2023 Sustainable Investing

ANNUAL REPORT

ROCKEFELLER ASSET MANAGEMENT

Contents

• 03 Foreword
• 05 History and 2023 accomplishments
• 08 Research
• 15 Engagement
• 34 Thought leadership
• 37 Internal initiatives

Foreword

Casey C. Clark, CFA© President and Chief Investment Officer, Rockefeller Asset Management

We called 2020 and 2021 the Breakout Years. 2022 was The Blip. 2023 will be known as the Divergence. The year was marked by a growing divergence between the Magnificent Seven and the rest of the market within both global and domestic politics, and between European and US sustainable investing flows. Events of the past year also set up the five sustainable investing trends we see for 2024 (outlined below).

WHAT WE MEAN BY THE YEAR OF DIVERGENCE

Magnificent Seven: An equal weighted basket of Magnificent Seven stocks generated 111.6% relative to MSCI World Index of 23.8% in 2023. In the year ahead, we see more modest earnings growth and fewer rate cuts relative to market expectations. We believe the market will likely muddle through much of 2024, moving sideways and favoring last year's laggards.

Political Views: In a Pew Center Research poll conducted in the summer of 2023 with US adults, "divisive" was the most frequent word used to describe politics. Other common words included "messy," "chaos," "broken," and "dysfunctional." The gap globally is also palpable with wars in the Middle East and Europe, trade tensions, semiconductor security, cybersecurity, China's focus on national security, and national elections. More voters than ever in history will head to the polls in 2024. 64 countries, representing 49% of the population, are expected to hold national elections. One data point to watch is foreign direct investments. Investments into China in 2023 increased by the lowest level in 30 years.

Sustainable Flows: The sustainable investing landscape in 2023 was marked by a growing divergence between European and US investors. There were $76bn of net inflows into European sustainable funds compared to $13bn of outflows in the United States, according to Morningstar. European assets now represent 84% of sustainable assets globally.

Despite the divergence in markets, politics, and sustainable flows, equity investors cheered solid economic growth, accelerating corporate profitability, falling inflation, tight labor markets, and the hope for a soft landing by driving global equities, as measured by the MSCI All Country World Index, up.

Foreword (continued)

22.2%. Mainstream sustainable leaders and thematic equity indices generally underperformed in 2023. Macroeconomic forces such as high interest rates and supply chain disruptions contributed. The MSCI EAFE ESG Index and the MSCI USA ESG Select Index, which seek to maximize Environmental, Social, and Governance (ESG) exposure with similar beta and low tracking error to traditional indices, underperformed their non-ESG counterparts by 0.3% and 0.9%, respectively, in 2023. Meanwhile, the S&P Global Clean Energy Index underperformed S&P's Global Broad Market Index by 42.3%, generating -20.4% return in 2023 compared to +21.9% for S&P Global Broad Market Index.

OUR VIEW: 2024 SUSTAINABLE INVESTING TRENDS

1. Europe will continue to attract most inflows globally.
2. Small cap strategies emphasizing improvers will start to get noticed.
3. Thematic strategies with an improvers, transition, or innovation focus will grow.
4. Climate solutions strategies will return to favor as attractive valuations and a more stable rate environment should lead to stronger performance going forward.
5. The drawbacks of divesting will receive increased media attention.

At Rockefeller Asset Management, ESG-integrated research emphasizing improvers, coupled with in-depth shareholder engagement, is important to our philosophy of delivering alpha and client outcomes. We are committed to constructing investment strategies that seek outperformance and are proud of the partnerships forged with institutions and intermediaries globally. We will continue to build partnerships and expand Rockefeller Asset Management's product lineup in a manner that leverages our more than 30 years of global equity, US small cap, and ESG investing experience, decades of constructive shareholder engagement, and Rockefeller's differentiated brand and network.

Casey C. Clark, CFA© President and Chief Investment Officer, Rockefeller Asset Management

Sustainable Investing History

1970s

• 1977 "Mission-Related" Odyssey Strategy launched

1990s

• 1996 ICCR (Interfaith Center on Corporate Responsibility)
• Ceres Investor Network on Climate Risk and Sustainability (current Carbon Asset Risk Working Group member)

2000s

• 2001 International Corporate Governance Network (ICGN)
• 2002 One of 35 original investors to launch the Carbon Disclosure Project (CDP) questionnaire

2010s

• 2012 Became UN Principles for Responsible Investment (PRI) signatory
• 2013 Began work with the Sustainability Accounting Standards Board
• 2017 Invited to be a founding member of UNEP FI's TCFD Working Group as the only US Asset Manager; Climate Action 100+
• 2018 Became members of PRI Plastics Working Group; Council for Institutional Investors (CII); Became SASB Alliance members; Sustainable Blue Economy Finance Principles Signatory; Joined Seafood Business for Ocean Stewardship (SeaBOS)
• 2019 One of five founding members of UNEP FI's Climate Resilience Risks and Opportunities Coalition; Won PRI's ESG Research Report of the Year Award

