Sustainability Report - 2021 - RPIA

Sustainability Report 2021

www.rpia.ca

RPIA

Email Address: esg@rpia.ca

39 Hazelton Ave. Toronto, ON M5R 2E3

General Line: +1 647 776 1777

Investor Services: +1 647 776 2566

There are three very simple reasons why we take ESG seriously - to minimize risk, to improve the quality of our returns for investors, and to fulfill our duty to our stakeholders. - Mike Quinn, Principal & Chief Investment Officer

CONTENTS

OVERVIEW

Executive Summary

Industry & Community Commitment

FIRM

CONTRIBUTORS

Measuring Our Climate Impact

Our Diversity, Equity & Inclusion Journey

Dannielle Ullrich (She/Her) Principal, Chief Financial & Operating Officer

Louise Pitt Brindle (She/Her) Principal, Head of Credit Research

Engaging With Our Community

Supporting Our Employees

Our Focus inl2022

Tania Henriquez (She/Her) Director, HR & Administration

Aaron Young (He/Him) Associate Portfolio Manager

INVESTMENT MANAGEMENT

Evolving Our ESG Integration

The Importance of Climate Change

Tushar Lalwani (He/Him) Manager, Compliance

Lydia George (She/Her) Manager, Marketing

Providing Thought Leadership

Increasing Focus on Social Pillar

Engagement in 2021

Rameen Amin (She/Her) Associate, Marketing Communications

Ozioma Nwankwo (She/Her) Manager, Workplace Experience

Our Engagement Focus in 2022

RPIA SUSTAINABILITY REPORT 2021

FIRM INVESTMENT MANAGEMENT

RPIA SUSTAINABILITY REPORT 2021

FIRM INVESTMENT MANAGEMENT

OVERVIEW

EXECUTIVE SUMMARY

INDUSTRY & COMMUNITY COMMITMENT

RPIA is an employee-owned investment management firm that specializes in global fixed income strategies. The firm was founded in 2009 by a small group of professionals who each have more than 20 years of international debt market experience and has now grown to over 80 staff. As at December 31, 2021, RPIA managed $6.4B in assets for high-net-worth individuals, retail investors, pensions, foundations, and endowments. As global investors and stewards of our investors’ capital, we believe that sustainability plays an integral role in our investment philosophy and our business. In 2021, we continued to evolve and refine our beliefs around how we assess environmental, social, and governance (ESG) factors as we believe they play a critical role in defining risk and opportunities - both for invested capital and for RPIA. To that end, our 2021 Sustainability Report has two focus areas:

RPIA became a UNPRI signatory in August 2018 to solidify our commitment to continued integration of ESG analysis into our firm and investment process in order to engage with issuers on ESG matters and advance ESG concepts through peer collaboration and public action. To this end, we have continued to join organizations that align with our goals and provide forums through which we can share ideas.

2021

The Sustainability Accounting Standards Board

Firm

• Measuring Our Climate Impact: In 2021, we completed our first corporate GHG inventory, aligning with the GHG Protocol to measure the firm’s carbon output. • Our Diversity, Equity & Inclusion Journey: RPIA is dedicated to promoting diversity, equity, and inclusion (“DE&I”) in our workplace, and we took actions to formalize this in 2021. • Engaging With Our Community: In 2021, as in previous years, we demonstrated our commitment to engaging with our community both within the organization through allyship and education, as well as our philanthropic giving and active volunteerism in our local community. • Supporting Our Employees: We established a few key initiatives in 2021 that have the sole goal of providing opportunities for growth, development, and personal support for our employees.

Task Force on Climate Related Financial Disclosures

30% Club

2020

United WAY ILEO Charter

Canadian Coalition for Good Governance

Investment Management

• Evolving Our ESG Integration: In 2021, we redesigned our ESG Integration framework to include sectoral materiality, better data aggregation, and structured qualitative inputs, culminating in the design of our proprietary RP Barometer. • The Importance of Climate Change: We continued to advance our commitment to analyzing issuers through a climate lens with new tools and our 2021 TCFD report. • Providing Thought Leadership: We published several thought leadership pieces related to ESG themes, sharing our views on topics our investors are focused on. • Increasing Focus on the Social Pillar: We continue to believe social factors will be a top thematic discussion for engagement opportunities and we designed a scoring system to help our team analyze issuers’ advancements in workplace diversity. • Issuer Engagement: Our Credit Research team held meaningful engagements with issuers across sectors and geographies which informed our thematic focus for 2022. We are excited about the advances we have made in 2021 and the goals we have set for 2022. If you would like to discuss our approach to sustainability within the firm and our investment process and collaborate on ideas, please feel free to reach out to a member of our Client Portfolio Management team or email us at esg@rpia.ca.

