2013 Impact Report

2013 ANNUAL IMPACT REPORT
Impact Investing in Public Markets: Methodology, Analysis and Thought Leadership

San Francisco New York www.sonencapital.com San Francisco New York www.sonencapital.com
Lessons from the Field
Lessons from the Field
May 2014 May 2014
PUBLICATION DETAILS

PUBLISHER
Sonen Capital
50 Osgood Place, Suite 320
San Francisco, CA 94133
info@sonencapital.com
www.sonencapital.com

PLEASE SEE IMPORTANT DISCLAIMERS IN APPENDIX AT THE END OF THIS
DOCUMENT.

This report was published in May 2014.

AUTHORS
Will Morgan
Ral Pomares
Martn Whitaker Ph.D
THE RESULTS PUBLISHED IN THIS REPORT ARE THE CULMINATION OF THE
DISCIPLINED INVESTMENT APPROACH OF OUR PUBLIC MARKETS INVESTMENT TEAM:
Nick Koukopoulos
Eyal Bilgrai, CFA, CAIA
Joshua Newman

PROJECT MANAGER
Amando Balbuena

DATA SOURCE
MSCI ESG Research
Leadership Perspectives
Executive Summary
Introduction to Impact Investing at Sonen Capital
Sustainable Investing: Creating Impact Through ESG Integration
Thematic Investing: Investing to Meet Social & Environmental Needs
Shareholder Engagement & Advocacy
Looking Ahead
Appendices
3
7
14
18
34
48
52
54
2013 Annual Impact Report Sonen Capital 4
MESSAGE FROM RAL POMARES
SONEN CAPITAL SR. MANAGING DIRECTOR
We are pleased to share with you Sonens frst annual
impact report. This report provides quanttatve and
qualitatve impact performance data on Sonens
public markets investment strategies.
We believe that the results and methodology presented
in this report provide clarifcaton and transparency
for investors building and managing impact portolios,
and galvanizes those considering transitoning assets
towards impact.
Our aim in publishing this report is to demonstrate
that impact investng can provide compettve returns
with meaningful and measurable economic, social
and environmental benefts. At Sonen, we believe that
the prudent, proactve integraton of Environmental,
Social and Governance (ESG) issues into the investment
process is an integral part of managing sustainability
risks and opportunites. Aggregated analysis of
underlying securites presented in this report also
reveals industry leadership in sustainability, evaluated
through ESG dimensions.
Sonens mission is to deliver compettve investment
solutons with meaningful impact. For the period
covered in this report, the frm was able to do just
that. In 2013, Sonens investment strategies were
compettve with target benchmarks while identfying
investments that directly address global social and
environmental challenges including climate change,
resource scarcity, clean energy sources and poverty
reducton among disadvantaged communites around
the world.
Sonens integrated focus on impact and fnancial
performance afords our clients the opportunity to align
their investment actvity with personal values. It is this
unique combinaton that motvates our team, clients
and investors onwards and upwards, providing our
inspiraton to build capital markets in which investment
resources help address large-scale global challenges.
RAUL POMARES
Sonen Capital Sr. Managing Director
May 2014
PREFACE FROM WILL MORGAN,
SONEN CAPITAL DIRECTOR OF IMPACT
This report is the frst in a series of regular impact
reports provided to Sonen clients and impact investors.
Its purpose is to illustrate, clearly and specifcally, the
impact that Sonens investment strategies create across
asset classes and investment themes. Through this
and other reports, we will show that impact investors
can direct resources to create measurable, lastng and
large-scale positve impact through a wide variety of
investment approaches.

