DEXIA AM S THEMATIC SRI FUNDS. European SRI Transparency Code

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1 DEXIA AM S THEMATIC SRI FUNDS

2 STATEMENT OF COMMITMENT Sustainable and Responsible Investing (SRI) is an essential part of the strategic positioning and behaviour of Dexia Asset Management. We have been involved in SRI since 1996 and welcome the. This is our statement of commitment pertaining to our SRI thematic funds and describes our sustainability process as of July Our full response to the can be accessed below and is available on our web site Please note, that we have also drafted, in 2010, the Transparency Code for our: Dexia AM s core SRI funds which comprise 18 open-ended SRI funds in various asset classes; Dexia Money Market Euro Sustainable fund which invests in short-term instruments issued by sustainable and responsible governments and corporations; Dexia Equities L Sustainable Emerging Markets which invests in sustainable and responsible emerging markets; Dexia AM s Indexed SRI Funds which take into account sustainable criteria s in its index management investment process; Dexia AM s SRI Employee Savings Plan which invest in in-house funds that take into account sustainable and responsible criteria s. Our full response to the for all those funds can be found on our above mentioned website. COMPLIANCE WITH THE TRANSPARENCY CODE Dexia Asset Management is committed to transparency and we believe that we are as transparent as possible given the regulatory and competitive environments that exist in the countries in which we operate. Dexia Asset Management meets all recommendations. However, it should be noted that, as voting is not applied in the case of our SRI Thematic funds, section 6, on voting policy, cannot be treated in our response (below) to the. 15 July, Page 2 of 21

3 TABLE OF CONTENT 1 - Basic Details ESG Investment ESG Evaluation and Implementation Engagement approach Voting policy Additional Appendix Page 3 of 21

4 1 - Basic Details The fund management company 1a - Provide the name of the fund management company managing the funds to which this code apply The fund management company is Dexia Asset Management. Dexia Asset Management Belgium Place Rogier Brussels - Belgium Detailed information are available on our website: 1b - Describe, in general way, the SRI philosophy of the fund management company and the way it is implemented concretely Dexia Asset Management is a pioneer in the realm of Sustainable and Responsible Investment (SRI) since 1996 and we are committed to being a responsible financial asset manager by investing for the long term. SRI is one of Dexia Asset Management's key strategic businesses. About 23% of our assets under management ( 19.9 billion at end of March 2010) involve sustainable and responsible approaches in all asset classes (equity, bond, balanced, money market, structured products, micro-credit) and in all geographical regions (Europe, North America, Asia Pacific, Emerging Markets, Global). We also have one of the largest SRI teams in continental Europe composed of about 20 SRI experts (half of whom are sustainability analysts, specialised by sector or sustainability themes) which have long-standing experience and come from different professional domains. Dexia Asset Management s SRI philosophy is based on the idea that a company s long-term value is not purely affected by financial criteria such as revenues, margin growth, etc... By taking into account environmental, social and governance (ESG) criteria, we identify additional factors that affect a company s long-term value and competitiveness but that are not always apparent in traditional financial analysis. At Dexia Asset Management, sustainability analysis is the starting point for the investment process and aims to select those equity/bond issuers that manage the challenges of sustainable development in the best way. Sustainability analysis defines a SRI universe composed of issuers eligible for investment. Then, based on the recommendations of traditional financial analysts, a portfolio is composed from this SRI universe. This rigorous investment process ensures sustainable and financial risks and opportunities in the short, medium and long term are integrated into investment decisions. Our large range of SRI products is based on several SRI approaches that address the challenges of sustainable development, guarantee solely investments in responsible issuers and make the investment process as efficient and robust as possible. Depending upon the characteristics of the SRI funds, one or more of the following SRI approaches are applied in the analysis process. The best-in-class approach aims to select the top issuers (companies or countries) by sector or category, based on how they meet the challenges of sustainable development. The thematic approach is designed to select the best companies based on specific sustainability themes. The norms-based approach checks companies and countries' compliance with universal principles. The Armament Exclusion approach checks if no investment is made in companies involved in the production and/or sale of weapons. As a responsible asset manager, our commitment to our clients is to further develop our leadership in SRI. Detailed information regarding our SRI activity and the way we actively promote and advocate SRI in the investment industry can be obtained on our website: sri.dexia-am.com. Page 4 of 21