2020s

• 2020 Received 6th A+ on UN PRI Assessment Report; Launched Rockefeller's ESG Improvers Score™ (REIS); Established relationship with Bloomberg
• 2021 Joined FAIRR Aquaculture Collaborative Engagement; NYU Stern Center for Sustainable Business and RAM publish research paper; Net Zero Asset Managers Initiative Signatories; Won PRI's ESG Incorporation Initiative of the Year Award
• 2022 Chaired the SMI Investor Expectations for Shipping Transition to Net-Zero; Formalized Net Zero Asset Managers Initiative commitment; Signed UNEA statement in support of a global treaty to reduce plastic pollution
• 2023 Rockefeller Climate Solutions Equity wins Family Wealth Report Award: Best ESG Investing Product

STRATEGY LAUNCHES

• 1991 Rockefeller Global Equity ESG Improvers
• 2011 US Small Cap ESG
• 2012 Climate Solutions; Core Taxable ESG Fixed Income
• 2013 Short Term Taxable ESG Fixed Income
• 2014 Intermediate Tax-Exempt ESG Fixed Income
• 2016 Global ESG Fossil Fuel Free; Non-US Fossil Fuel Free
• 2018 Rockefeller US Equity ESG Improvers; Non-US Equity ESG
• 2020 Ocean Engagement; VantageRock Long-Short Equity
• 2021 Bloomberg Rockefeller US All Cap Multi-Factor ESG Improvers
• 2022 Rockefeller US Equity Concentrated; Global Value ESG; US Small Cap Core Equity
• 2023 US Small Cap ESG Equity; Ocean Engagement

2023 Accomplishments

The Rockefeller heritage in sustainable investing dates back to the 1970s, when the family office began public and private investment programs that incorporated environmental and social factors into the investment process. Drawing on the intellectual capital built over the decades, Rockefeller Asset Management has won two headline PRI Awards* (2019s ESG Research Report of the Year and 2021s ESG incorporation initiative of the year) and a 2023 Family Wealth Report Award for Best ESG Investing Product* in the past four years and offers equity, alternative, and fixed income strategies that seek to deliver alpha and positive outcomes. We do so by leveraging our more than 30 years of global equity US small cap, and ESG investing experience, nearly 40 years of constructive shareholder engagement, and a legacy that has the ability to utilize our global networks to generate insights not commonly found in the investment community.

SMALL CAP

Rockefeller Asset Management launched a US Small Cap Equity ESG vehicle to increase accessibility outside the US. This expands the firm's available suite of ESG-focused investment solutions available to non-US investors, which currently includes both US and Global Large Cap ESG equity strategies as well as a Climate Solutions strategy.

OCEAN ENGAGEMENT

Rockefeller Asset Management launched an ETF in partnership with KraneShares which provides exposure to the "blue economy" by allocating to companies whose business activities materially impact ocean and ocean resources. The blue economy is defined as economic activities that are centered around and actively benefit the ocean. It encompasses a wide array of industries that have direct and indirect links to the ocean, ranging from marine transportation, port infrastructure, offshore renewable energy, the global seafood complex, and companies that have a role to play in developing the circular economy.

We believe that the blue economy is an emerging investment opportunity due to increased regulations, changes in consumer buying preferences, and technological advancements. Through our decade-long partnership with The Ocean Foundation, we have created a framework to identify and gain relevant exposure to blue economy investment opportunities, while also seeking to catalyze positive impact through engagement.

FAMILY WEALTH REPORT AWARDS

In 2023, Rockefeller Asset Management's Climate Solutions strategy was selected from a group of well-known and respected asset managers dedicated to ESG investing products for the "Best ESG Investing Product". The annual Family Wealth Report Awards recognizes the most innovative and exceptional firms, teams, and individuals serving the family office, family wealth, and trusted advisor communities in North America. The awards are decided by an expert panel of more than 40 judges.

NET ZERO APPROACH

As long-term investors serving our clients, we believe that climate change is transforming markets and recognize the risks and opportunities for our portfolios. In September 2021, Rockefeller Asset Management joined the Net Zero Asset Managers Initiative and committed to managing select investments in line with achieving net zero greenhouse gas emissions by 2050 or sooner. In 2023, Rockefeller Asset Management introduced new disclosures related to Net Zero and Task Force on Climate-related Financial Disclosures (TCFD) in the PRI Report.

Sustainability Research Highlights

RESEARCH AND ANALYSIS

• Bottom-up, fundamental, and ESG analysis.
• Leverage the Rockefeller ESG Improvers Score (REIS) to assess a company's ability to improve on material issues and opportunities.
• Analyze Rockefeller's proprietary materiality map to better understand which issues may be material to a business.
• Utilize third-party ESG data, tools, frameworks, and assessments.

CONSTRUCTIVE ENGAGEMENT

• Intentional dialogues based on robust company, sector, and issue analysis.
• Emphasis on building trust and rapport with companies throughout the holding period.
• Thoughtful proxy voting.

RENOWNED ROCKEFELLER NETWORK

• Deep experience of ESG-integrated investing and effective shareholder engagement.
• Scientific experts and non-profit organizations help to inform our research and engagement process.
• Participate in collaborative engagements.

THOUGHT LEADERSHIP

• Partner with holding companies to publish case studies, proving the effectiveness of partnership.
• Publish thoughtful engagement briefs to solidify our stance on material issues.
• Participate in industry-leading conferences to understand most recent updates.