Women in Capital Markets

2019

100 Women in Finance

2018

UNPRI SIgnatory

FIRM

OVERVIEW

INVESTMENT MANAGEMENT

FIRM

Measuring Our Climate Impact

Our Diversity, Equity & Inclusion Journey

Engaging With Our Community

Supporting Our Employees

Our Focus in 2022

FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW

INVESTMENT MANAGEMENT

OVERVIEW

INVESTMENT MANAGEMENT

FIRM

MEASURING OUR CLIMATE IMPACT At RPIA, we recognize that understanding the sources of our greenhouse gas (“GHG”) emissions is a key step in managing them and setting impactful goals for reduction. In 2021, we completed our first corporate GHG inventory, aligning with the GHG Protocol to measure the firm’s carbon output and provide a baseline on which to set targets during 2022. The exercise was facilitated by Quinn & Partners, a leading management consultancy specializing in corporate sustainability, sustainable finance, and responsible investment practices.

Scope 3 Transportation Breakdown FY2020 (tCO 2 e)

Air and rail Air and rail

The activities captured covered emissions from all three scopes for the fiscal period of 2019 to 2021:

Passenger vehicles Passenger vehicles

31.5

28.0

Employee commuting Employee commuting

Office natural gas consumption

SCOPE 1

4.1

SCOPE 2 SCOPE 3

Office electricity use

Office waste management, air/rail travel and hotels, taxis/Ubers/Lyfts, and daily employee commuting

FY 2021 Employee Commuting Survey

Metric

Result

Our firm emitted a total of 24.7 tons of greenhouse gases in FY2021, most of which resulted from employee commuting, natural gas, and electricity. This represents a significant decrease in emissions from the previous year, when our carbon output was 79.8 tons. This decline can largely be attributed to the effects of the COVID-19 pandemic as business travel and employee commuting emissions fell by 97% and 74% respectively between FY2020 and FY2021.

Percent working from home

42%

24.7 tons of greenhouse gases in 2021

Average commute distance

10 km

Active transportation (walk/bike)

34%

Public transit (TTC/GO transit)

32%

Motor Vehicle

34%

GHG Inventory Results

GHG Emissions: Peer Comparison (tCO 2 e/FTE*)

Company

Value

Main Sources of Scope 3

RPIA

0.9

Employee and business travel

Employee commuting Business travel Waste disposal Electricity Natural gas

Total GHG Emissions (tCO 2 e*)

Peer 1

1.1

Business travel, excl. offsets

Source FY2019 FY2020 FY2021

Peer 2

1.3

Excludes scope 3

Scope 1

1.2

6.4

5.9

Peer 3

3.9

Business travel

Scope 2

7.0

7.2

7.7

*Metric tons of emissions per full-time equivalent employee

Scope 3

63.1 66.1

11.1

Total

71.3 79.8

24.7

FY2019

FY2020

FY2021

*GHG Inventory results are reported in units of metric tons of carbon dioxide equivalents

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW

INVESTMENT MANAGEMENT

OVERVIEW

INVESTMENT MANAGEMENT

FIRM

OUR DIVERSITY, EQUITY & INCLUSION JOURNEY RPIA is dedicated to promoting diversity, equity, and inclusion (“DE&I”) in our workplace, and we took actions to formalize this in 2021. We strive to maintain an environment where no one is denied opportunities for reasons unrelated to their performance. We celebrate and welcome the unique attributes of all employees, stakeholders, and external personnel in support of our mission to promote diversity and inclusion across our organization. Our Diversity, Equity, and Inclusion in the Workplace Policy was published last year to demonstrate our commitment to promoting an atmosphere where respect for each person’s dignity, ideas, and beliefs is consistently upheld. The policy summarizes the guidelines we expect each employee to follow with respect to cultural competence, hiring and recruitment, and succession planning. It also outlines the various responsibilities, at the individual, group, and committee levels to ensure that the policy is respected and that our DE&I goals are met. Our firm is committed to taking a consultative, thoughtful, and impactful approach in evolving this policy over time. RPIA’s hiring practices continue to evolve and adapt to the growing demands of the business and the increasingly diverse landscape of talent within the industry. We are proud partners of organizations such as Women in Capital Markets (WCM), 100Women in Finance (100WF), and the Canadian Association of Urban Financial Professionals (CAUFP) to ensure that our job opportunities are reaching members of historically marginalized and underrepresented groups. We believe in the power of diversity of thought, and we aspire to have an inclusive workplace that mirrors the fabric of our communities. In 2021, we conducted our first employee demographics survey to determine the diversity that exists across our organization and identify opportunities to further promote inclusion, equity, and engagement within the organization. Though we recognize there is more work to be done to increase representation of marginalized groups, we take pride in the progress we have made to date.

Chinese

Malayalam

Ukrainian

Igbo

Gujarati

Bengali

Spanish

Hebrew Vietnamese

French

Urdu

Creole

Irish

Russian

Romanian

Kutchi

Dutch

Polish

Italian

Punjabi

Mandarin

Arabic

Tagalog

Portugese

English

Afrikaans

Albanian

Languages

Hindi

Marathi

Greek

Sindhi

Cantonese

German

Armenian

Women Firm-Wide

Corporate

78%

Client

64%

45%

Finance & Operations

54%

Portfolio Management

18%

Risk & Compliance

17%

Technology

13%

43%

27%

20%

Women in Governance Roles*

Principals

Executive Committee Operating Committee

Finance & Operations

77%

Risk & Compliance

67%

Visible Minorities by Department

Technology

50%

Corporate

44%

Client

44%

Portfolio Management

41%

*Data presented as of May 2021 (Fiscal Year End 2021). All other data presented as of November 2021.

