

Application of Custom Proxy Voting
Guidelines

Glass Lewis applies a bespoke set of Proxy Voting Guidelines created andResolution research and analysis
and analysis as one of several resources when preparing a
recommendation for the Active Ownership Committee on a referred item.
For more information on referred items, please see Section 5.2.
Sustainalytics

Coordinate collaborative engagement
partnership

Sustainalytics coordinates and leads engagement activities; Russell
Investments participates in Sustainalytics' Thematic engagements, pleasesee Section 5.1.

Company-level ESG ratings and analysis
analysis in our manager due diligence, in portfolio management andconstruction, and in our engagement practice.

Source: Russell Investments. For illustrative purposes only.

To ensure our process of delivering effective stewardship is of high standard, we regularly monitor and review theto measure the accuracy and timeliness of the Glass Lewis research team. Russell Investments tracks thesestatistics year-on-year to ensure consistent quality of service. Members of the Active Ownership Committee also
hold an annual meeting with Glass Lewis, addressing any concerns or updates regarding the services they provide.
Russell Investments has partnered with Sustainalytics as an engagement service provider because their modelallows for close oversight and integration with our internal active ownership and investment processes. Our Active

Russell Investments / Investment Stewardship Report/ 49

Ownership Team, under the oversight of the Active Ownership Committee, is responsible for the selection andmonitoring of engagement themes. The team communicates regularly with Sustainalytics on the positioning ofthese themes, target company selection and on progress and outcomes. Additionally, portfolio managers and wider
members of the ID regularly participate in direct company engagements led by Sustainalytics.

Other third-party vendors
As a global organisation, Russell Investments has longstanding experience of integrating with various
internationally recognised outsourcing vendors and partners, alongside our internal resources, to improve theoverall efficiency of our core services for clients. We engage with providers across our operational, information
technology and financial service lines, for some of our middle and back-office support services. We maintaincontinuous oversight of our providers via service level agreements, formal relationship meetings and evaluations
that incorporate performance metrics.
We utilise third-party providers for middle-back-office services such as administration services for our pooled
funds, custodian/depository services, portfolio accounting, and certain IT services. Three primary service providers
we engage with are described below.
•

State Street We have a long history of working with State Street globally, since 1995 in EMEA. State Street
provides all fund administration (including fund accounting), prospectus and regulatory guidelines monitoring,and custodian/depository services for Russell Investments.

•

SS&C Globe Ops•

CGI
Applications and Infrastructure department works in conjunction with CGI to provide IT infrastructure,including IT support and security.

SS&C Globe Ops provides portfolio accounting services, including daily reconciliations ofmanagement, centralised risk management, and focused sourcing and procurement. Key components to managing
vendors include business unit ownership of vendor activities, sourcing and procurement assistance, and risk
management oversight.

oversight of key vendors, such as management of service levels and the identification and mitigation of service
ne of defence
improvement. For example, Global Operations (Fund Services, Investment and Data Operations) works directlywith key service vendors (custodians, trading counterparties, reporting providers, etc.) daily to manage fund andclient investment activities. During the initial selection and onboarding process, the first line activities include
consultation, as needed, with subject matter experts such as Legal, IT, Compliance and Operational Risk
follow up on any relevant findings or issues noted in key vendor controls documentation such as SSAE 18/SOC 1
reports. Other activities include tasks such as vendor performance monitoring, continuous improvement reviews,
event management and analysis, and quality assurance. Onsite visits (if required) are periodically performed withkey vendors to review operations and to assess performance as necessary.
As a second line of defence, Global Risk Management operates a Third-Party Risk Management programme that
conjunction with first line business units include assessment of vendor SOC reports, IT posture via vendor security
assessment questionnaires, and vendor business continuity and (4th party) oversight programmes. The
programme also conducts ad-hoc targeted due diligence in response to specific widespread events, such as
cybersecurity events impacting a large number of firms or geopolitical events that potentially impact service
providers. Governance of the programme is directed by the Operational Risk Committee with assistance from othercommittees depending on the type of vendor and risks involved.

Russell Investments / Investment Stewardship Report/ 50

Case study

An unnamed vendor review in 2023

assurance that lockbox items were processed completely and timely. Russell Investments Global Finance teamconducted an investigation and as a result were assured that Russell Investments was not impacted by the
missing lockbox control.

OutcomeR

ussell Investments review

at the lockbox processing centre and the inability of the vendor to provide an audit report detailing thetimestamp for each step in theprocesses and procedures to validate, track, and trace lockbox operations were appropriate.

Global Sourcing and Procurement
Starting in 2022 and following a review of systems that would allow us to analyse vendor spend data alongside
metrics on diversity, our Global Sourcing and Procurement team implemented a product from Supplier.io, called
Supplier Explorer. The tool identifies supplier diversity metrics within our existing spend data and allows us tosearch for other diverse suppliers as well. Utilisation of that tool in 2023 resulted in a 45% increase in the number ofvendors that meet the classification of diverse provider and a 51% increase in spending with Women BusinessEnterprises (WBEs). The tool has also helped establish a baseline for reporting and transparency. We are a memberof the Financial Services Roundtable for Supplier Diversity giving us access to further benchmarking and learning
about best practices that are specific to our industry. We continue to evaluate additional memberships with groups
that certify, develop, and connect Minority Business Enterprises (MBEs) with major corporations and publicagencies.

Russell Investments / Investment Stewardship Report/ 51

5. Active Ownership✓

UK Stewardship Code - Principle 9✓Japan Principles for Responsible Institutional Investors - Principle 1, 3, 4✓

The New Zealand Stewardship Code - Principle 2, 4

5.1 Our engagement approach
Active ownership is an important component of our investment responsibilities and decision-making process. As
part of our stewardship activities, we aim to engage with companies on overall business strategy, capital allocation
and responsible investing practices, while encouraging appropriate levels of risk mitigation. Furthermore, throughongoing dialogue, we can better understand both the risk factors and potential return associated with theownership of a company. Through our engagement activities, we aim to promote changes by encouraging goodpractices on material issues that may protect and enhance long-term sustainable value creation and shareholder
rights, and ultimately benefit our clients as the beneficiaries of our investments.
Our business model and service capabilities enable a multi-channel approach to stewardship, meaning that weengage directly with issuers, engage through and with our sub-adviser partners, and join collaborative
engagement efforts with third-party market participants.

Exhibit 23: Impactful ownership practices

Source: Russell Investments, for illustrative purposes only.

Russell Investments / Investment Stewardship Report/ 52

As a leading investment solutions partner with multi-asset and multi-manager capabilities, we leverage a broad setof relationships, including those with our sub-adviser partners, to exert influence and enable multiple levels of
engagement. These relationships extend across and through our sub-advisers, external standards setters, proxy
and engagement service providers, other market participants and, of course, corporate issuers. These connections
also provide information sharing and serve as an important feedback loop into our active ownership andinvestment processes.

Russell Investments-led engagements
A strong stewardship programme includes pursuing activities which offer the highest return or risk mitigation
general categories of ESG. While we recognise that a broad set of issues are worthy of shareholder attention, we
believe that identifying a select set of engagement priorities supports accountability and successful outcomes.
Internally led, direct company engagements are initiated by two key methods:•

Intentional selection of portfolio companies identified as high ESG risk through various data resources. Further
described in the engagement selection criteria below.

•

From our proxy voting activity We may engage with management in advance of an AGM, or instances where
we have voted against management may lead to a follow-up engagement. Some of these votes are determinedby our custom guidelines; others are referred to the Active Ownership Committee for special review. The proxyvoting section below provides additional information on referred items and the manual voting process.

Sub-adviser partner engagements
Given our position as a multi asset manager-of-managers, we leverage our relationships with our sub-advisers toprovide an informed and integrated approach to active ownership. Sub-advisers are hired to play targeted, valueenhancing roles in our portfolios. Day-to-day they are routinely in close contact with our investee companies, withover 80% of sub-advisers noting they regularly meet with management to discuss ESG issues (per the FY2023
ESG DDQ). Therefore, it is natural that their insights and recommendations regularly contribute to our
engagement and voting processes.
We consider our sub-adviser relationships to be a strategically important element of our stewardship programme.
Whenever possible, our portfolio managers solicit input from our sub-adviser partners in the selection of ourengagement priorities. Discussions with our sub-advisers can validate the benefit of an engagement and inform
our approach. Through consultation with our sub-adviser partners, we determine whether joint outreach or
separate but aligned efforts are more likely to be effective. Opportunities highlighted by our sub-advisers might
result in partnered engagement efforts, in Russell Investments-led engagements with sub-adviser input, or in
reinforcement of engagement efforts that are already underway. In all scenarios, we have an opportunity to amplify
the strategic input of our sub-adviser partners to the holding company.

Collaborative engagements✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors✓

The New Zealand Stewardship CodePrinciple 10
Principle 3, 4

Principle 4, 7

Russell Investments leverages third-party engagement initiatives to extend our reach across regions and markets.
In 2023, we utilised Sustainalytics engagement offering alongside our memberships with the Climate Action 100+
initiative, Net Zero Engagement Initiative (NZEI), and Nature Action 100 initiative. More information on ourcollaborative engagement efforts is provided below.

Sustainalytics
Since early 2020, Russell Investments has leveraged a partnership with Sustainalytics for thematic andwith a selected set of issuers to encourage action on specific issues in ways that promote long-term value. In thesecond half of 2023, Sustainalytics restructured their collaborative engagement channels, beginning a shift fromion ofcompanies for engagement, as well as evolving the processes to allow for engagement beyond the three-yeartimeline that was previously in place. The new structure supports third-party industry initiatives and stewardshipcodes. Russell Investments is continuing our participation through selected topics that align with our engagement
Sustainalytics has materially broadened our scope of engagements particularly in emerging markets, where it canbe difficult to initiate engagement conversations with companies. Across all four themes selected, our investment
professionals participate directly in calls with the targeted companies.

Russell Investments / Investment Stewardship Report/ 53

Exhibit 24: Thematic engagement through Sustainalytics in 2023

I IVERSITY AN
NAT RE CAPITA
PR
RAMME

MAN CAPITAMANA EMENTMAN RITS

MATERIA RIS S
EN A EMENT
APAN

Source: Russell Investments, for illustrative purposes only.

Climate Action 100+
Russell Investments recognises climate change as a threat to the global economy and the financial security of ourclients, and we participate in investor collaborations that support our efforts to mitigate this threat and deliver
strong financial outcomes. One of the largest is Climate Action 100+, an investor initiative launched in 2017 toencourage companies to improve governance and strengthen climate-related financial disclosures and transition
plans. As members of the Climate Action 100+ initiative since early 2020, Russell Investments has engaged with aare paralleled by 27% of our funded sub-advisers who are also participants in the Climate Action 100+ initiative,
showcasing the value the initiative can have in expanding our active ownership programme.
Russell Investments is actively involved as a participating member, taking the lead on a select number ofengagements and prioritising the protection of our clients' interests as our primary focus. We directly andindirectly engage with 170 companies, making it a meaningful component of our active ownership programme.
Climate Action 100+ participation has allowed us more efficient access to these companies and allowed thecompanies to be responsive to a wider number of investors. During 2023 we have actively contributed to theworking groups with respect to companies we engage with.

Russell Investments / Investment Stewardship Report/ 54

Case study
100+
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorRepositioning our leadership within Climate Action

Collaborative Engagement
United Kingdom$8.7bn (USD)
Fixed Income & Public Equity
Utilities

In 2021, Russell Investments joined the collaborative engagement via CA100+ as a Lead Investor for a UKbased oil and gas distribution company which is classified as one of the 100 largest emitting companies
globally.
As co-lead of the engagement, we had regular dialogue with the company as it considered how to improve its
lobbying alignment disclosure. We have found the company to be very constructive and open to engagement on
climate change risk.

Outcomeits journey toward achieving net zero emissions and considering that our primary sub-adviser raised noconcerns regarding the company's decarbonisation strategy, Russell Investments decided to step down from its
co-lead role in 2023 and redirect our stewardship efforts toward other leadership positions we hold. Our shift in
focus emphasises our commitment to engaging on the highest risk and return opportunities across ourinvestment portfolio, thereby benefitting our clients.

Net zero engagement initiative
The NZEI launched formally in March 2023 and aims to extend investor engagement beyond the CA100+ focus
list. The aim is to include more companies that are heavy users of fossil fuels, thus exposing these companies torisks due to the transition to a low-carbon economy. The initial target is focused on 107 high-emitting companies
in Europe with plans to expand the scope of engagement targets after the initial phase. These companies areengaged by more than 90 investors with the goal of providing more transp
transition plan.

Nature Action 100
Estimates suggest that more than 50% of global GDP is dependent on nature and, therefore, exposed to risks
relating to biodiversity loss and natural resource degradation. Nature Action 100 is a global investor engagement
initiative mobilising institutional investors to establish a common high-level agenda for engagements and a clear
set of expectations to drive greater corporate ambition and action to stem nature and biodiversity loss. Investors
participating in the initiative are engaging with 100 companies in key sectors deemed to be systemicallyimportant in reversing nature and biodiversity loss by 2030. Russell Investments joined Nature Action 100 at its
launch in 2023 as a co-signatory of the letter sent to the targeted companies. Initial engagement actions arescheduled to take place in early 2024. With our participation in Nature Action 100, we aim to contribute to thetransition toward a more sustainable and resilient global economy for the protection of our clients' interests.

