EXERCISE OF VOTING RIGHTS REPORT

Transcription

1 Document intended for professional clients only in accordance with MIFID EXERCISE OF VOTING RIGHTS REPORT MIROVA 2017 March 2018 Document intended for professional clients only in accordance with MIFID

2 In compliance with Article of the AMF s General Regulations, Mirova has produced this Exercise of Voting Rights Report document, describing how it has exercised its voting rights as shareholder of the UCITS/ AIF it manages. In accordance with Article of the AMF s General Regulations, exercising its voting rights is an integral part of Mirova s socially responsible investment strategy. Mirova believes that aligning its voting policy principles with its investment strategy is essential for promoting value creation for its clients. EXERCISE OF VOTING RIGHTS REPORT - [Subtitle]

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4 SUMMARY FOREWORD 5 GENERAL SCOPE 6 1. Organisation 6 2. Details of the General Meetings Voted 6 EXERCISE OF VOTING RIGHTS BY MIROVA IN Voting Perimeter General statistics 7 3. Analysis of voting results by geographic region 7 a) All geographic areas combined 8 b) Europe 9 c) America Analysis of Challenge Factors 11 a) Distribution of value 12 b) Transparency and Quality of Information 14 c) Balance of Power 15 d) Financial Structure 16 e) Bylaw Amendments 17 f) Shareholder Resolutions 18 CASES IN WHICH MIROVA DID NOT RESPECT ITS VOTING POLICY 20 CONFLICTS OF INTEREST 20 4

5 FOREWORD Mirova believes that aligning its voting policy principles 1 with its investment strategy is essential for promoting value creation for its clients. This presupposes defining the principles of good governance that Mirova upholds, particularly in order to take into account the long-term challenges that companies are facing, above all environmental and social issues. In order to better associate environmental and social issues with strategic decisions, a more balanced distribution of power between the various stakeholders is needed. This organisation favours a partnership view of corporate governance. Redefining shareholders roles and placing responsibility for decisions on long-term issues back in the hands of the Board of Directors or the Supervisory Board are key issues to be considered during this process. Accordingly, Mirova began an in-depth, critical reflection in 2015 on conventional governance issues, seeking to define a model based on an entrepreneurial and sustainable vision of companies. This reflection has resulted in initiating a new voting policy in firm support of a new governance model. This model is based on four major pillars: the establishment of long-term shareholding, capable of supporting sustainable company growth; the creation of a board that considers the companies stakeholders in a balanced way and takes CSR issues into account in its strategic planning; the balanced and fair distribution of value created between the various stakeholders, and the consideration of environmental and social issues in incentive mechanisms and alignment of interests; the transparency and quality of financial and extra-financial information provided, with the establishment of a reporting procedure that integrates sustainability issues. Given the strength of the currently prevailing shareholder governance model, effectively applying this policy and, more generally, diffusing these good practices among the companies that Mirova invests in will necessarily be a long process. In parallel, Mirova has decided to employ an in-depth engagement strategy based on these issues to encourage companies to progressively take them into account. This strategy is developed in a variety of ways: through direct dialogue, cooperative engagement, and targeted advocacy. Mirova is also convinced of the need to create a theoretical framework for developing new models of governance which include environmental and social issues. Mirova has therefore decided to support academic research, thus joining the Mines ParisTech Chair Théorie de l entreprise. Modèles de gouvernance et création collective (Theory of Companies. Models of governance and Collaborative Creation) in This strategic cooperation will be crucial for developing new ways of thinking about developing viable, value-creating companies for all stakeholders. 1 Access Mirova s Voting Policy 5

6 GENERAL SCOPE 1. Organisation The exercise of voting rights is structured around two distinct sets of activities aimed at ensuring that this process is in the best interests of unit holders: Resolution analysis is conducted by the Voting and Governance division of Mirova s responsible investment research department, a team of 11 SRI analysts specialising in environmental, social and governance issues. Voting decisions are the responsibility of the voting committee that consists of Mirova s Head of Equity Management and the heads of Responsible Investment Research. Fund managers and extrafinancial analysts may be invited to participate in the Committee's discussions, depending on the topics discussed. Exercise of voting rights is carried out by Ostrum AM's Middle Office department in accordance with the instructions given by Mirova as part of a service provider agreement. 2. Details of the General Meetings Voted Accessible from its website, Mirova now has a platform that presents in detail all the votes cast by Mirova on the resolutions presented at general meetings of companies held in its voting funds (excluding dedicated funds). Access to this platform is public, thus meeting the requirements of the AMF Regulation (Article ). >>Access the platform EXERCISE OF VOTING RIGHTS BY MIROVA IN Voting Perimeter 2017 Pursuant to the AMF regulations on the exercise of voting rights by asset management companies (Article of the General Regulations), and in accordance with the principles defined in its voting policy, Mirova has exercised its voting rights as a shareholder of the UCITS and AIF it manages. In 2017, the voting perimeter was composed of 218 companies held in 21 UCITS and AIF managed by Mirova. On this voting perimeter, 236 shareholders meetings were held in 2017 and Mirova exercised its voting rights at 232 shareholders meetings, i.e. a participation rate of 98%. Mirova did not exercise its voting rights at 4 general meetings due to technical problems i.e. migration of funds in the proxy or administrative systems and validity of power of attorney. 6