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW

INVESTMENT MANAGEMENT

OVERVIEW

INVESTMENT MANAGEMENT

FIRM

ENGAGING WITH OUR COMMUNITY The pillars of our success as an organization are our commitment to having an inclusive and open culture, our passion for doing good through our work, and our dedication to empowering employees to become leaders in the causes they care most about. We take pride in engaging with our community both within the organization through allyship and education, as well as our philanthropic giving and active volunteerism in our local community. This has been an important focus area in 2021 and prior years, and we aim to continue with strong momentum in 2022.

Allyship Committee

ART & CULTURE

CHILDREN & YOUTH

CIVIL RIGHTS

EDUCATION ENVIRONMENT

The Allyship Committee embodies grassroots volunteerism, social activism, and community engagement. It is a safe place where all RPIA employees can help each other identify specific actions that can make a meaningful impact on the world around us. Allyship is a topic that generates tremendous voluntary engagement and passion in our firm. Each month, we host meetings that focus on a specific subject and have been attended by 55-60% of our workforce, with representation from all seniority levels of the firm. Meetings typically involve a combination of sharing lived experiences and external speakers and are intended to foster awareness and remove barriers, moving the firm even further toward an inclusive environment. The committee’s goal is to encourage inclusive behaviours and leave our employees feeling more equipped to practice allyship regularly, consistently, and openly, both inside and out of the workplace, as well as more broadly in the community.

FOOD SCARCITY

HEALTH CARE

HEALTHCARE RESEARCH

HOMELESSNESS HUMAN RIGHTS

MENTAL HEALTH

RACIAL EQUITY

JEWISH COMMUNITIES

IMMIGRATION INDIGENOUS COMMUNITIES

Charitable Giving

At RPIA, we believe in giving back to the community. We hope to create meaningful change through philanthropic giving and promoting active volunteerism among our employees in support of community development, scientific research, environmental initiatives, education, global development, and arts and cultural programs. We support a wide variety of organizations that reflect the values of our investors, our employees, and our firm. Below are some of the themes that the firm and employees have focused on for our charitable giving and we hope to increase this with additional opportunities in the coming months and years.

SPORTS

WATER & SANITATION

WOMEN’S RIGHTS

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW

INVESTMENT MANAGEMENT

OVERVIEW

INVESTMENT MANAGEMENT

FIRM

SUPPORTING OUR EMPLOYEES

OUR FOCUS IN 2022

Education & Training We take pride in offering our employees various opportunities for professional and personal growth through ongoing education and training. As a UN PRI signatory, one of our firm’s goals is to ensure our employees are educated in responsible investing. As a result of this commitment, all investor-facing, risk, and portfolio management team members, comprising 67% of our total staff, have either completed an introductory ESG course or enrolled in an ESG certification program. Individuals from other groups at the firm were also given the opportunity to complete introductory courses on the topic and many chose to do so.

Mentorship Program Each year, the RPIA Mentorship Program pairs mentees with senior mentors for a 12-month period with the intent of promoting professional and personal development, encouraging cross-functional coaching, and cultivating a sense of community and mutual empowerment. With their mentor’s support and guidance, mentees establish career goals, discuss strategies to overcome challenges, and gain broadened perspectives from their mentor’s breadth of experience. In 2021, we expanded the program to have more individuals serve as both mentor and mentee. The program has been a beneficial way to improve visibility and upward mobility for junior members of the firm. For mentors, the program is equally rewarding as it provides an opportunity to coach, motivate, and empower their mentees to maximize their potential.

Our mandate is to position RPIA as a leader and go-to asset manager in Canadian sustainable investing, thereby delivering value to our investors and employees through our own firmwide ESG targets and initiatives. - Louise Pitt Brindle, Principal & Head of Credit Research | ESG Innovation Team Sponsor

Smart Commute In 2022, as part of our ongoing commitment to reducing our carbon footprint, we have begun to partner with organizations to provide our employees with tools and resources that support sustainable commuting. These partnerships will benefit our employees and communities in many ways, including reducing congestion, improving health and fitness, and taking action on climate change. Leadership Skills Development One of the initiatives we have launched in 2022 is a bi-weekly drop-in session for people managers and new leaders. The purpose of these sessions is to collectively explore various leadership concepts, develop soft skills, build relationships, and most importantly learn together how to effectively manage productivity while remaining positive, inspiring, and authentic leaders. We believe that senior leadership sets the tone for a truly inclusive environment, and as such, all RPIA Principals are undertaking a 6-month leadership effectiveness program in 2022 that incorporates a focus on modern empathetic leadership principals. Innovation Teams At RPIA, we believe that investing in our employees’ growth and development is one of the key drivers of success and innovation. Leveraging the diversity of thought, skills, and abilities of our employees, we have launched a new initiative of cross-functional Innovation Teams in 2022. The objective of these teams is to harness the knowledge and interests of our employees to help pioneer new products, projects, and processes in support of our near and longer-term firm goals. The ESG Innovation Team is comprised of individuals from the investment, client, and operations functions of the organization to ensure diversity of thought and thorough discussions that bring together multiple perspectives regarding our sustainability initiatives. This team will be driving the firm’s ESG strategy by developing benchmarks, setting goals, conducting research, and providing recommendations for the ESG Committee and functional departments to implement within the workplace and our investment processes.

