Impact Beyond the Obvious

T. ROWE PRICE

Global Impact
Equity Fund
2022 ANNUAL IMPACT REPORT

Issued October 2023.
For Australian residents and Wholesale Investors in New Zealand only. Not for further distribution.

CONTENTS

INTRODUCTION

PORTFOLIO

02

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Introduction
The Need to Make an Impact is Greater Than Ever
About Global Impact

04

Portfolio
Portfolio by Pillar
Portfolio by Primary United Nations Sustainable Development Goals
Portfolio Changes

08

Thematic Insights
Narrowing the Health Care Gap
Circular Economy and Waste Reduction

13

Measurement
Measuring Impact and Outcomes
Impact Outcomes
Pillar 1—Climate and Resource Impact
Pillar 2—Social Equity and Quality of Life
Pillar 3—Sustainable Innovation and Productivity
Carbon Footprint

34

Active Ownership
Accelerating Impact Through Active Ownership
Engagement
Case Study­—Thermo Fisher Scientific
Case Study—Ingersoll Rand
Proxy Voting

44

Resilience
Pursuit of Good Outcomes45

Appendix
Portfolio Holdings
Engagement in Action
Global Impact Equity Team
Impact Glossary| 01

APPENDIXINTRODUCTIONCONTENTSPORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEThe Need to Make an Impact
Is Greater Than Ever
It has been another period of extremes for capital markets, the environment, and society.
It was marked by one of the fastest interest rate hike cycles in history as central bankssought to control spiraling inflation, driven in part by one of the standout positives from2022, the exit from the worst of the pandemic. Many have also endured record-hightemperatures, bringing into focus environmental change and elevating concerns overglobal warming and its destructive influence. War continued in Europe as the RussiaUkraine conflict moved into its second year. Global equities moved lower during theperiod, with caution and a reset of expectations the dominant themes of the market.
As the political, economic, and investment landscape has evolved once more, anadditional theme has emerged—sentiment fractures directed toward ESG policymaking.
A lack of consensus over ESG label definitions and analytical practices remains an
issue, together with an ongoing need to strengthen the alignment of all stakeholders
on the intended real-world progress that sits behind the policy. This is where webelieve impact investing can be part of the solution, by creating clearer research andmeasurement frameworks that reduce the scope for greenwashing, while better aligning
stakeholders with their intended goals. Concerns have also been raised regarding thealignment of ESG policymaking and financial returns, following a period that has clearly
been challenging for many values-based investors. Here we remain steadfast in ourview that we are seeing growing demand for solutions from the corporate sector that
address global environmental and societal pressure points. This is likely to continue,
providing real opportunity to identify companies where impact and financial returns arecompounding and growing.
By applying and sharing our impact processes, we believe we are contributing to theprogression of the industry as debate grows over how investors can develop researchframeworks, exert more influence on corporates through engagement and further
the measurement of outcomes and impact. We could not be more excited about theprospects for impact investing and the focus of the many to make a real world positive
contribution. We believe that concerns over energy dependency will hasten investments
in a cleaner-energy future, accelerating net zero ambitions that are lagging targets.
Beyond energy, the health care sector embodies investment and change, particularlyin the wake of the coronavirus pandemic, which highlighted the need for more robust
health care systems and investments in improved patient outcomes.
Looking back, the pandemic has resulted in widening inequality in certain communities
around the globe. The forecast funding gap to help realize the United Nations Sustainable
Development Goals by 2030 has widened to USD 5 trillion – USD 7 trillion per annum
over the last year.1 However, impact investing offers meaningful opportunities to gosome way toward addressing this funding gap.
Investing in the right companies that seek to address environmental and societalpressure points is ever more pressing. Our efforts to identify these opportunities anddemonstrate their impact journeys is reflected in this annual report.

1

Source: United Nations| 02

Hari Balkrishna
Portfolio Manager,
T. Rowe Price Global
Impact Equity FundWe could
not be more
excited about
the prospects
for impact
investing andthe focus of
the many tomake a realworld positive
contribution.

APPENDIXCONTENTS

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About Global Impact
The T. Rowe Price Global Impact Equity Fund was inspired by our desire to proactively addresssome of the challenges confronting our planet and society. We believe impact investing can bepart of the solution to address these challenges—via conscious allocation of capital, company
engagement, and skilled execution.
Our approach targets underappreciated impact, in
combination with mispriced future economic returns,
on a truly global, stock-by-stock basis. Investing incompanies that we believe are on the side of secularchange that aligns with our impact goals, is key tounlocking improving economic returns in businessmodels, especially in an era of shifting consumer,
business, and regulatory preferences. We believe stocks

that deliver positive environmental and/or social impact
have the potential to offer better topline and bottom-line
growth prospects than the overall market. Aligning with
the UN Sustainable Development Goals (UN SDGs),
we apply a forward-looking, research-driven, and highconviction approach, analyzing the full breadth of impact
opportunities available in an evolving and complex world.

Our Impact Charter
Societal, regulatory, and fiduciary dynamics are driving
meaningful change across a range of environmental
and social fronts. As companies shift investments toaddress global pressure points, the opportunity to ownbusinesses in public equity markets with the potential
to create a positive impact on society and the planet isbroader than ever.

Generating impact, however, goes beyond investing incertain types of companies. It draws active ownership—
directing capital toward desired impact outcomes andencouraging change through impact-oriented company
engagements and active proxy voting. Our impact
approach is framed around four principles—material,measurable, additional, and resilient.

MATERIAL

MEASURABLE

ADDITIONALRESILIENT

We base our stockinclusion criteria
on a corporation’s
activities and itsalignment with clearly
defined impact
pillars, using revenue
inclusion criteria,
always accounting
for dimensionsof positive futurechange.

We quantify
outcomes
individually andcollectively where
possible as wetranslate impact
intentionality intoa measurement
framework.

We aim tocapture positiveenvironmental and/or social outcomeson a global basis,
but we also commit
to using our scaleand resources
to promote andprogress the impact
agenda.

In an era of
disruption andextreme outcomes,
positive change
has to be durable.
Learning, patience,and collaboration
will be key inpursuing good client
outcomes.

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INSIGHTSPORTFOLIO

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Portfolio by Pillar*
As of December 31, 2022

Building Sustainable
Industry and Infrastructure (0%)
Cash (3.4%)

Sustainable Technology
Enhancing Qualityof Life (4.4%)

Reducing Greenhouse
Gases (GHGs)

5.5%

2

6%
6.
10
.0%

30.5%

Improving Health

Promoting Healthy
Ecosystems (3.0%)
Nurturing Circular
Economies

16.7%

Enabling Social Equity

Climate andResource Impact
39.5% (43.5%)

Social Equity
and Quality of Life
51.6% (50.7%)

Sustainable Innovation
and Productivity
5.5% (5.2%)

Reducing Greenhouse
Gases (GHGs)
2022: 26.6% (30.6%)

Enabling Social Equity
2022: 16.7% (17.0%)

Sustainable Technology
2022: 5.5% (5.2%)

Promoting Healthy
Ecosystems
2022: 3.0% (2.6%)

Improving Health2022: 30.5% (30.6%)

Building Sustainable
Industry andInfrastructure2022: 0.0% (0.0%)

Nurturing Circular
Economies
2022: 10.0% (10.4%)

Enhancing Qualityof Life2022: 4.4% (3.1%)*Pillars are proprietary to T. Rowe Price and were developed for the purpose of aligning portfolio holdings according to the impact being delivered.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. We have also included data as of December 31, 2021 (inparentheses to reflect the change over the previous period reporting). Cash weighting for 2021 was 0.6%. Subject to change without notice. Figures may
not total due to rounding.
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Portfolio by Primary United Nations
Sustainable Development Goals
 Agilent Technologies
 AIA Group Alexandria Real Estate
Equities AstraZeneca
 Becton Dickinson
 Daiichi Sankyo

 Danaher Eli Lilly EssilorLuxottica
 Evotec Hamamatsu Photonics
 Intuitive Surgical Koninklijke DSM

 Lonza Group Sartorius
 Stryker
 Thermo Fisher Scientific UnitedHealth Veeva Systems
 Zoetis Badger Meter Mueller Water Products

 Atlassian
 Brookfield Renewable
Partners

 Hubbell Ingersoll Rand
 Linde NextEra Energy Partners
 Nibe IndustrierP G & E Rockwool
 Roper Technologies
 Schneider Electric ASML Bank Central Asia
 Synopsys
 TSMC Ashtead Group Ball Corporation
 Darling Ingredients
 IDEX Corporation

 Sika SolarEdge Technologies
 Tesla Trane Technologies
 Trimble

 Axis Bank
 Bright Horizons Family
Solutions Chailease Holding HDFC Bank Hubspot

 MSA Safety

 Intuit Kanzhun Nu Holdings
 OneMain Holdings
 Shopify

 Keyence Tomra Systems
 Trex Waste Connections

 Fortinet

Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice.
The securities shown represent 100% of the publicly traded securities held in the portfolio. There were no holdings primarily aligned with UN
SDGs 1, 2, 4, 5, 11, 13, 14, 15, or 17. The specific securities identified and described do not represent all of the securities purchased, sold, or
recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified and discussed were or
will be profitable.
Source for images: United Nations. The trademarks shown are the property of their respective owners. Use does not imply endorsement,
sponsorship, or affiliation of T. Rowe Price with any of the trademark owners.
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INTRODUCTION

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Portfolio Changes
Top 5 investments added*
UNITEDHEALTH GROUP
As the largest U.S. health insurer, UnitedHealth Group provides a financial safety
net to its customers to facilitate improved access to health care. The company isdifferentiated from its peers given it has the largest presence of any managed carecompany in Medicare Advantage. Its value-based care business also helps drive
improved patient outcomes and lower costs for the entire health care system, while its
focus on utilizing technology enhances its ability to deliver more effective care.
DARLING INGREDIENTS
Darling is one of the oldest rendering companies in the world. Its rendered products,
which would otherwise be discarded, are transformed and recycled for use as
specialty ingredients, fertilizers, and feedstock for biodiesel fuel. While it contributes
highly to the circular economy by reducing the amount of waste sent to landfills, its
joint venture with Valero/Diamond Green Diesel, is one of the largest producers ofrenewable diesel—a low-carbon diesel replacement that utilizes animal fats from therendering process as feedstock.
BALL CORPORATION
Ball Corporation positively contributes to the circular economy by producing
packaging that is highly recyclable. Its beverage aluminum containers have a highrecycled content (>60% recycled content)1 and, as such, reduces the amount ofwaste sent to landfills and lessens the need to extract additional natural resources.
Its circular manufacturing model helps to lessen the environmental impact of the
packaging industry and lowers the dependence on fossil-based materials, suchas single-use plastics.
INGERSOLL RAND
Ingersoll Rand manufactures flow control products such as compressors, pumps,
and vacuums for a range of global customers in various industries. Studies
have estimated that energy use in buildings and industry represent roughly 40%
of global greenhouse gas (GHG) emissions. The company’s products contributeto decarbonization by improving energy efficiency across industries and enablingcustomers to reduce their carbon footprint. It also provides products for water
management, including purification and efficient consumption.
NEXTERA ENERGY PARTNERS
NextEra Energy Partners (NEP) is one of the largest producers of renewableenergy in the U.S. The company operates an industry-leading portfolio of wind, solar, andbattery storage assets, which supports the decarbonization of the power sector in
the U.S. While NEP does own a natural gas pipeline business (which it is divestingfrom), its development pipeline is 100% renewable energy. We believe NEP is helping
to contribute to the urgent need to increase the share of renewable energy in the
global energy mix.
* Transactions made through calendar year 2022.
1
Source: Ball Corporation 2022 Annual Report..
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Portfolio Changes
Top 5 investments eliminated*
NEXTERANextEra is a leader in renewable energy generation in the U.S. and one of the largest
investors in renewable energy globally. While the company is a clear contributor
to the electrification and decarbonization of the power grid, we decided to switch
our position into NextEra Energy Partners (NEP), given the greater alignment of its
business mix with decarbonization objectives.

CHARLES SCHWAB
While we believe that Charles Schwab is enabling financial inclusion and improving
financial stability, our confidence diminished that this was true for households toward
the bottom end of the socioeconomic pyramid. As such, we chose to eliminate ourposition in the third quarter of 2022 in favor of companies where socio-economic
impact was more easily evidenced.

SALESFORCE
Our position in Salesforce was oriented around the view that the company iscontributing to the reduction of GHGs. Its customer relationship management
software, which is predominantly cloud-based, is inherently more energy efficientthan on-premises alternatives and enables end clients to reduce their carbon
footprint. However, sourcing reliable and quantifiable metrics related to GHG
savings from the use of the company’s platform was challenging, so we decided
to eliminate our position in the fourth quarter of 2022.

SERVICENOW
ServiceNow is a leader in cloud-based workflow software, and we believe that its
platform is contributing to increased energy and resource efficiency relative to onpremises software solutions. Enabling GHG savings is a cornerstone of the impact
thesis, but, like Salesforce, our ability to evidence real-world, reliable metrics has
been limited, so we decided to eliminate the position in the fourth quarter of 2022.

PROLOGIS
The world’s largest owner of industrial distribution space, Prologis is a leader
in certified green buildings, far surpassing the industrial average as a percentageof the total portfolio. As global interest rates began to rise, the stock held up well,
but our view that real estate would suffer amid rising rates and waning warehousedemand weakened our thesis; hence, we opted to eliminate in early 2022.

* Transactions made through calendar year 2022.
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INTRODUCTION

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INSIGHTSPORTFOLIO

MEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

THEMATIC INSIGHTS

Narrowing the Health Care Gap
The Challenge
Healthy lives and societal well-being are intrinsically linked
to sustainable development. The coronavirus pandemic
brought into sharp focus the critical importance of global
health care investment, innovation, and access. While
tremendous progress has been made since the United
Nations (UN) announced its Millennium Development
Goals, which focused on child mortality, maternal health,
HIV/AIDS, and malaria, many of the other top 10 causes ofdeath globally have increased in frequency over the past
20 years. These include cardiovascular disease, cancers,
Alzheimer’s disease, and diabetes.1 Since the pandemic,
mortality rates of respiratory-related disease have also
increased sharply, reversing a long-term trend of decline.

Noncommunicable diseases continue to create asignificant burden globally, but particularly in developing
nations where disease can be a significant factor leading
to deprivation. The UN estimates that the cumulative
economic losses incurred by low- and middle-income
countries from cardiovascular disease, cancer, chronic
respiratory disease, and diabetes alone are likely tosurpass USD 7 trillion by 2025. While social security
networks typically help to provide health care for manyin the developed world, it is often not the case in theemerging world. Meanwhile, aging populations are
creating distinct health care burdens that must be met
in an affordable way, with innovation in therapeutic
treatments and investment in infrastructure.

Top 10 Causes of Death Globally, 2019
Cardiovascular
Disease18.56 million
10.08 million

Cancers
3.97 million

Respiratory Diseases

1	 Digestive Diseases

2.56 million

Lower Respiratory
Infections

2.49 million

Neonatal Disorders

1.88 million

Dementia

1.62 million

Diabetes

1.55 million

Diarrheal Diseases

1.53 million

Liver Diseases

1.47 million

05000000

Source: IHME, Global Burden of Disease (2019).

10000000 15000000 20000000| 08

CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEThe Role of Investors
Better health care outcomes require the alignment ofmany stakeholders, including government, philanthropic
bodies, and private research. One of the most remarkable
outcomes from the pandemic was the speed at which
the global scientific community responded, applying
a magnitude of research and development (R&D) thatyielded the fastest vaccine delivery in history.

2	 At the heart of the timeline—between the Chinese
government sharing the genetic sequence of COVID-19(January 2020) and the outcome of mass trials of COVID
vaccines (December 2020) by Moderna and Pfizer/
BioNTech—was a new level of alignment in terms ofgovernment and private sector interests. This helped
significantly compress the timeline of drug development
to release from the average 10-years estimate.2 While thepandemic was exceptional, much can be learned from thiscollective effort and potentially applied to address the global
health care needs of an expanding and aging society.

Source: McKinsey Pharmaprojects, October 2020.

Treatment and Therapy
There is significant debate about whether the pandemic either catalyzed or crowded out research
into new therapies. But there is no doubt the pandemic had an incredibly disruptive impact on
normal health care routines, including screening, identification, and prompt treatment of disease.
With many of the largest causes of death still rising, the need to invest and further the efficacyof treatment has increased sharply. Here, we see real cause for optimism in many areas. For
example, considerable progress is being made in antibody drug conjugate treatment for cancer
by companies such as Daiichi Sankyo and AstraZeneca, enabling more targeted chemotherapy
delivery for patients.
Breakthroughs in drug development for diabetes and Alzheimer’s by Eli Lilly are also highly
encouraging, with potential to treat vast numbers of sufferers globally. Finally, with a backlog of
medical procedures for health care systems to contend with, technology is playing a significant
role in helping to treat patients with scale and efficiency. Here, the potential of robotic surgery is
being explored and developed by companies like Intuitive Surgical.

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Narrowing the Insurance Gap
According to the World Health Organization (WHO), universal health coverage is defined as theambition for “all people to have access to health services they need, without financial hardship.”
However, approximately 100 million people are pushed into extreme poverty each year becauseof out-of-pocket health expenses, which partly underlies WHO’s goal of “1 billion more people
benefiting from universal health coverage.”
Arguably, the largest unmet need is in the developing world where the absence of public healthcare systems and lack of insurance protection has been exacerbated by rapid population growth.
The private sector, however, is playing a critical role in tackling coverage issues. AIA Group in Asia
(case study to follow) is one of the largest entities helping to provide both health and life insurance
to individuals across Southeast Asia.
The benefits of better health care coverage are universal, however. According to a study
published by Lancet Public Health in 2022,3 those states in the U.S. with Medicaid expansion
have 11.8 fewer deaths per 100,000 adults per year than those without. UnitedHealth is one
such company that is helping to address the gap in coverage. The company is one of the largest
health care insurers in the U.S. and an operator for Medicaid services. By expanding its valuebased case and in-home clinical care, UnitedHealth is broadening out health care access at alower cost to many more Americans.

Enabling Innovation and Impact
Mobilizing global health research and development is a significant goal for WHO. R&D in healthcare is essential to achieve many of the targets set by the UN Sustainable Development Goals,
notably those within Goal 3, “Good Health and Well-Being.” It is estimated that the annual investment
gap to achieve the objectives within Goal 3 is approximately USD 140 billion.4 This will require
publicly listed companies to plug the funding gap and provide the products and services that canaccelerate progress.
Despite many technological breakthroughs over the past 20 years, there remains real complexity
in safe drug development, necessitating investment by a network of companies that research andproduce small molecules, biologics, and gene therapies. The enablers of these technologies, suchas Thermo Fisher Scientific, Agilent, Lonza, Sartorius, Evotec, and Danaher, are leading thecharge in mobilizing global health R&D and enabling the health care industry to innovate betterand become more cost efficient.