7 Geographic Distribution of Voting Perimeter 2016 Number of companies In % Europe % Americas % Asia % Oceania 1 0.5% Total % 2. General statistics Out of 232 approved and confirmed shareholders meetings, Mirova voted on resolutions. Distribution of Votes by Geographic Region Number of resolutions In % Europe % Americas % Asia % Oceania 4 0.1% Total % Of these resolutions: Mirova approved resolutions, i.e. 64% Mirova disagreed with 899 resolutions, i.e. 25% Mirova abstained on 379 resolutions, i.e. 11% Of the resolutions voted, were proposed by the management or supervisory board. Mirova voted against 880 resolutions, i.e. 25% and abstained on 376 resolutions, i.e. 11%. Of the 43 resolutions proposed by shareholders, Mirova supported 21 resolutions, i.e. 49%. Mirova cast at least one vote against at 227 shareholders meetings, i.e. 98% of shareholders meetings voted. 3. Analysis of voting results by geographic region The average rate of contestation ( against" and "abstention votes) was 36% in 2017, up 9 points from This is mainly due to the rate of opposition on the topics "Distribution of value" and "Transparency and quality of information", which have been the subject of a growing number of resolutions and on which Mirova has high levels of opposition. 7

8 Distribution of Votes by Geographic Region For In % Against In % Abstention In % Resolutions Europe % % % 2649 Americas % % 75 9% 810 Asia 72 66% 32 29% 5 5% 109 Oceania 2 50% 2 50% 0 0% 4 Total % % % 3572 The rate of contestation in Europe (36%) was slightly higher than in America (33%) and Asia (34%), which can be explained by the fact that the agendas of European companies offer shareholders a wider and more diversified range of subjects for voting. This means that, for example, Europe concentrated 78% of the resolutions on "Distribution of value" and 87% of the resolutions on "Transparency of information", both of which are subject to a particularly high level of challenge by Mirova. In view of the importance of Mirova's most valued topics on the agendas of the American and European general meetings, the analysis of the 2017 voting results will focus on these two geographical areas of the voting perimeter. a) All geographic areas combined Breakdown of votes by geographic zone Number of resolutions % of opposition % 75% % % % 50.00% 46% % 36% % 26% % % 10.00% 8% 0 Bylaws Amendments Balance of Power GA-related Issues Distribution of Value Shareholder Proposals Financial Structure Transparency & Quality of Information 0.00% Opposition For % opposition 8

9 The "Balance of Powers" category, i.e. resolutions affecting the composition of the boards, accounted for more than one third of the resolutions voted. The opposition rate on this issue was 11%, in line with the previous year (10% in 2016). The "Distribution of value" theme, covering mainly remuneration issues and second in terms of the number of resolutions voted, remained the one with the highest opposition rate (75%). This confirms a trend already observed in previous years (67% of opposition in 2016 on average on this subject), reflecting the strengthening of Mirova's requirements in terms of executive remuneration [see 4. a)]. Established at 46%, the opposition rate on the theme "Transparency of information" increased by 6 points compared to 2016, reflecting the absence of significant changes in corporate practices on these subjects, especially in Europe, which accounted for 87% of the resolutions on this topic. b) Europe In Europe, France and the United Kingdom together accounted for more than 60% of the resolutions in the geographic zone. Germany, Belgium, Switzerland and the Netherlands followed suit to a lesser extent (7% for Germany and 6% of the resolutions for the other countries) while the remaining six countries each covered less than 5% of the resolutions in this zone. Distribution of votes in Europe Number of resolutions % of opposition % % % % % 70.00% % 50.00% % 40.00% % 36% 30.00% % % 8% 10.00% 0 Bylaws Amendments Balance of Power GA-related Issues Distribution of Value Shareholder Proposals Financial Structure Transparency & Quality of Information 0.00% Opposition For % opposition The average opposition rate increased to 36%, but a by-country analysis reveals large disparities. Italy recorded the highest rate at 51%, whereas Denmark was at 25%. It should be noted that France recorded a rate in the average of the geographical zone (36%) and the United Kingdom slightly lower (33%). The "Distribution of value" theme was the subject of a higher level of controversy than in 2016 (70% vs. 66%). This is not only due to the strengthening of Mirova's guidelines on executive 9