Engagement selection
At Russell Investments, we hold thousands of securities on behalf of our clients. Our engagements are conductedwith consistent application of our processes across geographies, sectors and market cap. However, given thebreadth of our investment operations
the highest return or risk mitigation opportunities. The time horizons of these engagements are aligned with ourRussell Investments considers the following criteria when selecting targets for engagement:••

Proxy voting history and management responsiveness to shareholder concerns;•

Material ESG analysis performed in-house and by third-party vendors of ESG metrics focusing on sub-industry
peer comparison and ESG-related controversies;•

Research and analysis from Glass Lewis, our proxy voting administrator;

Russell Investments / Investment Stewardship Report

/ 55

•

Any history of previous engagement activity; and•Opportunities highlighted by our sub-advisers.

Engagement targets are finalised using the input and insights of our portfolio management teams via processes

Engagement focus areas
In addition to the criteria outlined above, we centre our engagement activities around six focus areas, listed
below. These have been chosen in consideration of:
1.
2.
3.

Our proxy voting and engagement practices through time,4.

Our corporate values and purpose, and5.

Our responsible investing beliefs.

Our engagement focus areas are monitored and updated as required to address regulatory developments,
can be found in our engagement policy.
We expand on the financial materiality of these focus areas and provide relevant case studies beginning on page
70 of this report.

Exhibit 25: Engagement focus areas

Source: Russell Investments, for illustrative purposes only.

Russell Investments / Investment Stewardship Report/ 56

ESG Disclosure
Russell Investments encourages companies to publicise how they are addressing material ESG issues relevant totheir business practices in a timely manner. To this end, we promote the publication of an integrated or standalone
sustainability report on an annual basis, which provides information in line with peers and industry good practices.
For most small market capitalisation and emerging market equity holdings, we expect ESG disclosure to be themain engagement topic. We recognise that these companies have a disadvantage compared to their larger ordeveloped market peers due to resource constraints and the financial burden that comes with measuring anddisclosing ESG risks. Our advocacy for small cap and emerging market holdings therefore often starts withimproving ESG disclosures.

Case study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorImproving ESG disclosure at a small cap company

Russell Investments-led
United Kingdom$1.1bn (USD)
Public Equity
Materials

Russell Investments engaged for the second time with a UK-based chemicals company that operates globally.
After an initial engagement on the topic of increased disclosure in 2022, the company demonstrated some
progress by reporting a strategic, integrated approach to sustainability. However, Russell Investments held afollow-up engagement in 2023 to encourage higher transparency around the actions the company is taking tomeet its stated targets. We requested that the company to disclose metrics and specific targets relating to its
sustainability goals. In our view, the lack of disclosure is material because it obscures key aspects of its risk
profile and operational performance. Clear disclosures support the evaluation of the long-term viability andresilience of the business while insufficient disclosure can erode investor trust and interest.

OutcomeRussell Investments will continue to engage with the company. While it has invested in addressing ESG risks
within its business, we aim to see the opportunities from this strategy reflected in the company's growth.
Furthermore, we will expect more transparency and specificity in their next annual report.

United Nations Global Compact
Established in 1999, the United Nations Global Compact (UNGC) is a voluntary framework consisting of ten
principles focused on human rights, labour standards, the environment, and anti-corruption. These principles
promote the integration of sustainable business practices and challenge companies to become more open andtransparent about their strategies, policies, and procedures related to sustainability issues. The UNGC has growninto the largest corporate sustainability initiative in the world.
To ensure that companies meet a minimum standard for good governance practices, we check whether a company
has breached global 'norms', as represented by the UN Global Compact Principles. The Russell Investments Global
Exclusions Committee (GEC) monitors our holdings for breaches of the UNGC Principles and oversees any actions
that are taken as a result. If a company is identified as being in breach of one of the principles of the UNGC, we
consider the company a high-priority engagement target. Our goal is to understand why a breach has been
flagged, promote improvements in governance practices, and ultimately assess whether the company exhibits
good governance.

Russell Investments / Investment Stewardship Report/ 57

Case study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorMitigating potential human rights violations

Russell Investments-led
United Kingdom-Australia$106.8bn (USD)
Public Equity
Diversified Metals Mining

Russell Investments engaged with a global diversified miner to ensure the company complies with theconduct, ILO Conventions, and the OECD Guidelines for Multinationals Enterprises.
The company is facing some challenges in its operations due to the presence of numerous protected rockshelters in the area. The company expressed efforts to avoid blasting near these sensitive sites. In the past,similar events had a profound material impact on the company, influencing its stakeholder relations andoperational strategies. It led to reputational damage, affecting investor confidence and brand reputation.

Outcome
The company has recognised the need for potential revisions in blasting management techniques and theacknowledged the complexity of balancing operational needs with environmental and cultural preservation
concerns. Russell Investments will continue to engage with the company to ensure we are comfortable withhow the company is addressing human rights impacts.

Engagement tracking and escalation✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 3, 4✓

The New Zealand Stewardship Code - Principle 4, 7

Principle 11

Tracking
Our Active Ownership Team, in coordination with the relevant portfolio management team, is responsible formonitoring and recording the status of company progress for each engagement action, including the relevant
focus area and the aim of each outreach. E
Ongoing activities include early-stage conversations that result in raised awareness, as well as companies thathave moved toward implementation of a revised strategy. While we do not subscribe to an explicit time frame for
escalating or closing our internally-led engagements, we expect and plan for most issues to be resolved over athree-year period.

Russell Investments / Investment Stewardship Report/ 58

Exhibit 26: Tracking engagement progress

Source: Russell Investments, for illustrative purposes only.

Engagements and outcomes are reviewed at least annually, and members of the Active Ownership Team arecharged with recommending whether an engagement should be escalated, finalised, or closed - typically inconsultation with relevant AOC members or investment colleagues. When a company repeatedly fails to respond to
our outreach and/or does not advance along a path toward implementation, the Active Ownership Team may
recommend escalation activity to the AOC.
Escalation
At Russell Investments, being an active owner is an important component of our investment responsibilities andfiduciary duty. We are a long-term shareholder across thousands of securities on behalf our clients, and we engage
knowing our clients should benefit over the longer-term. Our engagement approach is to encourage risk mitigationon the most material risk or return opportunities through building mutually beneficial long-term relationships withinvestee companies. We believe that ongoing dialogue is likely to be more effective than divestment or exclusion
see that as a fundamental part of our responsible investing strategy.
We have several avenues for escalation, including enhanced dialogue with our sub-advisers and other market
participants that result in coordinated or collaborative engagements, sharing concerns in writing (publicly or
privately), and/or adverse proxy voting on related items. Regardless of engagement status, we challenge andmonitor our sub-adviser partners on the sustainability risks of their holdings on a regular basis, assessing theirinsight and analysis to ensure strong oversight.
As a global investment solutions provider, we seek to maintain a broad investible universe that provides thegreatest scope for identifying excess return opportunities and diversified portfolio positioning.
We believe that in many circumstances there are better alternatives to managing risk and sustainability outcomesthan outright exclusion, and we adopt a multi-disciplinary approach to managing sustainability risks, as detailed in
our Sustainability Risks Policy.3 Where appropriate, exclusions are used to meet client preferences, manage risk,or to deliver on strategy objectives. When using an exclusion, we strive to employ a thoughtful approach tocalibrating criteria so as to meet complex topics such as energy transition with a holistic approach, meaning
identifying companies whose business models are at risk as well as those likely to contribute to real-world
solutions.

Russell Investments / Investment Stewardship Report/ 59

Exhibit 27: Escalation strategies

Source: Russell Investments, for illustrative purposes only.

Case study Escalation to sub-adviser due to poor governancepractices at a controlled company
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorRussell Investments-led
France$14.5bn (USD)
Public Equity
Industrials

Russell Investments expects companies to follow governance good practices for the market they operate in,including remuneration benchmarked versus peers and transparency into pay structure. Further, controlled
companies are encouraged to have at least one third of their board constituted by independent directors.
Russell Investments engaged for a second time with a French aerospace and defence company, focusing on its
governance practices as well as environmental and social strategies. Ultimately, the company is below peers in
integrating reasonable governance practices - even considering it is a controlled company. The company has
no remuneration committee on the board and all remuneration decisions are made by one individual.

OutcomeDuring this engagement, the company showcased their response to shareholder requests to integrate ESG
issue management into remuneration. While this demonstrated they are willing to work with shareholders,
they were unwilling to increase transparency into remuneration. Russell Investments escalated theengagement to vote-againstontinued indifference
toward shareholder opinions on board independence and executive remuneration.
engagement by communicating the outcome of our conversations to our sub-advisers, flagging this as amaterial governance risk.

Russell Investments / Investment Stewardship Report/ 60

Engagement across asset classes
Fixed Income
The fixed term and contractual nature of bond investments afford bondholders a finite number of engagement
opportunities to make explicit impact with individual issuers. In most instances, these opportunities are brief induration, occur before an investment decision must be made, are not open to all parties, and are offered at thellingness to engage. However, repeat and frequent bond issuers have a greater
incentive to listen to bondholders.
Russell Investments leverages a multi-avenue engagement approach for its fixed income holdings alongside equity
engagements. This results in direct engagements with corporate fixed income holdings as well as our monitoringof sub-advisers engaging with issuers. As bondholder engagement has become a key source of information forassessing ESG-related risk and return opportunities in the marketplace, we actively use these activities to gain
greater insight into underlying companies or entities, improve corporate transparency, and influence businesspractices.
In 2023, Russell Investments expanded its Enhanced Oversight processes to incorporate fixed income holdings, achallenging process due to the nature of the securities and lack of data. In our assessment, we consider bondspecific characteristics alongside traditional ESG risk metrics. This includes our total market-value exposure, theduration remaining to maturity, and credit rating. Combined, these metrics are used to evaluate the downside ESG
risk an issuer may be presenting within our portfolios. See section 4 above for more information.
The Enhanced Oversight process has led to an increase in the number of Russell Investments-led, fixed-income
specific engagements. Due to our broad equity exposure, we may conduct these in tandem with our equity teams;
however, the focus of the conversation will be more focused on improving risk management practices as opposed
to sustainable opportunities. Please see below for more in-depth case studies of our fixed income specificengagements.
At the same time, we maintain oversight of the responsible investing awareness and capabilities of our underlying
managers, including their efforts toward engagement. Our sub-adviser due diligence framework incorporates anassessment of the level and quality of ESG integration and active ownership across all asset classes, including
fixed income. Consideration given in this process includes, but is not limited to:•

How managers prioritise engagement activities;•

How engagement objectives are set;•

Who is involved in the engagement activities;•

How the progress is monitored;•

How engagement activity success is measured; and•Publication of product or asset class specific sustainability reports.

Based on our monitoring activities, our sub-advisers are increasingly exercising proactive engagement in thecontext of materiality and industry and company-specific risks, but the frequency and nature of the conversations
can vary depending on the credit quality of the issuer. More information regarding this process can be found in thesection 4 above.
Investment-grade corporate bond issuers are, by definition, companies with higher credit ratings resulting fromhealthier financial conditions. Such companies are often large in size, listed on the stock market, and employ
dedicated investor relations personnel to address investor concerns. Therefore, the transparency of theinvestment-grade bond issuers tends to be greater than that of the below-investment-grade bond issuers. As such,
although we have seen a substantial expansion of engagement efforts among below investment-grade bondmanagers (such as high-yield managers), engagement activities are more established among sub-advisers withinvestment-grade corporate bond mandates.
Depending on market conditions, high-yield issuers potentially have a greater incentive to listen to potential-grade companies.
There are also more private companies in the high-yield market than in the investment-grade corporate market,
and private companies often lack transparency, such as visibility into the composition of board members. While
our high-yield managers were already communicating with the management of underlying companies and theirstakeholders, this dialogue is shifting to include broader ESG-related questions. Our high-yield managers also
focus on increasing transparency and influencing corporate behaviours, to improve the long-term enterprise valueof the company. At the same time, our sub-advisers are increasingly focusing on their engagement activities
around climate risk.

Russell Investments / Investment Stewardship Report/ 61

Case study Fixed Income engagement on natural capitalmanagement
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorRussell Investments-led
Canada$26.4bn (USD)
Fixed Income
Chemicals

Russell Investments continued its engagement with the company following an initial discussion in 2022 toincrease its disclosures of metrics, targets, and overall strategy regarding climate change resilience andnatural capital management.
agricultural-chemical provider, it must consider both emissions-reduction
strategies and opportunities for natural capital and biodiversity management by collaborating with growers.
We found that the company has significantly advanced the integration of sustainability strategies anddisclosures through improved annual reporting. However, there is still room for improvement, especiallyconcerning measurements and targets for Scope 3 emissions reduction.

OutcomeThe disclosures made and targets set by the company showcase a logical approach to managing its natural
capital risks. We will continue to monitor how the company succeeds in tracking biodiversity metrics and the
expected expanded targets aimed at reducing adverse impacts.

Case study Fixed Income engagement on natural andhuman capital
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorRussell Investments-led
Mexico$12.2bn (USD)
Fixed Income
Materials

Russell Investments engaged with a company involved in production, distribution, marketing and sale ofcement and other global construction materials to encourage the company to identify the natural capital
impacts and/or dependencies that are relevant to their business and long-term strategy. Furthermore, we
aimed to confirm the robustness of the human capital management of the company.
From a materiality perspective the efficient utilisation of human capital ensures smooth operations,innovation, and quality control throughout the production and distribution processes. Secondly, natural
capital, particularly access to raw materials like limestone and clay, is essential for cement production, andsustainable management of these resources is critical for long-term viability and environmental compliance.