3	 
4	 

thelancet.com
springer.com| 10

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INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

THEMATIC INSIGHTS

Circular Economy
and Waste Reduction
The Challenge

The Role of Investors

One of the most pressing issues for our planet is the
speed at which we are consuming our natural resources
and the waste that results from that consumption.
Population growth and a secular trend of rising personal
consumption result in an estimated 2.24 billion tons ofwaste creation per year, amounting to a footprint of 0.79
kilograms per person per day.1 While estimates varyby study, in 2021 the United Nations (UN) estimatedthat 300 million tons of plastic waste alone was being
created annually, an amount that is almost equivalent
to the entire weight of the human population.2 Humans
inhaling and consuming microplastics via our air and foodchains is now a harsh reality of our collective footprint,emphasizing the urgency needed to address the problem.

Any solution to the growing waste issue demands a
scaled response. This will mean a combination of public
and private infrastructure investment, government
incentives, and societal engagement to engender
the behavioral change needed. Encouragingly, many
companies are starting to recognize the benefits ofmore efficient consumption and are identifying growing
customer demand. Within our impact investment
universe, we have identified several firms that are
helping to advance the push toward a circular economy
in areas that include product innovation, recycling andpackaging, and waste management.

Reducing waste as the global economy grows and as
standards of living rise will be difficult, but the principleof sustainable consumption and resource management
can be addressed by transitioning to a more circular
economy. We need to move from an inherent make-useand-dispose economy to a model that focuses on thecontinuous and recycled use of resources to help reduce
waste and its negative impact on the environment.

1	 
2	 

Source: The World Bank, Solid Waste Management report, February 11, 2022.
Source: Pollution to Solution UN Environment Program, October 21, 2021.
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Innovation in Products and Services
Rethinking production techniques and finding ways to innovate the manufacturing process tohelp reduce waste are critical to the shift to a circular economy. One impactful way of improving
resource use is to create products from waste itself, as is the case for Trex, a wood manufacturer
based in the U.S. Its composite decking, made in part from plastic from landfill and recycledwood, is a notable example of the type of innovation companies are developing to solve for these
problems. Reducing duplication and under-utilization of products is another highly effective wayof cutting waste. Ashtead, a construction equipment company, leases out its steel machinery
equipment to help lift the utilization rate of privately owned and steel-intensive machinery (froman average of 16% to Ashtead’s own utilization rate of 70%), thus saving carbon emissions fromsteel production.

Waste Management and Reduction
One very damaging, but less discussed aspect of waste is its propensity to generate methane as it
decomposes. Methane has a global warming potential of between 84 and 87 over a 20-year life span
(carbon dioxide is the reference point of 1 on this scale).3 By investing in methane recovery systems at
its waste sites, Waste Connections is helping to mitigate the release of methane into the atmosphere.
The firm also manages recovery and recycling, primarily from paper and cardboard. Darling
Ingredients (case study to follow) is also engaged in waste reduction and methane avoidanceby manufacturing biofuel from the byproducts of animal processing and rendering.

Recycling and Packaging
Estimates of the global total amount of plastic recycled range between just 10% and 20%.4
With approximately 11 million tons of plastic waste entering our oceans per annum (an amountestimated to triple in the next 20 years), there is a huge amount to be done to address the problem.
We believe the long-term solution requires a dramatic rethink of packaging and a shift away fromplastics. In the interim, recycling has a key role to play in the transition. Countries like Norway
are leading the way with policy, implementing a deposit return scheme that has helped drive
the recycling rate of polyethylene terephthalate bottles up to around 97%.
Tomra (case study to follow) has been at the vanguard of the recycling process, with a
mission to increase its collection of containers from 45 billion to 500 billion by 2030. Meanwhile,
Ball Corporation’s highly recyclable packaging is also contributing positively as its aluminum
beverage containers have high recycled content of greater than 60%, which helps to reduce theamount of waste entering landfills. Aluminum recycling has around 5% of the carbon intensity
compared with other products. It is also true that about 75% of all aluminum ever produced is stillin use today.5 Almost 70% of aluminum cans are recycled, making them the most recycled drinking
container on the planet.3  
3	 
4	 
5	 

Source: United States Environmental Protection Agency
OECD Global Plastics Outlook Database (2019)
Source: world-aluminium.org| 12

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Measuring Impact and Outcomes
Impact Due Diligence—Five Dimensions Framework
A key part of our impact due diligence is defining and evaluating key performance indicators (KPIs) for each
investment.1 We utilize the five dimensions of impact framework.2 This framework helps assess a company’s
ability to deliver impact on a holistic basis, including any risks.

WHAT

HOW MUCHWHO

CONTRIBUTION

RISKSDetermine theimpact outcome
being targeted

Quantify thescale, depth,and durationof outcome
experienced by
the stakeholders

Identify thebeneficiaries—
people or planet

Assess thecompany’scontribution of theoutcome relative
to what would haveoccurred anyway

Evaluate the risks
to people and theplanet if impact is
not delivered as
expected

Impact Measurement—Theory of Change
We use a “Theory of Change” model for impact measurement and reporting. This framework helps evaluate
and measure impact over time by identifying how the activities of a company lead to particular outcomes.

Impact Journey
INPUT

OUTPUTOUTCOME

IMPACT

Financial,human, ormaterial
resources thecompany puts
into its business
operations

Products orservices that
result from thecompany’s
business
activities

Short- tomedium-term
effect on
stakeholders
attributable toa company’s
products orservices

Long-term effecton the planet or
society caused
by a company’s
products orservices

The use of impact KPIs is not intended to provide a forward-looking view on the likely performance of each issuer held in the portfolio. Instead
it is intended to document how we will assess the positive additional impact that each issuer’s economic activities are having on the planet. For
example, we would note that increasing revenue streams from sustainable economic activities does not necessarily equate to increasing profits.
Our investment analysis focuses on the profitability and perceived value of each issuer held in the portfolio, but this is not part of the impact KPI.
2
Source: Impact Management Project (IMP).
See Glossary for details on KPIs.
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THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Impact Outcomes
Companies in which the portfolio invests delivered
positive outcomes across many areas of impact. We
primarily measure impact at the company level. However,
we aggregate these data points across companies
where available and where it makes sense to do so.
For example, where KPIs and measurement outcomes

have a similar characteristic. Here, we present theestimation of short-term outcomes as well as long-term
impact delivered by a sample of companies we invest in(approximately 55% of assets under management), using
annual reports as well as third-party impact estimations.

Climate and Resource Impact

5,500

13.4 million

29.9 million

Tesla (0.9%)

Badger Meter* (1.7%) and Mueller
Water (1.3%)

204,400

155 million

Ashtead† (1.4%)

Trex (0.6%), Darling Ingredients(1.8%), Ball Corporation* (1.8%)

46.1 million

49,000197.5 million

NextEra Energy Partners* (1.7%),
PG & E (1.7%), and Brookfield
Renewable Partners (1.7%)

Waste Connections†1(1.8%)

Linde (2.9%), Nibe* (0.7%), Sika*(0.8%), Trane (2.0%)

TERRAWATT HOURSOF ENERGY SAVED
from use of insulation
products
Rockwool (1.5% portfolio weighting)

31 million

METRIC TONS OF CO 2 e
MITIGATEDby solar energy equipment
solutions

METRIC TONS OF CO 2 e
MITIGATEDby electric vehicle production

METRIC TONS OF STEELPRODUCTION AVOIDED
by rental services

SolarEdge (1.0%)

METRIC TONS OF CO 2 e
MITIGATEDby renewable energy
generation

METRIC TONS OF
PLASTIC DISPOSAL
diverted by waste
management systems

CUBIC METERS OF
WATER SAVED
by firms’ products

METRIC TONS OF WASTEAVOIDEDthrough recycling

METRIC TONS OF CO 2 e
MITIGATED
industrial and construction
solutions| 14

CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Social Equity and Quality of Lifeand Sustainable Innovation and Productivity

36.1 million
JOBS SUPPORTED
through lending services,primarily within emerging
markets†

Axis Bank (2.5%), HDFC Bank (2.7%),
Bank Central Asia (2.0%), Chailease (1.7%)

268.7 billion
USD IN CREDIT
outstanding to Retail and SME
clients in Emerging Markets

95,000

13 million

AstraZeneca (1.4%), Eli Lilly (1.6%),
Daiichi Sankyo (1.7%)

Bright Horizons (1.1%)

LIVES EXTENDED
through pharmaceuticaltreatments†

58 million

2.3 million

PEOPLE INSURED
by protection solutions

WORKERS PROTECTED
by fall protection systems
and industrial helmets

AIA (2.2%)

Axis Bank (2.5%), HDFC Bank (2.7%),
Bank Central Asia (2.0%), Chailease(1.7%), Nu Holdings (0.9%)

MSA Safety † (1.3%)

448 million

1.9 million

Becton Dickinson (1.5%), Intuitive
Surgical (2.0%), Stryker (1.0%),
Thermo Fisher Scientific (2.6%)

Intuitive Surgical (2.0%)

PATIENTS TREATED
by medical devices andsurgical equipment

PEOPLE PROVIDED WITH
BACK-UP CARE
capacity and access to
educational services

10.5 billion

ROBOTIC SURGERIESCONDUCTED
by surgical technology

USD SPENT ON RESEARCH
AND DEVELOPMENTin sustainable technology
solutions
ASML (2.5%), Synopsys (1.5%), and
TSMC (1.5%)* T. Rowe Price estimates.
†
Net Purpose estimate.
1
Based on 2021 company data.
For illustrative purposes only. The impact outcomes provided here can be susceptible to potential inconsistencies due to lack of precise information.
Companies do not measure or report in a consistent or uniform way. Where information is not available we have not included a company’scontribution within the impact outcome. This means that these estimates may actually be conservative, but as companies get better at measuring
impact we expect these data points to become even more precise.
Individual company results may vary significantly and may not achieve the same level of impact in the future. Based on company-reported data.
CO2e: carbon dioxide equivalent or CO2 equivalent. This metric is used to compare the emissions from various greenhouse gases on the basis of
their global-warming potential, by converting amounts of other gases to the equivalent amount of carbon dioxide with the same global warming
potential. Source: Eurostat.
| 15

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTS

Climateand Resource
ImpactReducing Greenhouse
Gases (GHGs)

Promoting Healthy
Ecosystems

Nurturing Circular
Economies

MEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXPROMOTING HEALTHY ECOSYSTEMS

Badger Meter
Pressure Points

PRIMARY UN SDG

Global water use has increased by approximately 1% every year since the1980s, primarily due to rising industrial and domestic demand, creating
global pressure on supplies.1 Approximately 16% of all treated water in
the U.S. is lost through leaks and other system inefficiencies, equating to
6.4 billion cubic meters of wasted drinking water. This costs the nation
approximately USD 2.6 billion annually.2

IMPACT PILLAR
Climate and Resource Impact

Impact Thesis
Badger Meter manufactures flow measurement and control products
for municipal and utility water/wastewater and several industrial
markets. We attribute nearly 100% of its revenue to sustainable
activities. This combines its Utility Water segment (approximately 80%
of revenues), which includes water flow measurement, control anddistribution solutions, and its Flow Instrumentation Products segments(approximately 20% of revenues), which includes flow control andmeasurement solutions for commercial and industrial applications.3

IMPACT SUB - PILLAR
Promoting Healthy Ecosystems
IMPACT JOURNEY
Input
USD 6 million of investment
in 2022 including acquisitions
and capital expenditures3

KPI: Water saved from use of products

Five Dimensions of Impact

OutputBroad range of products
and services to help detectleaks in water pipeline
infrastructure

What: Enable efficient water conservation and consumption throughadvanced metering and leak detection solutions.
Who: Planet
How much: Badger Meter’s technology can drive approximately 25
million cubic meters of annual water savings globally.4

Outcome
Improved efficiency of leakdetection and water pipe
damageContribution: With a business solely focused on water conservation andmanagement, Badger Meter has broadened its product pipeline, service
provision, and technology to enhance water use efficiency.
Risks: Potential product issues and system outages can lead to productquality and safety issues.

Impact25 million cubic meters ofwater saved4

Progress Monitoring
In 2022, the company set a renewed and more ambitious reduction target
for GHG of 50% (from a 2020 baseline) by 2030, materially improving its
conviction with respect to reducing its footprint.3

United Nations World Water Development
Report 2023
United States Geological Service
3
Badger Meter 2022 annual report
4T. Rowe Price estimate based on 2022
Badger Meter company data.
1

2

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CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Case Study

REDUCING GREENHOUSE GASES (GHGs)

Brookfield Renewable
Partners

PRIMARY UN SDG

Pressure Points
Fossil fuel combustion accelerates climate change through the greenhousegas (GHG) emissions they emit. While estimates continue to develop,
research suggests that fossil fuel air pollution is responsible for over 8 million
deaths annually.1 The Intergovernmental Panel on Climate Change (IPCC)
projects tremendous damage to the global ecosystem and human society if
temperature increase cannot be limited to 1.5 degrees.2 Energy generation
constitutes over 35% of global carbon emissions,3 making it imperative todecarbonize the energy sector to meet the 1.5-degree Celsius target.

IMPACT PILLAR
Climate and Resource Impact
IMPACT SUB - PILLAR
Reducing Greenhouse Gases(GHGs)

Impact Thesis
Brookfield Renewable Partners is one of the largest hydro, solar, andwind electricity providers in the world, generating zero carbon electricity
across multiple geographies. The company plays a key role in the global
energy transition by using clean sources for electricity generation.

IMPACT JOURNEY
Input
USD 4,600 million invested(USD 2,200 million of capexand USD 2,400 million of
acquisitions)5

KPI: Carbon emissions mitigatedFive Dimensions of Impact
What: Decarbonizing the power sector by investing in renewable wind,solar, and hydro infrastructure and energy production.

OutputAvailability of clean electricity
in North America, Europe,
Latin America, and Asia

Who: Planet and people
How much: The company helped mitigate 33 million tons of carbon
emissions t(CO2e) in 2022 as its renewable energy assets generated 69.7
TWh (Terawatt Hour) of alternative energy.4 Both of these figures grew 14%
year-on-year from 2021.

Outcome69.7 TWh clean energy
generated4

Contribution: The company has committed to doubling its operating
portfolio by 2030 to respond to demand dynamics and the overall
challenge of decarbonization. Brookfield has one of the lowest carbon
footprints in the sector (in terms of emissions per kWh (Kilowatt Hour)of power generated) and has reduced its own Scope 1 and 2 emissions
by over one-third since 2018, even as the business has grown.4

Impact33 million tCO2e emissions
mitigated4

Risks: Changes in regulatory frameworks or tariffs that slow thedevelopment of additional renewable capacity, or that worsen theeconomics of existing projects. Potential negative biodiversity impact
from hydro projects.
Leah Burrows (2021). “Deaths from fossil fuelemissions higher than previously thought.”
Published online at Harvard.edu
2Intergovernmental Panel on Climate Change(IPCC) Sixth Assessment Report (2021)
3
United States Environmental Protection
Agency. Global Greenhouse Gas Emissions
Data
4
Brookfield Renewable Partners 2022 ESG
Report5
Brookfield Renewable Partners 2022 Annual
Report1

Progress Monitoring
Brookfield has set clear goals for its business, which are aligned withdecarbonizing our planet. In its 2022 ESG report, it provided good datawith respect to progress against these goals. It is encouraging to seethat the business is on track with respect to adding installed capacity.
The firm has continued to build renewable capacity into 2023 with theacquisition of Duke Energy renewables.
| 18

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXNURTURING CIRCULAR ECONOMIES

Darling Ingredients
Pressure Points

PRIMARY UN SDG

In the past 50 years, meat production has more than tripled, accounting
for more than 340 million metric tons each year.1 Every kilogram ofedible meat produced is estimated to generate 620 grams of animal byproduct. By recovering proteins and fat from animal by-product and otherfood waste/residues, a contribution is made to the circular economy,
reducing GHG emissions and improving biosecurity.

IMPACT PILLAR
Climate and Resource Impact

Impact Thesis
Darling Ingredients utilizes waste from the meat industry and usedcooking oils to produce products including animal feed and bioenergy.
Its processes reduce waste to landfill and GHG emissions given that in
the meat production process, only about half of the animal is ultimately
used for food. The company also operates a joint venture with refining
expert Valero, producing renewable diesel that utilizes animal fats fromthe rendering process as feedstock. The low-carbon diesel produced
has up to 80% lower GHG emissions than fossil fuel-based fuels.2

IMPACT SUB - PILLAR
Nurturing Circular Economies
IMPACT JOURNEY
Input
USD 2,400 million investment
into rendering and biodiesel
infrastructure (includes capex
and acquisitions) in 20223

KPI: Waste avoided; carbon emissions mitigatedFive Dimensions of Impact
What: Transformation of waste product into usable and speciality ingredients

OutputProduction of green energy,
renewable diesel, fertilizer
and animal meals from wastematerials

Who: Planet
How much: Darling Ingredients processes approximately 15% of global
meat industry waste. In 2022, the company processed 13.9 million tonsof waste which represented an increase of 23% year on year.2
Contribution: The firm is an industry leader in U.S. waste processing.
It opened a new renewable diesel plant as part of its ongoing capex
to increase capacity, while doubling European renewable energy
production in 2022.

Outcome13.9 million tons of waste
avoided2

Risks: While we believe the company has appropriate risk mitigation
practices in place, workplace accidents have occurred resulting in
fatalities, while the company has also been fined over wastewaterpollution, air pollution and foul odours coming from factories.

Impact15.5 million tCO2e emissions
mitigated4

Progress Monitoring
Having engaged with Darling in 2021 and 2022 on their businessand ESG reporting, we welcome the release of the company’s 2022
Sustainability Progress Report which furthers disclosure. California’s
low carbon fuel standard (LCFS) and similar programs continue to drive
demand for renewable diesel, but feedstock competition and inflationand changes in incentives are influencing sentiment toward the industry
in the short term.

OurWorldData.org
Darling Ingredients 2022 Sustainability
Report3
Darling Ingredients 2022 Annual Report
4
Net Purpose estimate
1
2

| 19

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXPROMOTING HEALTHY ECOSYSTEMS

Mueller Water Products
Pressure Points

PRIMARY UN SDG

Global water use has increased by approximately 1% every year since the1980s, primarily due to rising industrial and domestic demand, creating
global pressure on supplies.1 Approximately 16% of all treated water in
the U.S. is lost through leaks and other system inefficiencies, equating to
6.4 billion cubic meters of wasted drinking water. This costs the nation
approximately USD 2.6 billion annually.2

IMPACT PILLAR
Climate and Resource Impact

Impact Thesis
Mueller Water Products helps municipalities deliver clean, safe drinking
water and manufactures fire hydrants to improve the safety of properties
and life. We attribute approximately 90% sustainable revenue alignment towater infrastructure and flow control products for use in water distribution
networks, water and wastewater treatment facilities, and fire protection
piping systems. We exclude exposure to natural gas utilities, which accounts
for roughly 10% of company revenues.3

IMPACT SUB - PILLAR
Promoting Healthy Ecosystems
IMPACT JOURNEY
Input
USD 55 million of investment
in 2022 including acquisitions
and capital expenditures3

KPI: Water saved from use of products

Five Dimensions of Impact
What: Improve the conservation of clean, safe drinking water throughtreatment, distribution, and leak detection solutions.