10 compensation and the concomitant increase in the number of resolutions on the report or remuneration policy. Apart from the "Shareholders' Resolutions" theme, which remained very marginal in this geographical area (only 4 resolutions in 2017), the most contested topics were "Financial structure" and "Transparency of information". While the rate of contestation on the "Financial structure" theme remained in line with the previous year, the rate of contestation on the "Transparency of information" theme increased (42% vs. 34% in 2016). This increase is mainly due to the increase in the number of resolutions relating to regulated agreements. c) America In the American region, which comprises essentially the United States and Canada, the average opposition rate increased to 33% as opposed to 25.5% in Distribution of votes in America Number of resolutions 600 % of opposition % 95% 94% 90.00% % % 60.00% % 44% 40.00% % 25% % 7.69% 10% 10.00% 0 0% 0.00% Bylaws Amendments Balance of Power GA-related Issues Distribution of Value Shareholder Proposals Financial Structure Transparency & Quality of Information Opposition For % opposition More than two thirds of the resolutions submitted in this area concerned the election of directors, with a strong impact from the American market, which accounted for nearly 90% of the resolutions on this issue. The "Distribution of value" theme, even if it only covered 17% of the proposed resolutions, is marked by a strong contestation in general, which was further strengthened in 2017 (95% vs. 73% in 2016). This dispute mainly concerned the approval of compensation reports and variable compensation in the United States. Lastly, in the area of "Transparency and quality of information", more than 80% of the challenges were brought to bear on the appointment and renewal of statutory auditors in the United States, a market where practices in this area are much less regulated than in Europe, and therefore lagging far behind Mirova's expectations. It should be noted that the approval of the financial statements 10

11 is not subject to a shareholder vote in either Canada or the United States, contrary to European markets where all countries propose it on the agenda of general meetings. 4. Analysis of Challenge Factors Breakdown of contestation by theme Transparency & Quality of Information 24% Bylaws Amendments 3% Balance of Power 12% GA-related Issues 0.5% Financial Structure 15% Shareholder Proposals 2% Distribution of Value 44% Mirova s voting policy is dedicated to addressing the issues that companies are facing today, primarily those related to sustainable development. In this respect, it pays particular attention to the distribution of remuneration among the company's various stakeholders and to the quality of both financial and non-financial information. These two themes are thus those which have accounted for the highest proportion of opposition votes. 11

12 a) Distribution of value The Distribution of Value category covers all resolutions concerning the remuneration of the various stakeholders that contribute to value creation within a company: shareholders (dividends), employees (savings plans), and managers (remuneration structures). This also includes the remuneration paid to directors insofar as their wages can impact the good exercise of their responsibilities in the wider interest of the company and all its stakeholders. Breakdown of votes in the "Distribution of value" theme Number of resolutions % of opposition % 100% 100% % 83% 90% 80% % 70% 60% % % 40% 30% % 50 10% 0 Dividends Directors' Fees Share-based remuneration (directors) Severance Payments (executives) Long-term incentives (executives) Remuneration report or policy 0% 0% Employee stock ownership plan Opposition For % opposition The "Remuneration report or policy" and "Dividends" topics represented the highest rates of opposition. The opposition on compensation reports or policies increased in 2017, rising to 83% from 64% in This is mainly related to the growing number of resolutions approving compensation policies. It is, however, important to recall that for dividends and remuneration policy, Mirova has a specific approach in which the majority of their opposition votes are actually abstentions. As companies are a human collective, all major stakeholders have a legitimate right to receive a portion of the created value. Therefore, defining fair remuneration for each stakeholder, including shareholders and managers, could be subject to an internal company policy that would primarily be the responsibility of the Board of directors. So, Mirova generally questions the legitimacy of a specific stakeholder having a say in the remuneration of another, and thus chooses to abstain from resolutions on these principles of remuneration defined ex ante. This same logic justifies the large 12

