Climate Change
Action Plan
2022-23First Sentier Investors • Climate Change Action Plan 2022-23

Key Performance Indicators
This document sets out First Sentier Investors’ progress on our Climate Change Action Plan for the period 1 July 2022 – 30 June 2023. We have put in place a number of key
performance indicators (KPIs) to measure our progress on increasing the proportion of active strategies covered by net zero targets by 2050 (or sooner); and our operations by 2030
(or sooner). We have made good progress in most areas over the period, as outlined below.
These KPIs are aligned to our 5 C’s of Climate Change Action:•

Collaboration - We will continue to support climate-related industry collaborations, climate policies, and regulation, to drive systemic change.

•

Company engagement - We aim to use our influence and proxy voting to influence companies and we will allocate capital to help accelerate the climate transition.

•

Clarity - We will be transparent about our progress on reaching net zero, and provide evidence for climate-related claims we make.

•

Clients - We aim to be a trusted partner who can support our clients in their transition to a low carbon economy.

•

Corporate sustainability - We are decarbonising our business operations through a broad range of initiatives, and will report on progress.

Our progress is colour-coded as follows: green (KPI successfully met); amber (progress being made toward KPI) and red (KPI not met).

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Collaboration
Goal
Continue to participate
actively in climate-related
initiatives and provide
input on key climate
policies in countries
where we are active.

KPI for 2023
We will have reported to
NZAM on progress
made and submitted acase study on how weare aligned with theInvestor Climate Action
Plans (ICAPs)
Expectations Ladder Tier
2 on one of the priority
areas.

KPI to be met for 2024
Reporting

Progress

We will implement the Policy
Advocacy Principles we aredeveloping in 2023.

We have met this target. Actions we took to meet thistarget included:• Submitting our Net Zero Asset Managers (NZAM)
progress report to NZAM’s local partner Investor
Group on Climate Change (IGCC).
• Publishing a case study with IGCC on our ICAP.

• Responding to the Australian Sustainable FinanceInstitute (ASFI) survey for an Australian Taxonomy.

• Hosting a Safeguard Mechanism Briefing,an initiative by ASFI and IGCC, in our Sydney office.

• Making a submission to the Australian Treasury’s
consultation on climate-related disclosure, and to
the Department of Climate Change, Energy,
Environment and Water (DCCEEW) on the Safeguard
Mechanism reforms. We also contributed tosubmissions by industry bodies, the Financial
Services Council and IGCC.

We will participate in collaborative
engagement initiatives hosted by
the Principles for Responsible
Investment (PRI) and Assessing
Sovereign Climate-related
Opportunities and Risk (ASCOR),
in order to advance the creation ofstandardised methodologies for
asset classes where currently
unavailable.

• In March and April 2023, our Global Head ofInvestment Management joined the IGCC with aselected group of investors in Canberra to build
relations with Australia’s leading politicians, and wasable to engage with members of parliament on
climate-related disclosure and the reform of thesafeguard mechanisms1, Australia’s response andalternative to carbon pricing.
• Submitting to the European Union (EU)’s call forevidence on greenwashing on the key drivers andrisks associated with greenwashing.
• Contributing to the UK Sustainability Disclosure
Requirements consultation paper.

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Company Engagement
Goal
Achieve a coverage of assetsaligned, or under active
engagement, to 70% of financed
emissions from material sectors(also using a net zero alignment
criteria) by 2030.

KPI for 2023

Progress

We will have engaged directly withat least 20 priority companies inhigh impact sectors anddeveloped a number ofrepresentative case studies.

We have met this target.

KPI to be met for 2024
Reporting

The FSI investment teams have
met with over 20 companies, and anumber of those engagement
examples will be released in 2024.

We will develop a formal
engagement plan that supports
investment teams to better identify
high impact companies
for targeted engagement on net
zero alignment.