In Sonens view, a partcular social or environmental
impact is not limited to or defned by asset class.
Rather, these impacts exist both within and across asset
classes, and combining varying investment approaches
and manager strategies across asset classes results in
impact diversifcaton for investors. The optmizaton of
such Impact Implementaton at the portolio level is
integral to our approach, and is achieved by selectng
those managers capable of delivering genuine breadth
and depth of impact within asset classes.
Finally, shareholder engagement and advocacy further
strengthen portolio atributes by exertng asset
owners infuence on the companies they own. Across
our public markets investng strategies, shareholders
actng in concert are advocatng for greater social and
environmental sustainability, increased transparency
into corporate practces and greater responsibility for
the earths precious resources and the communites in
which we live and these corporatons operate.
Highlights from Sonens investment strategies reveal
companies that are actvely reducing greenhouse gas
emissions, environmental polluton and resource use
directly and through the products or services they
provide. Sonens portolio refects greater responsibility
and accountability at all levels of corporate structure,
from workers throughout complex supply chains to
more diverse corporate governance. Sonens Thematc
solutons exhibit an orientaton to addressing climate
change and resource scarcity, alongside investments
that provide social and economic opportunites for
disadvantaged populatons in the US and abroad.
We antcipate signifcant growth in the impact investng
industry in the coming years and, with it, an increasing
alignment between the planets urgent social and
environmental challenges and the opportunites that
asset owners have to solve these problems.
WILL MORGAN
Sonen Capital Director of Impact
May 2014
Business Ethics
90%
Exceed average performance ratings for Business Ethics
among respective market indices
4X Fewer
Carbon Emissions
1000 metric tons less carbon emitted
per million dollars of sales compared
to traditional equities benchmarks
CO
2
35
Shareholder Actions
Direct engagement and shareholder
advocacy across 6 impact themes,
including political spending, climate
change and greater transparency
Toxic Emissions
Significantly less sulfuric oxides (SOx),
nitrogen oxides (NOx) and volatile
organic compounds (VOC) compared
to traditional equities benchmarks
26X Less
Water Used
82,000 cubic meters less water used
on average per million dollars of sales
compared to traditional equities
benchmarks
15X Fewer
X
Health & Safety
8
Women Representation on Corporate Boards
20+%
Companies have an average of 20% more Women
on Corporate Boards than market indices
71%
Exceed benchmark average for Health & Safety
performance ratings for the workforce
Public Markets Impact Investing at Sonen Capital
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Impact
Themes
ESG Investment Highlights
Source: MSCI ESG Research.
Within our proprietary impact framework, we pursue
our Impact Implementaton through a combinaton of
three distnct approaches:
I. Responsible: Investments that avoid investng
in specifc securites with excessive ESG risks or
objectonable practces. These are represented
to a lesser extent within Sonens investment
approaches.
II. Sustainable: Strategies that invest in securites
that exhibit high performance along multple ESG
dimensions.
III. Thematc: Investments that focus on specifc issues
of global social and environmental signifcance,
such as adaptng to climate change, resource
efciency, water, sustainable food producton or
poverty alleviaton.
Sonens Impact Implementaton blends investment
approaches that themselves provide diversifed and
Sonens investment platorm delivers impact across asset classes, provided through mult-strategy, mult-
themed investment strategies. The public markets strategies described in this report provide clients with
the ability to direct investment dollars to companies that are exhibitng industry and market leadership
along environmental, social and governance (ESG) dimensions; that have direct exposure to impact-oriented
themes; and that are driving positve environmental and social beneft through their actons, products and
services.
EXECUTIVE SUMMARY
IMPACT INVESTING IN
PUBLIC MARKETS
EXECUTIVE SUMMARY
complementary impacts within and across asset classes.
Impact Implementaton also includes impact actvites
beyond security selecton, such as proxy votng and
shareholder advocacy actvites that can amplify the
Sustainable and Thematc outcomes from various
investment strategies.
The net efect of our overall framework is the ability
to deliver multple, diferent and mutually reinforcing
impact themes and sustainability approaches, all of
which can be qualifed, monitored and reported at the
strategy level.
Sonens Impact Dashboard
Across public and private markets strategies, we
currently evaluate and report impact using a dashboard
approach that illustrates product-level social and
environmental impact relatve to that of a selected
fnancial benchmark.
Specifc examples that typify both Sustainable and
Thematc approaches are also provided in order to
illustrate specifc ways in which underlying securites
exhibit ESG leadership or are addressing Thematc social
and environmental issues.
Sonens Key Performance Indicators
At the highest level, we track impact in public markets strategies through the following metrics:
1. A breakdown by Responsible, Sustainable and Thematc investment approaches;
2. A further breakdown by Thematc social and environmental issues represented;
3. Perhaps most importantly, we utlize a set of ESG-based Key Performance Indicators (KPIs) that
illustrate the actual performance of each strategy, relatve to its benchmark, along certain critcal
environmental and social issue vectors;
Environment: Carbon Emissions, Toxic Emissions, Water Use
Social: Supply Chain Labor Standards, Controversial Sourcing, Health and Safety
Governance: Gender Diversity on Corporate Boards, Business Ethics Rankings
4. A summary of proxy votng actvity and other shareolder actons by underlying issue.
Delivering Results
The charts below illustrate the impact breakdown of Sonen public markets strategies, as of December 31, 2013.
The equites and fxed income strategies all feature a core allocaton to Sustainable investment approaches, with an
allocaton to Thematc approaches;
Chart 1: Impact Breakdown by Asset Class
Thematic 42.7% 57.3% Sustainable Thematic 22.6%
77.4% Sustainable
Thematic 26.7% 40.9% Sustainable
Responsible 32.4%
Thematic 20.1%
79.9% Sustainable

Global Equity US Public Equity
Global Fixed Income US Core Fixed Income
Sonen Strategies Key
Blue bars on the charts refect Sonen investment strategies in US Equites.
Green bars on the charts refect Sonen investment strategies in Global Equites.
EXECUTIVE SUMMARY
For the equites strategies, energy- and water-related impacts are the most represented Thematc issues, followed
by infrastructure, waste and polluton and agriculture;
Chart 2: Equities Thematic Investments
For the fxed income strategies, social impacts are the most represented impact theme (grouped under the
community development heading) followed by clean energy;
Chart 3: Fixed Income Thematic Investments
6.9% Infrastructure
Other 16.3%
Water 39.3%
3.4% Health
22.3% Energy
5.1% Agriculture
1.0% Community Development
5.7% Waste & Pollution
8.7% Other
1.8% Water
8.3% Infrastructure
35.1% Energy
1.4% Agriculture
Community Development 42.3%

51 companies held in Sonens various strategies were subject to 65 shareholder actons in 2013. Sonen
managers directly partcipated in 35 of those actons, with prominent issue areas including politcal spending and
environmental sustainability;
In terms of the specifc Environmental, Social and Governance KPIs we use to track impact performance:
Relatve to the benchmark, Sonens strategies exhibit signifcantly lower carbon intensity, toxic emissions and water
usage;
Chart 5: Carbon Emissions: Metric Tons of Carbon Emissions per $mm/sales
1
0 5 10 15 20
Other
Human Rights
Climate & Energy
Board Diversity/EEO*
Environment
Sustainable Governance
Political Spending
18
16
11
7
6
4
3
1. Source Data: MSCI ESG Research. Global Equity and MSCI ACWI data incomplete for 2012.
Chart 4: 2013 Breakdown of Shareholder Actions
*EEO: Equal Opportunity Employment
0
50
100
150
200
250
300
350
400
128.81
368.54
Global Equity MSCI ACWI
Index
2011
Global Equity Carbon Intensity
0
100
200
300
400
500
600
524.88
177.35
US Public Equity Russell 3000
Index
2012
US Public Equity Carbon Intensity