ESG Improvers: An Alpha Enhancing Factor

In 2020, we built Rockefeller's ESG Improvers Score (REIS) to rank a company's change in performance on material ESG issues relative to industry peers. That research led to us winning PRI's 2021 ESG Incorporation Initiative of the Year Award* for our submission titled ESG Improvers: An Alpha Enhancing Factor. REIS is created via a five-step process and utilized for (1) quantitative research, (2) fundamental bottom-up research process, and (3) portfolio management and client reporting.

Five-Step REIS Process

1. Rockefeller Materiality Map – Identify ESG issues that are material to the risk and return profile of companies across 77 Sustainable Industry Classification System industries.
2. Data Selection and Metric Mapping – Determine which metrics best quantify each material ESG issue and correlate with financial performance.
3. Imputation – Use proprietary imputation techniques to estimate missing values across metrics, companies, and time.
4. Scoring and Relevance Ranking – Create material issue weights using a quantitative process investigating their relationship with financial performance.
5. REIS Computation – Isolate the component of a firm's ESG traditional financial variables and other potentially correlated sources of risk.

Fundamental Equity Research

We believe that integrating material ESG analysis with traditional investment analysis can increase the probability of generating outperformance. For select strategies, this belief is implemented through a structured process that emphasizes (1) ESG Industry Relevance, (2) Materiality assessment, and (3) Engage-ability.

1 ESG INDUSTRY RELEVANCE

The goal is to understand if ESG issues have a high, medium, or low impact on the risk and return profile across all industries. ESG issues have varying degrees of impact to risk and return depending on the industry.

2 MATERIALITY ASSESSMENT

The goal is to uncover risks and opportunities overlooked by traditional investors. Rockefeller Asset Management's "Materiality Map," identifies ESG issues that are material to companies' risk and return profiles across 77 Sustainable Industry Classification System® (SICS®) industries. It serves as the foundation for the research and engagement process. Examples of material issues include, but are not limited to air quality, climate transition risk, customer privacy and data security, diversity and inclusion, labor rights management, talent attraction and retention, and board independence.

3 ENGAGEABILITY

We seek to determine our ability to create shareholder value and catalyze change via engagement. Prior to an investment, formal ESG reviews are conducted that include an assessment of companies' willingness to improve and engagement targets, which outline key areas to deploy shareholder engagement techniques throughout the holding period.

ESG Integration Case Study: CMS Energy

OVERVIEW

While CMS falls under a low risk classification within our quantitative tool assessing industry ESG relevance, our materiality assessment flagged emissions management, sustainability oversight, and bribery & corruption as key risks for an electric utility. These were determined through a combination of Rockefeller's proprietary ESG scoring tools as well as qualitative internal industry assessments. Emissions management was the most material topic in our view given the significant earnings growth opportunity associated with the Company's decarbonization trajectory. With a history of following CMS by periodically meeting with the management, analyzing quarterly earnings results, and tracking their sustainability journey, we came to the conclusion that the Company was highly engageable from an ESG perspective.

CMS Energy is one of the largest investor-owned utility companies in the US. The company provides electricity and natural gas to nearly two million customers, primarily serving those in Michigan's lower peninsula. CMS Energy has been on a path of decarbonizing the power they deliver to customers by transitioning to cleaner production methods. Harnessing the sun and wind while minimizing labor and maintenance requirements has the ability to decrease operating costs relative to traditional forms of energy extraction. Decreased operating costs have the potential to drive economic benefits for both shareholders and customers.

Regulated utility companies are monopolies; a state-level public utility commission decides what they are allowed to charge their customers. This is determined by what the regulator views to be a fair allowed return on equity ("ROE") and appropriate capital structure. As such, customer bills and shareholder earnings are impacted by the size of the asset base (driven by capital expenditure), the equity-financed portion of that asset base, the allowed ROE, and operating expenses ("O&M"), among other factors. As a result of this dynamic, the capital expenditure necessary to de-carbonize power generation can directly increase the earnings of utility companies.

DECARBONIZATION PATHWAY

CMS Energy has been steadily focused on renewable energy and natural gas. Their primary regulatory jurisdictions offer favorable economic constructs around the retirement of fossil fuel plants, which can prevent shareholders from bearing a disproportionate share of the costs associated with early retirement. CMS Energy's progress in decarbonization has been accomplished via increased capital spending which, in turn, is driving the 6-8% growth of their asset base that is expected to continue over the medium- to longer-term. Not only can this directly increase the asset base off which the regulator determines their allowed returns, there should also be a positive tailwind related to O&M expenses given the lower cost required to operate renewable energy and natural gas assets. By reducing O&M expenses, there is a potential benefit to both the customer and the shareholder. Note that while O&M can also be reduced in ways unrelated to their power mix, decarbonization has been a positive contributor. Management estimates that roughly $600 million worth of savings (through 2040) will be directly attributed to implementing cleaner forms of power generation.