Outcome
While we are broadly satisfied with the board's oversight of the human capital strategy from a governance
perspective, there appears to be a challenge with the monitoring of third parties, particularly regarding roadaccidents, which may compromise the company's commitment to achieving its target of zero fatalities by2025. Biodiversity impact is also an area that needs development. The company will be setting targets and iscurrently in conversations with the Science Based Targets Network (SBTN) to establish science-basedtargets. They expect to have the targets verified within the next year. Russell Investments will continue toengage with the company with a particular focus on natural capital management, as the company isdeveloping its strategic approach to these issues.

Russell Investments / Investment Stewardship Report/ 62

Private Markets
Over the past decade the level of sophistication of private market funds has increased significantly. In this context,
and as a private market investor, Russell Investments recognises that active ownership, combined with the ability
to ensure strong execution in individual portfolio companies, is increasingly important to realising value.
Private Markets is a diverse asset class that includes a wide range of different strategies such as venture capital,
growth equity, and buyouts, as well as indirect strategies such as fund of funds and secondaries. Different subasset classes and funds will have different exposures to ESGsize-fitsthroughout the life cycle of a particular asset.
To overcome the challenges associated with this asset class, and to ensure we execute on fulfilling our duties as anactive owner, we employ the following mechanisms for active ownership in private markets:•

Good Governance: Governance is crucial in this asset class because it is very difficult to adjust the terms ofownership after the initial investment. Hence, governance practices and requests are discussed upfront, while
thinking about the long-term relationship with the manager.

•

Limited Partner Advisory Committee (LPAC) seats: Where possible, we try to gain LPAC seats to provide
opaque; these interactions enhance the transparency we receive for our investors.

•

Voting: We actively participate on voting items. Adjustments to documentation that require LPAC or investor
approval can occur regularly due to, for example, new investors or adjustments to Key Person provisions.

Engagement and Monitoring: Given that data in this market is not readily available, insights gained throughregular engagement with managers and other investors is the best source to improve transparency. Using side
letters to require and encourage disclosure and reporting on material ESG issues is another important tool used inthis process.

Case study
Engagement TypeCountry of Incorporation
Subasset

Private Equity partnership governance engagement

Negotiation of proper key person clause in Limited Partnership Agreement
United Kingdom
Buyouts European lower middle market

Russell Investments engaged with a company involved in production, distribution, marketing and sale ofcement and other global construction materials to encourage the company to identify the natural capital
impacts and/or dependencies that are relevant to their business and long-term strategy. Furthermore, we aimed
to confirm the robustness of the human capital management of the company.
From a materiality perspective the efficient utilisation of human capital ensures smooth operations, innovation,and quality control throughout the production and distribution processes. Secondly, natural capital, particularlyaccess to raw materials like limestone and clay, is essential for cement production, and sustainable
management of these resources is critical for long-term viability and environmental compliance.

Outcome
While we are broadly satisfied with the board's oversight of the human capital strategy from a governance
perspective, there appears to be a challenge with the monitoring of third parties, particularly regarding roadaccidents, which may compromise the company's commitment to achieving its target of zero fatalities by 2025.
Biodiversity impact is also an area that needs development. The company will be setting targets and is currently
in conversations with the Science Based Targets Network (SBTN) to establish science-based targets. They
expect to have the targets verified within the next year. Russell Investments will continue to engage with thecompany with a particular focus on natural capital management, as the company is developing its strategic
approach to these issues.

Russell Investments / Investment Stewardship Report/ 63

Case study
Engagement TypeCountry of Incorporation
SubassetRe-electing independent directors

Election of independent directors LPAC member
Singapore
Asian core open-end real estate fundOur sub-adviser recognised the importance of maintaining strong governance practices and sought investor
consent for key board appointments. This included the re-election of two independent directors to ensure
continuity and uphold the integrity of the board. Additionally, the sub-adviser proposed the election of a third
independent director to replace an outgoing member, thus ensuring a diverse and skilled board composition
capable of effectively overseeing the fund's operations and safeguarding investor interests.

Outcome
Independence stands as a cornerstone of sound governance principles, ensuring objectivity andaccountability within decision-making processes. Recognising this fundamental value, Russell Investments
supported the election and re-election of independent directors. By doing so, Russell Investments reaffirmed
its commitment to upholding the highest standards of governance, thereby fostering investor confidence andtrust in the integrity of the board's oversight. This endorsement further underscores Russell Investments'
dedication to promoting transparency, fairness, and responsible stewardship across its investment activities.

Case study
Engagement TypeCountry of Incorporation
Subasset

Private Equity Fund Extension

Fund Term Extension LPAC member
United Kingdom
UK Close-end opportunistic real estate fundOur sub-adviser manager approached the Limited Partner Advisory Committee seeking approval to extend thefund term by six months. This extension was necessitated by deferred payments resulting from the sale of the
fund's interest in a corporate entity. The decision to seek approval underscored the manager's commitment totransparent communication and prudent financial management, ensuring that all stakeholders were informed
and consulted regarding the fund's operations and strategic decisions. This proactive approach aimed tomitigate potential uncertainties arising from the deferred payments and to safeguard the interests of the fund's
investors.

OutcomeAs a member of the Limited Partner Advisory Committee (LPAC), we were asked to approve this extension.
Since the fund was no longer charging investment management fees, our sub-adviser manager proposed that
overheads of the fund-specific general partner entities would be borne by the partnership during theextension period, up to a specified cap. Russell Investments found the proposal to be reasonable andapproved the extension.

Russell Investments / Investment Stewardship Report/ 64Engagement activity in 2023
At Russell Investments, engagements are dialogue undertaken to understand, influence and/or improve businesspractices and disclosures. As a result of our active ownership development and efforts, during the reporting year
we held 510 engagements with 263 different equity issuers.

Our engagements related to environmental topics:

Climate Change
Resilience

52%
48%

Natural Capital

Environmental

61%

Our engagements related to social topics:
Diversity & Inclusion

28%
72%

Human CapitalSocial13%

Our engagements related to governance topics:
Board Composition &Accountability

49%

Executive
Compensation

51%
24%

Other*

Governance17%* Identifies topics outside our engagement focus areas (proxy vote-related, capital allocation,
related party transactions, and share capital structure)

Russell Investments / Investment Stewardship Report

ESG Disclosure

UNGC

8%

1%

/ 65

Engagement by avenue
Russell Investments occupies a privileged position in terms of industry influence and reach which creates multiple
avenues for engagement. Our active engagements encompass Russell Investments-led engagements where we aresolely responsible for building agendas and tracking engagement outcomes, as well as those conducted inpartnership with our sub-advisers.
Through third-party initiatives, Russell Investments supports collaborative outreach as detailed above (the CA100+,
NZEI, and Sustainalytics). Due to the structure of these initiatives, Russell Investments leads only a select numberof conversations, while in others, we contribute to agenda building and knowledge sharing. The breakdown of ourinvolvement between third-party collaborations is detailed in exhibit 29.

Exhibit 28: Engagement channels - active engagement
1% 2%
3% 2%

15%

31%

33%

15%

Russell-Led: Environmental

Russell-Led: ESG Disclosure

Russell-Led: Governance

Russell-Led: Social

Co-Leading Climate Action 100+

Sub-Adviser Partnership: Environmental

Sub-Adviser Partnership: ESG Disclosure

Sub-Adviser Partnership: GovernanceSource: Russell Investments, data as at 31 December, 2023.

Exhibit 29: Engagement channels

0%

10%

20%

30%

influence through third-party collaborations

40%

50%

Sustainalytics

60%

CA100+

70%

80%

90%

100%

NZEI

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 66

Engagements by sector
At Russell Investments, we recognise the importance of materiality, and we seek to evaluate how companies aremanaging material ESG factors that also impact financial performance. For this reason, we support thecommunicate financially material sustainability information to investors in an industry-specific and comparable
way. In the same manner, we use SASB standards to identify sector-specific priority issues for corporate
engagement.
In line with the breadth of our engagement strategy, during 2023 we engaged with companies across 88 different
sub-industries. Almost one quarter of the engagements conducted over the reporting period were with companies
in the materials sector, followed by Industrials and Energy.

Exhibit 30: Percentage of engagement by sector

Materials

24%

Industrials

17%

Energy16%

Utilities

11%

Consumer Staples

10%

Consumer Discretionary

9%

Financials

5%

Health Care

3%

Information Technology

2%

Real Estate1%

Communication Services

1%
0%

5%

10%

15%

20%

25%

30%

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 67

Engagement by region
Because we are a global firm, our active ownership strategy has wide geographic reach. In the last two years,
through our partnership with Sustainalytics, we increased our engagement activity with companies in emerging
and other markets where we had limited activity in the past, particularly the Japanese market. Across all our
engagement channels in 2023, we held engagements with companies in 36 different markets, across seven main
geographic regions:Exhibit 31: Engagement distribution by region

26%

42%

Canada &United States

9%

EuropeAsia ex-Japan

11%
Japan

3%
Latin America &Caribbean

3%5%Africa & Middle East

Oceania

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 68Engagement outcomes
tracking the progress of corporate action and measuring the impact of our engagement activities.
In 2023 while reviewing the status of on-going engagement activity, we determined that 14% of the companies weengaged with had resolved the issue(s) positively. Furthermore, over three quarters of these companies with
objectives that remain on-going have shown a clear appreciation of the concerns we raised and have committed toaddress the issue or are already developing a strategy to do so. We believe our efforts and oversight are acontributing factor to many of these positive developments. We note that only a small proportion of the ongoingengagements have been closed due to an unsatisfactory response from the company.

Exhibit 32: Breakdown of engagement outcomes

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 69

Activity across our focus areas
Climate change resilience
Russell Investments recognises that climate change is one of the defining global challenges of our time and,
therefore, a material investment issue that crosses regions and industries. Our policy is to research, measure,report and consider climate change risk and opportunities as an integral part of our investing practice, our active
ownership, and our business operations to mitigate the impact of climate change-related risks.
Russell Investments has been an official supporter of the TCFD since 2019, and we promote its recommendationthat companies provide effective climate-related disclosures to enable more informed financial decision making. In
addition, we advocate for companies to have board-level oversight and governance of climate change impacts.
Finally, Russell Investments expects companies to explain how they have incorporated climate-related issues into
their business, strategy, and financial planning including the disclosure of key metrics and risk management
processes.

Case study Encouraging the development of a strategictransition plan
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorSub-adviser partnershipUSA$73.8bn (USD)
Public Equity
EnergyIn 2023, Russell Investments, in partnership with our sub-adviser, conducted an initial engagement with a
global energy equipment and services firm that mainly works with oil and gas operators. The primary goal of
the conversation was to encourage the company to create a transition plan that includes short- and mediumterm actions to support its strategic ambitions. We also requested improvement of its climate-related
financial disclosures.
transition plan, encompassing its short- and medium-term strategies aimed at
reducing carbon emissions across various scopes. This plan focused on transition technology, which theCompany recognised as an opportunity for growth. The company expressed its intention to release moredetailed disclosures in its next sustainability report, which will also include improved CDP disclosure.

Outcomewith valuable insights into its sustainability performance and risk management practices. Russell Investments
plans to continue engaging with the company in partnership with our sub-adviser following the release of thest half of 2024.

Russell Investments / Investment Stewardship Report/ 70

Natural capital management
Measuring and valuing natural capital can enable companies to better manage the natural resources that
contribute to economic development and growth. Better understanding of the mechanisms that link ecologicalsystems to human wellbeing is required to assess both the value of benefits from natural resource systems, as wellas the expenditure required to maintain those benefits. Russell Investments believes that companies should display
an understanding of their environmental resource usage across their businesses and demonstrate responsible
environmental management aimed at maintaining the long-term availability of assets. As well, we expect
companies to implement sound and sustainable environmental practices across their operations and supply chainsto protect against material and reputational risks which can arise from the mismanagement of natural capital.
Initiatives and policies that avoid and/or reduce deforestation are an area of focus for Russell Investments. We
advocate for disclosure as a starting point. In addition, for companies with material biodiversity exposure, and/or
those which operate in natural resource-constrained regions, we seek policies on restoration, preservation, andefforts to control any soil and water contamination.

Case study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorManaging natural resources risk in the supply chain

Russell Investments-led
Japan$2.7bn (USD)
Fixed Income & Public Equity
Consumer Discretionary

Russell Investments engaged with a Japanese automobile components company which operates on a global
scale. The company is exposed to significant risk from natural capital management, given their reliance onnatural resources including water and rubber in their supply chain. We encourage companies to disclose
metrics related to nature-related risks and opportunities based on dependencies and impacts, and to showcase
how the organisation integrates such risks into the overall risk-management approach.
Since our initial engagement, the company has expanded its capacity to assess sustainability specific risks andopportunities by increasing the resources that support its sustainability-related working group structure.
However, the company's organisation of ESG-related documentation is a hindrance to good shareholder
communication of its strategy and approach.

Outcome
The company is working to enhance its supplier assessments to include climate, nature, and human capital
metrics. By integrating these metrics, the company aims to better understand and mitigate potential risks
associated with its supply chain, ranging from environmental vulnerabilities to social and labour issues. Russell
Investments acknowledges the significance of this initiative and will maintain ongoing engagement with thecompany as it evolves its supplier selection and retention strategy to include natural capital metrics.