EXECUTIVE SUMMARY
Our equites strategies are over 4.5x less carbon intensive and 2.7x less carbon intensive than their respectve
benchmarks. Similarly, water use is more than 48x and 13x lower than corresponding market benchmarks. We
atribute these diferences to the underlying strategies of our managers and their ability to select stocks that create
more positve impact relatve to respectve benchmarks;
Chart 6: Water Use: Cubic Meters of Water Use per $mm/sales
2
Sonens strategies exceed benchmark performance on sourcing of controversial materials and the health and safety
performance for the workforce. We believe this is explained by data availability, and the biases contained in our
benchmarking process;
Chart 7: Percentage of Companies that Outperform Market Benchmarks (MSCI ACWI and Russell 3000 )
3
US Public Equity Global Equity
2012
Supply Chain Labor Management
40%
42%
44%
46%
48%
50%
47.8%
50.0%
0%
10%
20%
30%
40%
50%
60%
56.0%
25.0%
Controversial Sourcing
2012
80%
84%
88%
92%
96%
100%
92.0%
86.3%
Health & Safety
2012
0
5000
10,000
15,000
20,000
25,000
30,000
2,144.11
27,377.61
Index
2012
Global Equity Water Use Intensity
0
10,000
20,000
30,000
40,000
50,000
60,000
1,204.23
58,397.97
Index
2012
US Public Equity Water Use Intensity
2,3. Source Data: MSCI ESG Research.

The net effect of our overall framework is the ability to deliver
multiple, different and mutually reinforcing impact themes and
sustainability approaches, all of which can be qualied, monitored
and reported at the strategy level.

Sonens portolios also exhibit higher representaton of women on corporate boards relatve to the benchmark.
Chart 8: Percentage of Companies that Outperform Market Benchmarks (MSCI ACWI and Russell 3000 )
4
0%
20%
40%
60%
80%
100%
80.7%
57.0%
2012
0%
20%
40%
60%
80%
100%
94.4%
85.4%
Business Ethics & Fraud
2012
4. Source Data: MSCI ESG Research.
CO
2

Sonen is commited to understanding and reportng
impact as an essental part of the portolio management
process; this report provides qualitatve and quanttatve
impact data on Sonens underlying investments in the
public markets, encompassing all investments across
fxed income and public equity securites.
At present, we invest in multple managers within our
public equity and fxed income strategies. Managers are
selected for their ability to artculate a defned impact
strategy and demonstrate that underlying securites are
consistent with that strategy and that indeed provide
the intended impact. Managers are also selected
according to their ft with and contributon to Sonens
growing collecton of impact investment managers.
See Sonens Manager Selecton Process on p. 17 for
more informaton on manager selecton.
Sonen Capital LLC is commited to providing our clients with impact investment solutons across asset classes
and impact themes, with the mission of delivering compettve fnancial returns alongside meaningful
positve social and environmental beneft. For asset owners who believe, like we do, that investment capital
can help meet large-scale global challenges while generatng strong fnancial returns, our solutons provide a
direct link between investment strategy and positve global social and environmental change.
INTRODUCTION TO IMPACT
INVESTING AT SONEN CAPITAL
IMPACT INVESTING IN
PUBLIC MARKETS
Impact Investing Spectrum
Chart 9 on the following page illustrates the Sonen Impact Investng
Spectrum, including the Sustainable and Thematc investment approaches
described above. In general, moving from lef to right relays an increasing
focus on impact derived from underlying securites.
Sonen Capital strives to ensure that clients beneft from the broadest
possible coverage of Responsible, Sustainable, Thematc and Impact First
(where desired) investment opportunites across asset classes, impact
themes and investment strategies. Our focus is on Sustainable and
Thematc investng, where we believe the greatest opportunites to
optmize impact and fnancial return exists.

Responsible Investng, in which companies are eliminated from
investment due to their involvement in specifc actvites (such as weapons
manufacturing, tobacco producton or nuclear energy) is represented to a
a lesser extent in Sonens strategies. Nevertheless, Responsible investng
consttutes a major element of modern impact investng and indeed is
the foundaton on which many new manifestatons of impact investng
originate. We separate this from Sustainable and Thematc approaches on
the grounds that such negatve screening is technically an avoidance of
negatve impact, as opposed to the pursuit of positve impact. However,
for some clients, Responsible investment strategies can play a legitmate
role in an overall impact strategy.
Sustainable Investng focuses on the integraton of ESG factors as a
fundamental part of the investment decision-making process. Such ESG
data is most ofen used to evaluate related risks and opportunites to
specifc companies and industries, although the data itself provides a
strong basis from which to evaluate investors impact and the markets
infuence on corporate ESG practces.
Thematc Investng targets issue areas where social or environmental
markets ofer specifc commercial growth opportunites, such as growing
worldwide demand for water, or providing goods and services to low-
income communites.