OutputBroad range of products andservices that increase accessto clean and safe drinking
water and minimize water loss

Who: Planet
How much: Mueller’s EchoShore® leak detection product saved
approximately 4.9 million cubic meters of water.4
Contribution: Mueller’s EchoShore® product has saved 10.6 million
cubic meters of water for customers since 2020 with a target of 29.1
million cubic meters by 2027.4

Outcome
Replacement of aging, andbuild-out of new, water
infrastructure supports
resilience to climate change
events such as high-volume
rainfall or drought

Risks: Potential product issues and system outages can lead to productquality and safety issues.

Progress Monitoring
The firm is progressing toward its goal to save 29.1 million cubic metersof water by 2027 and impact disclosure has improved, which we welcome.
We would like to see additional disclosures and detail related to how thecompany is achieving its progress. We are keen to see how the company
might benefit from the U.S. Infrastructure Investment and Jobs Act, signed
into law in 2021.

Impact
4.9 million cubic metersof water saved through useof Mueller’s EchoShore® leakdetection product4

United Nations World Water Development
Report 2023
United States Geological Service
3
Mueller 2022 annual report
4
Mueller Water 2022 ESG Report
1

2

| 20

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXNURTURING CIRCULAR ECONOMIES

Tomra Systems
Pressure Points

PRIMARY UN SDG

Production of material resources, such as plastics and aluminium,
largely relies on extraction of primary resources resulting in high GHG
emissions. The facilitation of recyclable waste collection and sorting canreduce demand for primary resources, mitigating carbon emissions.

Impact Thesis

IMPACT PILLAR
Climate and Resource Impact

Tomra Systems is a key enabler of the circular economy by promoting
waste collection and recycling. The company’s largest operating segments
include collection solutions via its reverse vending machines for drink
containers. It also manufactures sensor-based sorting machines for the
food and waste industries, which optimize processing and reduce waste.

IMPACT SUB - PILLAR
Nurturing Circular Economies

KPI: Carbon emissions mitigated

IMPACT JOURNEY

Five Dimensions of Impact

Input
Investment of NOK 831 billion
into products that enable
recycling in 20221

What: Reduction of waste and partial mitigation of the environmental
consequences stemming from manufacturing of around 1.4 trillion drink
containers each year.
Who: Planet

OutputManufacture and distributionof reverse vending machines
for collection and recycling ofused containers

How much: In 2022, Tomra’s technology enabled the collection of
45 billion containers.
Contribution: The company is a circular economy champion, directing
capex and innovation initiatives toward its primary recycling mission. The
company now reports impact data in its annual report, setting a positive
example for peers. It has set a long-term goal of 500 billion containers
collected per annum and a 2030 target of doubling the carbon
emissions avoided by its products in use.

Outcome45 billion containers captured,
provision of feedstock forcircular products made fromrecycled materials1

Risks: Plastic recycling can release huge quantities of microplastics,
which are challenging to filter in any recycling process. This can create
the risk of water and air pollution, as well as worker safety. Tomra does
not screen for any controversy/incident, so the issue remains a risk that
we shall engage on further.

Impact21 million tCO2e emissions
mitigated1

Progress Monitoring
The company has strengthened its reporting of annual impact andset ambitious impact targets. While growth in its recycling portfolio
is welcome, including its build out into food production and waste
reduction, the impact of microplastics is a subject for engagement.

1

| 21

Tomra 2022 Sustainability ReportCase Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXREDUCING GREENHOUSE GASES (GHGs)

Trane Technologies
Pressure Points

PRIMARY UN SDG

Heating, Ventilation and Air Conditioning (HVAC) consumption represents
approximately 12% of final energy use worldwide, which is on par withthat of passenger cars.1 Carbon emissions from building operations haverisen in recent years, mainly because of the increasing use of heating
and cooling equipment. We believe this has been partly driven by
extreme weather events stemming from global warming. According to theInternational Energy Agency (IEA), the sector’s energy intensity needs
to drop nearly five times faster over the next 10 years than it did in thepast five years to meet the net-zero emissions target by 2050.

IMPACT PILLAR
Climate and Resource Impact
IMPACT SUB - PILLAR
Reducing Greenhouse Gases(GHGs)

Impact Thesis
Trane Technologies enables greater energy efficiency in commercial andresidential settings and refrigerated transportation. More efficient HVAC
solutions reduce the emission of F-gases in the atmosphere, which havea global warming potential up to 25,000 times greater than carbon.2
The firm’s products also improve the low temperature-controlled supply
chain (the “cold chain”), which reduces food waste. The company has
committed to the ambitious Gigaton Challenge that aims to avoid
1 billion metric tons of greenhouse gas emissions by 2030.3

IMPACT JOURNEY
Input
USD 211 million invested insustainability-driven R&D3

KPI: Carbon emissions mitigatedOutputEnergy efficient HVAC andrefrigeration systems

Five Dimensions of Impact
What: Provide energy-efficient HVAC solutions for commercial andresidential real estate and transport refrigeration.

Outcome
Improved energy efficiency forcustomers and reduced foodwaste

Who: Planet and people
How much: In 2022, Trane Technologies’ products helped customers
reduce their carbon emissions by 43 million tCO2e (compared to 42
million tCO2e in 2021).3

Impact43 million tCO2e emissions
mitigated3

Contribution: Trane has committed to industry-leading 2030
sustainability targets. This includes achieving carbon neutral operations,zero waste sent to landfills, and a 10% reduction in absolute energy use
versus a 2019 baseline.
Risks: HVAC systems will need to begin using low-carbon refrigerants
going forward, replacing traditional hydrofluorocarbon (HFC) refrigerant
gases. The transition away from HFCs is a risk that will need to bemonitored and we will look for more disclosure reporting over time.

Progress Monitoring
The company is making progress toward its Gigaton Challengecommitment with an estimated 93 million metric tons of carbon avoided
by its customers since 2019. Trane’s net zero targets remain among
the most ambitious in the industry. We will monitor how the firm may be
impacted by global regulations relating to energy efficiency in building
renovations.

Source: ELSEVIER (Review on buildings
energy information - December 2021)2
European Commission Climate Action.
“Fluorinated greenhouse gases.” Published
online at climate.ec.europa.eu
3Trane Technologies 2022 ESG Report. tCO2e
stands for tonnes (t) of carbon dioxide (CO2)equivalent (e).
1

| 22

CONTENTS

INTRODUCTION

PORTFOLIO

Social Equity
and Qualityof Life
Enabling
Social Equity

Improving
HealthEnhancing
Quality of Life

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXENHANCING QUALITY OF LIFEAIA Group
Pressure Points

PRIMARY UN SDG

In Asia, the mortality protection gap1 was estimated to be USD 83 trillion
in 2019 and rising by 4% per year, with approximately 75% of households
under-protected in terms of life insurance.2 Emerging markets represent
two-thirds of the global health protection gap.3 An estimated 38.8 million
households within emerging Asia cannot afford medical treatment.
IMPACT PILLAR
Social Equity and Quality of Life

Impact Thesis
As a leading insurer operating across Southeast Asia, AIA contributes tothe protection of individuals by offering life and health insurance products.
AIA provides a significant financial safety net for its customers that helps
to mitigate out-of-pocket and unaffordable medical expenses, especiallyin markets that are still largely underserved by the insurance market and/or public sector health care provision.

IMPACT SUB - PILLAR
Enhancing Quality of LifeIMPACT JOURNEYKPI: Lives extended.

Input
USD 5,400 million in
annualized new premiums in
20225

Five Dimensions of Impact
What: Provide a financial and protection safety net for customers
through life and health insurance.
Who: Households that are currently under-protected by insurance
solutions, largely in the developing world.

OutputOver USD 2,000 billion total
sum insured4

How much: AIA serves 41 million individual policies and 17 million
members of group insurance schemes across 18 countries in Asia (39million and 16 million in 2021, respectively).4

Outcome41 million individual policies
and 17 million members ofgroup insurances schemes4

Contribution: AIA has committed to engaging one billion people by2030 through its “AIA One Billion” initiative and its Vitality and China
Wellness programs have over 2.6 million subscribers. Its telemedicine
consultations were made available to 5.7 million customers, double thatof 2021, and the number of consults increased 240% from 2021.4

Impact500,000 lives extended
through access to life andhealth insurance services6

Risks: Claim quality and customer satisfaction given the complexity of
insurance products. The reliance on tied agents and bancassurance
raises the risk associated with sales practices and may limit theaccessibility of products given the associated cost structure.

Progress Monitoring
We are pleased that AIA has begun disclosing progress toward its“AIA One Billion” commitment, but there is scope to enhance disclosuresaround demographics and how the company is improving access to
its products.

| 24

Mortality protection gap is a term used todescribe impact caused by premature deathof the breadwinner after matching protectionneeds with available resources.
2
Closing Asia’s mortality protection gap. Swiss
Re Institute. July 2020
3
Health protection gap is the sum of direct, outof-pocket medical expenses and unaffordable
medical expenses avoided by households.
4
AIA Group 2022 ESG Report
5
AIA Group 2022 Annual Report
6T. Rowe Price estimates based on company
reported data and industry studies.
1Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

IMPROVING HEALTH

DanaherPressure Points

PRIMARY UN SDG

Mobilizing global health care research and development (R&D) is asignificant agenda item for the World Health Organization (WHO).
Investments in health care are still insufficiently aligned with global publichealth needs, creating significant gaps between disease burden andresearch activity levels. The UNCTAD1 estimates that a further USD 140
billion investment is required annually to achieve the UN SDG 3 of good
health and well-being.2 Research innovation is absolutely critical aroundthe world to improve health care outcomes in both developed andemerging economies.

IMPACT PILLAR
Social Equity and Quality of LifeIMPACT SUB - PILLAR
Improving HealthImpact Thesis
Danaher is a life science and technology innovator providing customers
with the products and services required to solve complex health andenvironmental challenges. Its Life Sciences and Diagnostics businesses
contributes to improved drug discovery and clinical testing, advancing
patient health, and treatment outcomes. Danaher’s tools and services help
accelerate the development of biopharma products and improve scientificunderstanding of the causes of disease. Separately, the company also
supports cleaner and more efficient water supply solutions through its
environmental and applied solutions business.

IMPACT JOURNEY
Input
USD 1,700 million in researchand development spending5
OutputInnovative products andservices to solve healthchallenges

KPI: Biologic therapies supported by Cytiva life sciences business; R&D
committed to improving patient outcomes

Five Dimensions of Impact

Outcome
Biotech division specified inover 90% of approved mAbs.3
73% of biological therapies
approved in 2022 were
supported by Cytiva4

What: Solve complex scientific challenges related to human health andcontribute to improved patient outcomes.
Who: Individuals receiving medical care
How much: In 2022, Danaher’s biotech, life sciences and diagnostics
business generated USD 26,600 million in revenue, an increase of 7.4%
from 2021.3

ImpactLives extended throughtherapeutic approvals enabled

Contribution: Danaher’s biotechnology group is specified in over 90%
of approved monoclonal antibodies (mAbs).3 73% of biological therapies
that were newly approved in 2022 were supported by its Cytiva life
sciences business.4
Risks: Product quality and effectiveness, customers’ ability to pursue
innovation.

Progress Monitoring

United Nations Conference on Trade andDevelopment
2
Zhan, J.X., Santos-Paulino, A.U. Investingin the Sustainable Development Goals:
Mobilization, channeling, and impact. Journalof International Business Policy 4, 166-183(2021).
3
Danaher’s 2022 Investor Day Presentation
4
Cytiva’s 2022 Sustainability Highlights Report
5Danaher 2022 Annual Report
1

We would like to see KPIs related to its life sciences and diagnostics
segments, which will help in quantifying real-world impact. We areencouraged that management is receptive to our recommendations
and engagement.

| 25

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

IMPROVING HEALTH

EvotecPressure Points

PRIMARY UN SDG

Mobilizing global health care research and development (R&D) is asignificant agenda item for the World Health Organization (WHO).
Investments in health care are still insufficiently aligned with global publichealth needs, creating significant gaps between disease burden andresearch activity levels. The UNCTAD estimates that a further USD 140
billion investment is required annually to achieve the UN SDG 3 (Good
Health and Well-being).1 Research innovation is critical to improve healthcare outcomes in both developed and emerging economies.

IMPACT PILLAR
Social Equity and Quality of Life

Impact Thesis

IMPACT SUB - PILLAR
Improving Health

Evotec is a provider of sophisticated drug discovery and development
solutions for pharmaceutical companies. Its outsourcing model helps
its customers accelerate innovation, reduces the time and cost of
drug development, and allows for greater efficiency throughout thedevelopment life cycle. Evotec also develops therapies to address unmet
needs for a range of rare diseases and has built a pipeline of more than
130 co-owned assets.

IMPACT JOURNEY
Input
Investment into a life
sciences research platformthat helps discover, develop,
and manufacture medicines
included EUR 77 million in
R&D2

KPI: Time and cost reduction in drug development; R&D committed to
improving patient outcomes

Five Dimensions of Impact
What: Act as a partner to pharma and biotech companies, assisting in
pre-clinical drug development outsourcing.

OutputBiopharma services thatenable customers to produce
drugs more effectively

Who: Individuals receiving medical care
How much: Evotec has more than 800 customer partnerships, including
the world’s top 20 pharma companies. The company has 130 co-owned
projects with 18 in clinical development.2

OutcomeReduction in the time andcost of drug development
by 30% and 50% vs.
conventional in-housediscovery1

Contribution: Evotec enables innovation in the fields of small molecules,
biologics, and gene therapy, helping to reduce the cost and time involvedin drug development. The company has made significant progress on
impact in the past two years.
Risks: Impact is ultimately contingent on biopharma’s ability andwillingness to fund outsourced innovation, which will itself fluctuate,
especially as funding availability changes. Product safety and single use
plastics are other potential issues.

ImpactLives extended throughtherapeutic approvals
achieved

Progress Monitoring
The U.S. Department of Defense (DoD) contract award to provide
therapeutic antibodies for plague is a validation of Evotec’s technology
and investment program, which is at the innovative end of continuous
bioprocessing at its J.POD facility in Seattle. During the year, Evotec alsoestablished a Paris-aligned emissions target to reduce absolute scope 1
and 2 emissions 50% by 2032 vs. 2021.

1
2

| 26

Evotec 2022 Sustainability Report
Evotec 2022 Annual Report

CONTENTS

INTRODUCTION

Case StudyPORTFOLIOENABLING SOCIAL EQUITY

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXHDFC Bank
Pressure Points

PRIMARY UN SDG

Globally, 1.4 billion people remain unbanked, meaning they lack either an
account at a financial institution or a mobile money provider. Virtually all
unbanked adults live in developing countries with India being home to thesecond-largest unbanked population.1 In emerging economies, many micro,
small, and medium enterprises (MSMEs) face a huge funding gap, remaining
largely underserved by financial institutions. The potential demand for
MSME finance in developing countries is approximately USD 5.2 trillion.2

Impact Thesis

IMPACT PILLAR
Social Equity and Quality of LifeIMPACT SUB - PILLAR
Enabling Social Equity

HDFC Bank is a leading financial services company which is increasing
financial inclusion in India with retail and SME customers accounting fornearly 70% of its loan book. Approximately 240 million adults in India
remain unbanked. The bank’s lending to these sectors helps enableeconomic growth and reduction in domestic and international financial
inequalities. HDFC Bank is also contributing to India’s economic growthby supporting and enhancing investment and infrastructure lending togovernments and private entities. HDFC Bank also participates in the
Pradhan Mantri Mudra Yohana (PMMY) government scheme, which aims
to “fund the unfunded” micro enterprises and small businesses.

IMPACT JOURNEY
Input
INR 18,800 billion in totalcustomer deposits3
OutputIncreased access to financial
services and enablement of
SME and enterprise growth3

KPI: People brought into the financial system

Five Dimensions of Impact
What: Support job growth and economic development through financial
inclusion for retail and SME customers.

Outcome83 million clients served,
INR 7,300 billion and INR
3,600 billion in outstanding
retail and MSME loans,respectively. INR 146 billion
in new PMMY loans in 2022.

Who: SMEs and individuals, especially those who are unbanked or inrural areas.
How much: 83 million clients served, INR 7,300 billion in outstanding
retail loans, representing 47% of the bank’s total loan book, and INR
3,600 billion in outstanding MSME loans. New PMMY loans during 2022
totaled INR 146 billion, roughly double that of 2021.3
Contribution: Over 50% of bank branches are in traditionally
underserved areas. Its corporate social responsibility program(Parivartan) is one of the largest in India, and it impacted over 99 million
individuals and 1 million households across 3,400 villages in 2022.3

Impact360,000 customers brought
into the financial systemthrough ECLGS and PMJDY
schemes3,4

Risks: Macroeconomic and political headwinds can impact the banking
sector in India. A lack of financial literacy could lead to customer
indebtedness.

The Global Findex Database 2021: Financial
Inclusion, Digital Payments, and Resiliencein the Age of COVID-19. World Bank.
2
International Finance Corporation. 2017.
3
HDFC Bank 2022-2023 Integrated Annual
Report.
4
ECLGS and PMJDY are government
programs designed to provide financial
relief and financial inclusion to MSMEs andindividuals.
1

Progress Monitoring
HDFC Bank has set goals to increase its presence in semi-urban andrural Indian villages in 2023. Our engagements will focus on progress
toward these goals, as well as seeking increased disclosure related tofinanced emissions of the firm’s corporate customers.

| 27

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXENHANCING QUALITY OF LIFEMSA Safety
Pressure Points

PRIMARY UN SDG

Approximately 2 million people die each year because of occupational
accidents or work-related diseases globally, with around 360 million
work-related injuries.1 The economic burden of poor occupational safety
and health practices is estimated to cost around 4% of global grossdomestic product each year.1 Providing a safe working environment
has positive implications for employee safety and improved mental
and physical health. This can feed through into better organizational
performance due to higher employee satisfaction and a safer work
environment.

IMPACT PILLAR
Social Equity and Quality of LifeIMPACT SUB - PILLAR
Enhancing Quality of Life

Impact Thesis
MSA Safety is a leading global manufacturer of safety equipment
committed to developing, manufacturing, and supplying safety products.
Core products include self-contained breathing apparatus, fixed gas andflame detection systems, portable gas detection instruments, fire andrescue helmets, and fall-protection devices. MSA Safety is a pure playsafety impact company whose products help to save lives.