Russell Investments / Investment Stewardship Report/ 71

Human capital management
Human capital management is a critical component in company performance. It determines how companies
attract, develop, and retain employees while providing working conditions that stimulate greater employee
engagement. Human capital is material across all companies; hence we expect companies to provide meaningful
and comparable disclosure in this area. Moreover, research shows that the relationship between diversity on
executive teams and the likelihood of financial outperformance has strengthened over time2. The most diverse
companies are now more likely than ever to outperform less diverse peers on profitability.
While human capital is perpetually important, an increasingly tight labour market has led to a greater focus on
employee recruitment, retention, and inclusion. Furthermore, societal emphasis on gender, racial and ethnic
equity continues to grow; we address this as a separate focus area given its significance.

Case study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorImproving Health and Safety Practices

Russell Investments-led
Canada$27.5bn (USD)
Public Equity
Metals & Mining

Russell Investments engaged with a mining company domiciled in Canada. The dialogue was focused on thecompany's efforts around human capital management, climate change resilience, and natural capitalmanagement. The company has a robust ESG report and is consistently transparent with stakeholders.
However, recent and consistent controversies and events showcase that the company's strategy needs to be
adjusted to prevent further negative impacts on the business and a subsequent shift in strategy (and reporting)
may be required. The company has had five on-the-job deaths since December 2022 and is focusing on
overhauling its health and safety practices to meet its target of zero fatalities.

Outcome
The company plans to hire a third-party auditor to assess its health and safety programmes, with the results
expected in early 2024. They aim to make the report available to investors. The expected release of the audit
report to investors in early 2024 reflects the company's proactive approach to communicating its efforts in thiscritical area and building trust with stakeholders. Russell Investments recognises the importance ofprioritising health and safety practices within companies, as they not only safeguard employees but also
contribute to operational efficiency and long-term sustainability. As such, we are committed to continuing our
engagement with the company to support its endeavours in enhancing health and safety practices.

2"Diversity wins: How inclusion matters". (2020, May 19). McKinsey & Company. Available here:
https://www.mckinsey.com/featured-insights/diversity-and-inclusion/diversity-wins-how-inclusion-matters#

Russell Investments / Investment Stewardship Report/ 72

Diversity, equity, and inclusion
There is ample evidence, and it is globally accepted by way of empirical research, that diversity is aligned withgood governance and that it helps to create long-term shareholder value. Russell Investments promotes diversity
as a valuable tool to enable high-performing teams and strong business outcomes, and we advocate for greater
diversity disclosure. This includes basic workforce statistics, ethnic and cultural diversity, and details on policies.
Russell Investments sees lack of disclosure as a barrier for
deterrent for the wider workforce and potential employees of a company who want toapproach to equity and inclusion. Workers want to know their efforts will be recognised and fairly rewarded.
Companies should demonstrate how they are recruiting, promoting, protecting, and retaining a diverse workforce.

Case study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorJapanese Board Diversity and Executive DEI

Russell Investments-led
Japan$3.3bn (USD)
Public Equity
Financials

Russell Investments engaged with a regional bank located in Japan, to discuss improvements in board
independence and gender diversity at the board and management levels.
While compliant with the Japanese Corporate Governance code, the company does have room for improvement
especially compared to global practices. At the board level, just 9% of directors are gender diverse, and while
the company indicated it maintains internal targets and a strategy to increase female board diversity, it was not
yet comfortable sharing the plan with investors. When asked about how the company is promoting a culture ofinclusion and how it supports female managers to maintain a work-life-balance, the company was unable toprovide a satisfactory answer besides noting it does train employees on DEI areas.

OutcomeRussell Investments would like the company to demonstrate significant cultural improvements regarding its DEI
practices and transparently provide retention rates of females across management levels. Due to the low
diversity on the board and in management, as well as the perceived attitude toward DEI practices, the Active
Ownership Team recommended that the Active Ownership Committee consider voting against the Chair of theNomination Committee at the next AGM.
Russell Investments aims to schedule a call with the company ahead of the 2024 AGM to communicate ourintention and gather a response.

Russell Investments / Investment Stewardship Report/ 73Board composition and accountability
The board of directors is the focal point of corporate governance. Directors represent the shareholders, and they
long-term best interests of thecompany by acting on an informed basis, with good faith, care and loyalty. This helps to ensure the effectivenessof the directors in promoting successful companies, thereby generating sustainable value creation for investors
while having regard to other stakeholders.
At Russell Investments, we expect companies to have foundational governance structures that promoteaccountability, responsibility, transparency, responsiveness, diversity, and independence from company
management.

Case study
place
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorEnsuring appropriate governance structures are in

Russell Investments-led
United States$502.7bn (USD)
Fixed Income & Public Equity
Diversified Banks

Russell Investments engaged with a financial holding company based in the U.S., to request the company
to split up the roles of the CEO and Chair of the board. Splitting the roles of chair and CEO is material as itenhances corporate governance by introducing a system of checks and balances, reducing the risk of
conflicts of interest, and promoting independent oversight.

OutcomeIn acknowledgment of the substantial support garnered at the AGM for the separation of the CEO andChair roles, the company has made a firm commitment to enact this change upon the CEO's departure. A
succession plan has already been set in motion, with the CEO slated to assume the chairmanship role forapproximately one year to facilitate a seamless leadership transition. Following this interim period, an
independent chair will be appointed to the board, aligning with best practices in corporate governance andenhancing board oversight and accountability. This proactive approach underscores the company's
dedication to responsive governance and ensures continuity and effectiveness in its leadership structure.
We are satisfied with the response received, and no further action is needed.

Russell Investments / Investment Stewardship Report/ 74

Executive compensation
Russell Investments believes
those of shareholders. Programmes should offer clear and transparent disclosure, coupled with basic fairness inse management. Inappropriate and poorly designed
remuneration structures have been a contributing factor to excessive and imprudent risk taking by individuals.
Hence, we regularly engage with companies to ensure that remuneration packages effectively align the interests ofCase study
Engagement Channel
Country of Incorporation
Market Cap
Asset Class
SectorCompensation accountability

Russell Investments-led
Australia$7.71bn (USD)
Public Equity
Industrials

Russell Investments engaged with an Australian transportation infrastructure company during its
compensation road show to address the negative outcomes from the 2023 AGM. The board attributed muchof the dissent to a semi-controversial acquisition, which has since demonstrated strong performance. They
believe that increased disclosure will foster positive sentiment among shareholders for the 2024 AGM.
The company plans to reconfigure the equity plan to incorporate relative total shareholder return (TSR)
metrics and operational cash flow, expanding the metrics to two. Additionally, they intend to extend thevesting period to four or five years. We see the proposed changes as an improvement in the compensation
package.

Outcome
The company has clearly responded to shareholder feedback and is working to enhance transparency around
remuneration reporting and compensation structure to better align with shareholder interests. Russell
Investments will monitor the remuneration report before the 2024 AGM for the anticipated changes to ensure
the company follows through on its commitments. We will reach out to the company before the AGM if thesechanges are not reflected in the reporting.

Russell Investments / Investment Stewardship Report/ 75

5.2 Proxy voting✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 1, 5, 6✓

The New Zealand Stewardship Code - Principle 2, 5

Principle 12

For 30 years, Russell Investments has executed a robust, global proxy voting programme that is a foundation forour stewardship efforts. Russell Investments has documented Proxy Voting Policies and Procedures and maintains
custom Proxy Voting Guidelines. Our Guidelines are a bespoke set of rules and policies, based on industry best
drafted to result in votes that promote the best interest of our clients, and, at least annually, our Guidelines Subaddress most proxy issues with detailed specificity; however, the Active Ownership Committerecognises some issues require more scrutiny and a non-prescriptive approach. In those instances, the Guidelines
refer the votes to the Committee for review. Our committee members are among our most experienced investment
professionals around the globe.
As our external proxy administrator, Glass Lewis, is responsible for aggregating proxy ballots received directly
any proposals that require case-by-case review to internal proxy research analysts, who in turn provide a
recommendation to the Committee based on individual and proxy administrator-provided research. The majority of
proposals voted on by Russell Investments do not require case-by-case review Glass Lewis applies our Guidelines
directly. To ensure that Glass Lewis casts votes in accordance with our Guidelines, the Committee oversees anannual internal audit process to verify the accuracy of vote execution.
Our Proxy Voting Guidelines are available to review in their entirety on our Responsible Investing site here.

Impact of 2023 guidelines updates
As described above, the Guideline SubCommittee to remain abreast of regulatory updates and industry trends. Two amendments to the Proxy Voting
Guidelines that were implemented for the 2023 proxy season made a considerable impact on our voting activity:• Time Commitment of Directors• Following a review of the efficacy of the overboarding threshold before the 2023 proxy season, the Committee
voted to adjust our approach to overboarding, so that our default stance is to oppose the election of a nonexecutive director who serves on the boards of more than four publicly traded companies. If the candidate isalso an executive director of a publicly traded company, the number of board seats allowed (outside of thecompany for which the candidate serves as an executive director) is reduced to two.
• As a result of this update, our rate of voting against directors for overboarding significantly decreased yearover-year and was no longer the primary driver of votes against directors. This marks an improvement from
our approach in 2022, where we found that our overboarding policy did not allow enough flexibility fordirectors who also served as executives at external companies.
•• Management sponsoredproposals emerged as a new channel for investor engagement inclimate change strategies during 2021. We believe these votes can drive better carbon disclosures, encourage
more credible climate strategies and enhance shareholder engagement; however, we are also wary of
unilaterally supporting these resolutions, given that shareholders could approve plans with emission targets or
strategies that prove inadequate in the future. Companies might then try to avoid updating those plans infuture years by anchoring to the fact that they received shareholder approval.
• We expect companies to provide a level of transparency that allows investors to better understand how they
may be impacted by climate-related risks and opportunities, and how they have embedded climate change
into their strategy. We evaluate management-sponsored votes on climate plans and reports on a case-by-casebasis, and we may consider several factors, including but not limited to the governance of the vote, themateriality of climate risk to a company compared to its peers, and any information gained from ourengagement activities and/or sub-adviser input.

Russell Investments / Investment Stewardship Report/ 76

Looking ahead: 2024 guidelines updates
For the 2024 proxy season and as per annual practice, the Committee refined our Guidelines to enhance Russell
voting process.

Case study

Annual Proxy guidelines review

In the fourth quarter of 2023, Russell Investments' Active Ownership Committee undertook acomprehensive review and drafted updates to our Proxy Voting Guidelines. This initiative reflects ourongoing commitment to enhancing our stewardship practices and aligning them with evolving market
trends and best practices. Through this process, we sought to ensure that our voting guidelines remainrobust, relevant, and reflective of our core principles and values.

OutcomeIn addition to revising our policies, the Committee approved the reformatting of the guidelines document
a high-level overview of each issue. We trust this new format demonstrates transparency andaccountability in our stewardship activities. It provides clients and stakeholders with insight into theprinciples guiding our voting decisions on behalf of our investment portfolios.
The 2024 version of Russell Investments Proxy Voting Policy can be found here.

The responsible investing landscape is constantly changing, and Russell Investments aims to keep pace with theregulatory environment. Beyond refining the guidelines concerning ESG shareholder proposals, the Committee
ratified amendments for the 2024 proxy season, including but not limited to:• Updated voting policy on board diversity• Regulations promoting board diversity are increasingly recognised as vital for fostering inclusive decisionmaking and enhancing corporate governance practices worldwide. These regulations aim to ensure thatboards reflect the diverse perspectives of society, including gender, ethnicity, age, and background. Throughmandates or guidelines, governments and regulatory bodies encourage companies to embrace diversity at thehighest levels of leadership, promoting fairness, equality, and representation in corporate settings.
• While at Russell Investments, we consider the specificities of each market, we have had a threshold-based
approach to board-level gender diversity for the last two proxy seasons. We vote against the chair of thenominating committee of the board of a blue-chip developed market company outside Asia that is not at least
30 percent gender diverse. Following analysis of the proposals where Russell Investments voted against a
nominating committee chair in 2023, we found that there were several instances where the nominating
committee chair that we had opposed based on this rule was in fact a gender-diverse director.
• The committee determined an update was appropriate, as voting against the election of a gender-diverse
director under the existing guideline was inconsistent with the intention of the rule.
• As a result, we have amended the guideline going into the 2024 season where a given board does not meetthe 30% threshold for gender diversity, but the chair of the nominating committee is gender diverse, Russell
Investments will vote on a case-by-case basis.
• Streamlined approach to remuneration policies and reports.
•

Russell Investments has historically applied a customised set of proxy voting guidelines for over a decade.
These guidelines, initially developed with a region-specific focus on remuneration, have evolved over time. In
2024, after careful review by the AOC, it was determined that updating our approach was necessary to ensurealignment with current industry practices and global trends. This update aims to streamline our approach inline with global best practices, moving towards a single, unified approach across all markets.

Russell Investments / Investment Stewardship Report/ 77

Referred Items
The Committee reviews those proposals that require more scrutiny and a non-prescriptive approach, and any
proposals that are not specifically addressed in our guidelines. At Russell Investments, we believe goodstewardship requires careful consideration of each proposal on its individual merits. To this end, the Committee
evaluates each proposal, considering the following factors:• Research conducted by our internal proxy analyst,• External research from our proxy administrator,• External research from Sustainalytics,• Input from our sub-advisers on voting and engagement, and• Input from the Active Ownership Team when a Russell Investments-led engagement has been previously
conducted.
During 2023, 699 proposals were referred
Guidelines dictated case-by-case review or because the proposal topic was not covered by the Guidelines. Of thereferred proposals, 62% were evaluated and voted on by the Committee. The remainder of the referred proposals
were of a technical nature, so our internal proxy analysts were able to make a vote decision based on careful
application of existing proxy voting guidelines without additional input from the Committee. An overview of how
the Committee has voted is provided on the graph below:

Exhibit 33: Russell Investments votes on referred items

Environmental
proposals*

Socialproposals

23%

77%

30%

Governanceproposals

70%

86%

AgainstAgainstManagement
Management

14%

With
Withmanagement
Management.
Source: Russell Investments, data as at 31 December, 2023.