5 The SRI funds 1c - Provide the name of the funds to which this code apply, and their main characteristics This code applies to all SRI thematic funds 1 managed by Dexia Asset Management: 1d - Provide details on how to find further information regarding the funds Detailed information regarding the funds can be obtained via by clicking funds in the main menu and selecting the corresponding fund. All requests for additional information may be sent by to Investor.support-dam@dexia.com. Financial performance history, key statistics and fund managers comment are also summarized in the funds on-line management reporting. 1e - Provide details of the content, frequency and means of communicating information to investors The information compliant with the will be updated once a year or more frequently if relevant. The information included clarifies SRI investment criteria, the SRI research process, the integration of the SRI criteria in the investment process, etc. The Transparency Code can be downloaded on our SRI webpage (sri.dexiaam.com: choose by pointing to We Outline in the main menu). Our fund web pages are permanently updated ( click on Funds in the main menu and insert the name of the corresponding fund). Financial and extra-financial performances, key statistics and manager s comments are also updated in the fund reportings (monthly or quarterly depending upon the fund) and are online available. Furthermore, a lot of relevant SRI information is publicly communicated through our SRI dedicated web pages sri.dexia-am.com which presents our SRI activities and reports on the results of our sustainability analysis, changes in our SRI methodology/investment process, sustainability related topics and much more. Many SRI publications (such as research and discussion papers) are available in the on-line library. Finally, a SRI newsletter announcing the latest SRI evolutions and activities at Dexia Asset Management is sent regularly to our clients. For all other queries, please see contact details in the above section 1d. 1 Please note that the list of funds shown in the table may contain UCITS which are not registered in the reader s jurisdiction. Hence such UCITS cannot be publicly offered to this reader. We invite readers to consult our internet webpage, in order to check whether the funds are commercialised in their country. Click on Funds in the main menu and insert the name of the corresponding fund you are looking for. If the fund appears, this means it is commercialised, in the opposite case, it is not. Page 5 of 21

6 2 - ESG Investment 2a - How do the funds define SRI? SRI is a long-term investment strategy that systematically takes environmental, social and governance (ESG) criteria into consideration when making investment decisions. The SRI philosophy of Dexia AM s thematic SRI funds, is based on the idea that there are businesses that tackle challenges in three key global environmental domains 2 : energy resources/climate change, water use and waste management. They are secular growth themes, and companies that are positioned to benefit from them stand out to do very well in the long term. 2b - What are the ESG investment criteria of the funds? Dexia AM s thematic SRI funds only invests in companies that propose sustainable and innovative solutions to three environmental challenges mentioned above. To be eligible for investment, these companies must also comply with the ten principles laid out in the United Nations Global Compact (concerning human rights, labour rights, the environment and anti-corruption) and respect basic corporate governance rules. Finally, they may not be involved in the production/sales of weapons. Please refer to question 3a for a more detailed description. 2c - How are the ESG criteria defined? The SRI criteria are defined by the in-house SRI team in collaboration with Dexia AM s SRI Advisory Board, which ensures that the sustainability analysis methodology is relevant and its application consistent. The Board also helps identify the emerging challenges regarding sustainability, and contributes to Dexia Asset Management s SRI strategy. The SRI criteria are revised on a 24-month basis, in collaboration with the Board. The selection of major long-term environmental trends and basic corporate governance rules is made to ensure that the sustainability analysis encompasses the constantly evolving environmental and economic reality as much as possible. The norms-based check criteria are determined on the basis of an ongoing follow-up of developments regarding international conventions. Please refer to the questions of part 3 for a more detailed description. 2d - How are criteria changes communicated to investors? Relevant changes are communicated by means of our SRI newsletter addressed to our clients that reports on our SRI funds, the results of our sustainability analysis, changes in our SRI methodology/investment process or any other sustainability related relevant topics. Further, our SRI dedicated web page sri.dexia-am.com is updated on a regular basis and accessible to the large public. Finally, the is updated annually or more frequently in the case of changes in methodology, investment process, etc. 2 Dexia Clickinvest B Climate Change only takes one theme into consideration, i.e. energy resources/climate change. Page 6 of 21