With the aim of retiring the last remaining coal capacity in 2025, CMS Energy targets a ~60% reduction in their CO2 emissions since 2005, while keeping customer bill inflation below the national average and maintaining reliable service levels. There has also been significant progress towards their goal of net zero carbon emissions in their electric utility segment by 2040. This has led to favorable regulation from the public utility commissions in their states of operation. CMS Energy typically receives above-average allowed ROEs and equity layers, as well as other mechanisms that create minimal lag between revenue increases and associated spending. Lastly, Michigan has recently implemented significant legislative and regulatory changes that accelerate demand for renewables and reward customer energy efficiency.

Fixed Income ESG Update

Overall global ESG bond issuance is tracking $750 billion in 2023, well below the peak of nearly $1 trillion in 2021. ESG issuance declined for securitized and corporate credit, while increasing for sovereigns and municipalities. The declining issuance is due to persistently high inflation, rising rates, and elevated market volatility. While municipalities also saw year-over-year declines of ~5% in overall gross issuance, its share of ESG issuance increased. We anticipate the pace of global ESG bond issuance will rise in 2024, with expectations of global supply shifting back towards the near $1 trillion global issuance if rate volatility and macro uncertainty decline.

US denominated ESG corporate bond issuance declined -40% year-over-year in 2023 as US companies issued ~$25bn of ESG bonds in 2023 versus over $50bn in FY22.

US Municipal ESG bond issuance increased to over $55bn in 2023, an ~15% YoY increase. We anticipate ESG bond issuance in the US credit market will increase in 2025, topping $100 billion. The 2022 Inflation Reduction Act (IRA), which included $370 billion in funds allocated toward climate and energy, might lead to additional ESG bond supply in future years, depending on the outcome of the US 2024 elections and whether the IRA remains intact as currently constructed.

Fund flows remain a critical gauge of investor demand for fixed income strategies globally. According to EPFR data, in 2023 global flows into ESG-labelled funds totaled $31 billion, a 50% increase relative to the $21 billion global inflows in 2022. However, this remains off the high of 2021, in which approximately $102 billion flowed into global ESG-labelled funds. US investors continue to increase overall market share, while remaining underweight ESG-focused strategies relative to European investors.

In our view, the fixed income ESG industry will evolve in the coming years, as issuer reporting across corporate and municipal credit continues to improve and as positive ESG impacts are realized using bond proceeds. We anticipate a continued trend of rising ESG issuance.

Intermediate Tax Exempt Fixed Income ESG Strategy SDG Mapping

• Quality Education: 32.1%
• Clean Water and Sanitation: 22.1%
• Sustainable Cities & Communities: 20.3%
• Industry/Innovation/Infrastructure: 12.9%
• Good Health/Well-Being: 7.9%
• Affordable/Clean Energy: 2.5%
• US Treasury: 1.2%
• Life on Land: 0.7%
• Peace, Justice, and Institutions: 0.2%

from state and local governments focused on many key areas. These include affordable housing, resilient infrastructure, rebuilding efforts following climate events, and improving sustainable cities, to name a few.

Our fixed income strategies are measured to quantify impact in alignment with the US Sustainable Development Goals ("SDGs"). Our ESG fixed income strategies financed:

• Improvements made to water infrastructure that enhance efficiency, drinking water access and quality, and access to wastewater and sanitation facilities.
• Upgrades and renovations to make buildings more resource efficient, improve transportation systems, and promote access to internet and mobile network systems.
• Access to safe and affordable housing for low-income populations, upgrades, and renovations to make community infrastructure more resilient to climate change.
• Improvements to educational and research institutions that enhance the productivity, quality, and access to education and research.
• Projects that support the development of renewable energy production and/or access to clean energy.
• Improvements to healthcare institutions that support healthy lives and promote well-being for all.

Shareholder Engagement

FOCUSED ON ALPHA AND OUTCOMES: ENHANCING SHAREHOLDER VALUE AND CATALYZING POSITIVE IMPROVEMENT

We believe that constructive shareholder engagement can increase the probability of delivering alpha and outcomes. It is a core part of our investment process for select equity strategies with long-term holding periods. The process typically follows four stages and is founded on in-depth company, sector, and issue analysis that is designed to strengthen our fundamental research: 1) Constructive dialogue, 2) Official letters, 3) Collaborative action, and 4) Shareholder resolutions.

THE FOUR STEP PROCESS

1. Step 1: Constructive Dialogue
2. Step 2: Official Letter
3. Step 3: Collaborative Action
4. Step 4: Shareholder Resolution

Summary of Rockefeller Asset Management 2023 Engagements

• 276 Total engagements
• 129 Total companies engaged
• 53% Percent of Core Holdings Engaged
• 88% Engagements that are 1:1 Calls or Meetings with Companies
• 46% Engagements with Company Leadership
• 26% Engagements with Subject Matter Experts
• 88% Engagements Involved RAM Equity Team Member

GEOGRAPHY OF 2023 COMPANY ENGAGEMENTS

• North America: 179 engagements, engaged with 104 companies
• Europe: 56 engagements, engaged with 38 companies
• Asia (excludes Japan): 22 engagements, engaged with 8 companies
• Japan: 15 engagements, engaged with 7 companies
• Latin America: 4 engagements, engaged with 2 companies