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Clarity
Goal

Increase the proportion of AUM
invested in assets that are net zero,aligned or aligning to net zero (using
a net zero alignment criteria
framework) (Baseline 2021).

KPI for 2023

We will have a higher proportion of
AUM committed to be managed inline with our net zero by 2050
commitment.
We will report on progress madetowards our short-term targets set
at investment team level.

KPI to be met for 2024
Reporting

Progress

We have partially met this target.

The initial proportion of AUM %managed in line with net zerocommitments was 44.5%3(31 December 2021).
By 31 December 2022 our AUM
managed in line with net zerocommitments had increased to49.7%. The reason for this is ourGlobal Listed Infrastructure teamalso committed to manage themajority of their assets in line witha target of net zero emissions
by 2050.
2

We will continue to work towards
increasing the proportion of AUM
that is managed in line with our net
zero ambition.

We have yet to publicly reporton progress made towards
team targets.

2 The total proportion of AUM is based on First Sentier Investor’s overall AUM. For NZAM purposes, Stewart Investors has a separate Net Zero commitment, and as such the NZAM reported numbers may look different. In our 2022 Climate
Change Action Plan, the initial proportion of AUM committed to Net Zero (38%) was based on AUM per 31 December 2021 and did not include Stewart Investors’ proportion, which has now been included.
3 In order to be consistent, going forward, our Climate Change Action Plan will include the total AUM (inclusive of Stewart Investors). The AUM managed in line with net zero by 2050 on 31 December 2021 was 44.5%, and this proportion
has since increased to 49.7%.

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Clients
Goal

KPI for 2023

Progress

Position FSI as a key
partner who can supportand enable our clients’transition to a low carbon
economy and theachievement of their own
net zero commitments.

In-depth client
engagement on net zeroalignment with asset
owners across Europe,Asia, Australia and theUS, who have set theirown targets, and others
who have not yet set
targets (to work towards
target setting); report on
progress made.

We have met this target.

KPI to be met for 2024
ReportingOver the course of fiscal year 2022-23, FSI met with clients both individually and as part of roundtables; formally andinformally - to discuss their approach and needs for net zero.
For example, we met with an Australian asset owner client andexchanged our respective net zero approaches. This exercise
was useful to understand client expectations.

We will continue to build on our
engagement with clients acrossdifferent jurisdictions and share
our experiences of our net
zero journey.

In April 2023, the Glasgow Financial Alliance for Net Zero
(GFANZ) hosted a webinar covering the Net Zero AssetManagers initiative. Our Global Head of Responsible
Investment shared First Sentier Investors’ net zero experience
with Asian-based asset owners.
We were involved in multiple initiatives with the IGCC to present
FSI’s experience around our climate action plan. We presented
and published our ICAPs case study.
We participated in the Paris-aligned working group and shared
our experience with peers and clients, regarding our
implementation of the Net Zero Investment* Framework.

Create new investment
products aligned with net
zero emissions by 2050
and facilitate increased
investment inclimate solutions.

We will have developed
firm-wide guidelines on
new productdevelopment.

We have made progress towards this target.
We commenced drafting and socialising these guidelines,
however, given the rapid regulatory changes we have seen
globally over the past 12 months, we decided not to finalise theseguidelines until H2 2024. Accordingly, we will maintain the sametarget for 2024.

We will have developed firm-wide
guidelines on new productdevelopment.

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Corporate Sustainability
Goal

KPI for 2023

Progress

Develop a corporate
sustainability strategy
with Scope 1, 2 and 3(including travel)emissions; establish abaseline of GHG
emissions for our office
operations, aiming to
reduce GHG and include
100% renewable energy
across our offices.

We will have
implemented acomprehensive GHG
emissions reporting
platform to monitor
progress and published
our emissions data.

We have met this target.

We will have developed asustainable
travel program.