7 3 - ESG 3a - Describe your ESG research methodology and process In order to select sustainable and responsible green companies, Dexia AM has developed a structured sustainability analysis that can visually be presented as follow: Environmental & Technological Sustainability Analysis Assess companies ability to offer sustainable and innovative solutions to environmental challenges Norms-based Sustainability Analysis Check companies compliance with major international treaties and conventions Corporate Governance Sustainability Analysis Check companies compliance with basic corporate governance rules Armament Exclusion SRI Thematic Universe Starting from a global investment universe of green companies, we perform a rigorous Environmental & Technological Sustainability Analysis. The goal of this analysis is to select only companies that propose sustainable and innovative solutions to three environmental challenges 3 : i.e. energy & climate change, water use and waste management. This means we check whether the technologies, methods etc. are in line with the principles of sustainable development. Eligible companies for instance may be active in renewable energies (solar, wind, bio-energy and hydropower), producers of alternative transport fuels, hydrogen, providers of water management services, providers of recycling products and services, etc. We have identified about 300 green thematic companies which have been submitted to this analysis. As of today over half of them have passed it. In a second step, the resulting companies we may want to invest in are submitted to a Norms-based and Corporate Governance analysis. Within the Norms-based Sustainability Analysis, companies are subject to normative checks based on the ten principles of the United Nation s Global Compact which encompasses the four main areas of Human Rights (HR), Labour Rights (LR), the Environment (ENV) and Anti-Corruption (COR), as outlined below: Area Human Rights Labour Standards Environment Anti-Corruption Principle Businesses should: 1. Support and respect the protection of internationally proclaimed human rights; and 2. Make sure that they are not complicit in human rights abuses. Businesses should: 3. Uphold the freedom of association and the effective recognition of the right to collective bargaining; 4. Eliminate all forms of forced and compulsory labour; 5. Abolish the child labour; and 6. Eliminate discrimination in respect of employment and occupation. Businesses should: 7. Support a precautionary approach to environmental challenges; 8. Undertake initiatives to promote greater environmental responsibility; and 9. Encourage the development and diffusion of environmentally friendly technologies. Businesses should: 10. Work against corruption in all its forms, including extortion and bribery. 3 Dexia Clickinvest B Climate Change only takes one theme into consideration, i.e. energy/climate change. Page 7 of 21

8 This analysis, which aims to filter out companies that have significantly and repeatedly breached any of the ten key principles, is done in accordance to Dexia AM s proprietary Norms-based Analysis Assessment Framework that encompasses three main steps: 1. Identification of Breaches With the use of external research provider, coupled with additional in-house analysis conducted by our sustainability analysts, information is collected on actual, suspected and/or reported incidents/violations of international norms. It is then determined if incident(s) identified potentially breach one or more widely accepted international norms in the four mains areas of HR, LR, ENV and COR. 2. Assessment of the Breach A combination of parameters is used to assess the gravity/severity of a breach, namely: the temporal proximity (when and for how long has the incident occurred), size (financial costs, land polluted etc associated with the incident), credibility (allegations, legal action taken etc), and repetitiveness (is the incident a one-off incident or it is evidence of systematic failings over a period of time). Emphasis is also placed on a company s response to an incident, with favourable consideration for positive and responsible practices taken by the company to ensure that such a breach does not occur again. 3. Categorisation of Breaches The goal of the last step is to categorize the assessed breaches of one or more of the four areas (HR, LR, ENV, and COR) into three classes: Green - No evidence of repeated or significant violations of the Global Compact principles Orange - Evidence of repeated violations of the Global Compact principles but these do not appear to be significant; or - Evidence of significant violations of the Global Compact principles but these do not appear to be repetitive; or - Evidence of repeated and significant violations of the Global Compact principles, but the company has taken appropriate corrective measures/actions Red - Evident of repeated and significant violations of Global Compact principles and the organisation has no appropriate response/behaviour For a company to pass positively the Norms-based Analysis filter, it must not be flagged more than one orange or any red in any of the four areas of the UN Global Compact. On average, between 5 and 10% of green companies submitted to this analysis are filtered out. Continual monitoring of companies occurs and updates are made accordingly on an ongoing basis. The Corporate Governance Sustainability Analysis checks whether companies respect basic corporate governance rules to protect shareholder value. This is to safeguard investment for long term and to avoid any value distortion based on corporate governance. The following questions should be analysed: Board issues: Is there a concentration of power: Does the company separate the roles of Chairman and CEO? Can the board be considered balanced and independent? Audit issues: Can the audit committee be considered independent? What is the ratio of audit fees vs. non-audit fees? (non-audit fees should not exceed audit fees) Shareholder issues: Does the one-share one vote principle apply? Are there any anti-takeover devices? Are there any controlling shareholders or any shareholders acting together? If yes are minority shareholders protected? Page 8 of 21