Employee and Family Assistance Program (EFAP)

Our Employee and Family Assistance Program (EFAP) exemplifies our commitment to the mental health and well-being of our employees and their families. The EFAP is a supplementary benefit program for employees that provides short-term counselling and support. It is most frequently used for personal challenges such as relationship concerns, family or parenting issues, anxiety, depression, addictions, grief, health issues, or work-related challenges.

Listening Forums

This initiative is intended to foster open and honest conversations with small, intimate groups of employees in order to collect meaningful first-hand accounts of the employee experience at RPIA. The responses collected through these candid conversations have been critical in refining our cultural identity and enhancing our engagement with employees.

Internship/Co-op Program

For many summers, we have invited a number of university students to take advantage of our internship and co-op program. This program is designed to provide students with a better understanding of the investment business, enabling participants to build on critical career capabilities and broaden their professional networks.

ESG Innovation Team

Louise Pitt Brindle | Sponsor Principal, Head of Credit Research Maksym Tupis | Member Trading Assistant, Portfolio Operations

Aaron Young | Leader Associate Portfolio Manager

Lydia George | Member Manager, Marketing

Chandini Balloo | Member Associate, Client Engagement

Vincenzo Bufalino | Member Analyst, Client Portfolio Management

INVESTMENT MANAGEMENT

OVERVIEW FIRM

INVESTMENT MANAGEMENT

Evolving Our ESG Integration

The Importance of Climate Change

Providing Thought Leadership

Increasing Focus on the Social Pillar

Engagement in 2021

Our Engagement Focus in 2022

INVESTMENT

MANAGEMENT

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

EVOLVING OUR ESG FRAMEWORK RPIA has focused on incorporating ESG analysis into our investment process for many years; however, as ESG data, disclosures, reporting frameworks, and regulations evolve quickly, asset managers need to keep pace. In 2021, the RPIA ESG Committee decided to evaluate and refine the processes and tools being used to integrate ESG analysis into our investment process as a part of our broader firmwide ESG commitment. The review ultimately led to an enhanced framework, which allows the investment team to collect and analyze ESG-related data with a new materiality mapping across sectors using the SASB model as the base for the proprietary tools we developed. This allowed the team to more accurately pinpoint which ESG factors are important for individual sectors, and have a better definition of a broader set of required qualitative information needed through issuer and/or engagement meetings.

How Do We Leverage Our ESG Focus?

1. Integration

2. Targeted Portfolios

ESG Integration applies to all strategies as we believe it is important to assess fundamental, technical, and ESG risks and opportunities before adding a company’s securities to the portfolios. It is critical to link these analytical frameworks together to fully understand management’s commitments and goals as standalone targets and in the context of the respective company’s sector and/or region. The integration process does not imply or include investment restrictions – we can and do invest in issuers who may be working on or are in the early stages of improving or adapting their ESG profiles for various reasons. However, we approach this in a similar way to assessing fundamental risks in that we would likely require an additional yield or spread enhancement to compensate for the higher risk profile of that company or sector. We believe that incorporating ESG factors into our relative value discussions and decisions is a requirement in today’s fixed income markets.

As we advance our ESG integration process we are also beginning to explore opportunities to design targeted ESG portfolios in 2022, expanding on our carbon reduced mandate. Targeted portfolios would have a specific ESG focus, built around factors that are quantifiable and impactful. These future solutions may include issuers who we believe are leaders in addressing certain ESG factors or may focus on companies exhibiting improvement in their ESG risk profiles. We continue to manage our existing Targeted Portfolio, the RP Broad Corporate Bond (BBB, Carbon Reduced) strategy. This strategy has a dual mandate of producing 100 bps per annum of excess return above that of the index while maintaining a weighted average carbon intensity lower than that of the index. 1

Improvements to the ESG Processes Within the Investment Team in 2021

• Developing research templates and replicable processes to enable analysts and portfolio managers to identify and manage ESG risks • Enhanced formal ESG analysis and processes to evaluate and assess issuers based on standardized internal ESG factors and ratings methodology • Regular reporting of ESG analysis to senior management • Dedicating additional resources to the Research Team to collect and analyze ESG criteria and sharing this information throughout the broader Investment Management Team • Requiring ESG-specific training for all members of the investment team by the end of 2021 • Establishing goals for specific ESG content to inform investors and third parties about the trends and developments within the asset class • Engagement meeting targets for the investment team • Addition of new information sources and collaborations/alliances with organizations related to the ESG goals of the firm • Goals set for ESG products/funds solutions for certain investors With these improvements, the goal is for ESG analysis to occur in parallel with fundamental credit analysis before we make an investment, where possible. We also benefit from our focus on global capital markets and an active trading style, which enhances the team’s ability to engage with issuers on disclosure, trends, and gaps in their ESG profiles. The Committee intends for the firm’s ESG framework to continue to evolve each year as the global ESG landscape changes, and we are committed to exploring new ways of incorporating ESG factors into our investment processes. It is critical to the new framework that we adapt and supplement our knowledge and influence as the world of ESG itself changes.