KPI to be met for 2024
Reporting

The Corporate sustainability Team published our GHG
emissions. These numbers are published in our
first Sustainability Report.
We developed a Sustainable Travel reference guide for
employees to provide practical information to support moresustainable travel. We also engaged with our corporate travel
provider to enhance the provision of carbon reporting related toflights, hotels and car hire.

Develop a Net Zero Roadmap,
outlining FSI’s preliminary
carbon abatement strategy towork towards Net Zero by2030 or sooner for our own
operations.
Certify Edinburgh officeagainst ISO 14001 global
standards and extend thecertification to other offices.

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Note: Change from 2022 Climate Change Action
Plan on fossil fuel exposure
In 2023, we aligned our definition of exposure to companies involved in fossil
fuel related activities in accordance to globally recognized initiatives4.
The FSI fossil fuel exposure calculations have been aligned with the SFDR
definition5. As at 31 December 2022, FSI’s overall exposure to companies
involved in fossil fuels was 9.13% of total AUM, and while this is higher than
the number quoted in the previous year (8.8%), the figure is not directlycomparable due to the updated methodology6.

4

Our agreed definition of companies ‘active in the fossil fuel sector’ means companies that derive any
revenues from exploration, mining, extraction, production, processing, storage, refining or distribution,
including transportation, storage and trade, of fossil fuels as defined in Article 2, point (62), ofRegulation (EU) 2018/1999.

5

Defined as companies that derive any revenues from exploration, mining, extraction, production,
processing, storage, refining or distribution, including transportation, storage and trade, of fossil fuelsas defined in Article 2, point (62), of Regulation (EU) 2018/1999.

6

The CAP 2022 calculation defined fossil fuel companies as those with any involvement in coal, oil orgas production or power generation. We included the full value of companies in this figure, regardlessof the proportion of their revenue that is derived from these activities.
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Important Information

This material is for general information purposes only. It does notconstitute investment or financial advice and does not take into
account any specific investment objectives, financial situation orneeds. This is not an offer to provide asset management
services, is not a recommendation or an offer or solicitation tobuy, hold or sell any security or to execute any agreement for
portfolio management or investment advisory services and thismaterial has not been prepared in connection with any such offer.
Before making any investment decision you should consider, withthe assistance of a financial advisor, your individual investment
needs, objectives and financial situation.
We have taken reasonable care to ensure that this material isaccurate, current, and complete and fit for its intended purpose
and audience as at the date of publication. To the extent thismaterial contains any measurements or data related toenvironmental, social and governance (ESG) factors, thesemeasurements or data are estimates based on information
sourced by the relevant investment team from third parties
including portfolio companies and such information may
ultimately prove to be inaccurate. No assurance is given or liability
accepted regarding the accuracy, validity or completeness of thismaterial and we do not undertake to update it in future if
circumstances change.
To the extent this material contains any expression of opinion or
forward-looking statements, such opinions and statements are
based on assumptions, matters and sources believed to be true
and reliable at the time of publication only. This material reflects
the views of the individual writers only.
Those views may change, may not prove to be valid and may notreflect the views of everyone at First Sentier Investors.
To the extent this material contains any ESG related
commitments or targets, such commitments or targets are
current as at the date of publication and have been formulated by
the relevant investment team in accordance with either internallydeveloped proprietary frameworks or are otherwise based on theInstitutional Investors Group on Climate Change (IIGCC) Paris
Aligned Investment Initiative framework. The commitments andtargets are based on information and representations made to
the relevant investment teams by portfolio companies (which may
ultimately prove not be accurate), together with assumptions
made by the relevant investment team in relation to future matterssuch as government policy implementation in ESG and otherclimate-related areas, enhanced future technology and theactions of portfolio companies (all of which are subject to changeover time). As such, achievement of these commitments andtargets depend on the ongoing accuracy of such information andrepresentations as well as the realisation of such future matters.
Any commitments and targets set out in this material arecontinuously reviewed by the relevant investment teams andsubject to change without notice.

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