Responsible Investment

UN Global
Compact BreachQ3 Engagement Update

Our Responsible Investment engagement efforts are guided by our Engagement policy
and our Environmental and Social Practices Statement as well as aligning with ourCorporate Governance Guidelines.
We continue to screen all holdings against global norm
breaches and controversies, including the UN Global
Compact (UNGC), engaging with all companies that are inbreach of any of the Principles. The third quarter of the year
registered 31 UNGC breaches across 27 companies withbreaches of principles relating to human rights abuses suchas at immigration detention facilities, allegations of forced
labour in relation to ethnic minorities, or the environmental
damage caused by dam disasters. Hawaiian ElectricIndustries was involved in the only new breach in Q3,
relating to allegations of negligence and the protection ofinternationally proclaimed human rights, while Norilsk Nickeland Hon Hai Precision Industry Co were both removed fromthe breach list in Q3. While some of the breaches in Q3
relate to incidents that occurred many years ago, we sought
to engage with issuers to encourage improvement andreceive any updates on actions taken to mitigate harms.
The Geo Group is in breach of the UN Global Compact
due to allegations of human rights abuses at immigration

The third quarter of the year
registered 31 UNGC breaches
across 27 companies

Issued November 2023

detention facilities. We have engaged the company on its
human rights mitigation program, focusing our engagement on
the publication of insights into its human rights due diligenceprocess. We were pleased to see the publication of its 5th
Annual Human Rights and ESG report in Q3, but believe furtherimprovements can and should be made such as encouraging
the disclosure of mitigation efforts for identified salient humanrights risks, reporting on complaints received through its ethics
hotline as well as any remediation undertaken, and increasingtransparency regarding potential cost implications if law suits
filed in relation to inmate work programs are upheld. This will
be a focal point to our ongoing engagement on this topic.
Youngor Group continues to be unresponsive to our requests
for engagement. We will continue to follow up with the company
and most recently, we wrote to the Board relating to ongoing
concerns about the presence of forced labour in its global
supply chains and the connection to egregious human rights
violations, particularly in Asia. We highlighted the global
convergence toward supply chain due diligence regulation,
notably the German Supply Chain Due Diligence Act wherecompanies can face financial penalties for a lack of mitigationand the U.S. Uyghur Forced Labour Prevention Act (UFLPA),
which prohibits the importation into the United States of all
goods mined, produced, manufactured wholly or in part in theUyghur Region. While we are disappointed that the company
has not been responsive to our engagement as yet, we willcontinue our efforts.

1Responsible Investment

Building on multiple engagements in Q2 – when Zinjing
Mining Group stated that allegations relating to theelimination of forced labour and complicity in humanrights abuses in both Papua New Guinea and China wereunfounded – the company invited investors from the Asian
Corporate Governance Association (ACGA) China Working
Group to visit their copper mine in Xinjiang. We view thisas a welcome development and look forward to an updatefrom the visit, as well as the outcome of the human rights
audit at mines in Serbia and China which the company has
committed to conducting to an OECD approved standard
by the end of 2024.
Particularly in light of its UNGC breach in relation toallegations of forced labour related to employing ethnic
minorities, we wrote to GCL Technology Holdings Ltd
to discuss its approach to human rights due diligence.
We asked for clarity on the company’s approach, andencouraged the application of a single global standard
consistent with the requirements of the Uyghur Forced
Labor Prevention Act (UFLPA) across the company’sentire supply chain for all retail markets, whether within or
outside of the United States. We await a response fromthe company.
We have not received responses from Xinjiang Zhongtai
Chemical Co. Ltd., OFILM Group Co. Ltd. and Hoshine
Silicon Industry Co. Ltd on specific allegations of forced
labour related to employing ethnic minorities throughcoercive labour transfer programs.
While we have been encouraged by a range of responses
and tangible outcomes to our engagement on breaches of
the UN Global Compact throughout 2023, with as many as
10 companies not responding to our request for dialogue inrelation to the controversies, additional focus on engaging
these issuers will be sought.
Given the nature of these breaches and the environmental
and social risks that they represent, we will continue toreach out to these companies to understand their approach,share best practice and clarify aspirations for addressingthese multifaceted issues.

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