Integration

Targeted

• Consider ESG factors for all portfolios as an input into risk management, credit analysis and relative value pricing • Use quantitave and qualitative assessments to ensure we are pricing material ESG factors into our investments, where appropriate. • Engage with issuers and relevant ESG organizations to ensure progress in improving disclosures and impact management’s approach to ESG-related risks/improvements

• Target specific factors within ESG that align with our investor’s desired outcomes • Focus on quantifiable and consistent ESG factors that we can utilize for optimizing the portfolio • Experience in carbon reduction mandates to date and updated focus on workplace diversity with our Workplace Equality Framework • Engage with issuers on these, and other, important ESG factors

1 Index: FTSE Canada BBB Corporate Bond Index

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

How Does the ESG Integration Process Work?

Outputs From Our ESG Integration

We prioritize numerous inputs to capture material ESG-risks and opportunities based on the sector within which an issuer operates. These inputs are mapped to ESG pillars and specific factors that differ by sector. The framework has a greater focus on the materiality of the specific ESG factors for each industry (guided by SASB and TCFD Standards). We capture quantitative metrics (current data and trends over time) and qualitative discussion points that provide insights into how management teams and boards develop and present their ESG profiles and deliver improvements over time. We also believe that the qualitative inputs to the ESG analysis are increasingly important to understand and discuss with both management teams and third parties such as regulators, rating agencies, and other investors globally.

Sector Rating Positive / Stable / Negative

Issuer Rating Leader / Average / Laggard

ESG OUTPUTS

Our ESG Integration Process

Transition Rating Leader / Average / Laggard

Workplace Equality Score 0 to 100

Inputs Information from companies through reporting and engagement, data providers, rating agencies, news outlets, etc.

ESG Pillars Categorize inputs under ESG Pillars and Transition Analysis ESG Factors Common themes under each ESG Pillar used to categorize areas of focus

Our updated, but still evolving ESG integration processes build on the quantitative scoring in our original ESG framework but have been redesigned to incorporate the additional relative-value lens through which we manage our portfolios. This includes rankings against the broad sector as well as direct peer groups of the respective issuer. We also construct ESG sectoral views and ratings that supplement our fundamental analysis. Most importantly, our analysis includes the subjective views of our Credit Research and Execution teams, who can apply their sectoral and market expertise to analyzing issuers and structures from an ESG perspective. The RP Barometer is a proprietary tool that aggregates all the above data and allows Credit Research, Execution, and Risk team members to find all relevant ESG information and relative rankings in one location in a consistent format for each company. The Barometer includes current and trend metrics (ranked against comparable issuers and the overall industry), policy analysis, suggested discussion topics for each of the ESG pillars, and modules dedicated to Transition Risk and DE&I analysis.

Metrics Quantifiable information assessed both on most recent data and trends overtime

Discussion Points Qualitative information to help guide assessment of company’s future management of ESG risks/ opportunities

ESG Assessment

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

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INVESTMENT MANAGEMENT

RP Barometer Snapshot

Environmental Risk Factors

Overall Rank:

2.6

RPIA Workplace Equality Scoring Model

12/23/2021

COMPANY X

Metrics (Current & Trend)

Current Rank: Trend Rank:

2.7 2.5

Sector: Midstream - Oil & Gas

Country of Risk: US

Ratings (M/SP/F): Baa1/BBB+/BBB+

Rep. Year: 2020

Curr Rank

Trend Rank

Workplace Equality Model

Factors

Metric

Unit Current

Trend

GHG Emissions Resource Management Resource Management Resource Management

Total GHG CO2 Emissions Intensity per Sales Energy Intensity per Sales Pct Renewable Energy Consumed Embedded Carbon Reserves Water Use/Withdrawal Intensity per Sales Waste Generated per Sales Spills Per MBOE Number Sites Environmentally Sensitive Areas Pct of Land Restored Number of Pipeline Incidents

CO2e/Rev MWh/Rev % MM Mt m³/Rev Mt/Rev Mt/MBOE # % #

324.4 997.5

2 2

-13.9 -0.3

1 1

PI - Participation

Value

PII - Mobility

Value

% Workforce Participation % New Hires of Total % Total Attrition Recruitment Strategy Post-Career Break Strategy

31 33 37

% of Total Promotions % of Entry Level Positions % of Revenue Contributing Roles Gender Diverse Candidates Bias Training

34 43 25 No Yes

Ecological Impact Ecological Impact Ecological Impact Ecological Impact Ecological Impact Ecological Impact Ecological Impact Ecological Impact