The Active Ownership Committee had the highest rate of support for governance-related proposals. Russell
Investments emphasises the importance of shareholder rights, which is reflected in our voting support of proposals
which request:• Right to Act by Written Consent• Independent Board Chairman/Separation of Chair and CEO• Elimination of Supermajority Provisions

Voting across asset classes
The right to exercise our votes through non-equity asset classes varies by the type of asset and even amongindividual investments. In all circumstances, we seek to achieve mutually beneficial outcomes while being
consistent with our fiduciary duty of protrights on environmental, corporate governance, and social matters, we ensure that the same process and policies
are applied across geographies and instruments.

Russell Investments / Investment Stewardship Report/ 78• For fixed income assets, the number of occasions when Russell Investments will be engaged in proxy voting will
be very limited. In 2023, the bondholder votes that Russell Investments cast were all of a technical nature.
• As mentioned in the engagement section, we actively participate in voting items for private markets. Details andcase studies can be found in section 5.

Stock lending
As a fiduciary, Russell Investments maintains the voting rights for all holdings. We do not delegate voting to any of
our sub-advisers, though we may reach out to a sub-adviser for additional information regarding specific proxyvotes. Our proxy administrator, Glass Lewis, is responsible for managing the proxy ballots that Russell Investments
e proxy coordinator is responsible for ensuring all ofagainst the accounts on record with Glass Lewis.
Our policy on securities lending, as it applies to proxy voting, ensures that we exercise voting rights on behalf ofour clients. Glass Lewis currently produces a weekly report of shares with upcoming proxy votes that meet predetermined criteria for poten
action for issuers that are either (1) undergoing M&A activity, or (2) issuers for which Russell Investments holds>2% of overall shares outstanding. Additionally, the Active Ownership Committee has discretion to restrict
securities on a case-by-case basis. We restrict these securities (either 15 business days out from the record date,or as soon as we are notified, whichever comes first) from being loaned before their record date, recalling any
loans as necessary. The restriction is lifted one business day after the record date.

Proxy voting activity in 2023
Proxy voting is a fundamental tool for listed equity, whereby shareholders are entitled to express support orhave an obligation to vote responsibly and hold companies to account on their behalf.
here. We do not publish voterationales beyond those described in our custom Proxy Voting Guidelines.

Exhibit 34: 2023 proxy voting activity

1,344

3,791

12,588Proposals voted

Shareholder
proposals

Votes against
providerVotes against
management

97%

95%

1%

4%

13%

Of eligible
meetings

Of eligible
proposals

Of total voting
activity

Of proposals voted

Of proposals voted

9,747

98,267

Meetings voted

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 79

Exhibit 35: Voting activity per topic
1% 4%

1%
Audit/Financials

13%

Board Related

16%

Capital Management

5%

Changes to Company Statutes

7%

Compensation
M&A
Meeting Administration

53%

Shareholder Proposals

Source: Russell Investments, data as at 31 December, 2023.

Proxy season overview
In 2023, Russell Investments voted on 98,267 individual proposals, representing 95% of proposals eligible, and on
9,747 individual meetings, representing 97% of meetings where Russell Investments was eligible to vote. As isusually the case, the majority of items voted relate to governance issues, with the largest portion being board
related. The small percentage of unvoted meetings were due to share blocking power of attorney markets (POAs)
or operational barriers. Additionally, Russell Investments did not cast any proxy votes for Russian issuers that were
subject to sanctions by any jurisdiction from 3 March, 2022 onwards. Our proxy administrator suspended their
engagement and research with these companies following the Russian invasion of Ukraine, and as a result, wewere unable to cast informed voting decisions and reached a decision to suspend voting action for these entities.

Exhibit 36: Votes by issue
Audit/Financials

5%

95%

Board Related

14%

86%

Capital Management

15%

85%

Changes to Company Statutes

10%

Compensation
M&A
Management ESG proposals
Meeting Administration

90%

19%

81%

5%

95%

13%

87%

6%

94%

Shareholder Proposals- Environment- Social- Governance

23%

77%

28%

72%
44%

56%

Against Management

With Management

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 80

Russell Investments voted against management on 13% of proxy items and voted against Glass Lewis
recommendation, which is reflective of the independence of R
-over-year, however
the largest portion of these votes - 57% of votes against management - remained against the election of director
candidates. Insufficient independence was the most frequently cited reason for voting against a given director,
coming up in about half of our votes against director candidates. Over-boarding (Russell Investments will
generally withhold support from candidates who serve on the boards of five or more public companies) andinadequate gender diversity at the board level were the next most common reasons for voting against. We alsofrequently disagreed with management proposals concerning compensation, voting against approximately 18% of
these proposals.

Exhibit 37: Russell Investments voting behaviour

95%

Audit/Financials

5%

Board Related

87%

1% 12%

Capital Management

84%

16%

93%

Company Statutes

7%

79%

Compensation

21%
95%

M&A

5%

87%

Management ESG Propsals

13%

Shareholder Proposals- Environment- Social- Governance

22%

1%

26%

77%
1%

41%

72%
1%

58%
For

Abstain

AgainstSource: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 81Proxy voting by region
Russell Investments applies a consistent proxy voting practice around the globe. We have exercised our votes
across 86 different countries during 2023. The distribution of our votes has shifted slightly: for the first time lessthan half of the proposals voted on applied to companies based in Europe and North America while Asia-based
companies (including Japan) accounting for nearly 40% of the votes. Oceania had the lowest voting activity
registered.

Exhibit 38: Proxy voting distribution by region

20%

25%

30%

EuropeCanada &United States

Asia ex-Japan

9%
Japan

11%
Latin America &Caribbean

4%2%

Africa & Middle East

Oceania

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 82

Climate risk-related proposals
During 2023, our voting activity has reflected our view of climate risk as financial risk. In this regard, Russell
Investments has voted on 165 climate-related management proposals. We voted with management on 71% of these
proposals. Only three shareholder proposals passed, including one which requested increased emissions
disclosure at a major energy company
change related shareholder proposals that passed, one at another energy company and the other in the banking
sector, had the support of management.

Exhibit 39: Votes on climate-related shareholder proposals

1%28%
Against Management
With Management
No rec from management71%

In line with our engagement focus areas, we have refreshed our voting guidelines regarding ay on climate
proposals. During the 2023 season, Russell Investments voted against the climate transition reports at threecompanies, out of 26 such management proposals brought forward for an advisory vote, and supported climatetransition plans at 23 additional companies. Nineteen of the say on climate proposals were on the ballot at
European companies, with the rest spread between Canada, Australia, and South Africa.

12%

Against Management
With Management

88%

Russell Investments / Investment Stewardship Report/ 83

Case study Management Say-on-Climate proposal vs. shareholder
proposal requesting transition targets at major energy company
Country of Incorporation
Market Cap
SectorUnited Kingdom$215.3bn (USD)
EnergyManagement and shareholders alike have recognised the need for climate change strategy, but tensions canarise between corporate strategies for transition and the goals that some shareholders believe should be set tomanage long-term risk from climate change and GHG emissions. In some cases, management and shareholder
proposal often competing visions. Russell Investments evaluates every climate and transition-related proposal
individually, based on the merits of the proposal, with our fiduciary duty to our clients to deliver long-term
benefits as the ultimate driver of all voting decisions.
Proposal Type: Management proposal on Energy Transition
Management recommendation
Russell Investments Vote

For
AgainstThis vote was unusual as it requested shareholders to provide a yes/no on the progress made towards thestrategy and thus the progress. The company should enhance its current disclosures to address sometransition goals.
Proposal Type: Shareholder proposal requesting Scope 3 emissions targets and alignment with the Paris
Agreement
Management recommendation
Russell Investments Vote

AgainstAgainstThis resolution was binding in nature. Binding resolutions raise concerns because they limit the flexibility of theboard to adapt to changing circumstances and make strategic decisions in the best interest of the company.
Additionally, they can undermine the accountability of the board to shareholders, as it may feel constrained in its
ability to exercise independent judgment.

OutcomeRussell Investments Active Ownership Committee voted against both the management proposal and theshareholder proposal concerning transition strategy. While the management proposal requested thatshareholders provide assent to the progress made towards its stated climate strategy, Russell Investments
AOC to vote against management s proposal.
Conversely, while the Committee understood and generally supported the onus of the shareholder proposal intheory, we could not support a binding vote on this matter. Supplanting the judgment of the board in this casewould have been inappropriate as it could, going forward, restrict management s ability to develop strategies toaddress the transition to a low-carbon economy in ways that would benefit shareholders.

Russell Investments / Investment Stewardship Report/ 84Voting on social issues
Our voting activity on social topics, including human capital management and human rights concerns, reflects anindustry trend as the total number of social shareholder proposals continues to increase on an annual basis, they
are receiving less support overall. In our opinion, the proportion of proposals put forward by shareholders whichhave evidentiary basis for support has fallen. Not all shareholder proposals are created equal, which makes Russell-by-case approach more important than ever. Russell Investments has opposed more than half ofall socially-oriented shareholder proposals in 2023, with the most frequently supported proposals pertaining torequests for increased disclosure at companies with public human capital controversies, while rejecting proposals.
As part of our focus on human capital management, we will exercise our vote with companies that we identify aslaggards, either by supporting a relevant shareholder proposal or holding directors accountable by voting against
their election at the shareholder meeting.
At Russell Investments, when assessing human capital related shareholder proposals, we consider taking voting
action under the following conditions:• Current practices and/or disclosures are deemed to be inadequate.
• The proposal addresses a peer relative deficiency.
• The proposal does not duplicate existing practices.
•• The topic is relevant to the company and sector in which it operates.
If the proposal is overly prescriptive in detailing strategy/operational decisions, we may vote against.

Exhibit 41: Vote on human capital-related proposals

Political Spendingor Lobbying

56%

44%

Human Rights

65%

35%

Racial Equity Audit/Report

62%

38%

Human CapitalManagement
Labour Practices
and Disclosures

55%

45%
100%

AgainstFor

Source: Russell Investments, data as at 31 December, 2023.

Russell Investments / Investment Stewardship Report/ 85

Case study Voting on human-capital and reputational risks relating
to labour controversy
Country of Incorporation
Market Cap
SectorManagement recommendation
Russell Investments Vote

United States$103.8bn (USD)
Consumer Discretionary
AgainstFor

Following significant media scrutiny regarding allegations of illegal anti-union practices attributed to company
management, shareholders took proactive steps to address concerns regarding employees' rights to freedom of
association. In response, they filed a proposal calling for an independent audit and comprehensive report toassess the company's adherence to labour laws and its respect for employees' rights to form or join tradeunions.

OutcomeAs a social issue, this proposal was referred to the Active Ownership Committee for further review, per ourguidelines. The Committee voted to support this proposal, alongside over 51% of shareholders. High-profile
controversies can, at a minimum, result in reputational harm and less engaged employees. They can also lead tocostly fines, litigation, or employee actions, such as walkouts, that can cause significant disruption to thecompany's operations.

Holding the board accountable through voting
support governance structures that ensure management and board members maintain independence, objectivity,
and act in the best interest of shareholders. We also emphasise the importance of shareholder rights.
As active ownership and engagement continue to be crucial tools for responsible investing, it is paramount thatboards are prepared to collect and respond to shareholder feedback, particularly when a company receives
significant dissent at their AGM. Best governance practices will include a formal process for the board to engage
with shareholders, and where this is not in place, a company is likely to face increasing shareholder discontent.
Engagement is an opportunity for a company to bridge any gaps in understanding companies which do not havean effective mechanism for shareholder engagement are likely to see increased opposition to management
proposals.

Case study Voting against Say-on-Pay following an unsuccessful
engagement
Country of Incorporation
Market Cap
SectorManagement recommendation
Russell Investments Vote

United States$49.3bn (USD)
Retail REITs
For
Againstengagement with a self-administered and selfmanaged real estate investment trust (REIT) based in the U.S.
anticipated voting against management on two items, as per our Guidelines. The purpose of the engagement
was to gain a deeper understanding of the reasoning behind a significant discretionary grant and to express ourconcerns regarding the overall structure of their compensation package.
During our discussion with the chair of the compensation committee, we discovered that they were unable toprovide a compelling rationale for granting an all-cash one-off award to the company executive team without any
performance conditions attached. Moreover, we expressed significant concerns regarding the level of discretion
allowed in the compensation structure, yet the chair of the compensation committee did not acknowledge why

Outcomerationale or approach to compensation structure. Consequently, we voted against the compensation package inaccordance with our Guidelines. The level of shareholder dissent following the 2023 AGM was practically-on-pay proposal.