IMPACT JOURNEY
Input
USD 43 million in investments
in design, development,
and manufacturing of safety
equipment2

KPI: Workers protected by fall protection systems and industrial helmets

Five Dimensions of Impact

OutputManufacture and distributionof safety equipment,
including early warning
incident detection systems

What: Improve on-the-job safety and protect workers from life- andhealth-threatening incidents.
Who: Workers in hazardous and life-threatening industries.
How much: MSA’s fall protection systems and industrial helmets
protected 2.3 million workers in 2022 (1.9 million in 2021).3

Outcome
2.3 million workers protectedby fall protection systems andindustrial helmets3

Contribution: MSA supplies safety equipment to numerous industries,
including fire service, construction, and utilities. In 2022 the company
introduced its Bacharach system, which provides remote and data-drivengas detection monitoring.2
Risks: Product reliability poses a significant risk and could impair thecompany’s ability to deliver on its goal of worker protection.

ImpactImproved workplace safety
from reduced on-the-job
incidents, injuries, andfatalities

Progress Monitoring
Additional academic research is needed to quantify the impact offirefighting, protective apparel (around 38% of MSA safety’s revenue),and gas detection equipment more accurately. We also would like to see
amplified disclosures to help quantify the number of incidents avoided
and/or lives extended by use of its products.

International Labor Organization
Source: 2022 annual report
3
Net Purpose estimates
1

2

| 28

CONTENTS

INTRODUCTION

Case StudyPORTFOLIOENABLING SOCIAL EQUITY

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Nu Holdings
Pressure Points

PRIMARY UN SDG

Globally, 1.4 billion people remain unbanked, meaning they lackeither an account at a financial institution or a mobile money provider.1
Financial system access through basic banking access is critical toeconomic progression and social equity. A simple bank account allows
for safer, easier, and cheaper transfer of wage payments and transfersfrom government, as well as remittances to family and the ability to pay
bills. It also allows for the reduction of black money in the system.

IMPACT PILLAR
Social Equity and Quality of Life

Impact Thesis
Nu is one of the world’s largest digital banking platforms. The company
is accelerating financial inclusion across Latin America, helping toempower individuals through digital banking services and helping SMEs
to enable job creation and economic growth. The company contributes
to financial empowerment through its low-cost banking platform,
providing access to the financial system for customers that have beensignificantly underbanked.

IMPACT SUB - PILLAR
Enabling Social Equity
IMPACT JOURNEY
Input
USD 15.8 billion of totalcustomer deposits2

KPI: People brought into the financial system

Five Dimensions of Impact

OutputDigital banking services
provided within underserved
populations, at lower costthan established peers.

What: Increasing financial inclusion by reducing financial inequality.
Provision of services to retail and SME customers in Latin America,
enabling economic growth.
Who: Individuals, especially those who are unbanked
How much: Nu had 75 million customers and USD 11,300 million in
outstanding personal and credit card loans at the end of the 2022 financial
year, despite only launching in 2013.2 The company is contributing to Brazil’s
growing financial inclusion, which has seen bank account ownership
growth of around 15% of the total population between 2011 and 2021.1

OutcomeOver 75 million customers
provided access to financial
services and USD 11,300
million in outstanding
personal and credit cardloans.2

Contribution: The company is a disruptor in its primary market, offering
digital services that are at a lower cost than industry peers. Nu estimatesand reports that its customers have saved USD 8 billion in banking fees
(cumulative), while its financial education blogs have been viewed 278
million times (cumulative).2

Impact
5.7 million people brought into
the financial system with theirfirst credit/debit card.4

Risks: Potential lack of technical and financial literacy by clients which
increases risk with credit service provision. APR’s3 remain high in Brazil
in absolute terms, although Nu has historically trended below banking peers.

Progress Monitoring
We will track progress in serving SMEs, another market which isunderserved by incumbent banks. This is a newer area of focus, with
only 2.5 million SME clients, but one that the company has identified
as a key potential growth area.

The Global Findex Database 2021: Financial
Inclusion, Digital Payments, and Resiliencein the Age of COVID-19. World Bank.
2
Nu 2022 ESG Report3
Annual percentage rate is the total annual
cost of borrowing money
4
Nu estimate for the period between July
2021 and July 2022
1

| 29

CONTENTS

INTRODUCTION

PORTFOLIO

Sustainable
Innovation and
Productivity
Sustainable
Technology

Building Sustainable
Industry andInfrastructure

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXSUSTAINABLE TECHNOLOGYASML Holding
Pressure Points

PRIMARY UN SDG

Global data creation and replication is expected to grow at 23% CAGR1
between 2020 and 2025, and the capacity of microchips is not infinite. Thismeans continuous innovation in lithography, a patterning process at the coreof chip manufacturing and shrinking, is crucial. Semiconductors are at thecore of technological advancements, bringing opportunities to companies
that contribute to positive and sustainable change. Semiconductors also
play a critical role in improving the energy efficiency of electronic equipment
and manufacturing processes, while lithography companies contribute to
the reduction of energy use associated with the fabrication process.

IMPACT PILLAR
Sustainable Innovation and
Productivity
IMPACT SUB - PILLAR
Sustainable Technology

Impact Thesis
ASML is a global supplier of lithography equipment used in semiconductor
manufacturing and thus enables downstream semiconductor innovation.
ASML has 100% market share in Extreme Ultra-Violet (EUV) lithographyequipment, which delivers unmatched levels of precision and is essential
for semiconductor manufacturers to create advanced, high-performancemicrochips capable of challenging new frontiers of energy efficiency andreducing the digital divide in a more energy efficient manner. Areas ofsustainable, high impact applications include electric vehicles, remoteeducation, financial inclusion, drug discovery and robotic surgery.

IMPACT JOURNEY
Input
EUR 1,300 million investment
into design, development, andmanufacturing of lithographyequipment4

KPI: Energy savings per wafer of ASML’s EUV NXE systems2; R&D
spending

OutputLithography equipment thatenables the developmentof high-performancesemiconductors capableof delivering new frontier
efficiency, 345 sold in 20223

Five Dimensions of Impact
What: Enable semiconductor innovation and downstream energy
efficiency through lithography equipment
Who: Planet
How much: In 2022, ASML sold 345 lithography systems—an increaseof 12% over 2021—including 40 EUV machines.3

Outcome37% reduction in energy
use per wafer of its futuregeneration EUV NXE systems(relative to 2018 baseline)4Contribution: As the capacity of microchips is limited, the precisionof EUV machines will be critical in enabling innovation and efficiencyof semiconductors in the future. ASML set a goal to reduce energy
consumption of its EUV NXE systems by 60% by 2025 (vs a 2018 baseline).2

ImpactReduction of greenhousegases associated with use of
the company’s lithographyequipment

Risks: EUV machines consume large amounts of energy, making it criticalfor companies to pursue energy efficiency in production of semiconductors.
There is also risk associated with end customers’ products, which could
be utilized in ways that are harmful to society or the environment.

Progress Monitoring
We are monitoring progress toward its 2025 energy reduction goal
related to its EUV NXE systems and have also engaged with the company
on the high energy usage of its equipment. Scope 3 emissions related touse of its products is a risk to the firm’s carbon footprint, albeit ASML has
set a net zero goal for its products by 2040.
| 31

CAGR = compound annual growth rate
NXE is a series of extreme ultraviolet
lithography machines developed by ASML.
3International Data Corporation (IDC)
4
ASML 2022 Annual Report12Case Study

CONTENTSINTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIXSUSTAINABLE TECHNOLOGY

Synopsys
Pressure Points

PRIMARY UN SDG

Semiconductors are crucial enablers of green and digital economies. As
shrinkage in semiconductors’ physical size and monetary cost begins toslow, advancing their design process is essential to bolster performanceand to improve end products’ performance and energy efficiency.
Designing for low power and energy consumption optimization are key
issues for chip developers. The advances, in turn, work to enable digitalfinancial inclusion, health care research and development (R&D), andproduction of robotics and electric vehicles, all while leading to moreenergy-efficient outcomes.

IMPACT PILLAR
Sustainable Innovation and
Productivity
IMPACT SUB - PILLAR
Sustainable Technology

Impact Thesis
Synopsys is a leader in Electronic Design Automation (EDA), thetechnology used to design semiconductor chips and systems, and holds
a strong position in semiconductor intellectual property (IP). Its activities
accelerate and improve the power use, energy efficiency, innovation
design, and accuracy of the semiconductor design process, reducing
manufacturers’ cost and time to market. Smarter chip design leads toenergy-efficiency gains and better outcomes in areas such as health care(computer power for R&D, microchips in health care technology) andclimate (adoption of cloud computing and electric vehicles), connectivity,
education, and financial inclusion.

IMPACT JOURNEY
Input
USD 1,700 million investment
in research and development1
Output
EDA and semiconductor IP
services and products

KPI: Energy efficiency gain for “System on a Chip” designs; R&D spending

Five Dimensions of Impact

Outcome
Design software that
fosters faster, more efficient
semiconductor manufacturing

What: Provide advanced development software that enables improved
energy efficiency in the chip design process.
Who: People and planet
How much: Synopsys’ revenue grew 21% in 2022 to USD 5,100 million,
with 33% being allocated to research and development.1

ImpactReduction of greenhousegases associated withlower semiconductor power
consumption

Contribution: Users of the DSO.ai™ application reported a 25%
reduction in turnaround time and compute resources, and up to a 30%
reduction in power consumption during chip design. Its Design IP
segment developed a low-power platform that allowed for a further 25%
power reduction for customers’ systems-on-a-chip products.2
Risks: Diminishing returns on energy savings given the finite natureof chip design. Lack of visibility into end customers’ application ofsemiconductor chips.

Progress Monitoring
We would like to see more detailed disclosures that allow for moreaccurate measurement of energy efficiency derived from its products.
We are excited about the application of artificial intelligence in thedesign process via its DSO.ai platform and will also look for metrics thathighlight the impact of this software.

Synopsys 2022 Annual Report
Synopsys 2022 ESG Report
DSO.ai is a trademark of Synopsys. Use does
not imply endorsement, sponsorship, oraffiliation of T. Rowe Price.

1
2

| 32

CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSACTIVEOWNERSHIP

MEASUREMENTRESILIENCE

Carbon Footprint Profile

1

T. Rowe Price Global Impact Equity Fund

Weighted Average Carbon
Intensity2

Total Carbon Emissions2(metric tons of carbon dioxide equivalent)(metric tons of carbon dioxide equivalent for each USD 1 million
in revenue)

1,986

175

172

1,687

197
115

603
2021
Benchmark2021
Portfolio

498
2022
Benchmark2022
Portfolio

2021
Benchmark2021
Portfolio

2022
Benchmark2022
Portfolio

Top Five Company Contributors to Portfolio Carbon Emissions
and Their Weighted Intensity212

Holding

Portfolio Weight (%)

Portfolio Carbon
Emissions (mtCO2e)

Portfolio Weighted
Carbon Intensity(mtCO2e/USD 1 Million
in Revenue)

Linde

3.0

119

41

Rockwool

1.5

92

8

Darling Ingredients

1.9

57

9

Waste Connections

1.8

53

19

PG&E

1.7

38

4

Our carbon footprint analysis includes total carbon emissions and wighted average carbon intensity metrics.
Total carbon emissions represent total amount of Scope 1 and Scope 2 greenhouse gas (GHG) emissions that are released by the fund’s holdingsthat are attributable to the percentage of ownership of the T. Rowe Price Global Impact Equity Fund in each company. They are aggregated to givethe total carbon emissions equivalent for the T. Rowe Price Global Impact Equity Fund. This metric is grossed up using the percentage of data
available to give the overall carbon footprint of the T. Rowe Price Global Impact Equity Fund. The fund’s weighted average carbon intensity is theweighted average, by fund portfolio weight, of the total carbon emissions per USD 1 million in revenue for each of the fund’s holdings. This metricgives the T. Rowe Price Global Impact Equity Fund’s exposure to carbon intensive companies. This is the Task Force on Climate-Related Financial
Disclosures (TCFD) recommended metric.
The benchmark for the T. Rowe Price Global Impact Equity Fund is the MSCI All Country World ex-Australia Index (Net). For sourcing information,please see Additional Disclosures.
Calculated by T. Rowe Price using data from Sustainalytics. Data for the T. Rowe Price Global Impact Equity Fund as at December 31, 2022.
| 33

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENT

Accelerating
Impact ThroughActive Ownership

ACTIVEOWNERSHIPRESILIENCEOur Impact Engagements
Are Designed to:

We seek to deliver impact beyond simply
owning companies whose business activities
lead to positive social and/or environmental
outcomes. We commit to being additionalin our capacity to influence change andenable or accelerate impact outcomes.

INVESTIGATE
Assess a company in the caseof a corporate event that potentiallyhinders an impact thesis

At T. Rowe Price, we believe it is our responsibility
as an asset manager to safeguard our clients’ interests
through active ownership, monitoring, and mutual
engagement with the companies we invest in. Thanks
to the trust our investment clients have placed in us,
T. Rowe Price is a significant investor in many of theworld’s leading companies. This affords us, in mostcases, greater access to company management
teams and board members.
Along with our role to direct capital toward desired
impact outcomes, we actively engage in impact-oriented
company activities, proxy voting, and closely monitor
the associated influence feedback loop on companies’
behavior. This is applied with conviction and in
partnership with our fundamental and responsible
investing research teams.

INFORM
Using our impact research
and measurement approachto improve impact

The central focus of our engagement program is at acompany level as we evaluate factors that may improveor impede a company’s ability to deliver positive impact.
We identify engagement targets through our proprietaryimpact due diligence framework based on the Five
Dimensions of Impact framework, Responsible Investing
Indicator Model (RIIM) analysis, governance screening,and our analysts’ fundamental research.

INFLUENCE
Guide the company towardspecific positive impact outcomesOur ultimate goal is to provide feedback, recommend,
and encourage to increase the probability that a company
will deliver better positive impact than its peers, enabling
our clients to realize better impact and investment
performance potential. Success is measured throughregular dialogue with management teams, enabling
us to monitor impact outcomes over time using key
performance indicators (KPIs).

| 34

APPENDIXINTRODUCTION

THEMATIC
INSIGHTSPORTFOLIO

MEASUREMENTACTIVEOWNERSHIPRESILIENCE

Engagement
Our processes frequently identify engagement targets, either through our impact screening
and proprietary RIIM analysis, governance screening, or our analysts fundamental research.
ESG engagement meetings are carried out by the portfolio manager as well as analysts
from our equity teams and our ESG specialists. While we engage with companies in a variety
of investment contexts, ESG engagement focuses on exchanging perspectives on theenvironmental practices, corporate governance, or social issues affecting their businesses.
While our normal investment research frequently
includes discussions of environmental and social topics,
engagements reflect a subset of where we identify ESG
concerns, share our views on why they are problematic
to our investment case, and request that the company
address them. We have engaged with 72.51% of theweighted average portfolio holdings through the course of2021 and 2022.

impact, the link between positive impact and financial
outcomes, as well as more broadly progressing theimpact agenda on topics such as accelerating renewabledeployment, improving patient outcomes, or increasing
financial inclusion. The most frequently discussed topic
was greenhouse gas (GHG) emissions and reduction
targets; this was discussed with two-thirds of thecompanies.

In 2022, we held 58 engagements with 43 companies
covering a broad array of environmental, social andgovernance topics. Of these 58 engagements, 19 of themfocused specifically on impact investing topics, such as
improved disclosure of impact measurement related data
points or how the prospect of generating positive impact
is influencing the company’s product development. The
purpose of the engagements was also to impress upon
portfolio companies the importance of delivering positive

The fund’s 2022 engagement program also included
one collaborative engagement conducted with FAIRR,
an investor network (USD 66tn member AuM) thatseeks to raise awareness of ESG risks/opportunities
brought about by animal agriculture. The objective of thisengagement was to seek additional clarity from companies
on the management of anti-microbial resistance (AMR)
across their value chain and encourage stronger
management of this topic.

Global Impact Equity Engagements by Category

Top 5 Engagement Topics by Category

Governance

Environment

%
36

30
%

CONTENTSENVIRONMENT
1. Greenhouse gas emissions
2. Environmental disclosure
3. Product sustainability
4. Water
5. Waste management

SOCIAL
1. Social disclosure
2. Access to medicine & drug pricing
3. Employee treatment
4. Diversity
5. Product sustainability

GOVERNANCE

Social

1. Executive compensation
2. Board diversity
3. Succession planning
4. ESG accountability
5. Shareholder proposals

3 4%Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. Figures may not total
due to rounding.
| 35

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

CASE STUDY

Thermo Fisher Scientific
Pressure Points

Engaging on Impact

Mobilizing research and development (R&D) is asignificant objective for the World Health Organization.
Given the critical nature of R&D to improving health care,
it is integral for progress toward many of the targets set
by the United Nations Sustainable Development Goals(SDGs), in particular those within SDG no. 3: “Good
Health and Well-Being.”

We engaged with the company to discuss specific metrics
related to its processes and reporting. Pleasingly, these
metrics are now featured in its company reports. The
company’s ESG report discloses new impact metrics,
which we believe are among the most comprehensive in
the industry and set new standards for peers. The new
metrics published include: the number of diagnostic tests
enabled, patients served with medicines manufacturedby the company, and the number of organ transplants
supported.

However, there is an annual investment gap of
approximately USD 140 billion to achieve the targets
set within this goal. It requires companies to provide
products and services that can enable life sciences
R&D to help solve for society’s health care problems.
Research and development into vaccines and medicines
for communicable and noncommunicable diseases thatprimarily affect developing countries offer enormous
potential and can make a significant impact on
millions of lives.

A Leading Enabler of Health Care
Innovation and Delivery
Thermo Fisher Scientific creates products that enable
its customers to solve specific scientific challenges.
The company acts as a “one stop shop” for its biopharma
clients that are focused on developing new therapeutics.
It provides products and outsourcing services that span
the drug development and manufacturing process.
Drug development can take up to 15 years, with the costs
being in the billions. Thermo Fisher Scientific generates
impact by helping to “bend” the time and cost curves
associated with drug development. Through its CDMO1
within its biopharma services division, the company canreach over 1 million patients per day.
In terms of measurement, R&D expense is a core impact
key performance indicator (KPI) for many life science
companies we analyze. We believe progress can bemade by the industry to better measure and monitor
impact in this area.

1

Thermo Fisher’s breadth of health care business units
make it impractical to distill overall impact into a single
metric, however. Management therefore encourages
its business units to track the KPIs that are most relevantto their activities. This approach helps the company track
and publish more meaningful impact metrics and derivestronger conclusions from data received.

The company’s ESG reportdiscloses new impact metrics,
which we believe are among
the most comprehensive in theindustry and set new standards
for peers.
In terms of disclosure, Thermo Fisher intends to add
even greater detail and breadth to reported metrics. We
recommended that the company provide more granularity
on its R&D spending. We also conveyed our view thatsetting impact-oriented targets makes sense not only froma sustainability point of view but also from a financial
return perspective. The continuous engagement with thecompany allows us to share our views on best practices,
especially in terms of ESG disclosure, and gain a better
understanding of the impact generated by the company.