0.5 0.5

1 1

0.0 -63.9

1 1

No No

Q4 Q3 Q2 Q1

1.0

-66.7

PI Score

10/20

PII Score

17/20

Pct of Natural Gas Pipelines Inspected Pct of Significant Pipeline Incidents

% %

0.0

-66.7

PIII - Leadership

Value

PIV - Equal Pay

Value

Metrics (vs. Peer Group)

% of Management Roles % of Executive Roles % of Board Members CDO/Equivalent Female Leadership Strategy

29 11 36

Average Gender Pay Gap % of Top Quartile Pay % of Second Quartile Pay Policies Addressing Pay Gaps Action Plan for Pay Disparity

- - -

Metric

No No

Q4 Q3 Q2 Q1

324.4 997.5

1,374.0 5,551.9 0.0

1,545.5 6,101.0 0.9

669.0

597.0 0.0

PIII Score

14/20

PIV Score

0/20

20.0

0.5 0.5

246.2 12.7

740.4 2.6

PV - Representation

Value

0.2

% Disabled % Minority Workforce % Minority Management Equal Opportunity Indigenous Engagement

3 21 19

92.1 55.0 20.0 45.0

34.9 9.0 13.2 44.0

1.0

4.0 24.0 13.3

6.0

Yes Yes

Pct of Natural Gas Pipelines Inspected Pct of Significant Pipeline Incidents

0.0

Q4 Q3 Q2 Q1

PV Score

18/20

Policy Implementation

Count:

2/3

Factor

Policy

Y/N

Total Score

59/100

GHG Emissions Ecological Impact Ecological Impact

GHG Reduction / Energy Use Policy Environmental Quality Management Policy Emergency Response and Preparedness Policy

No Yes Yes

For Illustration Purposes Only

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

RPIA Transition Risks

12/23/2021

X A B C D E

COMPANY X

Sector: Midstream - Oil & Gas

Country of Risk: US

Ratings (M/SP/F): Baa1/BBB+/BBB+

Rep. Year: 2020

Carbon Budget - Midstream - Oil & Gas Sector

5,000 10,000 15,000 20,000

Midstream - Oil & Gas as a % of Overall Market

Issuers as a % of Midstream - Oil & Gas Sector

500 1,000 1,500 2,000

Mt CO2e

Mt CO2e / $ Revenue

Scope 1

Scope 2

Avg.

92.5%

0.0% 0.2% 0.4% 0.6% 0.8% 1.0% 1.2% 1.4%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

1.3%

87.6%

1.2%

83.6%

Source: Bloomberg, Company Filings

76.7% 75.9%

1.1%

29.1%

Carbon Trajectory

Rank:

3.0

41.9% 29.4% 20.6% 22.3%

0.7%

Projections

Avg.

1.5°C Trajectory Industry Gap Transition Gap

0.5%

23.4% 25.1%

31.4%

Base (2019) Projected (2030) % Reduction (2030) Projected (2050) % Reduction (2050)

11,893.0 8,039.2 -32% 3,673.3 -69%

12,694.1 8,489.5 -33% 3,797.0 -70%

62.8% 32.4%

+17.2%

+0.7%

-50%

12.6% 9.8% 10.4% 19.9% 19.3%

21.0%

+16.8%

+1.0%

-86%

2016 2017 2018 2019 2020

2016 2017 2018 2019 2020 EDCBAXTotal

10000 12000 14000 16000 18000

Carbon Profile & Trajectory

Average Rank:

2.4

Metrics (Absolute & Intensity)

Absolute Rank: Intensity Rank:

4.0 2.0

0 2000 4000 6000 8000

Absolute

Intensity

Total Total

Scope 1 Scope 2 Scope 3

Total Total

Scope 1 Scope 2 Scope 3

Scope 1

Scope 2

Scope 3

Scope 1

Scope 2

Scope 3

X A B C D E

12,680.0 17,860.6 4,613.2 11,930.0 6,222.5 8,934.9

6,853.0 15,810.6 3,905.4 10,430.0 3,723.1 7,503.9

5,827.0 2,050.0 707.8 1,500.0 2,499.4 1,431.1

47,541.0 2,703.4

434.6 1,840.8 1,333.3 1,545.5 - 312.1

234.9 1,629.5 1,333.3 1,351.2 - 312.1

199.7 211.3 - 194.3

1,629.5 278.6

- - - -

2012

2020

2030

2050

- -

Business as Usual

1.5°C Consistent

Industry Avg.

Avg.

13,671.2

10,256.5

3,414.7

33,418.0

1,154.3

955.5

198.9

2,578.1

Source: Bloomberg, Company Filings, SBTi, TPI

For Illustration Purposes Only

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

Incorporating Thematic Focus Into Our ESG Research

Targeted ESG Portfolios

In 2021, RPIA identified key themes that we believe will have a meaningful impact on risk and returns across many sectors and geographies in the coming years. Although they are captured in our overall ESG framework, these themes warrant additional, more-focused analysis. The team creates specific modules within the RP Barometer to analyze these themes and they are often included as key discussion points when meeting with issuers.