9 Remuneration issues: Are there any extraordinary remuneration mechanisms? (golden hellos, transaction bonuses, golden handshakes etc.) Evidence from our sustainability analysis shows that only a very limited number of companies passing the Environmental & Technological Sustainability Analysis has not passed the Corporate Governance Analysis. As a final layer of our corporate sustainability analysis, the Armament Exclusion implies that companies involved in the production and sales of weapons will be excluded from SRI investments. More precisely, companies are excluded from our Sustainable and Responsible Universe if they: are embroiled in the production or sale of anti-personnel landmines, cluster bombs, depleted uranium weaponry and/or chemical/nuclear/biological weapons, regardless of the revenues generated; and/or generate more than 3% of their revenues from the production or the sale of conventional weapons. Up to now, none of the green companies passing the three above mentioned analyses have been filtered out on the basis of the Armament Exclusion. Consequently, the SRI Thematic Universe is composed of all companies passing positively the Environmental & Technological analysis, the Norms-based analysis, the Corporate Governance analysis and the Armament Exclusion filter. 3b - Does the fund manager use an in-house ESG research team and/or does he delegate this research to one or several external specialised providers? Dexia Asset Management employs a team of 10 dedicated sustainability analysts, headed by Isabelle Cabie, combining various areas of experience in the field of sustainable development, sustainability screening, industry and finance. 1 vacant position These analysts use numerous external sources of information within the context of their in-house sustainability analysis, including the services of external rating agencies. These agencies are Vigeo Group, RiskMetrics Group, Governance Metrics International (GMI) and Ethix SRI Advisors for research pertaining to corporate issuers, and Vigeo group for research related to government bond issues. Furthermore, other sources of information are used during the sustainability analysis, such as media, NGOs, industry associations, academic experts, etc. 3c - Is there an external control or external verification process in place for the ESG research process? Dexia Asset Management has established an SRI Advisory Board made up of 5 independent experts in order to ensure that the sustainability analysis methodology is relevant and its application is consistent. The board s also assists in identifying the emerging challenges regarding sustainability, and provides contributions towards guiding Dexia Asset Management s SRI strategy. The Board meets three to four times a year and is composed of: Dominique Bé: Deputy Head of Unit, ESF Coordination, DG Employment, Social Affairs & Equal Opportunities, European Commission Beat Bürgenmeier: Professor of Economics at the University of Geneva, Director of the Centre for Human Ecology and Environmental Sciences Page 9 of 21

10 Gilbert Lenssen: Chairman of EABIS (European Academy of Business in Society) and Professor of Management at the University of Leiden Céline Louche: Associate Professor, Vlerick Leuven Gent Management School, Ghent, Belgium Gérald Pachoud: Special Advisor to the Special Representative of the UN Secretary General on Business and Human Rights, Geneva. An external consultant audits whether Dexia Asset Management has implemented procedures to ensure that the fund solely invest in issuers included in the SRI Universe. The auditor also checks whether Dexia Asset Management has the resources (such as dedicated analysts, access to multiples sources of SRI data, etc.) and internal monitoring procedures and tools (such as an appropriate database) needed to deliver relevant sustainability analysis. 3d - Does the ESG research process include stakeholder consultation? The Dexia Asset Management sustainability analysis includes stakeholder information in the different stages of its research process. The relevance of sustainability issues is partly determined through the importance attributed by the stakeholders to the specific themes; and When analysing companies behaviour, sustainability analysts take into account many different sources of stakeholder information (such as industry associations and experts, unions, specialised NGOs, media, governmental organisations, company research provider ) and companies disclosures in order to have a wellbalanced opinion and analysis. In the assessment of a company (non)-compliancy with the four categories of UNGC or the possible involvement in any controversial activity, analysts will consult all those information sources through both their publications and direct dialogue if needed. 3e - Do companies/issuers have the opportunity to see their profile or analysis? The results of our analysis are available on request. Also, it may form the basis for discussion in the course of engagement with companies. Furthermore, we regularly explain sector specific sustainability challenges and trends and do discuss best practices of some companies in detail in our research and discussion papers available on our SRI dedicated webpage (sri.dexia-am.com). 3f - How frequently is the ESG research process reviewed? The sustainability analysis of companies is reviewed at least every 24 months. In case of major events (such as mergers and acquisitions, scandal revelations ) which could impact a company s rating, an alert could be launched on a company that is part of the SRI Universe and its analysis will be updated in the following 3 months. 3g - What research findings are disclosed to the public? With a view to increase awareness as well as transparency and promoting SRI, Dexia Asset Management is committed to share in an accessible, comprehensive yet rigorous way a plenty of information about its sustainability analysis, its SRI product range and relevant sustainability related news. All this information is publicly available on our SRI dedicated website (sri.dexia-am.com). Our publicly available research papers regularly outline our research on the material impact of sustainability criteria in sectors and on company valuations. Occasionally, we also discuss sustainability related themes. Our proxy voting and engagement reports, both accessible online, shed more light on our annual voting and engagement results. One can find the full list of sustainable and responsible issuers hold in the funds on our SRI fund pages. Moreover, besides the financial performances of our funds, those funds pages disclose on a monthly basis ESG (Environmental, Social and Governance) performances or comments. Page 10 of 21