Contract Development and Manufacturing Organization (CDMO) is an organization that serves the pharmaceutical industry and provides clientswith comprehensive services from drug development through manufacture.
| 36

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

CASE STUDY

Ingersoll Rand
Pressure Points
Compressed air systems are used prolifically throughindustrial processes, and according to the U.S. Departmentof Energy, can consume up to 30% of electricity in a
manufacturing facility. Almost 70% of all manufacturing
sites use compressed air and approximately 5 million
industrial air compressors are currently installed aroundthe world.
Equipment is energy intensive with the annual cost ofelectricity to operate a compressor potentially equal to or
exceeding the initial cost of purchase.1 While the cost ofthese systems is understood by many operators, systems
do not tend to be well monitored, with the primary focus
being production output rather than optimization for
power usage and energy efficiency.

Optimizing Energy Consumption
Within the Manufacturing Industry
Ingersoll Rand’s air compressors and air treatment
products create positive impact through increased energy
efficiency and the reduction of associated emissions
in industrial end markets. Innovation and technology
have driven improved product efficiency, including heatrecovery systems and the ability to remanufacture existingproducts. Developing waterless and water recirculation
products for the industry have added an additionaland growing leg of impact.

Ingersoll Rand’s air compressors
and air treatment products
create positive impact throughincreased energy efficiency
and the reduction of associatedemissions in industrial end
markets.

1	 In terms of measurement, we separate out revenuesaligned to products targeting positive impact in energy
efficiency and reduction in water consumption as our
KPIs. The company has made good progress in reporting
the potential energy savings and cost reduction of
improving air system efficiency, although aggregate
estimates of impact remain a challenge.

Engaging on Impact
We engaged with management to inform our impact thesis
and to discuss measurement, in particular the furtheringof company disclosures, as well as telegraphing tomanagement the importance of energy efficient metrics
in their day-to-day product solutions for their customers.
We believe the company has invested heavily in analyzing
and reporting the use-phase impact of its entire productportfolio, setting improved standards for the industry.
Customers can now access the environmental benefitsof Ingersoll Rand’s products including metrics such asenergy consumed, GHG emissions and water consumed.
The benefits from energy efficiency and cost savings are
increasingly highlighted in each customer dialogue topromote adoption and the associated positive impact.
The company has expanded its product suite into water
efficiency and its services into impact-oriented activities
including service and maintenance, carrying out energy
audits, repairs and offering solutions aimed at enablingchange and innovation. The company noted that its
customers have been used to managing products inhouse but have struggled to improve sustainability due
to a lack of expertise. We also discussed the potential
impact from the U.S. inflation reduction act, including
future reporting linked to any growing involvement inbiofuels and hydrogen production.
We informed our understanding of the company andimparted our views on how we view the company’s
impact. We suggested that management consider
making a number of additional disclosures to demonstrateenvironmental impact within its sustainability report. We
also suggested that management actively consider
the ability to aggregate impact where possible. We willcontinue to engage with the company and will explicitly
follow up on reporting progress within the next two years.

Ingersoll Rand Sustainability Report 2022
| 37

APPENDIXCONTENTS

INTRODUCTION

THEMATIC
INSIGHTSPORTFOLIO

MEASUREMENTACTIVEOWNERSHIPRESILIENCE

2022 Impact Engagements
Company Name

Quarter

Description

AstraZeneca

4

Engagement allowed us to request additional disclosures (e.g. on R&D,
outcomes data) and impart our view on the company’s overall approach toaccess to medicine.

IDEX Corp

4

Imparted our views on the company’s impact, improved our impact
assessments and provided feedback on impact-related disclosure.

Sartorius AG

4

Initial dialogue on impact and allowed us to impart our view on disclosures.

UnitedHealth Group

4

Engagement allowed us to share our view of best practices on impact andrequest additional transparency from the company to help provide a morerounded picture of the company's impact in future reporting.

Agilent Technologies

3

Engagement allowed us to begin initial dialogue on impact and helped tounderscore the value of providing impact disclosures. Enabled us to makespecific recommendations for future potential KPIs and reporting metrics.

Danaher3

Allowed us to share our view of best practices on impact and suggest
additional disclosures from the company (e.g. addressing bioprocessing;diagnostic tests enabled).

Ingersoll Rand

3

Discussed our views on best practices for the company’s environmental
targets on CO2 and water savings, and for providing additional disclosure on
the associated capital allocation process, client energy ‘audits’ as well as on
any potential impact from the current high energy prices environment.

Ingersoll Rand

3

We engaged with the company to inform our understanding and impart ourviews on the company’s impact.

Keyence3

We spoke to the company about monitoring their customer footprint toestimate the significant manufacturing savings from their processes.

MercadoLibre

3

The meeting helped us engage and present our views on reducing carbon
intensity and improving social access to their financial products.

Oxford Nanopore

3

The engagement allowed us to share our view of best practices on impact
and make specific recommendations for their inaugural sustainability report,
as well as attempting to drive greater social impact through recommending
greater access for their products, especially in less fortunate end markets.

Roper Technologies Inc

3

We asked for guidance on our estimations of their environmental and social
impact. We also provided the company with research that we received from
impact research provider, Net Purpose, to demonstrate how they estimatedRoper’s impact.

Sika

3

We stressed the importance of being able to quantify and measure impact,
and encouraged the company to publish an estimate of the GHG emission
and water savings enabled by its products.

Thermo Fisher Scientific3

Engagement allowed us to share our view of best practices on impact andrequest additional impact disclosures to help provide a more rounded pictureof the company's full impact in future reporting.

Zoetis3

Imparted our views on impact disclosures and encouraged the company toprovide robust and transparent impact KPIs on an annual basis.

Stryker2

Engagement allowed us to share our view of best practices on impact andrequest additional disclosures from the company in future reporting.

Linde

1

We impressed upon the company the need to improve on customer carbon
emissions saved and the disclosures related to these emission savings, aswell as their own decarbonization & green hydrogen efforts.

OneMain Holdings

1

We achieved our objective of conducting due diligence on the bank’s impact
thesis and recommended a follow up call with the company to establish abaseline on these discussions and advocate for improved disclosure.

Roper Technologies Inc

1

Meeting to discuss measurement of impact outcomes. There was a strong
acknowledgment from the CEO that they need to do better in this regard.

| 38

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

2022 ESG Engagements
Company Name

Quarter

Environmental

SocialGovernance

AIA Group4

Darling Ingredients

4







Eli Lilly

4







EssilorLuxottica

4





Hamamatsu Photonics

4

HubSpot4Intuit4Lonza Group

4





Thermo Fisher Scientific

4







NextEra Energy

4







Becton Dickinson

3





Koninklijke

3





Rockwool

3

Tesla

3





Zoetis3

Charles Schwab

2EssilorLuxottica

2

Evotec2

HDFC Bank

2

NextEra Energy2ServiceNow

2

Shopify

2



Trex

2

UnitedHealth2

Wuxi Biologics2Ashtead Group

1



ASML

1

AstraZeneca

1







Danaher

1







Evotec1

Koninklijke DSM

1

OneMain Holdings

1

Oxford Nanopore Technologies

1

PG & E1

Salesforce

1





ServiceNow

1





Shop Apotheke

1

Stora Enso

1



Tesla

1
































| 39



APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Proxy Voting
Voted in

Voted

97.1%

98.3%

of Votable
Meetings

of Votable
Items

761

93.6%

Items
Voted

Voted WithManagement

6.4%
Voted Against
Management

Proxy voting is a crucial link in the chain of stewardship
responsibilities we execute on behalf of our clients.
A separate set of proxy voting guidelines is administered
for the T. Rowe Price impact funds. These portfolios
require a separate voting policy because they have
two express mandates: seek long-term growth in valueof investments, and to have a positive impact on theenvironment and society.
The T. Rowe Price Global Impact Equity Fund proxyvoting program serves as one element of our overall
relationship with corporate issuers. We use our voting
power in a way that complements the other aspectsof our relationship with these companies, including
engagement, investment diligence, and investment
decision-making. A customized set of proxy voting
guidelines different from other T. Rowe Price funds
helps us establish governance norms and follow a
differentiated stewardship approach. We take a handson approach to joining voting and engagement activities
as part of our commitment to additionality, driven fromdiscussions at weekly impact research meetings.
For the vast majority of resolutions, the T. Rowe Price
Global Impact Equity Fund voted the same way as otherT. Rowe Price funds. However, there were three cases
where the T. Rowe Price Global Impact Equity Fund voted
differently from the other portfolio managers in 2022 onshareholder resolutions:§ At the Eli Lilly 2022 annual general meeting (AGM), theT. Rowe Price Global Impact Equity Fund supported
all four shareholder resolutions, which called for thecompany to provide a report on lobbying payments
and policy (item 8) and to commission a third-party
review of the alignment between the company’s
lobbying activities with its public statements (item 9).
The T. Rowe Price Global Impact Equity Fund voted forthese items and the resolution calling for a report on
Board oversight of the risks related to anticompetitive
pricing strategies (item 10) because the importance ofsetting market-leading expectations related to lobbying
and pricing/anticompetitive practices was felt to bealigned with the mandate of the fund. The fund also
voted in support of the shareholder resolution callingfor an independent Board chair (item 7).

Proxy data for the T. Rowe Price Global
Impact Equity Fund from December 31,
2021 through to December 31, 2022.

§ At the Charles Schwab Corporation 2022 AGM, theT. Rowe Price Global Impact Equity Fund voted insupport of the shareholder resolution requesting areport on lobbying payments and policy (item 8).
| 40

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTS

Upon review, it became clear that opportunities forincreased disclosure remained in the areas of lobbyingpriorities; direct and indirect, federal, and state lobbying
payments; and trade association affiliation. Given its
impact mandate, this resolution was supported by the
T. Rowe Price Global Impact Equity Fund. However,the company already provides aggregate disclosure of
its indirect spending, which the mainstream strategies
considered to be in line with typical market practiceand acceptable.

MEASUREMENTACTIVEOWNERSHIP

69 Votable Meetings

APPENDIXRESILIENCE

Meetings Not Voted (2)Meetings Voted

67

774 Votable Items

Items Not Voted (13)§ At the Badger Meter 2022 AGM, item 4 was a shareholder
Items Voted
resolution asking the Board to provide a report onachieving racial equity on the Board of Directors. The
761
specific request was that the Board of Directors reportto shareholders within six months after the company’s
0.000000
70.363636
140.727273
211.090909
281.454545
351.818182
422.181818
492.545455
562.909091
633.272727
703.636364
annual meeting, at reasonable expense, excluding# of% With % Against
Management Proposals
Proposals Mgmt.
Mgmt.
confidential information, with action steps to foster
Elect Directors (Uncontested)
427
96%
4%
greater racial equity on the Board. Last year, we
supported a similar shareholder resolution callingManagement Compensation:
113
88%
12%
Say on Pay and Equity Plans
for a report on Board diversity, along with 85% ofshareholders. After the 2021 AGM, the Board engaged
Routine Business and
70
96%
4%
Operational Matterswith investors and appointed a racially diverse Board
member. However, the company has not yet disclosed
Capital Structure Items
52
92%
8%
actionable plans to increase Board diversity, and so the
Appoint Auditors/Approve
62
100%
0%
T. Rowe Price Global Impact Equity Fund voted for the
Auditor Fees
shareholder resolution.
There were two cases where the T. Rowe Price Global
Impact Equity Fund voted differently from the otherportfolio managers in 2022 on pay, because of the fund’s
focus on social equity within its investment process:§ At the Ashtead Group plc 2022 AGM, the T. RowePrice Global Impact Equity Fund voted against the
remuneration report because the policy it had voted
against at the 2021 AGM, which included nonstandard
one-time awards, was implemented in the period andbecause the bonus payout in full arguably did notreflect the shareholder experience. The mainstream
strategies had supported the 2021 remuneration policy
and did not find the pay decisions in 2022 problematic.
§ At the Kanzhun Limited 2022 AGM, the T. Rowe Price
Global Impact Equity Fund voted against the Post-IPO
Share Scheme because the equity plan is overseenby the chief executive officer (CEO) rather than acommittee of independent directors and there is alack of clarity on the performance conditions despite
engaging. Other T. Rowe Price strategies supported
the scheme because the company confirmed that the
CEO does not authorize his own equity grant and wetypically give newly listed companies a little time toimprove their variable pay disclosure.

Other

10

Total

734

100%

0%

Shareholder Proposals# ofProposals% WithMgmt.

% Against
Mgmt.

On Social, Political, or
Environmental Matters

17

47%

53%

To Adopt or Amend
Shareholder Rights

5

40%

60%

Amend or Remove Takeover
Defenses---

Related to Director Policies

5

60%

40%

Related to Routine Businessand Operational Matters

-

-

-

Total

27

27 Shareholder Resolutions Voted

Environmental
Political Spending and Lobbying

Corporate
GovernanceSocial

10

10

4

3

0.000000
2.454545
4.909091
7.363636
9.818182
12.272727
14.727273
17.18181819.636364
22.090909
24.545455| 41

CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Pursuit of Good Outcomes
In future years, 2022 may be viewed as pivotal in many respects. First and foremost,the year represented the beginning of the end of the most extreme social restrictions
stemming from the coronavirus pandemic, reopening borders and economies,
and reuniting segments of society after a period of enforced and unprecedented
separation. However, with the fading of one crisis, we saw the emergence of war
in Europe and the reemergence of extreme economic outcomes, most notably
as energy prices surged, causing inflation to spiral and central banks to reverse
years of stimulus.
The year 2022 will be defined by debate about economic
and societal security, extreme inflation, extreme weather,and the challenge of managing the stresses of thepresent, all while the challenges of the future continue
to become more and more pressing. And 2023 has beenno less unusual in its extremes, marking the ongoing eraof normal being anything but normal. This backdrop all
but reaffirms the need for strong principles to withstanduncertainty and the ebbs and flows of constant change.
There are no easy answers to the very real conflicts
that are playing out globally. However, we have used
the period to reflect on the role and relevance of impact
investing and our own contribution to this discipline.
While 2022 presented some very real challenges to
impact investing in a financial return dimension, we findourselves comfortable in reaffirming our core beliefs, while
deepening our processes to reflect the obligation of the
impact community and its need to continuously improve.
Notable achievements include our T. Rowe Price
Global Impact Equity Fund maintaining its Responsible
Investment Association Australasia (RIAA) certification,
while also investing in our responsible investment andresearch platforms to help analyze and understandcorporate change. Meeting many of our impact investing
peers at the Global Impact Investing Network (GIIN)
Investor Forum at The Hague was an encouraging
demonstration of adoption and progress in impact
disciplines. However, measurement of impact remains
san area that requires progression and standardization.

As we have engaged with clients, experts, and gatekeepers
and reflected in our inaugural 2021 impact report, wehave sought to refine our key performance indicators andmeasurement criteria wherever new and more precise
data allow. We shall continue to iterate in this way, whileproviding as much disclosure on our impact perspectives
as possible to ensure our reporting and our principles areclear to investors.

While 2022 presented somevery real challenges to impact
investing in a financial return
dimension, we find ourselves
comfortable in reaffirming
our core beliefs...
While the year highlighted frailties in our preparednessfor energy transition and deep social division, we believethat 2022 also represents a period that will ultimately
expand corporate investment in positive impact activities.
Our engagements with companies give us real hopethat the debate and understanding of real-world impact
is spreading, bringing change, growth, and opportunity
for investors.
Patience and persistence remain key to impact andfinancial return outcomes, but this is the nature of thechallenge—one we continue to seek to address throughour T. Rowe Price Global Impact Equity Fund.

| 42

APPENDIXCONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Initiatives Promoting Advocacy
and Engagement
As of December 31, 2022, at least one T. Rowe Price entity is a signatory,
founder, or member of the following groups committed to change.

Council of
Institutional
Investors (CII)

Principles for
Responsible
Investment (PRI)

UK Stewardship
Code

AS SOCIATE ME MBE R
SINCE 1989

SIG NATORYSINCE 2010

SIG NATORYSINCE 2010

Japan Stewardship
Code

Associação
de Investidoresno Mercado deCapitais (AMEC)

Asia Corporate
Governance
Association (ACGA)UK Investor
Forum

SIG NATORYSINCE 2014

ME MBE R
SINCE 2015

ME MBE R
SINCE 2016

FOU NDING ME MBE R
SINCE 2016

International CapitalMarket Association(ICMA)

Investor
Stewardship Group(ISG)

Japan Stewardship
Initiative

ME MBE R
SINCE 2017

FOU NDING ME MBE R
SINCE 2017

FOU NDING ME MBE R
SINCE 2019

Investment
Association Climate
Change Working
Group

Institutional
Investors Groupon Climate
Change (IIGCC)

Pensions and Lifetime
Savings Association(PLSA) Stewardship
Advisory Group

Emerging Markets
Investors Alliance

ME MBE R
SINCE 2020

ME MBE R
SINCE 2020

ME MBE R
SINCE 2020

ME MBE R
SINCE 2020

| 43

CONTENTS

INTRODUCTION

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THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCEAPPENDIX

Task Force on
Climate-related
Financial
Disclosures (TCFD)

Responsible
Investment
Association
Australasia (RIAA)

Farm Animal
Investment Risk
& Return (FAIRR)

Access to Medicine
Index

SU PPORTE R
SINCE 2020

ME MBE R
SINCE 2020

ME MBE R
SINCE 2020

SIG NATORYSINCE 2021

Task Force on
Climate-related
Disclosures (TCFD)
Consortium (Japan)

Global Impact
Investing Network(GIIN)

Sustainability
AccountingStandards Board(SASB) Alliance

ME MBE R
SINCE 2021

ME MBE R
SINCE 2021

ME MBE R
SINCE 2021

UN Global
Compact

International
Corporate
GovernanceNetwork (ICGN)

Investment
Management
Education Alliance
ESG Committee

SIG NATORYSINCE 2021

ME MBE R
SINCE 2021

ME MBE R
SINCE 2021

30% Club
Investor Group–
UK Chapter

International CapitalMarket Association(ICMA) Principles*

Net Zero AssetManagers initiative

ME MBE R
SINCE 2021

ME MBE R
SINCE 2022

SIG NATORYSINCE 2022

Access to
Nutrition InitiativeJapan
Impact-Driven
Financing Initiative

Taskforce on
Nature-Related
Financial
Disclosures (TNFD)SIG NATORYSINCE 2022

SIG NATORYSINCE 2022

FORU M ME MBE R
SINCE 2022

*Principles—Green Bond Principles, Social Bond Principles, Sustainability Bond Guidelines, and Sustainability-Linked Bond Principles.
| 44

CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIP

APPENDIXRESILIENCE

Portfolio Holdings

T. Rowe Price Global Impact Equity Fund

Pillar 1: Climate and Resource Impact
Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

AshteadProvider of rental
services for construction
equipment

Reduce the need to produce
new equipment units and,
therefore, carbon emissions
associated with equipment
ownership and underuse.