13 portion of abstentions from votes on post-term advantages for executives as these policies are generally established ex ante. Voting on these elements that come from regulated agreements as a separate resolution is also specific to French companies. For resolutions on remuneration mechanisms and their implementation (remuneration reports and long-term initiative plans for management/employees), Mirova opposes those that do not include environmental and social performance criteria. This guideline was particularly reinforced in Mirova expected that these criteria be included in both short-term and long-term variable mechanisms for support for remuneration reports to be justified. Therefore, on remuneration reports, the vast majority of opposition votes were motivated by the absence of environmental and social criteria. More than 70% of the resolutions on this issue came from the United States and France, demonstrating the advances made in these countries. In the United States, integration of environmental and social criteria remains minimal, even though this practice is gaining in popularity, as was indicated by a recent Goldman Sachs study that found that 20% of S&P500 companies currently integrate these criteria. However, this trend is not reflected in long-term mechanisms, as can be seen by the fact that none of the long-term initiative resolutions proposed on the American market included these indicators (100% opposition). These long-term mechanisms are often viewed as first being a means to align management s interests with those of the shareholders, leading to a tendency to favour shareholder profit indicators over extra-financial indicators. Similarly, in France, only 24% of long-term incentive plan resolutions included environmental and social criteria (compared to 23% in 2016). The primary obstacle to integration of these criteria is often the difficulty of choosing which criteria are pertinent and can be objectified and quantified. The in-depth dialogue that Mirova has developed with nearly 30 companies, primarily French, demonstrates that this issue underlies and often structures CSR approaches. Integration of CSR criteria into remuneration mechanisms is therefore optimal when part of a group-wide CSR policy. Mirova believes this should be the basis of remuneration policy - it should be a part of the company s strategy and reflect the company s goals, be they financial or extra-financial. 13

14 b) Transparency and Quality of Information The Transparency and Quality of Information category was the second key theme for Mirova in analysing governance practices. As investment decisions are essentially made according to information communicated by the company, this information must be transparent, pertinent, and reliable. Distribution of votes in the "Transparency and quality of information" theme Number of resolutions % of opposition % % 85% 90% 80% 70% % 49% 50% % 40% 30% 50 20% 10% 0 1% Financial Statements Approval Related-Party Transactions Donations Election & Remuneration of Auditors Discharge 0% Opposition For % opposition The resolutions relating to the "Election and remuneration of statutory auditors" concentrated some of the highest rates of contestation. These were also the resolutions most put to the vote in this category (one third of the total) and proposed not only on several European markets (notably Germany, France and the United Kingdom), but also on American markets (notably the United States and Canada), and to a lesser extent in Asia (mainly Japan and Hong Kong). On this subject, Mirova ensures that the statutory auditors (CACs) remain free of interests in the exercise of their functions and did not support their re-election when the term of their mandate exceeded 18 years. Similarly, Mirova was against auditors providing services unrelated to auditing. In Europe, the audit reform passed by the European Parliament that applied starting in 2016 should better regulate firm and service rotation practices beyond certification of accounts, particularly in Germany where this type of service is very common (and largely explains Mirova s 92% opposition rate on this market). In the United States, on the other hand, the difference between practices observed and Mirova s expectations remains pronounced, leading to a 100% opposition rate. In terms of Related-Party Transactions, the French system prefers that all transactions made between a company and one of their corporate officers (managers and directors) be subject to a shareholder vote. 80% of the resolutions on this subject therefore concerned the French market and the grounds for dispute related either to the existence of an agreement between the company and a financial holding linked to one of the company's shareholders, or to an agreement relating to services provided by a board member (or affiliated company) of the company. 14