11 4 - Evaluation and Implementation 4a - How are the results of ESG research integrated into the investment process, including selection and approval of companies/issuers for investment? The sustainability analysts at Dexia Asset Management supply an investment universe of eligible sustainable and responsible companies (SRI Universe) using the research process set out above. This list is fully integrated into the investment process as it constitutes the initial investment universe. No investment is authorised outside this eligible SRI universe. Consequently, to establish the final SRI portfolio, the selection of companies within this SRI universe is based on financial analysis and optimal portfolio and risk management. This well established investment process guarantees that all companies the funds invest in are well positioned towards long-term challenges and have a financial potential. 4b - What internal and/or external measures are in place to ensure portfolio holdings comply (or do not comply) with ESG investment criteria? The internal procedures of the investment process guarantee that only SRI-compliant securities are taken into consideration when building up a SRI portfolio. In addition, the Dexia Asset Management risk management department ensures that the securities held in the portfolio are in line with the SRI Universe. This department is independent of the fund management department and reports directly to the Executive Committee at Dexia Asset Management. In terms of external measures, the custodian carries out checks to ensure that the portfolios comply with the SRI universe. An external party audits that all the positions and all the transactions carried out in the funds correspond to the SRI universe defined above, bearing in mind the authorised alignment period in the event of changes to the sustainable universe. 4c - What is the policy and procedure for divestments on ESG grounds? The selection of sustainable and responsible issuers is confirmed by the sustainability analysis team on a monthly basis and at specific times for exceptional reasons. When changes occur in the SRI universe and an issuer is excluded from the SRI Universe, the approach adopted by Dexia Asset Management consists of divesting it from the portfolio within six months depending on the market conditions (very rare exceptions may be allowed in order to take account of a possible liquidity problem). Dexia Asset Management risk management department ensures that the securities held in the portfolio comply with the SRI universe. 4d - What divestments occurred in the past year related to the SRI fund criteria? During the last year, some issuers were no longer admitted to the SRI universe due to ESG investment criteria. The portfolio managers must divest these issuers from the portfolio within six months depending on the market conditions. Page 11 of 21

12 4e - Are investors informed about divestments on ESG grounds? To date, divestments on SRI grounds are not communicated on a systematic way to investors. 4f - Does the fund manager inform companies/issuers of portfolio movements due to non-compliance with its ESG policy and criteria? Not on a systematic way. 4g - To what extent do any results of engagement activities feed into companies/issuers selection? Please refer to the question 5a. Page 12 of 21