SONEN IS
COMMITTED TO
UNDERSTANDING
AND REPORTING
IMPACT AS
AN ESSENTIAL
PART OF THE
PORTFOLIO
MANAGEMENT
PROCESS.
INTRODUCTION TO IMPACT INVESTING AT SONEN CAPITAL
Creating Impact Through Public Markets
Investing
In our view, a partcular social or environmental impact
is neither limited to nor defned by asset class. Rather,
diversifed impact results from combining varying
investment approaches and manager strategies across
asset classes. We deliver specifc, measurable impact to
clients across asset classes in three distnct ways:
1. First, by at a minimum making Responsible
investments, which avoid specifc industries
or business lines with excessive ESG risks, or
objectonable business actvites. Responsible
investments represent a small proporton of Sonens
investment approaches.
2. Second, by focusing on Sustainable investment
approaches, in order to invest in securites across
asset classes that exemplify high performance
along Environmental, Social and Governance (ESG)
standards and criteria; and
3. Third, by focusing on Thematc investment
approaches, in which asset owners direct their
resources to specifc social and environmental
impact themes and related needs refectng issues
of global urgency.
The result is Sonens Impact Implementaton -
combining investment approaches that themselves
provide diversifed and complementary impact within
and across asset classes. Impact implementaton also
includes impact actvites beyond security selecton,
such as proxy votng and shareholder advocacy
actvites that can amplify the Sustainable and Thematc
outcomes from various investment strategies.
Chart 9: Impact Investing Spectrum
5
5. The Impact Investng Spectrum has been adapted from the Spectrum of Capital, produced by Clara Barby of Bridges Ventures.
Classic
Investing
Responsible Sustainable Thematic Impact First Philanthropy
Competitive
Returns
ESG* Risk
Management
ESG
Opportunities
Maximum-Impact Solutions
Emphasis on profit
maximization
without regard for
ESG factors
Consideration of
ESG risk and/or
personal values
across a range of
factors to screen
out investments
Targeting
investments best
positioned to
benefit from the
integration of ESG
factors and
broad-based macro
trends
Focus on issue
areas where social
or environmental
needs offer
commercial growth
opportunities for
market rate return
Emphasis on the
optimization of
social or
environmental
needs (e.g., PRI*),
which may result in
financial trade off
Where social
and/or
environmental
needs outweigh
any consideration
for financial return
*PRI: Program-related investments available to US investors defned by the tax Reform Act of 1969.

Sonens Manager Selection Process
To create its mult-manager, mult-themed investment portolios, Sonens team assesses managers and
evaluates the ESG/impact merits of their respectve strategies alongside quanttatve, fundamental evalu-
aton. Sonen employs a rigorous four-stage due diligence process that fully integrates the analysis of social
and environmental impact factors, the skill and experience of the management team in a specifc invest-
ment strategy and the funds potental for fnancial return, all overlaid with a disciplined risk management
process.
Managers and strategies are evaluated along several quanttatve and qualitatve levels. We deploy a full due
diligence process to assess manager expertse, commitment and capacity to deliver on both fnancial and
social/environmental impact. Detailed due diligence therefore combines a fundamental quanttatve analysis
of manager fnancial performance, risk and strategy, with a thorough impact-based due diligence process
based upon Sonens Impact Scorecard, a proprietary evaluaton mechanism. Through Sonens integrated im-
pact and fnancial due diligence process, we seek to understand the strategy; the strength of the business;
the ethics and integrity of the people; the culture of the organizaton; the ownership structure, incentves,
staf retenton and turnover; Assets Under Management (AUM) stability in the strategy/fund and at the frm
level; and operatonal details including ofering documents and audited fnancials.
Sonen intentonally combines managers with varying
and complementary investment approaches in order to
create a diversifed impact strategy for each asset class.
In this manner, a single asset class can deliver multple
diferent impact themes and sustainability approaches,
all of which can be qualifed, monitored and reported.
As ESG data has become more widely available and
reliable, asset managers and investors have begun to
utlize it in increasingly creatve ways:
As a performance indicator, serving as a proxy for
how well a company is managed;
As a screening tool, to select securites with specifc
positve ESG atributes, or to help investors avoid
certain industries altogether due to specifc ESG
risks (e.g., excessive liabilites and risks from labor
abuses);
As a tool to compare relatve ESG performance with
industry peers in order to select companies that
demonstrate best practces on specifc issues; and
To augment methodologies for comparing statc and
longitudinal data of a companys ESG performance
over tme in comparison to industry peers or to
conventonal market-based benchmarks.
Sonen uses ESG data to help discern the positve
social or environmental impacts of an investment
portolio by comparing the same performance of
Sustainable investment strategies vary considerably in approach and executon. Ultmately, however, they
share a common objectve: to widen the scope of securites evaluaton to consider how ESG issues may
afect risk, compettve positoning, shareholder value and market performance over the long term.
IMPACT INVESTING IN
PUBLIC MARKETS
SUSTAINABLE INVESTING:
CREATING IMPACT THROUGH ESG INTEGRATION

market benchmarks. We also monitor the trends in
such ESG data in order to understand how companies
are evolving in response to the market and investor
demand.
While data does suggest that ESG and fnancial
performance are linked, we know this is a complicated
relatonship and do not assume there is a direct
correlaton between alpha generaton and specifc
ESG leadership. However, for impact investors, ESG
performance serves as an excellent proxy for impact, by
helping asset owners understand not what companies
do, but how they do it.
Table 1: Sample E, S and G Characteristics or KPIs
Environmental Social Governance
Sample KPIs Energy efciency
Greenhouse Gas (GHG)
emissions
Toxic emissions
Waste (generated for
producton and for product)
Community engagement
Human rights
Labor standards
Disclosure and
transparency
Board diversity
Politcal contributons
ESG Risks Cost escalatons
Supply chain disruptons
Evolving regulatory
requirements
Reputatonal damage
Loss of license to operate
Brand loyalty
Reputatonal damage
Fines and litgaton
ESG
Opportunites
Adaptaton through
innovaton
New market growth
Consumer and investor
appeal
Consumer and investor
appeal
Standard setng
Reduced labor costs
Leadership
Stakeholder partcipaton
and support
Improved fnancial
performance
ESG Impact GHG emissions reductons
Waste reductons
Water use reductons
Higher worker satsfacton
and retenton
Improved labor standards
Stakeholder alignment
Opportunity to set
standards and lead
industries
Lower cost of capital
Improved share price
Stakeholder alignment
Sustainable Managers in Public Equities
A critcal component of Sonens Impact Implementaton is manager selecton, which is intentonally varied in order to
render a diverse array of Sustainable investment approaches. This results in meaningful impact diversifcaton alongside
fnancial diversifcaton.
SUSTAINABLE INVESTING: CREATING IMPACT THROUGH ESG INTEGRATION
Table 2: Sustainable Public Equities Managers Impact Strategies
Sustainable Manager Sustainable Impact Thesis Manager Impact Strategy
Manager A ESG performance can increase
compettveness, reduce risk profles
and enhance fnancial performance.
Identfy industry-specifc ESG factors that may
afect company valuaton and performance
Invest in best-in-class companies along ESG
performance criteria
Actve corporate engagement and proxy votng
Manager B Incorporatng ESG performance can
reduce investment risk, partcularly for
certain industries.
Positve ESG screens such as carbon footprint,
workforce diversity, employee benefts and
governance structures
Proxy votng
Manager C Companies with higher ESG
performance provide higher overall
quality and carry less risk.
Specifc and defned positve and negatve ESG
screens inform investment selecton
Actve corporate engagement and shareholder
advocacy
Manager D Sustainability performance afects
long-term business proftability, and
companies best positoned to beneft
from long-term sustainability trends
will be more successful.
Industry-specifc sustainability drivers are used
to evaluate companies for investment
Proxy votng