Russell Investments / Investment Stewardship Report/ 86

6. Policies, processes, andprocedures supporting
responsible investing

6.1 Conflicts of interest policy✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors✓

The New Zealand Stewardship CodePrinciple 3
Principle 2

Principle 6

At Russell Investments, we maintain a governance framework that is designed to ensure a coordinated andconsistent approach to the management of conflicts of interests across all regions in which we operate. Our
culture, supported by the Global Code of Conduct, recognises the fiduciary duties that we owe to our clients, andof its associates. As a fiduciary, we are expected to eliminate or mitigate conflicts of interests and to make full
disclosure of all material conflicts to our clients.
The Russell Investments Global Conflicts of Interest Policy provides guidance in identifying and handling actualand potential conflicts of interest in the operation of its business, and each region has a supplemental conflict ofinterest policy to meet specific jurisdictional requirements. Together, our global and local policies are in place tomanage all potential or actual conflicts of interest in the best interests of our clients. Associates are required tocomply with the Global Policy but also the requirements of any applicable local conflict of interest policy in theirjurisdiction.
Our Global Conflicts of Interest Policy is the responsibility of the Global Chief Compliance Officer who administers
latest review dated February 2024.

Management of conflicts
Russell Investments maintains a governance framework to ensure a coordinated and consistent approach to
management of conflicts across all regions in which it operates.
The Russell Investments Global Conflicts of Interest Policy applies to all associates anywhere in the world, inconnection with any activity related to Russell Investments or its business. Each associate is expected to avoid
conflicts of interest where possible, and to play their part in identifying any conflicts of interest, enabling Russell
Investments to take appropriate action to eliminate or mitigate the conflict and/or make appropriate disclosures toour clients.
The controls which Russell Investments has in place to manage each potential or actual conflict of interest include
effective governance and stewardship; the segregation of duties; the creation of policies and procedures of
information barriers; remuneration policies that remove direct conflicts of interest; or setting pre-determined
individual approval limits, over which escalation and approval is required.
A number of global and regional committees have been established which play a key role in helping to ensure thatthe management of conflicts is embedded in business processes. Specifically, from a global perspective:

Russell Investments / Investment Stewardship Report

/ 87

•
framework including investment, credit and operational risk and it administers the Global Conflicts of Interest
Policy.
• Affiliated Business Oversight Committee oversees selection of affiliated entities for investment advisory,
brokerage and other related services.
• Global Trade Management Oversight Committee oversees and analyses trading arrangements and trade
execution.
At a regional level, we have implemented local conflicts of interest policies and practices which are applicable to
the requirements of the local jurisdiction and business, with oversight at a local level provided by the applicablemanagement and governance bodies.
Where the organisational and administrative controls are deemed insufficient to effectively manage or prevent a
potential or actual conflict of interest, or to ensure effective stewardship, the matter is escalated in accordancewith the regional policies and procedures.
For example, for our EMEA businesses, a Conflicts of Interest Working Group has been established to assist in the
management of potential conflicts with its membership comprised of associates from business line management
and support functions such as Legal, Compliance, Risk and Operations. The working group considers andwhilst assessing the effective business management of those conflicts of interest. If it is not possible to manage a
Conflicts of Interest Working Group will identify the client disclosures that will subsequently be necessary. The
Board of each EMEA Group Company is responsible for overseeing the implementation of arrangements to ensure
effective stewardship and management of conflicts of interests, including review of the EMEA conflicts of interest
policy. All situations identified as constituting a conflict of interest, or that may potentially give rise to a conflict ofinterest, are documented in the relevant conflict of interest maps, which detail the organisational andadministrative controls in place to manage them.
Some common conflicts and controls which apply to Russell Investments Group are set out in the examples below:

Russell Investments / Investment Stewardship Report/ 88Exhibit 41: Examples of conflicts and control procedures
CONFLICTCONTROL PROCEDURES

Employees might be able to benefit from awareness of confidential trading
activity undertaken by Russell Investments (e.g., personal account dealing
in a security that forms part of a transition event or is traded by the direct
investing team (dealing ahead/ front-running).

The Global Code of Conduct requires each of the regions to develop policies,
standards and limitations regarding the personal trading activity of its
associates to minimise the potential conflicts of interest relating to personalaccount dealing. Through regional policies, each associate is required to tradein their personal investment accounts lawfully and in a manner which avoids
actual or potential conflicts between the interests of the associate and theinterests of Russell Investments in our clients. This includes an obligation toreport certain accounts, holdings and transactions to regional compliance. In
particular, associates are prohibited from trading, either personally or on
behalf of others, on material, non-public information or communicating suchinformation in violation of applicable law. They are also prohibited frompurchasing or selling ahead of client orders.
Any suspected instances of market abuse must be reported immediately to theregional Compliance team for investigation.

Employees could be induced to enter into contracts with third parties, tothe detriment of a segregated or fiduciary management client, or funds(where Russell Investments acts as an Adviser/ Investment Manager or
distributor).

Associates are strictly prohibited from offering, paying or accepting
remuneration or consideration for the purpose of improperly influencing theactions of government officials, political parties, candidates for public offices orothers. They are also required to exercise particular care when extending
common business courtesies to public officials. Regional offices have specific
Employees might induce a client, distributor, money manager, or otherpractices relating to anti-bribery and corruption in alignment with local
service provider into doing business with Russell Investments where this isregulatory and statutory standards, but there is a global requirement for
not in the best interest of other clients or funds.
associates to promptly report any bribery or corruption concerns to theirregional compliance department or legal department.
Poor product design could adversely affect end clients; or lead to problems
with market integrity by enabling the firm to mitigate and/or dispose of its
own risks or exposure to the underlying assets of the product where thefirm already holds the underlying assets on own account.

Russell Investments operates comprehensive procedures relating to productgovernance. The Global Product Governance Committee is the top-levelgoverning body for all product approvals and amendments, and it delegatessome authority to local product committees on a regional basis. As part of the
product governance process, the relevant product committee will consider
potential conflicts for this specific issue, with all potential issues assessed aspart of the product development and management processes.
For both new and existing products, consideration is given to whether the
product design or amendment / development introduces any new risks tocustomer best interests which may need to be mitigated or disclosed.

Russell Investments segregated, fiduciary management or other large
significant influence on the investment strategy of the target fund (i.e., sothat the strategy is more aligned to the investing client(s) or in the case of
proposed significant redemptions, making a change to the investment
strategy to keep clients within the target fund).

Financial incentivisation/reward of portfolio managers may lead toinappropriate investment risks being taken (relative to the investment
objective and policies) to protect employee compensation.

The investment strategies of Russell Investments funds are overseen by theasset class sub-committees and the ISC. Additionally, the relevant regional
governing body will review the investment strategy as applicable.
The Russell Investments portfolio manager provides written details of theinvestment strategy proposal to the ISC to ensure, amongst other things, thefair treatment of all investors. All proposals regarding initial investments
required approval of the ISC.
Russell Investments has a Global Remuneration Policy that considers market
intelligence on compensation to be an important data point in thedetermination of both overall and individual pay levels for all Russell
Investments employees, including senior executives and associates in risk andcontrol positions.
A Global Compensation Council reviews and approves compensation
opportunities for individuals based on their job responsibilities and market
levels of pay for organisations of appropriate size, business segments,
geography, complexity and profitability relative to Russell Investments.
In addition to market levels of compensation, quantitative and qualitative
to that performance, including Russell Investments risk management, whereapplicable, are important determinants of incentive compensation outcomes.
A global Sales Compensation Council (SCC) has been established to review andapprove sales commission plans. The SCC comprises members of the global
senior management team.
In order to align incentives with clients, portfolio managers are compensatedbased on the performance of the portfolios managed, as well as on Russell

At Russell Investments, in regard to stewardship, we have specific conflicts of interest controls in respect ofactivities surrounding employee outside interests, our active ownership and our investment management
practices. The following outlines the procedures for these areas:

Outside interests
Investments, which could have an adverse effect on the ability to meet our obligations to our clients and our funds(where we act as adviser, investment manager, distributor or otherwise).

Russell Investments / Investment Stewardship Report/ 89All outside business interests or directorships of associates must be formally declared in accordance with theRussell Investments Global Code of Conduct. Associates must obtain prior approval from their supervisor and theirregional compliance department for any outside business affiliation, employment, or acceptance of compensationfrom any other person or entity including (but not limited to), the acceptance of directorships, governorships, ortrusteeships, becoming an officer, director or partner or any business organisation, or receiving compensationfrom another organisation. Detailed guidance is embedded in the Global Code of Conduct, for consideration interms of how to approach outside business activities in respect of both employees and independent contractors of
the organisation.
All new associates must certify that they have read and understand the requirements in the Russell Investments
Global Code of Conduct, which includes requirements in respect of outside business interests. Associates mustcomplete an annual declaration to certify they have read, understand and continue to comply with the Global Codeof Conduct.

Active ownershipat the forefront in relation to stewardship. Our stewardship activities in relation to active ownership relate to proxyvoting and corporate engagement, and we have processes to manage potential conflicts in both these areas:
1. Proxy voting conflict of interest procedures.
Where Russell Investments maintains the voting rights for underlying securities, it appoints a proxy administrator
that acts within the guidelines set out in Russell Investments Proxy Voting Policy. Our proxy voting policies andprocedures are designed to ensure that those proxy voting decisions; (i) are made in accordance with the bestinterests of clients; and (ii) enable the Active Ownership Committee to resolve any material conflicts of interest
relating to voting and engagement. Further details on our Active Ownership Governance Structure can be found in
the Governance of Stewardship section above.
Proxy Voting Guidelines are constructed to be aligned with international good practices and standards, and areapplied to all votable proxy items, without exception, for issuers that currently have, or recently had, an existing
relationship with Russell Investments, as either a client or vendor. Any votes that are not covered by the
Guidelines, or any votes which require case-by-case review, are referred to the Active Ownership Committee for areview and vote. This process is further explained here.
For any votes referred to the Active Ownership Committee, potential conflicts of interest are mitigated by (i) thecommittee structure itself, which requires a quorum for a final vote, and (ii) all votes submitted by committee
members requiring a certification attesting that the voting member has no knowledge of any potential conflicts ofinterest between the client, Russell Investments and its affiliates, as well as no personal material conflicts (such as
personal stock ownership).
2. Corporate engagement conflict of interest procedures.
Structural separation Russell Investments maintains a segregated reporting structure between active ownershipand client facing employees. Consistent with this, only ID associates engage with and provide feedback tocompanies.
Transparent and consistent selection process Russell Investments uses the same process to identify engagementtargets across the board, without regard to any relationship with such parties.
Robust governance structure
Strategy Committee for all engagement targets identified, before taking any action (even in the case of those of acollaborative nature) to (i) ensure decisions are made in accordance with the best interests of clients; and (ii)enable the Active Ownership Committee to resolve any material conflicts of interest relating to voting andengagement.

Russell Investments / Investment Stewardship Report/ 90

2023 Investment management
In most circumstances, Russell Investments acts as a manager of managers rather than investing directly insecurities. We have identified the following potential conflicts in respect of this model and, as a result, have
implemented appropriate controls to help mitigate these potential conflicts:

Exhibit 41: Examples of conflicts and control procedures
CONFLICTCONTROL PROCEDURES

The inappropriate selection or retention of managers forcommercial reasons. For example, appointing a money manager in
return for AUM investment.

Our procedures for appointment retention and termination ofmanagers follows a quantifiable process based on the ability ofis overseen by the entity-level and global committees.

Unfairly allocating high-ranked managers across certain clients orfund complexes, using up their spare capacity and inappropriately
disadvantaging another client or fund complex.

The segregation of duties between the research analysts
responsible for manager rankings and recommendations, andthe go-to-market sales team, who might have commercial
rather than investment reasons for selecting a manager.

Recommending frequent money manager changes to a client inorder to increase revenue for Russell Investments.

Research Analysts receive no incentives to favour one manager
over another. Such analysts are therefore not directly
influenced by AUM inflows, distributor relationships, client
relationships or commercial profit margins. Any changes madeor recommended are done so based on clear procedures forappointment, as alluded to above.

violations of these policies by the managers.
to mitigate conflicts of interest through ongoing employee training; use of monitoring processes and systems; theirinternal testing of controls; and their governance process to address conflicts identified.

Outcomes to managing conflicts in practice
Below, we provide examples of how we have addressed actual or potential conflicts in 2023 in relation to
stewardship.

Case study Conflict of interest arising from use of affiliates for
trading and execution services
Russell Investments has an established trading desk that provides comprehensive brokerage services to boththird-party clients as well as certain affiliates. An inherent conflict exists because Russell Investments earns
compensation for the trading directed by its affiliates through its trading desk. Russell Investments manages
this conflict of interest through monitoring of trade activity and periodic oversight by senior management.
We have established independent transaction cost analysis (TCA), where independent third parties provide
Russell Investments with benchmarking of the trading desk s execution quality versus its peers. The
independent TCA allows its affiliates to continuously assess whether they receive best execution from thetrading desk. In addition, Russell Investments has established an internal committee, which oversees thisrelationship and receives reporting on execution quality. The internal committee meets on a quarterly basis
and is comprised of members from Portfolio Management, Trading, Legal, Compliance, Risk, and Operations.

OutcomeRussell Investments continues to use its trading desk as the primary executing broker for its affiliates. We
recognise the risk of future conflicts and have implemented monitoring (e.g., independent TCA) andgovernance to appropriately mitigate these risks.

Russell Investments / Investment Stewardship Report/ 91

Case study

Information barriers to protect clientsfrom these ownerships and circumstances are identified and properly managed, controls and measures havebeen put in place.
holdings of each private equity fund in the ownership structure, with processes in place for protecting theindependence and objectivity of our research where this eventuality might occur. This includes a specificrequirement that all portfolio holdings in the private equity funds ownership structure that are determined byRussell Investments Compliance to be a controlling affiliate of that company, are blocked from user view on the
Russell Investments Research and Advisory Systems with these safeguards being compliance-monitored
throughout the year.