THEMATIC FOCUS OF ENGAGEMENT

• Environment: 57%
• Social: 22%
• Governance: 21%

ENVIRONMENTAL FOCUS OF ENGAGEMENT

• Climate (transition): 25%
• Environmental product innovation: 18%
• Ecosystem services (biodiversity): 16%
• Raw material risk (supply chain): 10%
• Waste management (pollution): 10%
• Climate (physical): 8%
• Plastic: 7%
• Water: 6%

SOCIAL FOCUS OF ENGAGEMENT

• Human capital management: 63%
• Product quality and safety: 11%
• Privacy and data security: 9%
• Human rights: 8%
• Access and new opportunities: 4%
• Work health safety: 4%

GOVERNANCE FOCUS OF ENGAGEMENT

• Board: 33%
• Political activity, lobbying: 24%
• Shareholder rights: 22%
• Compliance and ethics: 14%
• Executive compensation: 7%

NATURE OF ENGAGEMENT TARGET

• ESG Strategy: 32%
• Disclosure: 27%
• Risk Mitigation: 24%
• Business Opportunity: 17%

SECTOR OF COMPANIES ENGAGED

• Industrials: 32%
• Financials: 16%
• Con. Staples: 12%
• Health Care: 9%
• Materials: 8%
• Con. Discretionary: 7%
• Information Tech.: 6%
• Communication Serv.: 4%
• Energy: 3%
• Real Estate: 3%
• Energy: 1%

ENGAGEMENT ALIGNMENT WITH SUSTAINABLE DEVELOPMENT GOALS

• 13: Climate Action: 19%
• 14: Life Under Water: 15%
• 9: Industry, Innovation and Infrastructure: 13%
• 12: Responsible Consumption & Production: 12%
• 11: Sustainable Cities & Communities: 10%
• 16: Peace, Justice and Strong Institutions: 6%
• 8: Decent Work and Economic Growth: 5%
• 7: Affordable and Clean Energy: 4%
• 3: Good Health & Wellbeing: 4%
• 15: Life on Land: 4%
• 5: Gender Equality: 2%
• 10: Reduced Inequality: 2%
• 6: Clean Water & Sanitation: 2%
• 1: No Poverty: 1%

Progress Tracking

We believe that engagement is one of the few ways investors can effectuate change in public markets. Even so, attribution of progress often remains elusive and is a challenge with which the engagement community continues to grapple. The progress illustrated below is measured against our identified targets.

2023 Engagement Progress Across All Targets

Milestones:

1. Target has been communicated — 100%
2. Company has acknowledged issue — 71%
3. Company is addressing issue — 54%
4. Target achieved — 34%

Engagement Begins — Targets communicated and dialogue under way

Proxy Voting

UPHOLDING CLIENTS' PRIORITIES THROUGH EVOLVING ENVIRONMENTS

While proxy voting is a crucial part of our fiduciary duty to clients, it is also an important aspect of delivering value and change. We have maintained and continuously refined a custom proxy voting policy for over a decade and have integrated Principles for Responsible Investment considerations into our overall proxy voting process since 2013. The custom policy reinforces our objectives of creating shareholder value, encouraging ESG improvement, and enhancing the long-term interests of our clients. To ensure our votes reflect these objectives, we review each proposal and its corresponding research. Our Rockefeller Proxy Voting Policy and voting records are available online.

Good Governance in All Its Forms

As a complement to our proposal-by-proposal review, we contextualize everything with our view on the market. This involves cultivating an environment to question and re-evaluate proxy voting norms, best practices, and the alignment of intention to outcomes. This process therefore includes a rotation of questions we ask ourselves and our network of peers: What is the most effective way to vote proxies? Vote "no" campaigns, exempt solicitations, filing shareholder proposals, or targeting specific directors for their role in material governance failures?

Looking more specifically at the efficacies of filing shareholder proposals, we have noticed a two-sided change in tone of questions our network peers are asking: Are corporates receiving so many shareholder proposals that the noise, cost, and distraction takes away from the intent? On the other hand, are the corporates that receive the most proposals dealing with the natural consequences of their size and responsibilities to their respective shareholder bodies?

This year's season adds to growing evidence that supporting the integration of ESG issues into business oversight cannot be accomplished through proxy voting alone. As we remarked last year, metrics historically used for measuring a firm's support of ESG integration are becoming outdated, and as avenues for corporate-shareholder communication evolve, we must ensure that our voting practices are aligned and executed in tandem with our engagement objectives.

Rockefeller's Rate of Support Across Microcosm of Shareholder Proposals in 2023

Proposal	Support Rate
Environment – [Climate] – Climate Change Lobbying (S1801)	100%
Environment & Social – [Anti-ESG] – Environmental & Social Counterproposal (S0911)	0%
Social – [Human Rights] – Human Rights Risk Assessment (S0412)	100%
Social – [Political Spending] – Political Spending Congruency (S0430)	100%
Governance – [Severance Agreement] – Advisory Vote on Golden Parachutes (M0556)	0%
Governance – [Board Related] – Declassify the Board of Directors (M0215)	100%
Governance – [Board Related] – Require Independent Board Chairman (S0107)	100%

Spotlight: Ocean Engagement

We believe our 30+ years global investing experience and over 10 years of experience uncovering blue economy investment opportunities, supported by our partnership with The Ocean Foundation, give us differentiated knowledge and access to address ocean-related challenges, support solutions, and catalyze positive impact through engagement. The blue economy refers to economic activities that impact the ocean. The blue economy has the potential to more than double its contribution to the global economy by 2030.