13 5 - Engagement approach 5a - What are the aims of the engagement policy? Dexia Asset Management s objective is to actively use engagement during the process of conducting sustainability analysis for corporate issuers. It takes the form of a dialogue between our sustainability analysts/ research provider s analysts and company representatives. The objective is to raise the awareness and induce the reflection of the company as well as its transparency on a specific sustainability-related theme, and indirectly, its accountability in relation to the theme. 5b - How do the funds prioritise which companies/issuers it will engage with? Dialogue depends upon the relevance of the analysed sustainable-related issues and the level of company information readily available. Also, Dexia Asset Management is a member of some specific initiatives at industry level, like the Carbon Disclosure Project and the Investors Statement on Transparency in the Extractive Sector (see also question 5d), that do engage with companies on a non-discretionary basis. 5c - Who undertakes engagement on behalf of the funds? Engagement is undertaken by our internal sustainability analysts or our research provider s analysts when it comes to dialogue/engagement with companies. Also, the management of Dexia Asset Management intervenes in some specific sustainability-related collective initiatives (see 5b). 5d - What methods of engagement are employed? Dexia Asset Management uses various methods of engagement. Firstly, engagement takes the form of a direct and individual dialogue between sustainability analysts and company representatives (investor relations, sustainable development officer, management ) and other stakeholders (unions, sector federations ) through conference calls, written exchanges, company visits, one-to-one meetings with management In 2009, Dexia Asset Management has completed more than 150 direct engagement contacts. Secondly, Dexia AM is committed to join and support collaborative engagement initiatives whose goals are to collectively encourage companies to improve their disclosure on sustainable development related challenges that might impact companies long term value. Better disclosure would benefit not only Dexia AM but also all other investors who will have more information to better evaluate ESG risks and opportunities. This involvement in collaborative engagement initiatives will ultimately lead to create shareholder value for our customers and benefit to the civil society through more optimal financial asset allocation. The next table gives an overview of collaborative engagement initiatives already signed by Dexia AM: Name of collaborative initiative Date joined EITI - Extractive Industries Transparency Initiative CDP - Carbon Disclosure Project ISSR EM - Investor Statement on Sustainability Reporting in Emerging Markets FFD - Forest Footprint Disclosure Project ICOS - Investor Collaboration on Oil Sands CCCC - The Copenhagen Communique on Climate Change ISGACC Investors Statement on a Global Agreement on Climate Change CDP WD - CDP Water Disclosure Page 13 of 21

14 In addition, Dexia Asset Management participates to sustainable development related working groups, professional organisations and alike in order to raise the acknowledgment of ESG integration in business. This allows us to have a good view on current market discussions and trends. Please find an overview of our major participations in the next table: Name of Association AFG (Association Française de la Gestion financière), and its Commission «Investissement Socialement Responsable» Date joined BEAMA (Belgian Asset Managers Association) Committee Socially Responsible and Sustainable Investing EABIS (European Academy of Business in Society) Several Social Investment Forums, such as: - Eurosif (European Sustainable Investment Forum) Belsif (Belgian Sustainable and Socially Responsible Investment Forum) Forum Nachhaltige Geldanlagen (Germany, Switzerland & Austria ) Swesif (Swedisch Sustainable Investment Forum) - VBDO (Dutch Sustainable Investment Forum) SIO (Canadian Association for Socially Responsible Investment) RIAA (Responsible Investment Association Australasia) ORSE (Observatoire sur la Responsabilité Sociétale des Entreprises) : Club Finance Dexia AM participated in the course of 2009 to more than 20 conferences aimed at improving the integration of ESG criteria in business/industries. Among others: Eurosif - ESG corporate disclosure: Dexia AM s head of SRI participated as a panel member to a workshop on company ESG accountability and transparency organized jointly by Eurosif and the European Commission in September TBLI - Potential CO2 liabilities: Our internal sustainability analysts in charge of Energy and Utilities sectors, headed a workshop on Carbon Finance at the TBLI conference in Amsterdam in November e - How is the effectiveness of engagement activity monitored/addressed? When engaging directly with companies, Dexia Asset Management monitors the increased level of transparency and the improvement of companies performance on specific issues. Other progress is monitored by collective initiatives. 5f - What further steps, if any, are taken if engagement is considered unsuccessful? Unsuccessful dialogue can lead to the deterioration of companies rating which might result in the exclusion of a company from the SRI Universe. 4 May April 2007 Page 14 of 21

15 5g - How, and how frequently, are engagement activities communicated to investors and other stakeholders? Engagement activities are fully integrated into our companies sustainability analysis and are partly communicated through companies profiles. An overview of our engagement activities is publicly available on our SRI dedicated website (sri.dexia-am.com, see library). 5h - What engagement activity has been carried out on behalf of the funds during the past year? Regarding the engagement initiatives, please refer to the question 5d. Page 15 of 21