OutcomeRelevant companies are blocked from the user view on the Russell Investments Research and Advisory Systems
based on this control measure.

Case study

Individual conflict controls
owned by certain private equity funds which form partpotential conflicts of interest that may arise from these circumstances are identified and properly managed.
interest in, or being appointed as a director of, an organisation within the portfolio holdings of, or controlled
by, our private equity ownership structure, we have systems and controls in place to identify these

Outcome
Where control affiliations arise/exist, the Russell Investments Compliance function determines any potential
portfolio holding entity conflicts. The Compliance function examines a number of factors - including any
trading relationships, business relationships, finance relationships, direct financial interest, operational
synergies or shared profit incentives between the portfolio holding organisation and Russell Investments - todetermine if any conflicts of interest exist and need managing.
We recognise the risk of future conflicts of interest occurring in connection with any such identified portfolio
holdings, and therefore subject them to ongoing, specific, and stringent safeguards.

Russell Investments / Investment Stewardship Report/ 926.2 Diversity and inclusion✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 1✓

The New Zealand Stewardship Code - Principle 1

Principle 2

As a global company, we recognise the benefits of different sources of insight and knowledge. Valuing diversity
gives us an advantage by pooling ideas and providing solutions from more than one point of view. Effective
management of diverse perspectives enriches our culture and increases our ability to provide innovative solutions
to our clients, while adding value to our shareholders and community.
Diversity is an integral part of our long-term growth strategy. Our ability to fulfil our purpose of improving
financial security for people hinges on the quality of our workforce and our ability to provide appropriate
solutions to a diverse group of clients. Our approach to diversity and inclusion spans our internal corporate
diversity efforts, as well as those of third-party service providers. Details of our diversity efforts with regard to
third party service providers are covered under section 4.3. Below, we provide an overview of our internal
corporate efforts on this subject.

Internal corporate diversity and inclusion efforts
At Russell Investments, we consider diversity through multiple lenses (e.g., gender, ethnicity, and sexual
orientation). To advance our efforts we have established a Corporate Social Responsibility (CSR) Council whose
purpose is to increase diversity, equity, and inclusion among employees, support workplace sustainability efforts,
and promote community engagement through volunteering and giving. The CSR Council s goals related to DEI
include, but are not limited to, the following:• Demonstrating leadership commitment and accountability for attracting, developing, and retaining diverse talent• Championing the advancement of diversity, equity, and inclusion, internally and in our communities• Fostering a culture of inclusion• Growing our diverse associate representation globally each year
Our stated purpose is to create an inclusive work environment that is free from discrimination and harassment,emphasising our commitment to treating associates with respect. Equal opportunity extends to all employment
aspects including hiring, promotions, transfers, terminations, training, working conditions, compensation, andbenefits. Decisions pertaining to employment must not be discriminatory, based on any characteristic protectedby law. Further information can be found in our CSR report.

Global Associate Resource Groups
These associate groups/committees (ARGs) are led by associates and are designed to increase engagement andunderstanding while contributing to a more inclusive workplace. ARGs also facilitate dialogue and learning about
inclusion issues across Russell Investments. These groups provide leadership and development opportunities for
associates and support minorities and/or women in the workplace.
• Women's Associate Resource Group• Black Associate Resource Group• LGBT & Allies (LGBTA) Associate Resource Group• Veteran's Associate Resource GroupIn addition, we have a Global Community Engagement Council, a Global Wellness Associate Resource Group, aGlobal Sustainability Work Practices Group, and regional Social Committees all collaborating with our Diversity,
Equity, and Inclusion Associate Resource Groups under the CSR umbrella on programming and initiatives.

Russell Investments / Investment Stewardship Report/ 932023 Activity
Through 2023 we have continued to stay connected and have furthered our Diversity and Inclusion efforts.
Highlights from educational events hosted this year include the following:• Girl Scouts Financial Education Programme• Real Talk About Racism and Discrimination Training•• A Conversation with Angel Bonilla•

Trans Identity

Chat with Captain Alan Schrader, USN, Retired•

sponsored Generations: A Conversation with Dr. Jean Twenge• Black ARG Networking Socials
mes are also in place:• Women in Sales Excellence (WISE): A programme to provide mentorship and educational opportunities towomen in sales.
• Global diversity mentorship programme: An opportunity for diverse talent to reverse mentor senior executives.
• Training: All new hires are required to complete unconscious bias training. Russell Investments provides antiharassment and discrimination training to associates every two years and, in several regions, requires thetraining upon hire.
• Pay equality and disclosure: Russell Investments conducts a full compensation review each year, ensuring equalpay for equal work with a focus on gender and race/ethnicity diversity. Russell investments voluntarily
participates in the UK Gender Pay Gap initiative, publishing results annually.
• Policies and performance goals: Russell Investments ensures its global and regional policies are inclusive andfree from bias.
• Global volunteering programme whereby volunteer hours are matched and associates are afforded two days off
for volunteer activities of their choice per year.
Promoting diversity: The following incentives are in place globally to promote diversity:• Code of Ethics and Global Code of Conduct: Both Codes support overall ethical conduct and include statements
on anti-harassment and anti-discrimination that must be adhered to across the firm.
• Global Citizen Goals: These goals are assigned to all associates (manager and individual contributor versions),
and our EC and year-end bonus compensation is dependent upon succeeding with these objectives.
•principles and contributing to our culture of compliance, meritocracy, inclusivity, and diversity.
•urs, values, and principles.
Demonstrates good judgment with a focus on strengthening our culture of compliance, meritocracy, inclusivity,and diversity.
Further details of our efforts in this space can be found on our website.

Russell Investments / Investment Stewardship Report/ 946.3 Policy advocacy and collaborations✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 1✓

The New Zealand Stewardship Code - Principle 7

Principle 4, 10

We actively collaborate in initiatives with industry participants, regulatory working groups and other stakeholders
to collectively deliver a well-functioning financial system. Over the course of 2023, we have contributed to theactivities of the following organisations:
Principles for Responsible Investment (PRI)
As a signatory to the PRI since 2009, Russell Investments has a longstanding relationship with the organisation and has completed PRI
assessments annually. Russell Investments incorporates the PRI principles
into our processes including through manager research, portfolio
management, and proxy voting and engagement. Furthermore, we
purposefully assess the initiatives and consultations driven by PRI, and weparticipate where relevant.

Institutional Investors Group on Climate Change (IIGCC)
We have been a member of IIGCC since 2015, actively collaborating andparticipating at industry events and seminars. We also contribute toconsultations as and when there is an opportunity to do so.

Climate Action 100+
The role Russell Investments plays in this initiative is further explained underthe engagement section here.

Nature Action 100
The role Russell Investments plays in this initiative is further explained underthe engagement section here.

Transition Pathway Initiative (TPI)
We leverage the independent research and data from TPI to facilitate
information sharing and collective knowledge building. Moreover, we havecompleted the mapping of this open source to set our own targets towards
our net zero commitment.

Carbon Disclosure Project (CDP)
We use the global disclosure system provided by CDP as one of several
sources that help us to manage environmental impact in our portfolios. We
have also collaborated with CDP in engagement campaigns; for example,
during 2022 we supported a campaign that targets 1,200 high impact
companies on committing and setting a 1.5 degree-aligned, SBTi approved
science-based emissions reduction target.

Task Force on Climate-related Financial Disclosures (TCFD)
We have embedded the TCFD framework in our stewardship activities andregularly engage with companies in this area. More details have been
provided in the engagement section of this report.

Russell Investments / Investment Stewardship Report/ 95

The Net Zero Asset Managers initiative
In 2021, Russell Investments joined the Net Zero Asset Managers Initiative.
We have committed to work in partnership with interested clients on goalsconsistent with an ambition to reach net zero emissions by 2050 or sooner
across all its assets under management. Further information can be foundhere.
Institutional Investing Diversity Cooperative (IIDC)IIDC members meet regularly to discuss key initiatives and specific action
items that can encourage asset managers to offer more robust andcomprehensive diversity data. We are actively involved in IIDC throughregular meetings, ad-hoc sub-committee projects, and industry event
speaking opportunities.

Investment Association (IA)Collaborations in 2023 include attending multiple industry seminars andresponding to the FCA proposed rules on sustainability.

Investors Against Slavery and Trafficking Asia Pacific (IAST APAC)
Russell Investments is a participating investor in the Investors Against
Slavery and Trafficking Asia Pacific (IAST APAC) initiative is an investor-led,collaborative project. It was established in 2020 to engage with companies in
the Asia-Pacific region to promote effective action in finding, fixing andpreventing modern slavery in operations and supply chains.

Investment Company Institute (ICI)
We support the organisation to advocate on legislation, regulation andbusiness policy, affecting retail and institutional investors, equity and fixedincome markets and related products and services.

Securities Industry and Financial Markets Association (SIFMA)
Russell Investments supports SIFMA to advocate on legislation, regulation
and business policy that affects retail and institutional investors, equity and
fixed income markets, and related products and services.

Responsible Investment Association Australasia (RIAA)
We actively contribute to the RIAA to ensure capital is aligned with achievinga healthy society, environment and economy. Russell Investments has threerecognised by investors and consumers across the region, providing
confidence that a product or provider is delivering on its responsible
investment promise and meeting the Australian and New Zealand standard
for responsible investing.

Department of Labor (DOL)
In the United States, we have joined industry trade associations and worked
directly with the Department of Labor to improve the language associatedwith how The Employee Retirement Income Security Act of 1974 (ERISA)
plan sponsors consider financially-material factors related to ESG.

Russell Investments / Investment Stewardship Report/ 96

Case study

Collaborative consultations and advocacy

Throughout 2023, Russell Investments actively cooperated with various consultations organised by industry
groups and regulators. These consultations comprised a range of activities, including participation inquestionnaires, completion of surveys, and attendance at working group meetings. Through these channels,
Russell Investments took the opportunity to contribute our insights and expertise, thereby influencing the
trajectory of collaborative programmes and providing strategic advice to shape the direction of industry bodies.

OutcomeCollaboration Group

Consultation

HM Treasury (HMT)

Future regulatory regime for Environmental, Social, andGovernance (ESG) ratings providers

Investor Group

Letter from investors and corporates to call for Ofgem to be given
a net zero mandate

PRI

Global Stewardship Resourcing Survey

CDP

SBT Engagement Campaign

FRC

UK Corporate Governance Code Consultation

IIGCC

Stewardship Alignment Questionnaire

DWP

Taskforce on Social Factors (TSF) consultation

Nature Action 100
TNFD

Feedback on Draft Benchmark Indicators
Capacity Building Survey

Thought Leadership
We provide a range of training and development opportunities for our client base to ensure that our clients are
kept abreast of key industry developments, as outlined previously in this report. During 2023, Russell Investments
published 30 blog posts relevant to ESG and responsible investing. These posts were written by investment
professionals across various regions and teams, reflecting our broad range of services and diverse client base.

6.4 Reviewing policies and processes✓

UK Stewardship Code✓Japan Principles for Responsible Institutional Investors - Principle 1✓

The New Zealand Stewardship Code - Principle 2

Principle 5

Our policies cover all aspects of our investment and business practices, including our stewardship approach. Our
Compliance and Legal teams continually review the regulatory landscape and add and refresh policies to ensure
we are up to date with regulatory requirements. Furthermore, these reviews verify that our research aligns withbest practice.
Our governance oversight combines formal and informal feedback loops. Metrics are generated on a range ofongoing practices; these metrics are calculated regularly for items that are subject to ongoing review such as
performance assessment, portfolio risk exposures, compliance guideline reporting and productivity metrics.
In addition to regularly reviewed reports, ad hoc studies are conducted from time to time. These reports andstudies encompass a broader set of data over a range of time periods and are typically focused on a particular
aspect of our investment process that we are seeking to assess and improve.
Policy and process description documents are also regularly reviewed and updated. As an example, in 2023 we
updated our internal Investment Philosophy and Process paper, which is a comprehensive reference guide on the
beliefs and structure of our investment process available to our investment and business teams. In this iteration,
substantial updates and additions were included for components of our investment process where recent
enhancements have been made. These include in ESG-related practices and active ownership, management of
positioning strategies, implementation and governance structures.
When undertaking analysis, we aim to use the same underlying data and metrics that inform our investment
decision making and policy review process, as we use for client reporting and submissions to regulatory bodies.

Russell Investments / Investment Stewardship Report/ 97This alignment helps ensure that our evaluation and reporting practices for both internal and external uses are fair
and accurate.

Internal audit
In addition to continuous reviews and feedback loops, an independent Internal Audit (IA) team undertakes a rolling
agenda of review on a range of key investment activities. The purpose of Russell Investments Group Internal Audit
function is to provide independent and objective assurance and consulting services designed to improve the-based and objective
assurance, advice, and insight to enhance and protect organisational value. Internal Audit helps the organisationaccomplish its objectives by bringing a systematic, disciplined approach to test, evaluate and improve theeffectiveness of governance, risk management and control processes.
The Russell Investments Group Internal Audit function utilises a risk-based approach in developing the annual
audit plan. The audit universe of key processes is assessed to focus the audit plan on the areas of highest risk. Any
issues identified by Internal Audit require management action plans (MAPs) and are tracked to resolution by
Internal Audit. The status of open issues is regularly reported to relevant boards and audit committees. Internal
Audit validates resolution to close issues identified.
The IA process involves a structured assessment of key processes and risks, including detailed testing of
mitigating controls across the organisation. These audits are designed to assess if systems and procedures are
effective, efficient and function as designed, thereby helping ensure:• risks are appropriately identified and managed;•• significant financial, managerial, and operating information is prepared accurately and reliably; and• resources are adequately protected.