As we refine our ESG integration process, we are also beginning to discuss possible opportunities to develop solutions for investors in the form of ESG-focused portfolios. RPIA has managed a carbon-reduced corporate bond portfolio for over two years, successfully delivering on our dual mandate of attractive risk-adjusted returns combined with a lower carbon profile than the index. Leveraging our experience with this mandate, we hope to explore new solutions with our investors in 2022 that focus on targeted ESG themes. Throughout 2021, we have had meaningful conversations with investors about the ESG factors relevant to their organizations and where we believe a solution is possible when prioritizing the following three concepts.

The Carbon Transition

Workplace Equality

Although workplace inequalities faced by women, minority groups, people with disabilities, and other groups within society were a focus before COVID-19, the pandemic has only intensified the scrutiny on and importance of these social aspects. Research has shown that more diverse companies tend to exhibit better risk management and profitability, which is especially important to our industry. 3 Our ESG framework includes a proprietary Workplace Equality scoring module that provides information about an issuer relative to its peers based on five key pillars (see Increasing Focus on Social Pillar below). Our investment team’s work has also helped inform our firmwide discussion on these matters, leading to improvements and initiatives at the corporate level as we strive to incorporate the standards we expect from companies in our portfolios into our own culture.

Global economies are quickly shifting away from fossil fuel consumption as they recognize the risks climate change poses to humanity and global economic stability. By the end of 2021, 136 countries and 684 companies had made net-zero pledges, representing 90% of global GDP. 2 However, we note that these commitments vary greatly by time and scope, often making them not directly comparable. Our ESG framework includes a Transition Risk module that creates an in-depth carbon profile for an issuer compared to their peers and the broader market. It also compares the ambition of carbon reduction targets versus the industry peer group and a 1.5°C pathway.

3 Key Factors for Building a Sustainability-Focused Portfolio 1 2 3 Measurable Focus on quantifiable factors that can be measured and monitored. Impactful Focus on issuers exposed to climate risks or those that could improve their

Ambitious Seek to invest in companies that are

ambitious with their ESG goals, and advocate with others to drive material change over time.

diversity metrics as a means of promoting change.

Possible Focus Areas for a Sustainability Portfolio

Environmental Decarbonization of the Economy

S G

Social Equal Treatment & Opportunity in the Workplace

Governance Quality of Board Level Leadership & Composition

2 Net Zero Tracker 3 McKinsey & Company - Women in the Workplace 2021

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RPIA SUSTAINABILITY REPORT 2021

INVESTMENT MANAGEMENT

THE IMPORTANCE OF CLIMATE CHANGE Climate change continues to be the most urgent source of ESG risk for humanity and global economies. No sector has escaped the present or potential impact of climate change risks. As stewards of our investors’ capital, we continue to monitor short, medium, and longer-term effects on corporate credit arising from physical and transition risks. The most recent Intergovernmental Panel on Climate Change report has shown that the impacts from greenhouse gas emissions are not a far-off issue that can be addressed slowly over time. The report made clear that climate change has an immediate impact and must be addressed by governments and corporations across the global economy starting yesterday.

Climate Change Leading to Increasing Frequency of Extreme Weather Events

Hot Temperature Events Over Land

Once in 10-Yr. Event

Once in 50-Yr. Event

2 ° C 4 ° C Future global warming levels

1850-1900 Present 1C 1.5 ° C

I used to say, when I was talking about climate change, that climate change is serious, certain, and soon. But this is no longer accurate. Now it is very serious, very certain, and now.

Heavy Precipitation Over Land Once in 10-Yr. Event

Agricultural/Ecological Droughts Once in 10-Yr. Event

- Linda O. Mearns, Ph.D. Senior Scientist, Research Applications Lab, National Center for Atmospheric Research (she/her)

2 ° C 4 ° C Future global warming levels

1850-1900 Present 1C 1.5 ° C

Source: IPCC “Cimate Change 2021 = Physical Science Basis”

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

PROVIDING THOUGHT LEADERSHIP

In 2021, the changes implemented in our investment team and processes enabled us to generate additional thought leadership content on ESG, focusing on topics that are important to the investment community and our investors. Our published commentaries target the ESG-related themes that we believe will remain topical and impactful to investing in the fixed income markets over the coming years. In addition, the investment team has been active in discussions and initiatives with organizations such as The Credit Roundtable, the UNPRI, Climate Engagement Canada, and others to promote ESG awareness and progression.

With every additional increment of global warming, changes in extremes continue to become larger. For example, every additional 0.5 ° C of global warming causes clearly discernible increases in the intesnity and frequency of hot extremes, including heatwaves, and heavy precipitation, as well as agricultural and ecological droughts in some regions.

- IPCC Climate Change 2021 - Physical Science Basis

The Evolution of ESG A discussion on how RPIA integrates ESG into our strategies and where we see trends going forward.

Where’s Your Amibition How do we assess the impact from ESG-linked bonds and whether issues are funding incremental change or “business-as-usual.”