Sustainable Managers in Fixed Income
Table 3: Sustainable Fixed Income Managers Impact Strategies
Sustainable Manager Sustainable Impact Thesis Manager Impact Strategy
Manager A Extra-fnancial factors can impact fnancial
risk and return of investments. Higher
corporate ESG standards are positvely
correlated to higher credit ratngs and lower
volatlity.
Focus on municipal issuers that provide
essental services such as infrastructure,
educaton and sanitaton
Identfy corporate bonds with high ESG
performance
Manager B Corporate ESG liabilites may afect company
valuaton and ability to return capital to
investors. Sovereign ESG performance can
afect governments willingness and ability
to repay debts.
Examine corporate ESG performance for
excessive related risks and liabilites
Examine sovereign governments level of
corrupton, environmental stewardship,
politcal stability and human development
indices
Manager C Countries with high commitments to
environmental, social and governance
sustainability policies are inherently more
likely to deliver a beter return to investors
a sustainability dividend.
Proprietary tool to evaluate country-level
ESG risks and opportunites along 16
specifc dimensions not typically covered
by sovereign bond ratngs agencies
Table 4: Variations in Integrating ESG Data in the Investment Process
ESG Risk
Public Equity
ESG Opportunity
Public Equity
ESG Risk
Fixed Income
ESG Opportunity
Fixed Income
Use of ESG
Data
Reveal risks in supply
chains
Select companies that
are the best performers
along specifc ESG
dimensions
Examine non-fnancial
risks that may afect a
countrys willingness and
ability to repay debts
Evaluate municipal
and sovereign ESG
performance
Example Heavy reliance on fossil
fuels can result in supply
disruptons or price
escalatons. Investng
in energy efciency or
renewable sources can
reduce such carbon risk
and carbon emissions
Companies with higher
rates of employee
satsfacton and
compliance with labor
standards enjoy greater
stability and fewer
supply disruptons
Low educaton rates,
gender inequality and
limited civil libertes
reduce overall long-term
stability and solvency
Reduced resource
depleton and
environmental
sustainability can
improve long-term
credit quality

Growth in Sustainable Investing
Strategic impact investng in public markets can indeed create impact and at a large scale. As more investors
enter the market with expectatons of social and environmental sustainability on the part of the companies they
own, these investors demand greater transparency through corporate disclosure on related maters, and exercise
their ownership rights to induce favorable corporate policy changes.
The growth in investng that explicitly integrates ESG data illustrates that asset owners wish to express their values
by investng in strategies that incorporate such consideratons. Asset owners may also believe that their investments
may be at risk if environmental, social and governance issues are not considered as part of a prudent investment
process. Chart 10 below shows the growth of Responsible and Sustainable investng from 1995-2012.
Chart 10: Growth of Responsible and Sustainable Investing
6

Chart 11: US Social and Environmental Shareholder Proposals Filed, 2004-2014
7
Simultaneously, these actve investors
are also taking advantage of their
positon as owners to induce companies
to conform to industry best practces,
which includes sustainability disclosure
but increasingly takes into account
specifc issues relatng to climate
change, social inclusion and transparent
governance. A steadily growing
proporton of shareholder proposals
now include requests that companies
consider social or environmental issues,
and/or that companies disclose related
data and informaton.

$3.7 trillion represents 11.3% of the total $33 tril-
lion AUM in the US Market
486% increase from 1995 to 2012
In 2012, 60% of Request For Proposals (RFP)
included ESG criteria
0
50
100
150
200
250
300
350
400
450
200
49
87
183
60
113
198
56
103
195
64
111
201
62
140
180
48
145
182
65
148
185
68
153
180
61
148
192
49
153
417
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Votes Omitted Withdrawn
#

P
r
o
p
o
s
a
l
s
$-
$500
$1,000
$1,500
$2,000
$2,500
$3,000
$3,500
$4,000
$4,500
US $ Billions
1995 1997 1999 2001 2003 2005 2007 2010 2012
$639
$1,185
$2,159
$2,323
$2,164
$2,290
$2,711
$3,069
$3,744
6. US SIF, The Forum for Sustainable and Responsible Investment. 2012 Report on Sustainable and Responsible Investng Trends in the United States. Bank of
America Merrill Lynch, February 11, 2011 report on SRI - becoming mainstream.
7. Proxy Preview 2014.

