Responsible Investments Report 2021

Our Responsible Investment overlays

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Norms and PAI screening

Norms-based screening NAM’s investment products are subject to an ongoing norms- based screening process, which identifies companies allegedly involved in breaches of international laws and norms on envi- ronmental protection, human rights, labour standards and anti- corruption standards. Examples of such norms and standards include the UN Global Compact and the OECD Guidelines for Multinationals. If a company is identified in this screening pro- cess, an internal assessment of the norms breach is initiated. The assessment is conducted by the RI team, which provides a recommendation to the RIC. Typical actions which the RIC decides on include engagement, quarantine or exclusion. For more information please refer to the NAM RI Policy. PAI Screening Principal Adverse Impact (PAI) on sustainability factors is used as a tool to assess investee companies’ environmental and social impact. All NAM investee companies are assessed through our entity-level PAI integration due diligence process. NAM’s RI team has developed a proprietary quantitative “PAI Engine” that assesses the performance of NAM´s full invest-

ment universe across multiple, mandatory and optional, PAI indicators. The engine utilises a diverse set of data across numerous ESG thematic areas in order to ensure that investee companies’ performance is accurately analysed and outliers are identified. In this way, the PAI engine produces suggestions as to which investee companies are likely to perform outside NAM’s acceptance criteria for ESG performance. Investee companies which are considered outliers on one or more PAI indicators are analysed further by NAM’s RI team and a recommendation for action is made to our RIC in a process similar to the one applied for Norms-based breaches. The RI team analysts are able to review the suggested output and manually adjust, confirm or override the PAI engine’s sug- gested output as needed. NAM’s Entity-level PAI statement can be found here.

PAI statement on product level will be published in 2022, as required by the SFDR.

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