More frequent extreme weather events and the continued transition away from fossil fuels have significant impacts on many sectors in which we invest, similar to the examples outlined below:

• Energy companies face continued pressure to pivot their operations away from coal, oil, and natural gas and toward renewable products. • Transport and automotive manufacturers continue to transition from internal combustion engines toward electric vehicles with large-scale implications for global supply chains. • Lending institutions face pressure to reduce underwriting and lending to fossil-fuel intensive businesses. • Insurance companies face heightened risks due to higher claims from more frequent global extreme weather events and rising sea levels. Simply put, climate change permeates all elements of the global economy and our portfolios. To this end, we have completed our second annual TCFD report, which outlines our views on climate change and how we integrate this analysis into our investment process.

Enbridge’s SLB Addressing the “Transition Gap” in Energy Enbridge’s landmark Canadian energy sustainability-linked bond deal was the first step in addressing the “transition gap” between an energy- dominant economy and the need to decarbonize. The Transition to Net Zero - A Fixed Income Perspective A summary of Liam O’Sullivan’s presentation at the Pension Investment Association of Canada Conference (PIAC). This two-pager provides a summary of the themes he shared with the attendees. Nuclear Power: a necessary step in the path to net-zero Following Bruce Power’s inaugural green bond deal, we discuss the benefits of nuclear as a near-zero greenhouse gas emissions technology but the risks associated with waste management and a highly politicized view of nuclear power. A Discussion on Climate Change, Sustainable Living & Investing This interactive event covered the pressing topic of climate change and the need for sustainable actions. Our speakers provided an educational discussion from the lens of an individual and an investor, touching on the impact of climate change, changes we as individuals can incorporate to reduce our carbon footprint, and the growth and importance of sustainable investing.

TCFD Report

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RPIA SUSTAINABILITY REPORT 2021

OVERVIEW FIRM

INVESTMENT MANAGEMENT

INCREASING FOCUS ON THE SOCIAL PILLAR Although the environmental pillar has been top of mind in recent years, we believe that the social pillar will become as important in the coming years, especially as we see increased disclosure and standardized metrics. We are now seeing more focus on social metrics, particularly how companies manage diversity, equity, and inclusion, and the impact on their customers. This increased focus on the social pillar is evident in the amount of Social and Sustainability bonds issued in 2021 relative to environmentally-focused issues (“Green bonds”). We believe this increased issuance reflects how many issuers recognize that the social pillar can no longer be ignored.

RPIA’s Workplace Equality Framework

Participation / Attrition / Recruitment

Representation

Participation

Promotions / Entry Level / Diverse Candidates

PII

Board / Executive / Management / Action Plan

PIII

Equal Pay

Mobility

PII

Social Pillar Becoming an Increasing Focus for ESG Bonds

PIV

Gender Pay / Top & Mid Quartile / Action Plan

PIV

Leadership

36%

Minority Groups / Disability / Indigenous Engagement

$1,200

PIII

$1,000

$800

36%

$600

Women in the Workplace

14%

$400

8% 11%

How a company manages DE&I needs to be assessed across many levels. In the infographic on the next page we highlight the five pillars that make up our Workplace Equality framework. Our goal is to push issuers to disclose information on all aspects of diversity in the same detail that we have seen in gender metrics. We will use our engagements as opportunities to increase detailed disclosure across all population groups. In conjunction with that, we aim to use our own DE&I survey data to set ambitious and relevant goals for these pillars within our firm to improve workplace equality and transparency and ensure that we apply the same expectations to ourselves as we do the companies in which we invest.

$200

2% 0% 5%

2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Green Social Sustainability % of Issuance Including Social UoP

Source: Bloomberg UoP = Use of Proceeds

In light of this trend, and based on conversations with our investors, we found that gender diversity disclosure has improved enough to become measurable, and improvements would be impactful for the companies we invest in. Upon reviewing disclosures provided by many companies across the global fixed income sectors, we found that although most issuers reported on gender diversity, their metrics were often limited to female representation on their board or the percentage of their workforce that was female regardless of seniority. While these metrics are clearly important, we saw the opportunity to design a scoring system that took a more in-depth review of how an issuer encourages gender diversity in their workplace. The result was a scoring system built on five pillars, four of which focus on gender diversity and a fifth that incorporates other forms of diversity (ethnicity, disability, Indigenous peoples), for which data is currently less widely available but critical in our view. We will continue to advocate for an increase in the breadth of disclosures of these metrics and encourage management teams to incorporate these into their targets at the company or security level where appropriate.

Infographic Sources: McKinsey & Company and LeanIn.Org, OECD “Women in the Workplace” September 27, 2021 “COVID-19’s Impact on Women’s Employment” March 8, 2021. “Diversity Wins – How Inclusion Matters” May 19, 2020. OECD (2022), Gender wage gap (indicator). doi: 10.1787/7cee77aa-en (Accessed on 10 January 2022). Gender pay gap defined by as the difference between median earnings of women relative to median earnings of men. Full-time employees.

January 25th, 2022. All data presented as of 2020 or 2019

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