16 6 - Voting policy 6a - Do the funds have a voting policy? Due to the specific nature of green companies (often smaller companies) and the particularities of structured products, no voting policy is applied to our SRI thematic funds. 6b - Do the funds disclose its voting practices and reasoning for decisions? Not applicable. 6c - Do the funds sponsor/co-sponsor shareholder resolutions? Not applicable. 6d - What voting actions occurred that were related to the SRI fund ESG criteria? Not applicable. Page 16 of 21

17 Additional If applicable briefly describe the corporate responsibility policies of the organisation that manages or promotes the fund(s), or give direction to where this information can be located. Being a responsible asset manager goes beyond managing clients' assets. It is about establishing long-term relationships with all our stakeholders. For us, Dexia Asset Management, managing our clients assets is a great responsibility and we want to do it to the best of our ability and by being fully transparent. In our Sustainability Report, we outline our contribution to sustainable development in the asset management industry in For specificities pertaining to Dexia Asset Management s activities, measures and plans in the field of sustainability please refer to our Sustainability Report 2009: Dexia AM, a responsible asset manager published on If applicable, specify what the amount of donations and the percentage of management fees that the fund gave to charities were this past year. Not applicable. Signatories should feel free to create a one-page document to synthesize the response to the guidelines. This onepager must refer to the European Transparency Code and should not act as replacement for it. Please find the one-page documents for every fund in appendix. Page 17 of 21

18 Appendix Definitions of key terms used in the guidelines Definitions of key terms have been included to assist those reporting in line with the Guidelines as well as consumers who will use the information reported. Term Divestments ESG Engagement Exclusion Fund manager Fund(s) Fund Purpose Holdings Portfolio Signatories Voting Policy Definition Companies that are sold from the fund portfolio due to SRI analysis exclusion. Enviro4nment, Social and Governance A long-term process of dialogue with companies by investors which seeks to positively influence company behaviour in relation to their social, ethical, governance and environmental practices. This includes vote at AGM, filing or co-filing shareholder proposals, asking questions at AGM, collaborative engagement initiatives, individual company contact and dialogue with policy makers and industry organisations. The exclusion of sectors or companies from a fund if involved in certain activities based on specific ESG criteria. The entity responsible for overall management of the fund. A legal entity, the purpose of which is solely the acquisition of portfolio investments. This also includes compartments and sub-funds. The spirit and overall focus of the fund, but not the investment criteria employed. Equities and/or bonds of companies that collectively comprise the fund portfolio. A collection of investments managed by the fund manager. Fund(s) and/or fund manager that commits to disclose SRI information in line with the Code. Policy of a fund to exercise its voting rights as investors to influence company behaviour. European National Social Investment Fora to date EUROSIF, the European Sustainable Investment Forum, is the pan-european network whose mission is to address sustainability through the financial markets. Eurosif works as a partnership of the national Sustainable Investment Forums (SIFs) within the EU and with the support and involvement of Member Affiliates. Recognised as the premier European forum for sustainable investment, Eurosif s Member Affiliates are drawn from leading pension funds, asset managers, NGO s, trade unions, academic institutes and research providers, together representing assets totalling over 1 trillion. Eurosif's work includes a focus across asset classes - equity and fixed income markets, microfinance, renewable energy, property, private equity and hedge funds - all centred around the industry trends and future legislation affecting this space. The key benefits that Eurosif affiliate members receive include EU interfacing, SRI information and European wide initiatives that integrate Environmental, Social and Governance (ESG) issues into the financial services sector. For the full list of Eurosif Member Affiliates, please see National social/sustainable investment forum to date include: Belsif, Belgium Dansif, Denmark FNG The German, Austrian and Swiss Sustainable Investment Forum Forum per la Finanza Sostenible, Italy Forum pour l'investissement Responsable, France Norsif, Norway Spainsif, Spain Swesif, Sweden UKSIF, UK VBDO (Vereniging van Beleggers voor Duurzame Ontwikkeling), The Netherlands Page 18 of 21

19 For further information contact Eurosif at or by at contact@eurosif.org. Additionally, feel free to see the most updated information on the Transparency Code at Eurosif La Ruche 84 quai de Jemmapes, Paris, France Tel: One-page documents Please find on the following pages the one-page documents for every fund covered by this Transparency Code. Page 19 of 21