The Rockefeller Ocean Engagement strategy provides exposure to the blue economy by allocating to public companies across three core themes: (1) Pollution prevention, (2) Carbon transition, and (3) Ocean conservation. Within these themes, we believe companies that are on a trajectory toward improving ocean health ("Ocean Improvers") when constructively engaged with have the potential to deliver returns and positive changes.

The strategy has a proactive engagement mandate, conducted in the pursuit of healthier oceans and outperformance versus its benchmark. Areas of focus may include the management of marine coastal ecosystems, ocean acidification, and destructive fishing practices. Learn more about Rockefeller Asset Management's Ocean Engagement strategy and investment themes in our white paper Ocean Engagement: Shifting Tides.

Pollution Prevention

Chemical, Seismic and Acoustic, Waste Disposal, and Plastic

Carbon Transition

Carbon Emissions, Air Pollution, Ocean Renewable Energy, and Alternative Energy

Ocean Conservation

Overfishing, Unregulated Fishing, Depletion of Ocean Resources, Nutrient Loading, and Coastal Development

Engagement by Ocean Theme

• Carbon Transition: 34%
• Pollution Prevention: 30%
• Ocean Conservation: 36%

Engagement by Sector

• Industrials: 41%
• Con. Staples: 30%
• Materials: 9%
• Con. Discretionary: 7%
• Health Care: 5%
• Utilities: 3%
• Energy: 3%
• Information Tech.: 2%

Exhibit 1: Ocean Engagement Strategy Engagement Statistics

Among the engagement information presented herein, the Shareholder Engagement team maintains active dialogues with approximately 93% of the companies (as of 12/31/2023).

Geography of 2023 Company Engagements

• North America: 65%
• Europe: 20%
• Asia (ex. Japan): 8%
• Japan: 5%
• Latin America: 1%

Shiseido

Theme 1 – Pollution Prevention

Company Overview

Shiseido Co. Ltd. (Shiseido) is a Japan-based manufacturer and distributor of cosmetics, toiletries, personal care, and barber and beauty products. Operating a robust innovation and formulation department within its research and development (R&D) segment, Shiseido is in a position of responsibility to set precedent on eliminating marine- and human-harmful chemicals from its portfolio. As such, Shiseido's material issues related to ocean health include chemical safety, product safety and quality, environmental product innovation, packaging and waste, and supply chain management.

Engagement Objectives

Cosmetic and beauty companies, operating in a highly fragmented global market, are becoming increasingly responsive to their consumers' calls for transparent, healthy, and more holistic products to secure consumer loyalty and differentiate themselves in the market. Regulators across the globe have been answering similar calls from their constituents, leading to health and packaging legislation, with major implications on product design, patent, and formulation options.

While Shiseido has announced plans to reformulate in time with changing regulations, we believe a better approach would be to decouple its reformulation timeline from regulations and accelerate these changes to benefit both human and ocean health.

Progress to Date

We began our relationship with Shiseido knowing that the company carried sun care products with oxybenzone and octinoxate, two chemicals known to cause deformities in both coral larvae and baby corals, damage coral DNA, and create abnormal skeletal growth, all of which heighten coral's susceptibility to bleaching. Combining a landscape analysis of the growing investor sentiment around blue economy issues with research on relevant consumer preferences, we believe that eliminating these chemicals could create opportunity while reducing risk.

Shiseido informed us of their decision to phase out oxybenzone from all product formulations in late 2021. A hard date for the phase out is set for 2025. On a recent visit to their S/Park location in Tokyo, Japan, we were intrigued to hear that their prioritization of controversial ingredient phase out is being driven heavily by "consumer reaction." This underscores the market research we've compiled that indicates consumers, and especially premium consumers, may be willing to pay up for more sustainable products.

Santos Brasil

Theme 2 – Carbon Transition

Company Overview

Santos Brasil is an owner, operator, and manager of various container terminals throughout its home country Brazil. Most of the company's revenues and earnings are generated by its Tecon Santos port operations within its Port Terminals segment. Ports and terminals are a significant activity related to ocean health given they are sources of pollution and emissions.

Engagement Objectives

While their operations can trigger ecological disruption and emissions, the company has an opportunity to enhance its operational activities to reduce impacts on marine environments including via sustainability measures that address the "greening" of ports. Our engagement is focused on accelerating emissions reductions at port facilities as well as enabling emissions reductions for customers. Additionally, we encourage the company to reduce other impacts to surrounding marine environments including from pollution and port maintenance activities. We continue to leverage The Ocean Foundation's expertise in sustainable port infrastructure initiatives.

Engagement on Decarbonization

In 2023, we worked toward establishing a constructive relationship with the company, holding several calls over the year to discuss various aspects of the business and communicate our interest in sustainability initiatives where we see scope for improvement. A large part of the discussion to date has been on decarbonization efforts as the company works toward establishing new targets. We noted other best practice examples in the port industry, including input from the Ocean Foundation on alternative fuels and shorepower, which is the provision of shoreside electrical power for ships at berth to prevent idling and emissions.