Growth in Sustainable Investing (continued)

Last, we are witnessing signifcant growth in the number and variety of companies that are disclosing
sustainability data. We suspect that this is in response to a greater appette among investors as we note
above, but also due to companies recogniton that ESG performance is no longer the domain of a small
cadre of investors, but is rather becoming a commonplace expectaton.
Chart 12 below displays the upward trend in the number of companies partcipatng in the Global Reportng
Initatve (GRI), an organizaton whose mission is to make sustainability reportng standard practce for all
companies and organizatons.
In culminaton of this growing popularity of Sustainable investng, alongside investor demand for disclosure
and transparency, pro-forma trend data from Sonens various strategies illustrates a defnitve response
from companies over the last four years: reduced carbon and toxic emissions, and a reducton in the
amount of water use for normal operatons (refer to charts 14 and 15). Sonens investors thus become
actve partcipants in guiding corporate behavior, and the wider capital markets, toward greater social and
environmental sustainability.

Chart 12: Growth in Companies Reporting Sustainability Data
GRI Reporting Trend: 1999 - 2012
8

8. 2013 Global Conference on Sustainability and Reportng; GRI.
0
500
1000
1,500
2,000
2,500
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Sonen ESG Key Performance Indicators
Another key component of Sonens impact reportng
methodology is the collecton, analysis and aggregaton
of ESG data for the underlying investments in our
investment strategies and related performance relatve
to relevant benchmark for specifc asset classes. Our
impact dashboard gives asset owners an immediate
reference point for each portolios impact relatve to
its benchmarks, and trend analyses help reveal how
portolio companies contnue to improve their ESG and
impact performance.
A. ESG Analysis: Environment
For Sonens public markets strategies, we have chosen
to measure environmental performance in three critcal
areas:
1. Climate change, specifcally the carbon emissions of
underlying portolio holdings normalized by sales;

2. Environmental polluton, as measured by toxic
emissions normalized by sales; and
3. Rates of water use, also normalized by sales.
Sonens strategies exhibit signifcantly stronger
environmental performance relatve to their respectve
market benchmark across all KPIs.
9
Specifcally:
With respect to carbon intensity (tons of carbon
emited per $million of sales), Sonens equites
strategies produce 3x fewer carbon emissions than
their respectve benchmarks.
Rates of water withdrawal (measured by m
3

withdrawn per $million of sales) are 48x less and
13x less for Sonens collecton of US Public Equity
and Global Equity strategies relatve to respectve
market benchmarks.
Environmental polluton, measured by various toxic
emissions, is 2x lower than the benchmark for US
Public Equity, and more than 66x lower than the
benchmark for Global Equity.
Trend data shows that Sonens portolio companies
are actvely reducing carbon and toxic emissions, as
well as reducing the amount of water use over tme.
In additon to assessing relatve performance,
these KPIs may be used as a signal by investors who
antcipate increased regulatory and reputatonal risks
for companies with excessive carbon emissions, toxic
emissions or rates of water withdrawal. As the threat
of climate change and water scarcity grows, impact
investors can invest in companies that are proactvely
addressing the issue and simultaneously insulatng
themselves from the increasing likelihood of regulatory
risk related to emissions and water scarcity.
9. Performance data for Sonens strategies and for market benchmarks does not cover all securites due to lack of availability of data or due to companies that do
not report related informaton.
Sonen Strategies Key
Blue bars on the charts refect Sonen investment strategies in US Equites.
Green bars on the charts refect Sonen investment strategies in Global Equites.

Chart 13: Carbon, Water Use and Toxic Emissions Environmental Performance (Measured in Intensity metrics tons
(carbon, toxic emissions) or m
3
(water) per $mm/sales)
10
10. Source Data: MSCI ESG Research. Measuring and comparing intensity (unit/$mm in revenues) allows for a comparison between companies with signifcantly
diferent scales of operatons and/or market capitalizatons. Note that amounts are absolute and not weighted by security for either Sonen strategies or respectve
market benchmarks. Global Equity and MSCI ACWI data incomplete for 2012.
0
50
100
150
200
250
300
350
400
128.81
368.54
Index
2011
Global Equity Carbon Intensity
0
100
200
300
400
500
600
524.88
177.35
Index
2012
US Public Equity Carbon Intensity
0
5000
10,000
15,000
20,000
25,000
30,000
2,144.11
27,377.61
Index
2012
Global Equity Water Use Intensity
0
10,000
20,000
30,000
40,000
50,000
60,000
1,204.23
58,397.97
Index
2012
US Public Equity Water Use Intensity
Index
2012
0.668
Global Equity Total Toxic Emissions Intensity
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
0.010
0.035
0.072
US Public Equity Total Toxic Emissions Intensity
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
Index
2012

Chart 14: Carbon Intensity Trends from 2009 - 2012 (metric tons per $mm/sales)
11
The charts above illustrate the trends in carbon intensity averages (metric tons of CO
2
emissions per million dollars of
sales). It is important to note that the compositon of Sonen strategies, as well as their respectve market benchmarks,
does not remain constant for the period. It does illustrate, however, that this collecton of securites has actvely reduced
average carbon emissions over this tme frame.
0
100
200
300
400
500
600
700
800
2010 2011 2012
359.69
723.45
298.78
647.78
185.27
479.13
177.35
524.88
Carbon Intensity Trends from 2009 - 2012 (metric tons per $mm/sales)
2009
US Public
Equity
Russell 3000
Index
US Public
Equity
Russell 3000
Index
US Public
Equity
Russell 3000
Index
US Public
Equity
Russell 3000
Index
11. Source Data: MSCI ESG Research. Data for Global Equity and MSCI ACWI is partally complete for 2012 and will change as more data becomes available.
0
100
200
300
400
500
2010 2011
2009
Index
Index
Index
Carbon Intensity Trends from 2009 - 2012 (metric tons per $mm/sales)
156
422
124
386
129
347