Rental services helped
mitigate approximately
491,000 tCO2e

1.4

AtlassianOperator of task sharing
platforms

Improve remote collaborationand efficiency through cloudenabled technologies, while
reducing travel and associatedcarbon footprint.

Cloud-based collaboration
software helped mitigate
approximately 810,000
tCO2e

0.8

Badger
Meter

Water infrastructure &technology

Help deliver clean, safe drinking
water, enabling sustainable
management and efficient use.

Products helped save
approximately 25 million
cubic meters of water

1.7

Ball
Corporation

Manufacturer of aluminum
packaging

Reduce reliance on single-use
plastics and replace with highly
recylable material, decreasing
waste that goes to landfills.

Use of recycled material
helped avoid approximately
2.1 million tons of waste

1.8

Brookfield
Renewable
Partners

Solar, wind, and hydroelectricity provider

Contribute toward thegeneration of zero-carbon
electricity.

Renewable energy
generation helped mitigate
33 million tCO2e

1.7

Darling
Ingredients

One of the oldest
and largest rendering
companies

Contribute toward circularity
by recycling and reusing
byproducts of the rendering
process.

Rendering business andbiodiesel production helped
mitigate approximately 15.5
million tCO2e

1.8

HubbellElectrical equipment andpower systems provider

Enable electricity grid resiliencethrough modernization andelectrification, while also
integrating renewables.

Products helped mitigate
approximately 166,000
tCO2e

1.8

IDEX
Corporation

Provider of engineeringand life sciences
solutions, including
pumps, valves, and flow
metersSupply engineered solutions
to create efficiencies inmanufacturing, life sciences,and health care.

USD 157 million spent on
research and development

1.6

Ingersoll
Rand

Manufacturer of energy
efficient air compressors
and air treatment
equipment

Increase energy efficiency whileallowing customers to reduce
their carbon footprint.

USD 91 million spent on
research and development

1.7

KeyenceInnovation and supply of
precision robotic vision
sensing

Reduce manufacturing waste,
while improving product safety.

JPY 21.7 billion spent on
research and development

1.7

Linde

Producer and distributorof industrial gases

Accelerate environmental
transition and a lower carbon
future through innovationin green hydrogen andcarbon capture, as well as
decarbonizing heavy industries.

Solutions helped customers
mitigate 90 million tCO2e

2.9

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
| 45

CONTENTS

INTRODUCTION

Company

PORTFOLIO

Business Activity

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIP

APPENDIXRESILIENCE

Primary
UN SDG% of
Fund

Impact Goal

KPI

Mueller Water Water infrastructure &Products
technology

Help deliver clean, safe drinking
water, enabling sustainable
management and efficient use.

EchoShore products helped
save 4.9 million cubic metersof water

1.3

NextEraEnergyPartners

One of the largest
renewable energy
providers in the U.S.

Contribute to the growth of zerocarbon energy sources.

Renewable energy
generation helped mitigate
approximately 12 million
tCO2e

1.7

Nibe
Industrier

Heat pump technology
company

Promote energy efficiency, while
reducing energy consumption
and associated GHG emissions.

Products helped customers
mitigate approximately
470,000 tCO2e

0.7

PG&E

Electric utility services
company serving the stateof California

Enable decarbonization byincreasing electrification.

Utility business helped
mitigate 1.1 million tCO2e

1.7

Rockwool

Manufacturer of stonewool insulation forbuildings

Improve energy efficiency ofbuildings.

Insulation products helped
mitigate approximately 56.6
million tCO2e

1.5

Roper
Technologies

Multi-industrial company
focused on water
metering, health care,and software to improve
efficiency of processes

Increase resource efficiency.

Cloud-based productivity
software helped mitigate
approximately 1.1 million
tCO2e

2.5

SchneiderElectric

Global electrical
distribution andmanagement

Enable electrification andindustrial digitization, thus
reducing emissions.

Electrical components
helped customers mitigate
93 million tCO2e

1.6

Sika

Provider of admixtures
and additives for theconstruction industry

Contribute to decarbonization
through products that makeconstruction materials andbuildings more sustainable andenergy effiicient.

Use of products helped
mitigate approximately 64
million tCO2e

0.8

SolarEdge
Technologies

Residential and utility
scale solar systems andinverter provider

Enable solar energy generation,
mitigating carbon dioxide
emissions from fossil fuel-based
power.

Solar energy systems helped
customers mitigate 31
million tCO2e

1.0

Tesla

Manufacturer of electricvehicles and providerof renewable energy
solutions

Accelerate decarbonization by
improving access to electricvehicles and renewable energy
sources in place of fossil-fuelpowered alternatives.

Electric vehicles helped
mitigate 13.4 million tCO2e

0.9

Tomra
Systems

Provider of reverse
polyethylene terephthalate(PET) collection systems

Enable circular economy by
improving post-consumer waste
collection and recycling.

Products helped mitigate 21
million tCO2e

1.0

Trane
Technologies

Manufacturer of heating,ventilation, and air
conditioning equipment

Improve energy efficiency incommercial and residentialbuildings.

Products helped mitigate 43
million tCO2e

2.0

Trex

Major manufacturerof wood-alternative
composite decking

Increase use of recycled plastic
and wood, reducing landfill anddeforestation.

Use of recycled material
helped avoid approximately
154 million tons of waste

0.6

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
| 46

CONTENTS

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THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIP

APPENDIXRESILIENCE

Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

TrimbleGlobal hardware andsoftware solutions
providerImprove resource efficiency,
logistics, and land and water
usage.

Software and hardware
solutions helped customers
mitigate approximately 8.2
million tCO2e

1.5

Waste
Connections

Waste management andrecycling specialist

Enable improved waste recycling
rates, while mitigating methane
emissions from waste.

Recycling operations helped
mitigate 6.7 million tCO2e(2021)

1.8

Pillar 2: Social Equity and Quality of Life
Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

Agilent
Technologies

Leading life science anddiagnostics firm

Improving health care innovationand patient outcomes by being
the leading supplier of life
science and diagnostic tools to awide range of end markets.

115,000 customers across
CrossLab, Diagnostics, andLife Sciences segments;
USD 467 million spent on
research and development

1.5

AIA Group

Leading pan-Asian life andhealth insurance group

Offer access to insurance
products in a region where
penetration rates remain verylow.

Access to life and healthinsurance services helped
extend approximately
500,000 lives

2.2

Alexandria
Real Estate
Equities

Largest public life science
real estate investment
trust

Create environment to fuelinnovation and accelerate
medical research.

USD 1.6 billion in rental
revenue from life science,
biotech, and medical
academia sectors

1.2

AstraZeneca

Global pharmaceuticaland biotechnology
company and leader in
immuno-oncology

Push the boundaries ofscience to deliver life-changing
medicines, while increasing
access to essential medicines.

Delivery of medical
treatments helped extend
approximately 51,000 lives

1.4

Axis Bank

One of India’s largest
financial institutions

Increase financial inclusion forretail and MSMEs in India.

Approximately 2.2 million
customers brought into thefinancial system

2.5

Bank
CentralAsia

Largest privately ownedbank in Indonesia

Supporting financial inclusion inIndonesia.

Approximately 54,000 jobs
supported through MSME
loans

2.0

BectonDickinson

Provider of medical
equipment andtechnology used to
improve health outcomes

Provide solutions that improvehealth care delivery, treatment,
and patient outcomes.

Approximately 30 million
patients treated by thecompany's products

1.5

BrightHorizons
FamilySolutionsChild-care, earlyeducation, and eldercare
providerAllowing working parents
to more effectively manage
careers, while providing more
opportunities for dual careers
reducing gender inequities.

13 million people provided
with back-up care capacity
and access to educational
services

1.1

Chailease
Holdings

Taiwanese leasing
company with a specificfocus on SMEs

Offer leasing services to SMEs
often neglected by large
institutions.

Approximately 660,000
customers brought into thefinancial system

1.7

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
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APPENDIXRESILIENCE

Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

DaiichiSankyoGlobal pharmaceuticalcompany based in Japan

Create innovative
pharmaceuticals addressing
diverse medical needs,
especially in the field of cancer
treatment.

Delivery of medical
treatments helped extend
approximately 36,000 lives

1.7

Danaher

Life sciences company
providing science andtechnology solutions tosolve health challenges

Advance patient health andimprove treatment outcomesthrough solutions that enablesuperior clinical decisionmaking, research, andmanufacturing of therapeutics.

73% of biological therapies
approved in 2022 were
supported by Cytiva
business; USD 1.7 billion
spent on research anddevelopment

3.3

Eli Lilly

U.S. pharmaceuticalcompany with leading
diabetes franchise

Increase access to truly
innovative care in diabetes,
Alzheimer’s disease, andoncology.

Delivery of medical
treatments helped extend
approximately 7,400 lives

1.6

EssilorLuxottica

Producer of ophthalmic
goods and optical
instruments

Improve health and well-being
by providing eye care protection
and groundbreaking advances in
eye technology.

Ophthalmic products helped
extend approximately
135,000 lives

1.3

EvotecProvider of drug
discovery anddevelopment solutions
for pharmaceuticalcompanies

Provide sophisticated drug
discovery tools and platforms
that help reduce the cost
and time involved in drug
development.

Solutions help enablereduction in time and costof drug development by
30% and 50%, respectively,
vs conventional in-housediscovery; EUR 77 million
spent on research anddevelopment

0.7

Fortinet

Global network and cloudsecurity solutions provider

Provide cyber protection
for cloud and data center
operations powered by energyefficient solutions.

25,000 ransomware variants
stopped and 109 zero-day
threats discovered

0.9

Hamamatsu
Photonics

Manufacturer of opticalsensors, electric lightsources, and otheroptical devices as well
as automotive safety
solutionsImprove the detection of healthcare issues through better
imaging as well as improving
automotive safety through LiDAR
technology.

JPY 11.3 billion spent on
research and development

1.4

HDFC Bank

Indian bank offering
financing services to
India’s underserved
population

Increase financial inclusion
for retail and micro, small, andmedium enterprises with a
specific focus on semiurban andrural areas.

Approximately 360,000
customers brought into thefinancial system through
ECLGS and PMJDY
schemes

2.7

HubSpot

Cloud-based platform
offering sales andmarketing automation
solutions to SMEs

Enable financial inclusion by
providing affordable technology
solutions to SMEs powered byenergy-efficient solutions.

Cloud-based software
applications have 1.2 million
active users and support
100,000 SMEs

0.9

IntuitFinancial software
provider focused almost
exclusively on SMEs

Promote financial inclusion
using new technology to help
consumers and SMEs.

Financial services software
helped create approximately
USD 3.5 billion in economic
activity and support 33,000
jobs

2.1

Intuitive
SurgicalGlobal leader of roboticassisted surgery

Make surgery more effective,
less invasive, and easier onpatients and surgeons throughadvanced robotics.

Surgical procedures assisted
by Intuitive's da Vinci robotics
system helped extend
approximately 1,000 lives

2.0

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
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CONTENTS

INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIP

APPENDIXRESILIENCE

Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

KanzhunProvider of digital
recruitment platform in
China

Promotes greater inclusivityof employment by
increasing opportunities forunderpriviledged groups.

Recruitment platform
supports 101 million verified
users and 8.5 million SME
users

0.9

Koninklijke
DSM

Global purpose-led,science-based company
specializing in nutrition,
health, and bioscience

Reduce hunger and malnutritionin the food chain and improve
nutrition for those who need it
most.

Reached 642 million people
with solutions for plantbased foods and 321 million
people with immunitysupporting products

1.3

Lonza
Group

Global partner to thepharmaceutical, biotech,and nutrition markets

Strategic partner to the healthcare industry helping to bring
down the prices of medicines.

Over 790 biopharma clients;
CHF 95 million spent on
research and development

1.4

MSA Safety

Leading manufacturer ofsafety equipment

Protect workers from injuries
and health-threatening incidents.

2.3 million workers protectedby fall protection systems
and industrial helmets

1.3

Nu
Holdings

Brazilian digital bankoperating throughout
Latin America

Promote financial inclusion by
providing low-cost services
to underserved or unbanked
populations.

5.7 million people brought
into the financial system with
their first credit/debit card

0.9

OneMainHoldings

Lender focusing on
subprime personal andauto loans

Improve credit access to thosewith limited access, while
also providing budgeting andfinancial literacy resources.

Approximately 617,000
customers brought into thefinancial system

1.3

Sartorius

Life sciences company
providing tools andequipment to improvehealth outcomes

Improve patient outcomesby providing products that
help make the therapeutic
manufacturing process cheaperand more efficient.

EUR 178 million spent on
research and development

1.4

Shopify

Multinational cloud-based
e-commerce platformlargely focused on SMEs

Enable SMEs easy accessand opportunity to create andmanage online businesses
enabling effective competition.

E-commerce platform
helped create approximately
USD 444 billion in economic
activity and support 5.7
million jobs

0.6

Stryker

Medical technology
company with specificleadership in orthopedics
and medical surgery
solutions

Provide innovative solutions that
improve treatment outcomesand quality of life for patients.

130 million patients servedby the company's medical
devices

1.0

ThermoFisherScientificLife science tools
company providing
science and technology
solutions to solve healthchallenges

Provide innovative solutions to
help improve life for patientsand therapeutic research anddevelopment outcomes.

Organ transplants
supported by the company's
tools helped extend
approximately 195,000 lives

2.6

UnitedHealth

Largest health insurer
and value-based caretechnology provider in the
United States

Provide a health care safety net
while improving coverage foraging populations and pursuingcost-reduction initiatives.

Approximately 12,000 lives
extended as a result of
Medicaid membership

2.0

Veeva
Systems

Cloud-based software
solutions provider for thelife sciences industry

Enabling health care companies
to engage in faster and moreaccurate clinical trials andachieve better health careoutcomes.

Veeva's software solutions
serve roughly 1,400
biopharma and life sciences
customers

1.4

ZoetisWorld’s largest producerof medicine andvaccinations for pets andlivestock

Provide products and services
that improve companion animal
health and the quality of life in
the livestock food chain.

USD 539 million spent on
research and development

1.6

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
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APPENDIXRESILIENCE

Pillar 3: Sustainable Innovation and Productivity
Primary
UN SDG% of
Fund

Company

Business Activity

Impact Goal

KPI

ASML
Holding

Leading providerof lithography tosemiconductor industry;sole supplier of extreme
ultraviolet lithographymachines in the world

Through innovation in chip
manufacturing, enableenergy efficiency and digitalconnections.

EUV NXE systems led to a
37% reduction in energy use
per wafer relative to 2018baseline; EUR 3.1 billion
spent on research anddevelopment

2.5

Synopsys

Largest and fastestgrowing electronic design
automation company witha dominant position indigital design

Enabling innovative chip designthat improves energy efficiency
and reduces the digital divide.

System on a Chip designs
helped enable a 25% power
reduction for customers;
USD 1.7 billion spent on
research and development

1.5

TSMC

World’s largest
semiconductor
manufacturer

Improve energy efficiency
and foster digital connections
throughout the world.

TWD 163 billion spent on
research and development

1.5

Sources: T. Rowe Price, Net Purpose estimates, individual company annual reports.
Data shown for the T. Rowe Price Global Impact Equity Fund as of December 31, 2022. Subject to change without notice. The securities shown
represent 100% of the publicly-traded securities held in the pillar shown.
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THEMATIC
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Engagement in Action
Our engagements with companies in our investment universe serve to inform our impact research,highlight gaps in impact data measurement, and/or share sustainability best practices in areas suchas impact measurement, KPI target setting, and expanding the scope of impact.
Our engagements in 2022 had distinct objectives. For the securities we added to the portfolio, ouraim was to establish an impact dialogue and set a baseline to monitor progress toward specificoutcomes over time. For securities already held, we aimed to measure progress from the previous
year; this included measurement of KPIs, merger and acquisition activity, and impact guidance.
We use engagements to encourage portfolio companies to improve transparency and disclosuresin reporting that will allow investors to more effectively assess and link outcomes to impact.
Below is a summary of engagements with information pertaining to our impact thesis and outcomes.

Impact Engagements
Company

Investigate

InformInfluence

Objective

Comments and Outcomes

Impart our viewson the company’s
deliveredimpact, improve
our impact
assessments, andprovide feedback
on impact-related
disclosure items

 Broad ESG considerations are integrated into the company’s strategy, culture, andoperations, but there are challenges in measuring and assessing impact under acommon lens—there are 50 different businesses split into three segments—anddifficulties in gathering customer data.
 Sales from the company’s different segments are linked to different types of impact,
including energy efficiency, waste reduction, and employee safety.
 The company’s current reporting does not make impact-related disclosure, and we
encouraged it to set up appropriate impact metrics by providing examples (such as
customers’ greenhouse gas emissions avoided).
 Positively, in the first quarter of 2023, the company expects to publish its debut
Sustainability Report (new ESG messaging versus its prior CSR Report), which will
include enhanced ESG disclosure, a new materiality assessment, and a new mission
statement.

DECEMBER 2022
IDEX Corp

Outcome We established a dialogue that allowed us to share our views on several impact-related
subjects. We will monitor the company’s future sustainability reporting for progresson the impact-related disclosures and metrics that we believe are most helpful forinvestors to measure.

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Company

Objective

Comments and Outcomes

UnitedHealthGroup

Share our viewon how thecompany could
build on existing
disclosures tofurther evidence its
additionality andimpact in futurereporting UnitedHealth Group (UNH) leads the managed care industry in impact measurementwith the broadest range of impact KPIs of any MCO. Additionally, the company has set
three impact targets: a) 85% of UNH members will receive preventive care services
annually by 2030, b) 55%+ of UNH outpatient surgeries and radiology services will
be delivered at high-quality, cost-efficient sites of care by 2030 and c) UNH will close
600m gaps in care by the end of FY25. This is one of the most comprehensive target
sets focused on impact across the health care sector.
 We wanted to understand 1) how these targets intersect with UNH’s broader corporate
strategy, 2) UNH’s approach to delivering against each of these targets, and 3) impart
our view on how the company could further improve impact disclosure.
 Across each of its three target areas, UNH highlighted several considerations as
it seeks to deliver against these objectives. (1) Access to care, where deploying
care resources into homes is a critical driver and is a key focus for the company. (2)Affordability, where as an example UNH highlighted the delivery of care in ambulatory
settings, which can halve costs, while delivering stronger patient NPS and superior
clinical efficacy. (3) Improved outcomes, where understanding health equity
considerations implicit in any care gap is critical in UNH’s view.
 We imparted our view that additional granularity on a) the specific types of caregaps closed (as defined by HEDIS) or b) types of preventive care offered (defined inaccordance with American Medical Association guidelines) would be beneficial to get amore rounded view of UNH’s additionality. We also suggested UNH provide a summary
in its ESG report showing key KPIs associated with each of the three targets.
Outcome We will be monitoring future reporting for additional disclosures that support UNH’s
preventative care KPIs and key drivers of its progress toward closing care gaps.
 We will continue to monitor additional disclosures on the pathway for UNH’s scope
1 and 2 net zero target and scope 3 emissions reporting.