20 DEXIA SRI THEMATICS FUNDS Dexia Equities L Sustainable Green Planet LU Dexia Clickinvest B Minimax 4 Green Planet BE Dexia Clikinvest B Climate Change BE Section 1: Basic Details Company Assets Capitalisation Geographic Thematic Section 2: ESG Criteria Screening Section 3 - Research Process Research Team Advisory Committee Audit Process Stakeholder Consultation Name Dexia Asset Management More details on Equity Bonds Mixed Structured products Money Markets Others Large Mid cap Small Cap Blend Private Equity Others EMU Europe North America Asia/Pacific Emerging Markets Others Environment Social Governance Particular Sector armament exclusion Others Best-in-Class Norms-based Thematic Ethical Engagement Armament exclusion Internal External Both Yes No Internal External PricewaterhouseCoo Deloitte Deloitte pers Lu Yes No Update (1) every 24 months every 24 months every 24 months Never Research Sometimes Disclosure (2) Always Section 4 - Evaluation and implementation Internal Selection Process External Both Restricted Investment universe Selection Implementation (3) Over/underweight recommendations Others No Portfolio disclosure (4) Partly Completely No ESG Divestment Notice Regularly towards investors (5) Always No ESG Divestment Notice Regularly towards companies (6) Always Section 5 - Engagement Approach Do you have an engagement Yes policy? No Internal team If Yes, who undertakes External team engagement? Both Co-filling shareholders resolutions Fililng shareholders resolutions If Yes, which engagement Proxy voting methods do you use? Collaborative engagement Direct engagement conducted publicly Direct engagement conducted privately No If Yes, do you disclose the Regularly results? Always Section 6 - Voting Policy Yes Do you have a voting policy? No If Yes, do you disclose No your voting Regularly practices/decisions? Always No If Yes, do you fill Regularly resolutions? Often (1) The assessment of issuers is updated every 24 months (2) Do you disclose the analysis results of individual issuers? (3) How are the research results integrated in the investment process? (4) Do you disclose the portfolio holdings? (5) Are investors informed about divestments on ESG grounds? (6) Are companies informed about divestments on ESG grounds? (7) The fund invests in euro-denominated bonds. Those bonds can be issued by both european and non-european companies. Sustainable Responsible Investment

21 Dexia Asset Management Dexia AM is a pan-european asset manager offering a full range of investment vehicles. In addition to being an expert in traditional management, Dexia AM is a European leader in sustainable and responsible investment (SRI) and has forged a recognised leading position in alternative management. More information? Investor.support-dam@dexia.com Dexia AM has management teams in Brussels, Luxembourg, Paris and Sydney and sales teams throughout Continental Europe, Canada, Australia and the Middle East. Legal Notice This document is published purely for the purposes of information, it contains no offer for the purchase or sale of financial instruments, does not comprise investment advice and it is not confirmation of any transaction unless expressly agreed otherwise. The information contained in this document was obtained from a number of different sources. Dexia Asset Management exercises the greatest care when choosing its sources of information and passing on this information. Nevertheless errors or omissions in those sources or processes cannot be excluded a priori. Dexia AM cannot be held liable for any direct or indirect damage or loss resulting from the use of this document. The contents of this document may be reproduced only with the prior written agreement of Dexia AM. The intellectual property rights of Dexia AM must be respected at all times. Warning: If this document mentions the past performances of a financial instrument or index or an investment service, refers to simulations of such past performances or contains data relating to future performances, the client is aware that those performances and/or forecasts are not a reliable indicator of future performances. Moreover, Dexia AM specifies that: in the case where performances are gross, the performance may be affected by commissions, fees and other charges; in the case where the performance is expressed in another currency than that of the investor s country of residence, the returns mentioned may increase or decrease as a result of currency fluctuations. If this document makes reference to a particular tax treatment, the investor is aware that such information depends on the individual circumstances of each investor and that it may be subject to change in the future. This document does not comprise any investment research as defined in article 24, 1 of Directive 2006/73/CE dated 10 August 2006 implementing Directive 2004/39/CE of the European Parliament and Council. If this information is a marketing communication, Dexia AM wants to clarify that it was not designed according to the legal requirements to promote the independence of investment research, and it is not subject to any prohibition on dealing prior to the dissemination of the investment research. Dexia AM invites the investors to always consult the fund prospectus before investing in a fund. The prospectus and other information relating to the fund are available on our site at