15 As regards "Discharge", the level of contestation can be mainly explained by Mirova's opposition to supporting this resolution in countries where such a vote undermines the shareholders' ability to subsequently take legal action. Mirova was also led to oppose these resolutions because of the absence of an CSR committee on the boards. As it does every year, the Donations theme elicited the highest opposition rate and was constituted almost completely by United Kingdom resolutions (94%), which were opposed 100% of the time. These resolutions primarily aimed to allow the company to finance political parties, which could result in conflicts of interest. The only resolution supported on this issue was that of a Spanish company that specifically targeted charity projects. c) Balance of Power The Balance of Power theme concerned resolutions seeking to change the composition of boards of directors or supervisory boards. Although director election pertains to all markets, it is of note that election of censors and employee representatives is particular to France. Distribution of votes in the "Balance of powers" theme Number of resolutions % of opposition Director Nomination % Censor Nomination 9 100% Executive Nomination 4 0% Employee Representative Nomination 11 45% Board Functionning 4 0% Other 1 0% Total % For board composition, Mirova chose not to adopt a prescriptive position for director nomination. The choice of candidates is the responsibility of the nomination committee, which is also in the best position to define a board s needs and desired skills. Mirova does, however, adjudicate on the proposed candidates in light of certain criteria that it considers important for ensuring a good balance in stakeholder representation. Mirova particularly supports employee representation on boards. Of all opposition votes in elections for directors (11% contested), approximately one third were motivated by the absence of employee representatives on a board. In most cases, the percentage of women on boards was also below 40% and showed no progress compared to About one third was also justified by an excessive number of mandates. The ability of directors to address strategic issues, to enrich the debate on long-term business issues and to oversee the implementation of strategy by the executive is essential and should not be called into question by their lack of availability. Finally, for the remaining third, opposition votes were linked in particular to the existence of a service provision agreement or business relationship between the director and the company and to problems of lack of independence within boards. 15

16 d) Financial Structure Resolutions on the financial structure of companies accounted for 15% of total challenges, a proportion comparable to previous years. This theme covers various subjects as indicated below. Breakdown of Votes in the "Financial Structure" Theme Number of resolutions % of opposition % % 90% % % 70% % 50% 80 40% 40% 60 27% 32% 30% 30% 40 20% 20% 20 13% 10% 0 Dilutive capital increase Non-dilutive capital increase 0% Debt issuance Greenshoe Total cap Poison pill Capital decrease Group structure Other 0% Opposition For % opposition With the goal of allocating capital for long-term company development, Mirova pays particular attention to justifications of takeover operations and capital reduction. Mirova did not support capital reduction resolutions unless they compensated potential dilution due to capital increases from employee remuneration and employee shareholding. The resulting accretion could actually be another way to pay shareholders to the detriment of other stakeholders. Mirova also pays particular attention to the existence of anti-takeover mechanisms. This mainly concerns authorisations to increase capital via private placements, which Mirova almost systematically opposed. This category also includes authorisations of capital increases in general that can be used during takeover periods. Mirova s analysis of these mechanisms always reveals risks that could affect the company in question and its long-term strategy. Mirova therefore expects that governance structures be well constituted (in terms of diversity in stakeholders and skills) in order to ensure that decisions made are in the long-term interest of the company in the event of a takeover. 16

17 Finally, for the other Dilutive and Non-dilutive Capital Increases, Mirova voted according to the dilution limits recommended by its voting policy. Opposition to non-dilutive resolutions mainly concerned English companies that proposed a capital increase of more than 50% (72% of cases), while opposition to dilutive transactions was due to companies, particularly French companies (around 47% of cases) proposing a dilution level of 20%, versus the maximum 10% recommended by Mirova. e) Bylaw Amendments The issue of bylaws amendments accounted for 3% of the total contestation in 2017, in line with the previous year. Four countries (USA, Spain, France and the United Kingdom) concentrated more than 75% of the resolutions on this theme. Opposition to the amendments to the Articles of Association mainly concerned governance issues. Opposition Distribution in the Bylaw Amendments Sub-Theme Number of resolutions 70 % of opposition 50% % 45% 40% 35% 30% 25% 20% 15% 10 5% 10% 10% 5% 0 Governance Group financial structure Other 0% Opposition For % opposition As is the case every year, opposition votes were almost all (82%) against English companies resolutions to decrease the timeframe for convening an extraordinary general assembly to 14 days despite the 21-day timeframe that was established when the EU directive on shareholder rights entered into force. The choice of returning to previous convening principles was left to companies as long as it is subject to an electronic shareholder vote and approved by the general meeting. As the authorization generally expires at the next general meeting, it is a resolution submitted to a regular vote. 17