Case study

Internal responsible investing audit

During 2023, as part of our internal risk management processes, Russell Investments Risk Team conducted acomprehensive review of all processes and procedures related to ESG-related practices, active ownership, andresponsible investing. The audit, which took place over several months, delivered improved efficiency andgovernance across all contributing business units.

OutcomeThe outcome of the audit led Russell Investments to reinforce mechanisms which connect daily responsible
investing work to the Investment Strategy Committee to achieve stronger oversight. Russell Investments has
three committees which now provide regular, direct updates to the ISC on responsible investing matters the
Global Exclusions Committee, the Active Ownership Committee, and the Investment Division Responsible
Investing Committee.
Committee (EC) from annual to at least semi-annual. The Responsible Investing Council (RIC) Heads and/or
their operating committee sponsors provide updates on firmwide ESG and sustainable investing strategies andmilestones including both internal KPIs and public commitments, such as the United Nations-supported
Principles for Responsible Investment (UNPRI), The UK Stewardship Code, and the Net Zero Asset Managers
Initiative.

Russell Investments / Investment Stewardship Report/ 98

7. Appendix:
Stewardship code
mappings

7.1 The UK Stewardship Code
PRINCIPLEREQUIREMENTS

PAGES

Principle 1

strategy, and culture enable stewardship that creates
long-term value for clients and beneficiaries leading to sustainable benefits for the economy, theenvironment and society.

Signatories should explain the purpose of the organisation and an outline of its
culture, values, business model and strategy

7, 8Signatories should explain their investment beliefs, i.e., what factors they consider
important for desired investment outcomes and why

8-10

Signatories should explain what actions they have taken to ensure their investment
beliefs, strategy, and culture enable effective stewardship

4-6, 10Signatories should disclose how their purpose and investment beliefs have guided
their stewardship, investment strategy and decision-making

4-6, 10Signatories should disclose an assessment of how effective they have been in serving
the best interests of clients and beneficiaries.

10, 11, 17, 21-25

Principle 2
Signatories should explain how their governance structures and processes haveenabled oversight and accountability for effective stewardship within theirorganisation and the rationale for their chosen approach.

26- 32Signatories should explain how they have appropriately resourced stewardship
activities, including their chosen organisational and workforce structures

26- 32Signatories should explain how they have appropriately resourced stewardship
activities, including their seniority, experience, qualifications, training and diversity

31, 32, 93, 94

Signatories should explain how they have appropriately resourced stewardship
activities, including their investment in systems, processes, research and analysis

32-38

Russell Investments / Investment Stewardship Report/ 99Signatories should explain how they have appropriately resourced stewardship
activities, including the extent to which service providers were used and the services
they provided

31, 32, 45-51

Signatories should explain how any performance management or reward
programmes have incentivised the workforce to integrate stewardship and investment
decision-making

32

Signatories should disclose how effective their chosen governance structures andprocesses have been in supporting stewardship; and Signatories should disclose how
they may be improved

29, 30Principle 3

Signatories manage conflicts of interest to put the best interests of clients and beneficiaries first.

Signatories should disclose their conflicts policy and how this has been applied to
stewardship

87-92

Signatories should explain how they have identified and managed any instances ofactual or potential conflicts related to stewardship.

87-92

Signatories should disclose examples of how they have addressed actual or potential
conflicts

91, 92

Principle 4

Signatories identify and respond to market-wide and systemic risks to promote a well-functioning
financial system.

Signatories should explain how they have identified and responded to market-wide
and systemic risk(s), as appropriate.

42- 44Signatories should explain how they have worked with other stakeholders to promote
continued improvement of the functioning of financial markets.

18, 19, 95-97

Signatories should explain the role they played in any relevant industry initiatives inwhich they have participated, the extent of their contribution and an assessment of
their effectiveness, with examples.

95-97

Signatories should explain how they have aligned their investments accordingly.

42- 44Signatories should disclose an assessment of their effectiveness in identifying andresponding to market-wide and systemic risks and promoting well-functioning
financial markets.

42- 44

Principle 5Signatories review their policies, assure their processes and assess the effectiveness of theiractivities.

Signatories should explain how they have reviewed their policies to ensure they
enable effective stewardship

97-98

Signatories should explain what internal or external assurance they have received inrelation to stewardship (undertaken directly or on their behalf) and the rationale for
their chosen approach98

Signatories should explain how they have ensured their stewardship reporting is fair,balanced and understandable

13-16, 21-25

Signatories should explain how their review and assurance has led to the continuous
improvement of stewardship policies and processes

98

Principle 6

Signatories take account of client and beneficiary needs and communicate the activities andoutcomes of their stewardship and investment to them.

Signatories should disclose the approximate breakdown of their client base, forexample, institutional versus retail, and geographic distribution

11-13

Signatories should disclose the approximate breakdown of assets under management
across asset classes and geographies

11-13

Russell Investments / Investment Stewardship Report/ 100

Signatories should disclose the length of the investment time horizon they haveconsidered appropriate to deliver to the needs of clients and/or beneficiaries and why

11, 17Signatories should explain how they have sought and received clients' views and thereason for their chosen approach

20-25

Signatories should explain how assets have been managed in alignment with clients'
stewardship and investment policies

20-25

Signatories should explain what they have communicated to clients about theirstewardship and investment activities and outcomes to meet their needs, including
the type of information provided, methods and frequency of communication to enable
them to fulfil their stewardship reporting requirements.

13-16

Signatories should explain how they have evaluated the effectiveness of their chosen
methods to understand the needs of clients and/or beneficiaries

20-25

Signatories should explain how they have taken account of the views of clients andwhat actions they have taken as a result.

20-25

Principle 7

Signatories systematically integrate stewardship and investment, including material
environmental, social and governance issues and climate change, to fulfil their responsibilities.

Signatories should disclose the issues they have prioritised for assessing investments,
prior to holding, monitoring through holding and exiting. This should include ESG
issues of importance to them.

33- 38Signatories should explain how integration of stewardship and investment has
differed for funds, asset classes and geographies

17-25

Signatories should explain how they have ensured tenders have included arequirement to integrate stewardship and investment, including material ESG issues

17-25, 33- 38

Signatories should explain how they have ensured the design and award of mandates
included requirements to integrate stewardship and investment to align with theinvestment time horizons of beneficiaries

17-25, 33- 38

Signatories should explain the processes they have used to integrate stewardship andinvestment, including material ESG issues, to align with the investment time horizonsof clients and/or beneficiaries

17-25, 33- 38, 43, 44

Signatories should explain the processes they have used to ensure service providers
have received clear and actionable criteria to support integration of stewardship andinvestment, including material ESG issues

17-25, 33- 38, 43, 44

Signatories should explain how information gathered through stewardship has
informed acquisition, monitoring and exit decisions, either directly or on their behalf,
and with reference to how they have best served clients and/or beneficiaries

17-25, 33- 38, 43, 44

Principle 8

Signatories monitor and hold to account managers and/or service providers

Signatories should explain how they have monitored service providers to ensureservices have been delivered to meet their needs.

45- 50Signatories should explain how the services have been delivered to meet their needs

45- 50Signatories should explain the action they have taken where signatories' expectationsof their managers and/or service providers have not been met

45- 50Principle 9Signatories engage with issuers to maintain or enhance the value of assets

Signatories should explain how they have selected and prioritised engagement (forexample, key issues and/or size of holding)Russell Investments / Investment Stewardship Report

55-58

/ 101

Signatories should explain how they have developed well-informed and precise
objectives for engagement with examples

55-60, 70-75

Signatories should explain what methods of engagement and the extent to which they
have been used

52, 55, 66

Signatories should explain the reasons for their chosen approach, with reference totheir disclosure under Context for Principle 1 and 655-60

Signatories should explain how engagement has differed for certain funds, assets, or
geographies

65-68

Signatories should describe the outcomes of engagement that is ongoing or has
concluded in the preceding 12 months, undertaken directly or by others on theirbehalf.
Principle 10

Signatories, where necessary, participate in collaborative engagement to influence issuers.

Signatories should disclose what collaborative engagements they have participated in
and why, including those undertaken directly or by others on their behalf.
Signatories should describe the outcomes of collaborative engagement.
Principle 11

52-58, 67-75

53- 55, 95-97
53- 55Signatories, where necessary, escalate stewardship activities to influence issuers.

Signatories should explain how they have selected and prioritised issues, anddeveloped well-informed objectives for escalation

58- 60Signatories should explain when they have chosen to escalate their engagement,
including the issue(s) and the reasons for their chosen approach, using examples

58- 60Signatories should explain how escalation has differed for funds, assets orgeographies

58- 60Signatories should describe the outcomes of escalation either undertaken directly orby others on their behalf

58- 60Principle 12

Signatories actively exercise their rights and responsibilities

Signatories should explain how they exercise their rights and responsibilities, andhow their approach has differed for funds, assets or geographies

76-80

For listed equity assets signatories should disclose their voting policy, including any
house policies and the extent to which funds set their own policies

76-80

For listed equity assets signatories should state the extent to which they use thedefault recommendations of proxy advisers

78, 79For listed equity assets signatories should report the extent to which clients may
override a house policy

76-80

For listed equity assets signatories should disclose their policy on allowing clients todirect voting in segregated and pooled accounts

76-80

For listed equity assets, signatories should state what approach they have taken to
stock lending, recalling lent stock for voting and how they seek to mitigate 'empty
voting'79

For listed equity assets, signatories should disclose the proportion of shares that werevoted in the past year and why
For listed equity assets, signatories should provide a link to their voting records,
including votes withheld if applicable

Russell Investments / Investment Stewardship Report

76-80

79

/ 102

For listed equity assets, signatories should explain their rationale for some or all
voting decisions

79-86

For listed equity assets, signatories should explain how they have monitored whatshares and voting rights they have

79-86

For fixed income assets, signatories should explain their approach to seeking
amendments to terms and conditions in indentures or contracts

79

For listed equity assets, signatories should provide examples of the outcomes ofresolutions they have voted on over the
past 12 months

79-86

Signatories should explain how they exercise their rights and responsibilities, andhow their approach has differed for funds, assets or geographies

79-86

Russell Investments / Investment Stewardship Report/ 1037.2 Japan Principles for Responsible Institutional Investors
PRINCIPLEREQUIREMENTS

PAGES

Principle 1

Institutional investors should have a clear policy on how they fulfil their stewardship
responsibilities and publicly disclose it.

Principle 2

Institutional investors should have a clear policy on how they manage conflicts of interest in
fulfilling their stewardship responsibilities and publicly disclose it.

87- 92

Principle 3

Institutional investors should monitor investee companies so that they can appropriately fulfil
their stewardship responsibilities with an orientation toward the sustainable growth of thecompanies.

52-75

Principle 4

Institutional investors should seek to arrive at an understanding in common with investee
companies and work to solve problems through constructive engagement with investee
companies.

52-75

Principle 5

Institutional investors should have a clear policy on voting and disclosure of voting activity.
The policy on voting should not be comprised only of a mechanical checklist; it should bedesigned to contribute to the sustainable growth of investee companies

Principle 6

Institutional investors in principle should report periodically on how they fulfil theirstewardship responsibilities, including their voting responsibilities, to their clients andbeneficiaries.

Principle 7

To contribute positively to the sustainable growth of investee companies, institutional
investors should develop skills and resources needed to appropriately engage with thecompanies and to make proper judgments in fulfilling their stewardship activities based on indepth knowledge of the investee companies and their business environment and considerationof sustainability consistent with their investment management strategies.

26-38

Principle 8

Service providers for institutional investors should endeavour to contribute to theenhancement of the functions of the entire investment chain by appropriately providing
services for institutional investors to fulfil their stewardship responsibilities.

45-51

7-10, 39-41, 52-75, 93, 94,
95-98

76-79

11-25, 79

7.3 The New Zealand Stewardship Code
PRINCIPLEREQUIREMENTS

Principle 1

Signatories will establish, and publicly articulate, how their investment philosophy,
governance structures, and resourcing supports the goals of effective stewardship.

Principle 2

Signatories will develop and implement measurable and effective stewardship policies.

11- 25, 41, 52, 70, 76, 77,
79, 97, 98

Principle 3

Signatories will incorporate material ESG matters into their investment decisions andstewardship practices.

17-25, 33-44

Principle 4

Signatories will engage regularly and effectively with underlying managers, issuers, andother key stakeholders

45-51, 52-75

Principle 5Signatories will exercise voting rights in accordance with their investment mandate, andregularly and transparently disclose voting actions and outcomes.

76-76

Principle 6

Signatories will endeavour to avoid any conflict of interest that does not put the best interestsof their clients and beneficiaries first and explain their approach to managing any conflicts ofinterest that arise.

87- 92

Principle 7

Signatories will work collaboratively to amplify investor influence on ESG matters withissuers, policy makers, index providers, standard setters, and other key stakeholders.

48, 49, 50, 95- 97

Principle 8

Signatories will regularly measure, and publicly report, on their actions taken to support
stewardship, and demonstrate how these have contributed to the goals of effective
stewardship.

11-25, 78, 79

Principle 9

improve their internal capabilities, and provide resources to deliver impactful stewardship.

Russell Investments / Investment Stewardship Report

PAGES

7-10, 26-32, 93, 94

11-25

/ 104

FOR MORE INFORMATION
Contact Russell Investments Active Ownershipor visit russellinvestments.com/jp

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