Progress to Date

In our engagement, we learned that the company is actively making investments in electric Rubber Tyred Gantry (RTG) cranes and had several of these delivered in 2023, with more to come in 2024. We believe this should result in meaningful improvements for decarbonization efforts, especially in terms of scope 1 emissions from diesel. We have also encouraged the company to consider shorepower installation, as we believe this provides a solid value proposition for customers in that it enables lower emissions at ports and has benefits for other pollution reduction. We were pleased to learn that the company has actively contacted shorepower installation providers after our conversations and has now worked this into their capital expenditure budget for 2025.

Nissui

Theme 3 – Ocean Conservation

Company Overview

Nissui (formerly Nippon Suisan Kaisha) is one of the largest commercial fishery companies with wild, aquaculture, frozen, and canned fish operations. The Japan-based company also produces fish oil and fish meal, operates a cold storage business, and has a burgeoning pharmaceutical business.

Engagement Objectives

The world's marine resources are being depleted and, according to a report by the Food and Agriculture Organization (FAO), one-third (34%) of global fish stocks were overfished in 2017. Commercial fishery companies therefore have an inherent interest in preserving the marine environment and its biodiversity.

With a broad vision of preserving the sea and promoting the sustainable utilization of marine resources in procurement, Nissui has strived to make transparency and traceability of their wild caught products. The objective of our engagement with Nissui is for them to establish monitoring systems for compliance under international maritime organizations (IMOs), illegal, unreported, or unregulated (IUU) standards, and resource status by species, catch region, habitat, and size of catch.

Progress to Date

Our team visited three of Nissui's aquaculture sites in southeast Japan in 2023, including the company's Marine Biological Technology Center. Because so much of Nissui's growth strategy is contingent on the expansion of its aquaculture business, we wanted to understand the planned innovation and current systems across the firm's portfolio. This included discussion of biofloc pilots for whiteleg shrimp, a species notorious in aquaculture for being unsustainably harvested; coho salmon given the vast demand for salmon protein across global markets; mackerel and the genomic selection Nissui is perfecting to increase size and decrease time until maturity; and other areas of stock health research and climate change implications on the business.

Key Engagement Themes for 2023

Prioritization Process

Rockefeller's ESG Improvers Score (REIS) facilitates careful consideration of ESG Improvers verses Leaders. Each quarter, we strategically prioritize our engagements with investee companies based on improvement signals, topical events or themes, and momentum of previous engagement, and initiate dialogues with new investee companies.

While our engagements with each company are tailored to their unique business models, in 2023 we focused on the following five priority areas:

2023 Engagement Priorities

1. Human Capital Management
2. Circular Economy and Waste Reduction
3. Implementing Climate Ambitions
4. Biodiversity
5. Human Rights

2023 Engagement Priorities Framework

1. Engaging with companies with "High" and "Medium" ESG Industry Relevance, and "Weak" Improvement Signal.
2. Engaging with companies with "High" and "Medium" ESG Industry Relevance and "Medium" and "Strong" Improvement Signal.
3. Engaging with companies with "Low" ESG Industry Relevance and "Weak", "Medium" and "Strong" Improvement Signal.

With additional considerations to:

• Key material issues
• Potential impact of engagement to shareholder value and/or positive change
• Probability of generating an outcome

Key Engagement Themes for 2023

The Year in Review

Climate Action

117 Engagements

Engagement Focus

With many initial climate goals reaching their second and third year, short-term targets are quickly approaching. Specifics of capital allocation plans, especially as they pertain to the more volatile inputs like transition fuels, top the engagement target list for this material issue. Market-moving incentives like tax credits built into the United States Inflation Reduction Act (IRA) and Europe's Green Deal Industrial Plan are fostering an environment of relative comfort for corporations to make the implementation leap. As such, our engagements have focused on ensuring value accretive prioritization of spending and project outcomes.

Engagement Activity

Our engagements in 2023 focused on capital allocation plans and which business segments would see higher expenditures to meet short- and medium-term climate targets. This included working with corporations to effectively communicate and, in some cases, educate their stakeholders on what and where it is meaningful for the business to finance climate action.

Progress to Date

In the industrials space, we have engaged with Carrier Global on their product suite that currently uses, or that can switch over to, low Global Warming Potential (GWP) refrigerants. Given the impending legislation on heightened refrigerants standards in the US, we are working with Carrier Global and refrigerant-processing peers on how to best position themselves for these standards that will both force conversion and lower costs. For construction and freight companies like Deutsche Post AG and ArcBest Corp (two companies we have engaged with), decarbonizing their terrestrial, aviation and shipping fleets, while balancing planned versus forced retirement strategies, in addition to growth ambitions, should take center stage. Because we are invested across value chains, we engage with the financial sector on support mechanisms and financing incentive structures that facilitate change. We are working globally with financials of all segments to determine how helping commercial and residential clients meet their decarbonization goals can also help financiers better understand the risks facing their credit, loan, and investment portfolios.