18 f) Shareholder Resolutions In total, Mirova had to express its opinion on 43 shareholder resolutions in 2017 (vs. 62 in 2017), the majority of which dealt with governance issues and, to a lesser extent, social issues. Breakdown of votes in the "Shareholder Resolutions" theme Number of resolutions % of opposition % 100% 90% 80% 70% 60% 50% % 0% Environmental issues Governance issues Social issues 40% 30% 20% 10% 0% Opposition For % opposition In general, Mirova votes on shareholder propositions on a case-by-case basis when they pertain to social, political, or environmental issues. Mirova s in-depth analysis therefore verifies: the reasonable nature of the proposal and the validity of the justification provided, the impact on the company's short-term or long-term strategy, the company s exposure to these issues (impact on reputation, operational risk, etc.), the capacity and legitimacy of the company to act on the subject (vs. government responsibility), the responses provided by the company to the request submitted in the proposal and changes in company practices over recent years, the practices established by peers in the sector. Mirova would generally support any resolution that encourages companies to adopt more responsible practices. To this end, it supports all resolutions calling for greater transparency on the company s general CSR strategy or policy. Shareholders' resolutions concerned nearly 85% of American companies. Shareholders' resolutions on the "Environment" category concerned demands for transparency in the fight against climate change, but also for the management of other environmental impacts such as packaging practices or the use of antibiotics in the supply chain. After analysing the practices of the companies concerned, we supported these three resolutions. With regard more specifically to shareholder resolutions relating to the "Governance" category, this category covered a wide range of subjects. In particular, we supported resolutions calling for greater transparency on lobbying and donations to political parties. Among the contested resolutions, several were aimed either at the appointment of alternative candidates to those proposed by the board (Italy), or at a modification of the distribution policy of the result or an amendment of the statutes to require the appointment of an independent chairman. The lack of 18

19 transparency and detailed information on the impact of the proposed measures or the quality of existing practices led in each case to not supporting the resolution. Shareholders' resolutions dealing with "Social" matters also covered a wide variety of subjects. Among the most frequently discussed topics, several resolutions focused on reducing the gender pay gap. In view of the companies' practices, we supported these resolutions. Among the opposing resolutions, we did not support several resolutions on diversity issues or transparency on donations to charities because of the quality of the practices already in place in the companies concerned. Several resolutions also dealt with the evaluation of the impact of fake news on the democratic process. Mirova paid particular attention to analysing the policies already in place and their effectiveness in terms of the issues raised by the resolution s authors. In both cases, although the measures put in place by the companies were not considered to be fully satisfactory, the request seemed to us to go beyond the responsibility of these companies. 19

20 CASES IN WHICH MIROVA DID NOT RESPECT ITS VOTING POLICY Mirova exercises its voting rights in the exclusive interest of unit-holders and respects in this context the principles set out in its voting policy. CONFLICTS OF INTEREST In compliance with its voting policy, Mirova exercises its voting rights in the exclusive interest of unit-holders and does not participate in the general meetings of entities of the BPCE Group or BPCE Group s subsidiaries/ holdings, the securities of which are traded on the market. No conflict of interest came up during the exercise of voting rights in

21 Disclaimer This document is intended for professional clients only in accordance with MIFID. If no and you receive this document sent in error, please destroy it and indicate this breach to Mirova. Products and services do not take into account any particular investment objectives, financial situation nor specific need. Mirova will not be held liable for any financial loss or decision taken or not taken on the basis of the information disclosed in this document, nor for any use that a third party might make of this information. This document in no way constitutes an advice service, in particular an investment advice. This document is a non-contractual document and serves for information purpose only. This document is strictly confidential and it may not be used for any purpose other than that for which it was conceived and may not be copied, distributed or communicated to third parties, in part or in whole, without the prior written consent of Mirova. This document may not be used in some jurisdictions where such offers or promotions have not been authorized by the competent authorities. Each investor must ensure he complies with these requirements and prohibitions. No information contained in this document may be interpreted as being contractual in any way. Information contained in this document is based on present circumstances, intentions and beliefs and may require subsequent modifications. No responsibility or liability is accepted by Mirova towards any person for errors, misstatements or omissions in this document or, concerning any other such information or materials, for the adequacy, accuracy, completeness or reasonableness of such information. While the information contained in this document is believed to be accurate, Mirova expressly disclaims any and all liability for any representations, expressed or implied, with respect to this document. Prices, margins and fees are deemed to be indicative only and are subject to changes at any time depending on, inter alia, market conditions. Mirova reserves the right to modify any information contained in this document at any time without notice. More generally, Mirova, its parents, its subsidiaries, its reference shareholders, the funds Mirova manages and its directors, its officers and partners, its employees, its representative, its agents or its relevant boards will not be held liable on the basis of the information disclosed in this document, nor for any use that a third party might make of this information. This document has been created and prepared by Mirova based on sources it considers to be reliable. However, Mirova does not guarantee the accuracy, adequacy or completeness of information obtained from external sources included in this document. Additional Notes This material has been provided for information purposes only to investment service providers or other Professional Clients, Qualified or Institutional Investors and, when required by local regulation, only at their written request. This material must not be used with Retail Investors. In the E.U. (outside of the UK): Provided by Natixis Investment Managers S.A. or one of its branch offices listed below. Natixis Investment Managers S.A. is a Luxembourg management company that is authorized by the Commission de Surveillance du Secteur Financier and is incorporated under Luxembourg laws and registered under n. B Registered office of Natixis Investment Managers S.A.: 2, rue Jean Monnet, L Luxembourg, Grand Duchy of Luxembourg. France: Natixis Investment Managers Distribution (n RCS Paris). Registered office: 43 avenue Pierre Mendès France, Paris. Italy: Natixis Investment Managers S.A., Succursale Italiana (Bank of Italy Register of Italian Asset Management Companies no ). Registered office: Via Larga, , Milan, Italy. Germany: Natixis Investment Managers S.A., Zweigniederlassung Deutschland (Registration number: HRB 88541). Registered office: Im Trutz Frankfurt 55, Westend Carrée, 7. Floor, Frankfurt am Main 60322, Germany. Netherlands: Natixis Investment Managers, Nederlands (Registration number ). Registered office: World Trade Center Amsterdam, Strawinskylaan 1259, D-Tower, Floor 12, 1077 XX Amsterdam, the Netherlands. Sweden: Natixis Investment Managers, Nordics Filial (Registration number Swedish Companies Registration Office). Registered office: Kungsgatan 48 5tr, Stockholm , Sweden. Spain: Natixis Investment Managers, Sucursal en España. Paseo de Recoletos 7-9, Planta 7, 28004, Madrid, Spain. In Switzerland: Provided for information purposes only by Natixis Investment Managers, Switzerland Sàrl, Rue du Vieux Collège 10, 1204 Geneva, Switzerland or its representative office in Zurich, Schweizergasse 6, 8001 Zürich. In the U.K.: Provided by Natixis Investment Managers UK Limited which is authorised and regulated by the UK Financial Conduct Authority (register no ). This material is intended to be communicated to and/or 21