NOVEMBER 2022
AstraZeneca

As part of anindustry event
following therelease of the2022 Accessto Medicine
Index (ATMI), we
engaged withAZN to share ourviews on how it
could enhance
disclosure andtransparency
on access to
medicine AstraZeneca (AZN) has made substantial progress in the ATMF’s Access to Medicine
Index, rising from 16th place a decade ago to 3rd today. While we focus on key findings
from the index (e.g., progress on R&D) rather than absolute rankings, AZN neverthelesshas one of the most credible access-to-medicine strategies in the industry.
 AZN highlighted its PUMUA Initiative, a program focused on asthma care in Africa,and Healthy Heart Africa, as two examples of commercially focused access models.
AZN seeks to have a range of access offerings across the spectrum of donations (i.e.,
philanthropy) through to more commercially oriented access models.
 AZN has made substantial progress in integrating access considerations into R&D;
access plans now cover 96% of the late-stage pipeline versus 20% in the prior iterationof the index. AZN’s pipeline is also one of the deepest in noncommunicable diseases
versus its peers. The company identified moving access planning to earlier stages ofclinical trials and greater awareness of the unique challenges of low-income countries
as key priorities for improvement. We imparted our view that it would be helpful for
AZN—and the broader industry—to provider greater transparency on how accessconsiderations are considered. These data are typically disclosed only to the ATMF
rather than in public sustainability reports.
 T. Rowe Price (TRP) gave AZN several recommendations relating to access disclosures.
We recommended AZN include specific information on the outcomes of its accessefforts (i.e., not just patients reached but additional data around DALYs) in future
iterations of its sustainability report. This would help evidence its additionality and is anarea where peers such as Gilead, Takeda, and Novartis are stronger. AZN is currently
completing a five-year study on its access efforts within its respiratory portfolio andintends to reference this in its sustainability report. We also suggested additional KPIs
AZN uses in its financial disclosures be included in sustainability reporting (e.g., >100m
patients reached in main disease areas; >130 countries where AZN sells products).
Outcome We will monitor future sustainability reporting for additional disclosures to address
how access considerations are integrated into drug development and R&D, as well as
inclusion of financial KPIs relevant to impact.

Scope 1 Carbon Emissions: Direct emissions from owned or controlled sources (e.g., factories, owned fleet). Scope 2 Carbon Emissions:Indirect emissions, such as those from the generation of energy used for heating or cooling consumed by the reporting company. Scope 3
Carbon Emissions: Includes all other indirect emissions that occur in a company’s value chain, upstream and downstream (e.g., for a company
like T. Rowe Price, this would include emissions associated with business travel and waste disposal).
For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Company

Objective

Comments and Outcomes

Sartorius

We engaged to(1) inform ourunderstandingof the company’s
approach to
impact and (2)impart our view on
how the company
could better
demonstrate its
additionality andimpact in healthcare in futurereporting Sartorius’ views were broadly aligned to our own impact thesis on the company. Its
products play a key role in the production of biologics and contribute to reducing thecosts/time involved in drug development. This also has ramifications for potentiallyaddressing the high cost of biologic treatments, in the company’s view.
 Highlighting the ultimate affordability of drugs is unique for a life sciences company.
The company believes that, considering the significant costs and immaturity of thebiopharma industry, suppliers can play a key role in improving the accessibility of drugs.
 For life sciences companies, impact disclosure remains more basic versus otherparts of health care (which can more easily distill their impact into patients reached,for instance). A large part of the meeting, therefore, focused on understanding thecompany’s current thinking on impact reporting and imparting our view on potential
future disclosures.
 In discussing potential means to help investors evidence the company’s impact, wetouched on potential disclosure in a range of areas, including cost and efficiency
benefits of its products, breadth of impact throughout the biologics space, and productand consumer case studies.
 We provided examples of peer disclosures and case studies that could be used as a
guide for future reporting.
 Cost and efficiency: While on an instrument or individual facility level, Sartorius can
exemplify how it contributes to enhanced productivity/reduced cost, providing a
blended figure to this effect across the business is extremely challenging due tosignificant variability in customer product use. Its single-use products also have safety
benefits, which are difficult to quantify at large. We highlighted Wuxi Bio’s bioreactor
data showing single use versus stainless steel cost differences at different bioreactor
scales as a potential approach to better highlight the company’s contribution to
reducing manufacturing costs and enhancing efficiency at different scales.
 Breadth of impact: We also suggested metrics such as the proportion of biologics
in which Sartorius’ products are specified as another more general, group-wide
KPI reported by some peers that could be beneficial to disclose. We noted TMO’s
disclosures as an example of best-in-class impact reporting in life sciences.
 Product and customer case studies: Sartorius highlighted several customer casestudies where its products have been used to reduce the manufacturing costs andenhance efficiency. For instance, Amgen highlights a new Singapore facility in its ESG
report—Sartorius is a key supplier to this facility according to their Investor Relations
department. Client confidentiality constraints can make it challenging to highlightsimilar case studies in Sartorius’ own ESG reporting. However, we encouraged thecompany, where possible, to include case studies as proof points of the impact
credentials of the business.
Outcome We established a dialogue on impact that allowed us to share our view on future
disclosures, case studies, and KPIs that would be helpful in future reporting. We will
monitor for these and SASB disclosures in future reporting.

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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APPENDIXCONTENTS

INTRODUCTION

Company

PORTFOLIO

Objective

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Comments and Outcomes

SEPTEMBER 2022
DanaherGain a greater
understandingof the company’s
approach todisclosure anddata collection
and convey our
preferred impact
metrics

 While Danaher already provides several extensive impact KPIs for its Environmental
and Applied Solutions segment, reporting and data collection is more challenging
for life sciences and diagnostics. Danaher is working with individual business units tomeasure and develop accurate impact KPIs for these businesses. We conveyed theimportance of transparency in impact KPIs and were encouraged by the company’scommitment to this. Danaher anticipates being able to publish the KPI output of its
current efforts in next year’s sustainability report.
 Since the company has not yet decided on any firm impact metrics to report, we
discussed several potential impact disclosure items that are currently reported bypeers related to life sciences and diagnostics.
 In its ESG report, Danaher includes several examples of partnerships/programs that
seek to improve access to health care at the individual operating company level. We
encouraged the company to be more explicit in detailing its approach to access tohealth care to help evidence its additionality in this area in future reporting.
Outcome We were pleased by the company’s receptiveness and progress toward improving
its metrics gathering and disclosure, which can be more difficult for companies withmultiple segments.
 We will monitor future reporting for expanded impact KPIs addressing Danaher’s core
impact in life.

Ingersoll Rand

We sought tobetter understandthe company’s
approach to
impact and share
our views on
several issues

 Ingersoll Rand (IR) has invested heavily in assessing and calculating the use-phase
impact of its entire product portfolio. Customers can now have a clear reading of
the environmental benefits of IR’s products with metrics such as average useful life,
average run hours, product reused content, electricity use, greenhouse gas emissions,and water consumption.
 The company helps customers identify areas of sustainability improvement through its
service and maintenance business and on-site audits. The number of audits done in
the U.S. has significantly increased since 2019 as customers are increasingly looking
for opportunities to lower costs through sustainability and appropriate paybacks,
particularly in downturn cycles.
 We recommended that the company provide additional disclosures on how it delivers
positive environmental impact for its customers by leveraging existing impact KPIs,
and establishing metrics to demonstrate the benefit their services, maintenance, andauditing activities create.
 The company is increasingly involved in the remanufacturing business, aiming at
prolonging the life of its machinery and components, thus reducing raw material use
and waste. It sees this as an opportunistic business but does not make substantial
disclosure in its reporting, so we suggested that they increase their reporting on thisbusiness to highlight the derived impact to customers.
 Management long-term incentives or annual bonus are not yet linked to sustainability
targets, but they are currently part of management conversations and will be included
among the topics of the next board meeting with focus on linking compensation toenvironmental and diversity, equity, and inclusion targets. The company has alreadystarted to operationalize sustainability at the business unit level, and we stressed theimportance of providing disclosures that highlight how this is being achieved.
Outcome We gained greater understanding of the company’s approach to measuring andreporting impact and imparted our views on how current reporting could be improved.
We made several suggestions for how it can demonstrate its environmental impact
and to diversify itself from competitors with extra value-add activities related tosustainability impact.
 There are several areas to monitor, and we will maintain dialogue with the company
through further engagements to improve our impact assessment.

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Company

Objective

Comments and Outcomes

Keyence

We engaged with
Keyence to inform
our understanding
and impart ourviews on thecompany’s impact

 Keyence’s devices aim at improving manufacturing precision, reducing the number ofdefective products, and reducing the materials requirement in manufacturing, all ofwhich result in lower manufacturing waste, higher resource efficiency, lower costs, andhigher customer productivity. This also results in a lower carbon footprint.
 Keyence currently discloses simple resource savings estimates but does not haveactual figures on its customers’ energy, waste, or greenhouse gas emissions savings.
Keyence participates in product manufacturing and sale but does not currently monitor
its products’ utilization once at the customer site. We believe having one or more
impact metrics to demonstrate the environmental benefits associated with Keyence’s
products for the end user would be extremely helpful in measuring impact.
 The company also invests in product safety/robustness and has a dedicated “Safety”
product line, but it does not disclose an associated percentage revenue from its safety
products or other suitable impact metrics. We therefore shared that disclosing metrics
to this effect would be helpful in quantifying derived impact.
Outcome We suggested that the company evaluate and disclose metrics that can better
evidence its direct impact to end customers, as well as metrics demonstrating its social
impact to customers via its “Safety” product line.
 We will also monitor progress on Scope 3 emission disclosures over time.

ZoetisWe engaged with
Zoetis (ZTS) to:(1) provide our
input on impact
disclosures andimpart our view on
the importance ofevidencing impact
for investors/otherstakeholders and(2) inform ourunderstandingof the company’s
approach to
ESG and impact,
following the
publication of thecompany’s FY21
sustainability
progress update(which includes
several impact
relevant KPIs)

 Animal pharma companies are at an earlier stage of impact disclosures relative tohuman therapeutics. Some of Zoetis’s metrics for animals treated are reported at theinitiative level, but we highlighted the helpfulness of reporting group-wide KPIs where
possible.
 Metrics related to its companion-animal health segment is an area in which thecompany could improve, and we shared our view that it would be desirable for it toreport metrics that highlight the company’s impact in this segment, as well as casestudies that highlight specific examples.
 Zoetis noted its focus on disease prevention rather than treating sickness as and when
it arises. The company argues that this results in meaningful impact and sustainability
benefits. For instance, it noted a study highlighting that dairy cows in Europe emit
20% more methane but produce fives times more milk than comparable cattle in subSaharan Africa due to superior health and disease prevention.
 Encouragingly, Zoetis integrates ESG considerations into new product development
and hopes to be able to provide quantitative proof points in future reporting.
 Recent studies have highlighted that bacterial antimicrobial resistance (AMR) has
been a significant cause of livestock deaths in recent years, which the World HealthOrganization believes could be a result of antibiotics misuse. Zoetis has significantly
shifted its portfolio away from antibiotics over the past 15 years, with a significant
portion of the current portfolio used for specific treatment of disease rather thanprophylaxis. We encouraged the company to provide greater detail on this subject infuture reporting.
 Much of this information is not included in its ESG report, and we encouraged thecompany to provide greater transparency on this topic in public reporting, particularly
since a number of investors are seeking to engage the company on this topic througha FAIRR collaborative engagement (TRP is also a signatory). The company expressedmore interest in engaging with individual investors than with FAIRR. ZTS agreed,
however, that it could provide more detailed information on its antibiotic stewardshipefforts in reporting.
Outcome We will monitor future reporting for quantitative data detailing the integration ofenvironmental and social considerations into product development.
 We will monitor future reporting for greater detail on antibiotic stewardship and groupwide impact KPIs, especially within its companion animal segment.

Scope 1 Carbon Emissions: Direct emissions from owned or controlled sources (e.g., factories, owned fleet). Scope 2 Carbon Emissions:Indirect emissions, such as those from the generation of energy used for heating or cooling consumed by the reporting company. Scope 3
Carbon Emissions: Includes all other indirect emissions that occur in a company’s value chain, upstream and downstream (e.g., for a company
like T. Rowe Price, this would include emissions associated with business travel and waste disposal).
For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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INTRODUCTION

Company

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Objective

Comments and OutcomesWe engaged with
Agilent to: (1)provide our input
on potential impact
disclosures andimpart our view of
the importance ofevidencing impact
for investors/otherstakeholders and(2) inform ourunderstandingof the company’s
approach to
ESG and impact
following the
publication of thecompany’s FY21
ESG report For life sciences companies, impact disclosure remains more basic versus otherparts of health care (which can more easily distill their impact into patients reached,for instance). A large part of the meeting therefore focused on understanding thecompany’s current thinking on impact reporting and imparting our view on potential
future disclosures.
 Agilent does track several metrics internally, but few are externally disclosed. We
highlighted several opportunities for additional disclosures that would help evident
Agilent’s impact related to R&D expenditures, diagnostics tests enabled, and productcase studies.
 While life sciences tools companies are key enablers of impact in biopharma,
attributing this to specific numeric KPIs is often challenging. To this end, werecommended the company include product level examples showing applications
and the benefits that they offer to customers. We suggested that the company could
spotlight its impact in the oncology space, which would be easier to quantify and be astrong proof point of additionality.

We engaged with
Ingersoll Rand
to impart ourviews on bestpractices for theirenvironmental
targets andassociated capital
allocation process

 The company has already set ambitious forward-looking targets for CO2e and watersavings by 2030. We recommended that it adopt and provide additional disclosure onnearer-term, annual targets utilizing the same or similar metrics for investors to track
their progress against targets on a yearly basis.
 We recommended that Ingersoll Rand provide additional disclosure on how thecompany’s goals on CO2e emissions and water savings are incorporated into its capital
allocation process given the company’s highly acquisitive nature, as well as examples
of how it performs energy “audits” on its clients to illustrate how their product portfolio
can help them save energy and costs.
 We also recommended the company provide additional disclosure on how today’s highenergy price environment is affecting clients’ decisions in accelerating the adoption of
more energy-efficient compressors, vacuums, pumps, etc., based on more favorable
payback periods.

AUGUST 2022
Agilent
Technologies

Ingersoll Rand

Outcome The engagement allowed us to begin an initial dialogue on impact and helped us tounderscore the value of providing impact disclosures both for investors and otherstakeholders. We were encouraged by the company’s progress on greening its productportfolio.
 We will monitor future reporting for additional impact KPIs.

Outcome We will look for future disclosure related to CO2e emissions and water savings, including
annual targets and how those goals are incorporated in the capital allocation process.
 We will monitor future reporting for greater transparency into how the company
performs client energy “audits.”

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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INTRODUCTION

PORTFOLIO

THEMATIC
INSIGHTSMEASUREMENTACTIVEOWNERSHIPRESILIENCE

Company

Objective

Comments and Outcomes

Roper
Technologies

We met with
Roper to seek
guidance on
impact alignment
and measurement
across its portfolio
companies Roper’s approach to environmental and social aspects of ESG have been moreconservative relative to their more ubiquitous governance practices. There are two
aspects of why they have been deliberately more pragmatic in their sustainability
approach relative to the industry.
 First, they have been hesitant to be associated with ESG as a marketing exercise, citingthat companies who are bad businesses often use ESG to signal virtue.
 Second, ESG strategies are generally top-down, which counters how they run theirbusiness. For example, the CFO articulated that he would rather build a diverse andcompetitive talent pool from the bottom-up that helps make the enterprise morecompetitive than simply add more corporate functions at the top.
 We relayed to Roper that impact investing incorporates ESG into the process as well as
measuring sustainable activity that aligns with the UN Sustainable Development Goals.
In the absence of standardization, measuring environmental and social impact can bechallenging, and we often ask for guidance from companies or ask that they disclose
more data.
 Measuring Roper’s impact has distinct challenges because many of their products’environmental and social benefits are realized by their indirect customers. As an
example, Roper would be able to provide an estimate of cost savings for health carecompanies but would be unable to say what percent of those potential savings wereactioned.
Outcome We asked for Roper’s guidance on our estimations of their environmental and social
impact. We also provided research that we received from our impact research provider,
Net Purpose, to demonstrate how it estimates Roper’s impact.
 We will reengage with Roper on impact alignment and measurement and review thecompany’s next annual report for social and environmental data that will be useful for
impact KPI measurement.

Sika

Discuss impact
measurement andquantification, as
well as a broader
discussion about
the company’ssustainability
strategy Sika confirmed that it believes that 70% of its revenues are from products that have apositive sustainability impact, which supports our assessment of impact alignment.
Sika is currently running a project to determine its taxonomy alignment, which it aims topublish in its next annual report.
 We stressed the importance of being able to quantify and measure impact andencouraged the company to publish an estimate of the GHG emissions and watersavings enabled by its products. The company is clearly doing a lot of work to quantify
these, but we highlighted that an estimate would still be beneficial in the meantime.
Outcome The engagement confirmed our view that a significant portion of revenue is aligned tosustainable impact.

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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Company

Objective

Comments and Outcomes

Thermo Fisher
ScientificBetter understandthe company’s new
impact metrics andshare our view on
how the company
could build on thisnew disclosure tofurther evidence its
additionality andimpact in futurereporting Thermo Fisher’s 2021 ESG reporting disclosed a range of new impact metrics. This has
resulted in some of the most robust reporting across the life science tools and services
industry. The company newly reported (1) the number of diagnostic tests enabled, (2)patients served with medicines manufactured by the company, and (3) the number oforgan transplants supported.
 The company’s varied roles across health care makes it difficult to distill its impact
down to a single metric. Management has instead focused on encouraging business
units to track KPIs relevant to each, an approach they believe results in more
appropriate impact metrics and stronger conclusions than a centralized approach.
The company is wary of double-counting in its methodology, but we highlighted thatgroup-level metrics or a broader range of data points would be beneficial.
 Thermo Fisher intends to provide more granularity into the metrics currently reported
and has also discussed highlighting the impact of other parts of the business. We
advocated that the company also consider providing greater granularity on its R&D
spend alongside these plans. It highlighted some challenges around this approach
but acknowledged there is scope to share spend for products used in specificapplications, such as cancer research.
 We imparted our view that setting impact-oriented targets often makes sense not
only from a sustainability standpoint, but also a financial one. Although the company
was reticent to set impact objectives linked to executive compensation given thechallenges of measuring and auditing these metrics remain high, it was more receptive
to increasing the range of targets it has on ESG more generally.
 Several press articles have previously alleged that Thermo Fisher’s products havebeen used by police as a genetic surveillance tool to monitor minority populations in
Xinjiang, China. The company clarified that its technology is not actually able to do this,but that it has stopped selling its products to Xinjiang regardless. More generally, thecompany has developed an extensive set of controls and safeguards to prevent humanrights issues. It has a bioethics working group—directly reporting to senior leadership—
which assesses the use of the company’s products and its controls.
Outcome The engagement allowed us to share our view of best practices on impact and request
additional impact disclosures from the company that help provide a more rounded
picture of Thermo Fisher’s full impact in future reporting. The meeting also informed
our view of the company’s general approach to a broader range of ESG topics such asenvironmental sustainability and bioethics—including conducting Do-No-SignificantHarm due diligence.
 We will monitor future reporting for additional impact disclosures that help better
evidence the company’s impact, such as R&D related disclosures/examples and greater
granularity on the scope of existing impact metrics.