Key Engagement Themes for 2023

The Year in Review

Circular Economy and Waste Reduction

61 Engagements

Engagement Focus

Emerging regulation and enhanced scrutiny around circularity, pollution, and plastic pose new risks for companies across a wide variety of sectors. Additionally, emerging research has shed light on potential unintended consequences involved in the plastics and recycling space. These could have further implications for the risk profiles of companies, including litigation, reputational and stranded asset risks. Our focus has been on promoting the idea that companies adopt a life cycle perspective in product innovation and design, encouraging scalable strategies to promote circularity, and enhancing the knowledge of and addressing unintended consequences that stem from solutions to pollution. For example, research has suggested there could be problematic microplastics pollution occurring at some recycling facilities, and there are potential contamination and toxicity issues within food contact recycled polyethylene terephthalate (PET).

Engagement Activity

Our engagements in 2023 on circular economy and waste reduction primarily took place in the form of constructive dialogue. That said, we also escalated to collaborative engagement and formal letters when we had opportunities to do so. For example, we signed a public investor letter on plastics aimed at consumer-packaged goods companies, organized by Dutch investor group VBDO. Off of this initiative, we engaged further with relevant holdings in the form of letters and dialogue emphasizing the requests within the letter.

Progress to Date

We are in the early stages of engagement on toxicity and pollution that can result from mechanical and chemical recycling processes given research is emerging on this topic. With one petrochemical company that is a petrochemical player and leader in mechanically recycled PET, we communicated via constructive dialogue and subsequently in written form our concerns related to these issues. In engagements with retailers and consumer packaged goods companies, we have emphasized Extended Producer Responsibility (EPR) programs and encouraged companies to engage positively on the topic of extended producer responsibility programs, as we see this type of legislation as part of the solution to the plastics problem.

Other companies are making progress on circularity, some investing in recycling technology that will allow full circularity of things like wind turbines and car batteries, respectively. Again, via companies focused on innovative circularity solutions, we encouraged that the full range of environmental and social implications of these technologies be considered and mitigated at the design phase.

In the pharmacy space, we engaged with Eli Lilly on its injectables takeback program and how they approach this from a product design, supplier, customer interaction, infrastructure, and end-of-life assessment perspective as it pertains to the potential negative externalities of different recycling methods.

Key Engagement Themes for 2023

The Year in Review

Human Capital

93 Engagements

Engagement Focus

As competition for talent amongst scarce labor resources, inflationary pressures, and the post-COVID work environment continued to play out in 2023, we centered our engagement focus on how companies are managing people in ways that enable effective execution of business strategy. Topics that support strategic management of human capital included talent attraction and retention, employee engagement, and diversity, equity and inclusion (DEI).

Engagement Activity

In 2023, we began by narrowing our focus on sectors where human capital has high material relevance, such as financials, information technology and health care. We also identified several gaps amongst our small cap companies and sought to provide them with our view on where they might best allocate limited resources to mitigate people risks. For industrials and energy companies, especially those undertaking transition to lower carbon products and services, we encouraged strong initiatives to support execution of these strategies, especially as we frequently hear of limitations to the talent pool for many industrials and energy players.

Outcomes to Date

Regarding disclosures, we saw strong receptivity to our communicated targets related to enhanced data and qualitative information. While we generally do not view disclosures as our destination in terms of outcomes, we do view increased transparency as an important step toward helping investors better understand the controls a company has in place. In addition, they ideally help a company visualize its own progress and take strategic steps accordingly. In this instance, given we expect to see human capital related SEC disclosure rules come into play in 2024, we sought to better prepare companies for this expectation. For example, in a meeting with Applied Materials we encouraged the company to provide quantitative information to support its existing narrative around people, to which they were receptive. In several meetings with PROS Holdings, we learned about some of the best practices that it has implemented and encouraged the company to enhance its communication of these efforts more widely to the market.

Key Engagement Themes for 2023

The Year in Review

Human Rights

17 Engagements

Engagement Focus

We believe that companies that responsibly manage human rights experience lower supply chain, human capital management, and reputational risks and increased productivity.

Engagement Activity

In 2023, the engagement team focused on gathering new insights on how companies should properly manage all aspects of human rights. When looking across value chains, we are focused on how companies ensure safe conditions and fair wages for front-line workers, that no forced or child labor exists in supply chains, that whistleblowing policies to protect employees are in place, and that employees maintain freedom of association.

In 2023 we launched a campaign aimed at companies shown to be non-complying with the Sustainable Finance Disclosure Regulation's (SFDR) Principle Adverse Impacts indicators (PAIs). The campaign was in part targeted at companies which failed Principle Adverse Impact (PAI) #11: "Lack of processes and compliance mechanisms to monitor compliance with UNGC principles and OECD Guidelines for Multinational Enterprises". We encouraged companies to enhance their human rights practices to align with UNGC principles and OECD guidelines as we view this as a correct path to strong policies and practices to protect human rights.

Outcomes to Date

Protecting human rights across value chains was a consistent theme at the industry conferences we attended in 2023. By assessing 22 of our holdings and engaging with them about UNGC and OECD, we better understood the companies' grasp on managing human rights. With General Motors, Amazon, and Lowe's, we discussed labor relations and how they handled unionization efforts. For consumer discretionary companies like Carter's, LVMH, and Heineken, we had conversations about supply chain management and engagement with local communities. We will have ongoing engagements on these topics as regulations continue to increase and supply chain traceability knowledge improves.