Chart 15: Toxic Emissions Trends from 2009 - 2012 (metric tons per $mm/sales)
12
The charts above illustrate the trends in toxic emissions intensity averages (metric tons of nitrogen oxide (NOx), sulfur
oxide (SOx), and volatle organic compound (VOC) emissions per million dollars of sales). It is important to note that the
compositon of Sonen strategies, as well as their respectve market benchmarks, does not remain constant for the period.
It does illustrate, however, that this collecton of securites has actvely reduced toxic emissions from 2009 to 2012.
For many clients, qualitatve informaton about underlying securites provides additonal narratve and anecdotal
informaton that brings to life the quanttatve performance data in Sonens impact dashboard. Table 5 further explains
this environmental performance data across Sonens investment strategies.
0
6
12
18
5.76
16.92
10.14
16.15
6.40
12.10
3.48
7.17
Toxic Emissions Trends from 2009 - 2012 (metric tons per $mm/sales)
2009
US Public
Equity
Russell 3000
Index
2010
US Public
Equity
Russell 3000
Index
2011
US Public
Equity
Russell 3000
Index
2012
US Public
Equity
Russell 3000
Index
0
10
20
30
40
50
60
70
80
1.46
78.45
1.42
74.03
1.32
75.43
0.97
66.82
2009
Index
2010
Index
2011
Index
2012
Index

Table 5: Sample Environmental Performance Highlights from Sonen Equities and Fixed Income Strategies
Security
(Sector)
Asset Class Environmental Performance Highlights
Waste
Management
(Industrials)
Public Equity
(US)
Strong policies to mitgate GHG emissions, with 15% reductons in emissions
between 2010 and 2012.
Various waste-to-energy initatves (methane capture), with use of renewable
energy sources (wind, solar and waste heat) for its own power needs.
Operates ten bioreactor landflls in the US and Canada that reduce overall
toxicity, leachate (runof) and overall landfll volume. Landfll gases are also
collected and used onsite or sold.
Agilent
Technologies
(Healthcare)
Public Equity
(Global)
Among lowest energy consumpton in industry peer set, due to energy
efciency improvements at producton facilites and solar power systems in
Western US and Germany, producing 51,120 MWh of electricity annually.
Actvely minimizing environmental impacts of products and packaging,
through product take-back programs and internal Design for Environment
Guidelines.
Santa Rosa, CA facility recycles 38% of all water and treats wastewater on site.
Ecolab
(Industrials)
Fixed Income
(US)
Reduced carbon emissions intensity by 25% since 2006, with an additonal 5%
reducton target over next fve years.
Solid waste and wastewater reducton targets of 10% (each) from 2012
through 2017.
70 million gallons of water saved across the companys facilites in 2012
through internal efciency programs.
Starbucks
(Restaurants)
Fixed Income
(Global)
Target to reduce total energy consumpton by 25% through 2015 (2008
baseline).
Renewable energy credit purchases equivalent to 100% of electricity used in
all company stores by 2015.
All new stores must align with sustainable building standards.

B. ESG Analysis: Social
In order to report social performance and impact, we
have selected three KPIs that we believe represent
some of the most important and challenging social
performance criteria for companies today:
1. A Supply Chain Labor Management KPI, which
evaluates the extent to which companies adhere
to internatonal norms on labor, including the
eliminaton of child labor, provision of safe work
environments and provision of compensaton in
accordance with local law;
2. A Controversial Sourcing KPI, which evaluates
the extent to which companies rely on materials
that originate in regions associated with human
rights or labor abuses. While the issue afects many
industries, controversial sourcing is of partcular
importance for the technology industry, where
electronic components for mobile phones, tablets,
computers and electronic circuits ofen require
minerals such as tn, tungsten and copper; and
3. A Health and Safety KPI, which monitors the
degree to which underlying securites maintain
related policies and procedures in the workplace in
order to ensure worker safety. This is of partcular
concern overseas, where such management may
be less stringent or labor standards may be more
permissive.
Social performance along such dimensions is of
partcular concern to impact investors who, at a
minimum, want to be assured that their investments
are not proftng from substandard treatment of
laborers, indirectly supportng corrupt governments or
procurement of materials in unscrupulous ways.
Chart 16 on the following page illustrates the
percentage of portolio companies in Sonens Equity
strategies that exceed average performance ratngs for
social KPIs relatve to their benchmarks. Benchmarks
for US Public Equity and Global Equity are the
Russell 3000 and the MSCI ACWI, respectvely. Key
observatons include:
Supply Chain Labor Management: higher
performing companies for this KPI secure third
party monitoring of supply chains and maintain
actve strategies and incentves that help suppliers
comply with internatonal norms.
a. Highest performers include companies such
as Motorola, whose Supplier Code of Conduct
is enforced through third-party audits, with
detailed public reportng on fndings that
surpass any other company in its industry.
b. Our Global Equity strategy does not meet the
average benchmark (MSCI ACWI) performance
for supply chain labor management as fewer
than 6% of companies in the strategy (by
weight) are reportng related data. Going
forward, Sonen expects to collect more data
to help ensure that portolio companies are
exceeding performance standards in supply
chain labor management.
Controversial Sourcing of Materials: Higher
performing companies for this KPI are able to
trace the origins of raw materials, as well as
obtain third-party certfcaton that such materials
were procured in a manner that minimizes or
eliminates any associaton with or funding to
groups or governments engaged in human rights
violatons. Positve scores are also atributed
to companies that provide greater degrees of
transparency into supplier networks.
a. More than 56% of Sonens US Public
Equity strategy exceed the average
benchmark performance (Russell 3000)
for the controversial sourcing KPI. Intel
is a star performer, declaring at 2014s
Consumer Electronics Show that all of its
microprocessors will be free of confict
minerals.
b. Our Global Equity strategy does not perform
to the average benchmark score (MSCI
ACWI) again because of the small number of
companies reportng in this category (<7% by
strategy weight). As this data becomes more
available, Sonen expects that this portolio
will exceed the benchmarks performance on
controversial sourcing due to Global Equity
managers scrutny of such issues.
Sonens underlying securites average
performance in Health and Safety (H&S) exceeds
that of respectve benchmarks for all public
markets strategies, exemplifed by Praxair in US
Public Equity.
Chart 16: Percent of Equities that Exceed Average
2012
Supply Chain Labor Management
40%
42%
44%
46%
48%
50%
47.8%
50.0%
0%
10%
20%
30%
40%
50%
60%
56.0%
25.0%
Controversial Sourcing
2012
80%
84%
88%
92%
96%
100%
92.0%
86.3%
Health & Safety
2012
Benchmark Performance on Key Performance Indicators
13