JUNE 2022
MercadoLibre

Impact due
diligence
process on thesocial outcomesgenerated by thecompany The company is aiming to support distribution of more sustainable products bycreation of a dedicated area of its website and allowing merchants to charge a
premium for sustainable products.
 SMEs have historically been poorly served by banks in the region. MercadoLibre has
the advantage of visibility into SME business performance through its e-commerce
platform, which enables it to provide high performing loans and credit services that
SMEs may otherwise not be able to access. It expects that as repeat loan customers
grow, it will be able to offer lower annual percentage rates (APR), higher loan amounts,
and improve debt performance. We encouraged the company to provide transparency
on SME loan spreads and how these are expected to evolve.
 On the consumer lending side, MercadoLibre highlighted that the best performing loan
product is the personal loan—which can drive consumption but also opens avenues forhealthier borrowing categories, such as education and home improvement.
Outcome The meeting helped us engage with MercadoLibre and present our views on reducing
carbon intensity and improving social access to their financial products.
 After a strong run in the stock and initiating a position in Brazil-based Nubank, weelected to eliminate our position in September to keep balance in our bets.

Scope 1 Carbon Emissions: Direct emissions from owned or controlled sources (e.g., factories, owned fleet). Scope 2 Carbon Emissions:Indirect emissions, such as those from the generation of energy used for heating or cooling consumed by the reporting company. Scope 3
Carbon Emissions: Includes all other indirect emissions that occur in a company’s value chain, upstream and downstream (e.g., for a company
like T. Rowe Price, this would include emissions associated with business travel and waste disposal).
For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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Objective

Comments and Outcomes

Provide input on
impact metrics
and disclosures
as the company
works toward
publishing its
first sustainability
report, and better
understand thecompany’s impact
profile The company’s planned ESG framework is split into two pillars: its mission (focusing
on its impact on society) and its model (supported by seven interlinked focus areas),
where the focus is on ESG more generally.
 We reiterated our preference for SASB-aligned disclosures, with which the company
agreed, and noted that its current UN SDG disclosures are in line with market practice.
 In its annual report, the firm outlines several impact case studies. As the company
begins to expand its impact reporting ahead of its full sustainability report, we
discussed several potential ways for the company to articulate impact via metrics
related to access to sequencing, cost of sequencing, and contribution to scientificresearch, for example.
 The company noted that some metrics that they would like to include in reporting arechallenging to quantify in practice and that much of the potential evidence of positive
impact tends to be based on case studies. Throughout our discussion, we stressed
the importance of a robust methodology to measure impact and the importance ofclearly spelling out the model the company uses to achieve impact. We also noted thatquantitative KPIs are especially valuable for tracking impact.

MAY 2022
OxfordNanopore
Technologies

Outcome We gained insights into the company’s approach to, and provided recommendations
for, its inaugural sustainability report, and we provided ideas for driving greater social
impact through greater access for their products, especially in less fortunate end
markets.
 However, we decided to eliminate our position in October as competition for genome
sequencing accelerated and we became less confident in its ability to carve out ameaningful competitive moat.
Stryker

Discuss thecompany’s new
disclosure ofpatient lives
impacted andimpart our view onother areas of thecompany’s ESG
strategy In Stryker’s 2021 ESG reporting, it disclosed for the first time that it impacts more than
100 million patients annually. This figure is based on capital, implant, and disposable
products across the patient episode of care.
 The company noted this number is “really conservative” and that they have tried to
be as rigorous as possible while also attempting to reduce redundancies in arriving
at this figure. Although not mentioned in the report, the “more than 100million” figure
is derived from 2019 data. While acknowledging that impact data is more challenging
to collect and calculate in MedTech versus Pharma, going forward, we asked that thismetric be disclosed annually.
 Given the publication of a group-wide impact metric, we also requested additional
divisional level granularity in future reporting. While the company already includes
some examples in their ESG reporting (e.g., Mako, Sage), we asked that more casestudies from clinical studies showing the impact of Stryker’s products be included infuture reporting.
 In 2021, Stryker introduced a new corporate responsibility strategy with three pillars:(1) stronger people, (2) healthier planet, (3) good business. Stryker explained they
intend to add new targets as and when relevant over time. Focus areas include productquality, where it has historically lagged its peers, and scope 3 emissions, where thecompany acknowledged the need to set science-based targets across the value chain.
Outcome We shared our view on impact best practices and requested additional disclosuresfrom the company in future reporting. The meeting also informed our view of thecompany’s approach to topics such as product quality and emissions.
 We will monitor for annual disclosure of the patient lives impacted metric and greater
granularity on the components of the total, as well as inclusion of clinical study
examples and scope 3 emissions reporting.

Scope 1 Carbon Emissions: Direct emissions from owned or controlled sources (e.g., factories, owned fleet). Scope 2 Carbon Emissions:Indirect emissions, such as those from the generation of energy used for heating or cooling consumed by the reporting company. Scope 3
Carbon Emissions: Includes all other indirect emissions that occur in a company’s value chain, upstream and downstream (e.g., for a company
like T. Rowe Price, this would include emissions associated with business travel and waste disposal).
For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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Objective

Comments and Outcomes

Discuss theimportance ofexpediting carbon
mitigation atcustomer facilities

 We impressed upon management the need to quantify customer carbon emissions
mitigated versus their own emissions, and how this should be part of its core strategy.
 We spent a considerable part of the meeting discussing Linde’s strategy for helping
to decarbonize heavy industries, including the potential ESG implications of being
more involved in liquefied natural gas if Russia ends up being sanctioned (which did
eventually occur).
 Linde’s view is that it is still making customers more efficient here across the board. On
the engineering side, Linde believes that its gas management plants are going to be
critical and will be better than the existing technologies.
 We also discussed the role that Linde could play in accelerating the development ofgreen hydrogen, and the role that they could play in helping industries transition toward
the use of green hydrogen.

FEBRUARY 2022
Linde

Outcome We made our view clear that quantifying and reporting customer carbon emissions
mitigated should improve, as well as disclosures related to its own decarbonization andgreen hydrogen efforts.
 Monitor Linde’s reporting for additional disclosures related to customer GHG emission
savings.
Roper
Technologies

Provide ourviews on how thecompany could
better evidence
and quantify its
impact We stated the importance of improving disclosure on quantifying its impact, as wellas its broader ESG disclosure. The company’s disclosure, particularly in relation to its
water infrastructure assets, is limited.
 We encouraged the company to attempt to measure the industrial productivity benefits
and the elimination of waste within its industrial and network software businesses.
 The company has a significant cash balance, so we encouraged the allocation of more
capital toward impact-oriented areas, especially in the water space.
Outcome Positively, there was a strong acknowledgment from the CEO that they need to do
better in this regard, which was positive.
 We will monitor the company’s reporting for enhanced ESG and impact disclosures, aswell as monitoring its progress in allocating capital into more impact-aligned businessareas.

For illustrative purposes only to highlight the impact investment process. Unless otherwise noted, data were provided by the company during
the engagement or are available through company reports. The specific securities identified and described do not represent all of the securities
purchased, sold, or recommended for T. Rowe Price clients, and no assumptions should be made that investments in the securities identified anddiscussed were or will be profitable.
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Global Impact Equity TeamHARI BALKRISHNA

Portfolio Manager(London)

CHRIS VOST

Investment Analyst(London)LAURENCE TAYLOR

Portfolio Specialist(London)FATNA CHELIHI

Senior Portfolio
Analyst (London)

JOCELYN BROWN

Head of Governance,
EMEA and APAC
(London)Research Is Our Foundation
We leverage our firm’s traditional and responsible
investment research resources to bring together
a high-conviction portfolio, seeking long-term
growth in value of investments, and to have apositive impact on the environment and society

Regional expertise aids our search for companies
on the side of secular change that aligns with
our impact goals, while informing us on
macroeconomic risks

Sector expertise aids global stockcomparisons and the identificationof secular change

1

GlobalImpactEquityImpact Focused,
Research Enabled

Regional Strategies
63 Regional and Diversified
Portfolio Managers

Global Sector Strategies
12 Sector Portfolio Managers

Dedicated responsible
investment research is criticalfor ESG integration and refining
our impact universe

20 Team Members, Dedicated ESG Research

We have committed to a
global research presence,
giving us breadth anddepth in idea generation2011 Equity Research Professionals Worldwide

Responsible Investment Research

Global Equity Research Resources

12 sector portfolio managers, 98 research analysts, 56 associate research analysts, 4 quantitative analysts, and 31 specialty analysts as ofDecember 31, 2022.
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Additional (impact context): The extent to which an action or item adds to the existing activities of a company andresults in a greater impact. Engagement and proxy voting are two important tools at the Global Impact Equity team’s
disposal to be additional and accelerate the impact agenda.
Alignment (with SDGs): When a given company links its business activities to specific United Nations Sustainable
Development Goals (UN SDGs) and targets. An increasing number of companies report and communicate on SDGs intheir sustainable reports.
CO2e: Carbon dioxide equivalent or CO2 equivalent. This metric is used to compare the emissions from various
greenhouse gases on the basis of their global warming potential by converting amounts of other gases to the equivalentamount of carbon dioxide with the same global warming potential.
Due diligence (impact): Process of assessing the intended impact of a company before investing. The key benefits
are a deep understanding of the investee’s activities, incorporating stakeholders’ perspectives, identifying material ESG
factors, and aligning anticipated impacts with UN SDGs. Every stock selection decision begins with a clearly identified
positive impact thesis tied to one of three investment pillars and eight sub-pillars. See Theory of Change.
ESG: Environmental, Social, and Governance Criteria (ESG) - A set of standards for a company’s operations thatsocially conscious investors use to screen investments. Environmental criteria look at how a company performs as a
steward of the natural environment. Social criteria examine how a company manages relationships with its employees,
suppliers, customers, and the communities where it operates. Governance deals with a company’s leadership,
staff remuneration, audits and internal controls, management structures, employee relations, tax compliance, andshareholder rights.
ESG integration (T. Rowe Price): Incorporating environmental, social, and governance factors into investment analysis
for the purpose of maximizing investment performance. For certain non-impact T. Rowe Price investment strategies,
some investments, including, but not limited to, cash, currency positions, and particular types of derivatives, an ESG
analysis may not be relevant or possible due to a lack of data. Where ESG considerations are integrated into theinvestment research process, we may conclude that other attributes of an investment outweigh ESG considerations
when making investment decisions.
Fiduciary: Person or organization that acts on behalf of another person or persons, putting their clients’ interests
ahead of their own, with a duty to preserve good faith and trust.
Five Dimensions of Impact: Framework used to assess a company’s ability to deliver impact on a holistic basis,including the risks that may affect its ability to deliver the targeted impact. The five dimensions are:
 What outcome is occurring in the period?
 Who experiences the outcome?
 How much of the outcome is occurring (scale, depth, and duration)?
 Contribution – Would this change likely have happened anyway?
 Risks – What is the risk to people and the planet if the impact does not occur as expected?
(This framework has been developed by the Impact Management Project).
Global Impact Investing Network (GIIN): A non-profit organization dedicated to increasing the scale andeffectiveness of impact investing around the world. https://thegiin.org
Impact: Primary and secondary long-term effects produced by an intervention or investment directly or indirectly,
intended, or unintended. Can be positive and/or negative. Impact is often used to refer to higher-level effects of aprogram that occur in the medium or long term. See Theory of change.

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Impact investing: Investing that aims to generate specific beneficial social or environmental effects in addition tofinancial gain. Impact investing is a subset of socially responsible investing (SRI), but while the definition of socially
responsible investing encompasses avoidance of harm, impact investing actively seeks to make a positive impact
by investing, for example, in non-profits that benefit the community or in clean technology enterprises. Investments
are made into companies, organizations, and funds with the intention to generate social and environmental impact
alongside a financial return.
Impact Management Project (IMP): A project by Bridges Fund Management that has brought together a range ofdifferent impact practitioners to build and further global consensus on how to measure, assess, and report impacts on
people and the environment. https://impactmanagementproject.com
Impact measurement: Measuring and managing the process of creating social and environmental impact in orderto maximize and optimize it.
Impact pillar and sub-pillar (T. Rowe Price): Proprietary structure where impact activities that are aligned to the UN
SDGs, which guide all investment decisions. All stocks in the impact universe are linked to at least one pillar and subpillar. See Impact universe (T. Rowe Price).
Impact thesis: Explains how a given company’s activities are expected to generate results likely to contribute tointended impacts. Every stock selection decision begins with a clearly identified positive impact thesis tied to one ofthree investment pillars and eight sub-pillars which are aligned with the UN SDGs. The impact thesis ensures material
and measurable environmental and social impact. Also see Theory of Change.
Impact universe (T. Rowe Price): The universe of stocks that is available to the T. Rowe Price Global Impact Equity
Fund to invest. To define our impact universe, we start by applying the T. Rowe Price Impact Exclusion List Policy to theglobal developed and emerging all-cap opportunity set (MSCI All Country World ex-Australia Index (net of withholdingtax)). Securities are screened to exclude those whose activities may be considered harmful to the environment and/or
society and incorporates both category and conduct based exclusions. The exclusions are set in the Impact Exclusion
List Policy and for further details, please also refer to T. Rowe Price’s Australian Unit Trusts Impact Statement, both ofwhich are available at troweprice.com.au/investors. Our pillar alignment process and impact analysis based on the Five
Dimensions of Impact then ensure a starting point for deeper impact eligibility and inclusion.
Key performance indicators (KPIs): Set of quantifiable measures that the impact manager uses to determine
a company’s progress in achieving its strategic, operational, and impact goals.
Material (impact context): Process of defining the social and environmental topics that matter most to a given
business and its stakeholders.
Measurable (impact context): A hallmark of impact investing is the investor’s commitment to measure and report
the social and environmental performance and progress of underlying investments, ensuring transparency andaccountability. See Impact universe (T. Rowe Price).
Outcome: A result or effect caused by or attributable to the product, services, or policy of a given company. Outcome
often refers to more immediate and intended impact. See Theory of Change.
Private-equity markets: Private equity refers to capital investment made into companies that are not publicly traded.
Proxy Voting Impact policy (T. Rowe Price): The T. Rowe Price Global Impact Equity Fund has a custom voting
policy. It has the flexibility to vote differently from the rest of the firm, particularly on “impact issues.”
Public equity markets: Public equity investments available and easily traded daily through public market exchanges.

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Responsible Investment Association Australasia (RIAA): The Responsible Investment Association Australasia(RIAA) champions responsible investing and a sustainable financial system in Australia and New Zealand. RIAA is
dedicated to ensuring capital is aligned with achieving a healthy society, environment, and economy.
https://responsibleinvestment.org
Scope 1 carbon emissions: Direct emissions from owned or controlled sources (e.g., factories, owned fleet).
Scope 2 carbon emissions: Indirect emissions, such as those from the generation of energy used for heating or
cooling consumed by the reporting company.
Scope 3 carbon emissions: Includes all other indirect emissions that occur in a company’s value chain, upstream anddownstream (e.g., for a company like T. Rowe Price, this would include emissions associated with business travel andwaste disposal).
Small and medium-sized enterprise (SME): The categorization SME is designed to differentiate businesses withrelatively small amounts of capital and/or personnel from larger organizations, particularly in relation to market
segmentation, financial assistance, or regulatory issues.
Social: Relating to society or its organization. Social impact is the effect of an activity on the social fabric of thecommunity and well-being of individuals and families.
Socially responsible investment (T. Rowe Price): Imposing value-based investment parameters on a portfolio
regardless of their potential impact on performance.
Theory of change: Impact measurement framework which explains the steps taken by a company to produce specificsocietal and environmental outcomes on a chronological basis. It provides an opportunity to dig deep into a company’s
activities and understand the short- and longer-term effects on stakeholders. We use the “theory of change” model
as a basis for evaluating how the efforts of each holding or prospective investment is delivering impact, through themeasurement of achieved outcomes.
We scrutinize each candidate against the following the theory of change criteria to help us clearly identify the positive
impact thesis for each: Input – Financial, human, or material resources the company puts in its business operations
 Output – Products or services that result from the company’s business activities Outcome – Short- to medium-term effect on stakeholders attributable to a company’s products or services
 Impact – Long-term effect on the planet or society caused by a company’s products or services
See Case Studies for examples of the Impact Journey.
United Nations Sustainable Development Goals (UN SDGs): The UN Sustainable Development Goals encompass
17 goals to end poverty, protect the planet, and ensure prosperity. Each of the goals has specific targets to be reached
between 2015 and 2030 and corresponding regulatory guidelines. While the UN SDGs are a tool for countries, andnot corporations, they serve as a useful framework for identifying the world’s pressure points. As such, investors haveadopted the framework to understand how companies are impacting their various non-financial stakeholders.
The T. Rowe Price Global Impact Equity Fund reporting framework incorporates the UN SDGs as they are a recognized
and accepted tool that helps the asset management industry form a common language around sustainability.

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Additional Disclosures
Holdings shown are for illustrative purposes only and are subject to change without notice.
The specific securities identified and described do not represent all of the securities purchased, sold, or recommended for the portfolio,
and no assumptions should be made that investments in the securities identified and discussed were or will be profitable. T. Rowe Price may
have ongoing business and/or client relationships with the companies mentioned in this report.
The use of impact key performance indicators is not intended to provide a forward-looking view on the likely performance of each issuer heldin the portfolio. Instead, it is intended to document how we will assess the positive additional impact that each issuer’s economic activities arehaving on the real world. For example, we would note that increasing revenue streams from sustainable economic activities does not necessarily
equate to increasing profits, nor does it necessarily equate to positive share price performance. Our investment analysis will also focus on the
profitability and perceived value of each issuer and their sustainable initiatives, but this does not form part of the impact KPI.
Source: MSCI. MSCI and its affiliates and third party sources and providers (collectively, “MSCI”) makes no express or implied warranties
or representations and shall have no liability whatsoever with respect to any MSCI data contained herein. The MSCI data may not be further
redistributed or used as a basis for other indices or any securities or financial products. This report is not approved, reviewed, or produced
by MSCI. Historical MSCI data and analysis should not be taken as an indication or guarantee of any future performance analysis, forecast or
prediction. None of the MSCI data is intended to constitute investment advice or a recommendation to make (or refrain from making) any kindof investment decision and may not be relied on as such.

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Important Information

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T. Rowe Price focuses on delivering
investment management excellence
that investors can rely on—now andover the long term.

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