22 directed at persons (1) in the United Kingdom, and should not to be regarded as an offer to buy or sell, or the solicitation of any offer to buy or sell securities in any other jurisdiction than the United Kingdom; and (2) who are authorised under the Financial Services and Markets Act 2000 (FSMA 2000); or are high net worth businesses with called up share capital or net assets of at least 5 million or in the case of a trust assets of at least 10 million; or any other person to whom the material may otherwise lawfully be distributed in accordance with the FSMA 2000 (Financial Promotion) Order 2005 or the FSMA 2000 (Promotion of Collective Investment Schemes) (Exemptions) Order 2001 (the "Intended Recipients"). The fund, services or opinions referred to in this material are only available to the Intended Recipients and this material must not be relied nor acted upon by any other persons. Registered Office: Natixis Investment Managers UK Limited, One Carter Lane, London, EC4V 5ER. In the DIFC: Provided in and from the DIFC financial district by Natixis Investment Managers Middle East (DIFC Branch) which is regulated by the DFSA. Related financial products or services are only available to persons who have sufficient financial experience and understanding to participate in financial markets within the DIFC, and qualify as Professional Clients as defined by the DFSA. Registered office: Office Level 6, Currency House Tower 2, PO Box , DIFC, Dubai, United Arab Emirates. In Japan: Provided by Natixis Investment Managers Japan Co., Ltd., Registration No.: Director-General of the Kanto Local Financial Bureau (kinsho) No Content of Business: The Company conducts discretionary asset management business and investment advisory and agency business as a Financial Instruments Business Operator. Registered address: 1-4-5, Roppongi, Minato-ku, Tokyo. In Taiwan: Provided by Natixis Investment Managers Securities Investment Consulting (Taipei) Co., Ltd., a Securities Investment Consulting Enterprise regulated by the Financial Supervisory Commission of the R.O.C. Registered address: 16F-1, No. 76, Section 2, Tun Hwa South Road, Taipei, Taiwan, Da-An District, 106 (Ruentex Financial Building I), R.O.C., license number 2012 FSC SICE No. 039, Tel In Singapore: Provided by Natixis Investment Managers Singapore (name registration no D) to distributors and institutional investors for informational purposes only. Natixis Investment Managers Singapore is a division of Natixis Asset Management Asia Limited (company registration no D). Registered address of Natixis Investment Managers Singapore: 10 Collyer Quay, #14-07/08 Ocean Financial Centre, Singapore In Hong Kong: Provided by Natixis Investment Managers Hong Kong Limited to institutional/ corporate professional investors only. In Australia: Provided by Natixis Investment Managers Australia Pty Limited (ABN ) (AFSL No ) and is intended for the general information of financial advisers and wholesale clients only. In New Zealand: This document is intended for the general information of New Zealand wholesale investors only and does not constitute financial advice. This is not a regulated offer for the purposes of the Financial Markets Conduct Act 2013 (FMCA) and is only available to New Zealand investors who have certified that they meet the requirements in the FMCA for wholesale investors. Natixis Investment Managers Australia Pty Limited is not a registered financial service provider in New Zealand. In Latin America: Provided by Natixis Investment Managers S.A. In Chile: Esta oferta privada se inicia el día de la fecha de la presente comunicación. La presente oferta se acoge a la Norma de Carácter General N 336 de la Superintendencia de Valores y Seguros de Chile. La presente oferta versa sobre valores no inscritos en el Registro de Valores o en el Registro de Valores Extranjeros que lleva la Superintendencia de Valores y Seguros, por lo que los valores sobre los cuales ésta versa, no están sujetos a su fiscalización. Que por tratarse de valores no inscritos, no existe la obligación por parte del emisor de entregar en Chile información pública respecto de estos valores. Estos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el Registro de Valores correspondiente. In Uruguay: Provided by Natixis Investment Managers Uruguay S.A., a duly registered investment advisor, authorised and supervised by the Central Bank of Uruguay. Office: San Lucar 1491, oficina 102B, Montevideo, Uruguay, CP The sale or offer of any units of a fund qualifies as a private placement pursuant to section 2 of Uruguayan law 18,627. In Colombia: Provided by Natixis Investment Managers S.A. Oficina de Representación (Colombia) to professional clients for informational purposes only as permitted under Decree 2555 of Any products, 22

23 services or investments referred to herein are rendered exclusively outside of Colombia. This material does not constitute a public offering in Colombia and is addressed to less than 100 specifically identified investors. In Mexico: Provided by Natixis IM Mexico, S. de R.L. de C.V., which is not a regulated financial entity or an investment manager in terms of the Mexican Securities Market Law (Ley del Mercado de Valores) and is not registered with the Comisión Nacional Bancaria y de Valores (CNBV) or any other Mexican authority. Any products, services or investments referred to herein that require authorization or license are rendered exclusively outside of Mexico. Natixis Investment Managers is an entity organized under the laws of France and is not authorized by or registered with the CNBV or any other Mexican authority to operate within Mexico as an investment manager in terms of the Mexican Securities Market Law (Ley del Mercado de Valores). Any use of the expression or reference contained herein to Investment Managers is made to Natixis Investment Managers and/or any of the investment management subsidiaries of Natixis Investment Managers, which are also not authorized by or registered with the CNBV or any other Mexican authority to operate within Mexico as investment managers. The above referenced entities are business development units of Natixis Investment Managers, the holding company of a diverse line-up of specialised investment management and distribution entities worldwide. The investment management subsidiaries of Natixis Investment Managers conduct any regulated activities only in and from the jurisdictions in which they are licensed or authorized. Their services and the products they manage are not available to all investors in all jurisdictions. It is the responsibility of each investment service provider to ensure that the offering or sale of fund shares or third party investment services to its clients complies with the relevant national law. The provision of this material and/or reference to specific securities, sectors, or markets within this material does not constitute investment advice, or a recommendation or an offer to buy or to sell any security, or an offer of any regulated financial activity. Investors should consider the investment objectives, risks and expenses of any investment carefully before investing. The analyses, opinions, and certain of the investment themes and processes referenced herein represent the views of the portfolio manager(s) as of the date indicated. These, as well as the portfolio holdings and characteristics shown, are subject to change. There can be no assurance that developments will transpire as may be forecasted in this material. Past performance information presented is not indicative of future performance. Although Natixis Investment Managers believes the information provided in this material to be reliable, including that from third party sources, it does not guarantee the accuracy, adequacy, or completeness of such information. This material may not be distributed, published, or reproduced, in whole or in part. All amounts shown are expressed in USD unless otherwise indicated. 23

24 MIROVA French Public Limited liability company with board of Directors Regulated by AMF under n GP RCS Paris n Registered Office: 59, Avenue Pierre Mendes France Paris - Tel.: +33 (0) Mirova is a subsidiary of Natixis Asset Management. NATIXIS ASSET MANAGEMENT, S.A. Limited liability company Regulated by AMF under n GP RCS Paris n Registered Office: 43, Avenue Pierre Mendes France ParisTel