Consumer and Regulatory Expectations for Responsible Procurement
United States consumer data suggests that 88% of consumers would avoid purchasing products from com-
panies they knew to be undertaking irresponsible business practces.
14

And, in the recent Dodd-Frank Wall Street Reform Act, companies are now required to report from where
minerals used in their products originate. This added scrutny from regulators, as well as growing expecta-
tons from consumers and greater performance among afected companies, will ultmately result in a reduc-
ton in the amount and frequency of unintended contributon to labor and human rights abuses abroad.

Table 6: Sample Social Performance Highlights from Sonen Equities and Fixed Income Strategies
Security
(Sector)
Asset Class
Social Performance Highlights
Supply Chain, Controversial Sourcing, Health and Safety
Praxair
(Industrial Gases)
Public Equity
(US)
Lowest employee accident rate in its industry
Comprehensive H&S internal audits every three years
Quarterly H&S reports to board, an industry best practce
Qualcomm
(Informaton
Technology)
Public Equity
(Global)
Since 2011, formal policy in place to ensure supply chain is free of confict
minerals
Member of Electronic Industry Citzenship Coaliton (EICC) to ensure worker
safety and fairness, as well as environmental responsibility
Consistently ranks among top workplaces in employee surveys, including
working mothers
Intel Corp
(Semi-conductors)
Fixed Income
(US) Member of EICC, with recent pressure on lower-ter suppliers to adhere to
similar principles
Regular audits at all top 75 suppliers; public identfcaton of all suppliers
Provides educatonal resources and training to suppliers and regular
feedback on performance
Announced in Jan 2014 at Consumer Electronics Show that all
microprocessors released in 2014 will be free of confict minerals
Bombardier
(Aerospace, Trans-
portaton)
Fixed Income
(Global)
Reduced accident frequency and severity rates by 10% in 2012, and by 50%
since 2008
Comprehensive Health, Safety and Environment Preventve Culture
program including training and management engagement
Target of zero occupatonal illness and injury rate
Compliance program for Supplier Code of Conduct
14. Cone Communicatons, and Echo. 2013 Cone Communicatons/Echo Global CSR Study. 2013 Global CSR Study.
C. ESG Analysis: Governance
Sonen monitors corporate governance through two
straightorward KPIs:
1. The compositon and diversity of the board,
specifcally the percentage of women serving on
corporate boards; and
2. Relatve performance with respect to incidents of
corporate malfeasance, including insider trading,
controversies related to governance and fnes/
litgaton.
As impact investors may wish to express personal or
insttutonal values and priorites through investment
strategies, companies performance with respect to the
embrace of diversity, business integrity, transparency
and ethics can be of great importance and can refect
on asset owners themselves. Moreover, a growing
body of evidence suggests that companies with greater
diversity, and partcularly gender diversity, beneft from
improved fnancial performance and reduced risk or
insolvency in day-to-day management practces.
15
Chart 17 on the following page illustrates the
percentage of portolio companies in Sonens Public
Equity strategies that exceed benchmark average
performance ratngs for social KPIs. Benchmarks for US
Public Equity and Global Equity are the Russell 3000
and the MSCI ACWI, respectvely. Highlights include:
81% of Sonens US Public Equity strategy have
more Women Representaton than the average
representaton among Russell 3000 companies.
The fgure is 57% for Global Equity compared to the
MSCI ACWI.
The percentage of women serving on corporate
boards within Sonens US Public Equity and Global
Equity strategies are 15.1% and 16.0%, respectvely.
These fgures compare favorably to 11.8% and 13.8%
for Russell 3000 and MSCI ACWI companies.
15 companies report at least a third of total board
representaton is comprised of women.
85% and 94% (US and Global Equity strategies,
respectvely) exceed average benchmark
performance for Business Ethics and Fraud.

Gender Diversity on Corporate Boards
In two studies of Fortune 500 companies between 2001 and 2008, returns on sales and invested capital were
all signifcantly higher for those companies with larger representaton of women on the Board of Directors.
And for those companies with more than three women on the board, those fndings were amplifed and also
included higher rates of return on equity.
16

15. Gender Diversity and Corporate Performance. Credit Suisse Research Insttute (2012).
16. Joy, Carter, Wagner and Narayanan. The Botom Line: Corporate Performance and Womens Representaton on Boards. Catalyst Insttute (2007 and 2011).

Gender Diversity on Corporate Boards (continued)
Similarly, in a study of share prices for more than 2,360 global companies over the period 2005-2011, Credit
Suisse Research Insttute found that companies with one or more women board members outperformed those
companies with no women board members considerably. For large-cap companies (> $10 billion) share prices
outperformed by 26%, while for small- and mid-cap companies, share prices outperformed by 17%.
17
The study
further concludes that companies with women on the board exhibited higher returns on equity, lower debt to
equity ratos and beter average growth over the same period.
18

Chart 17: Percent of Equities that Exceed Average Benchmark Performance on Key Performance Indicators
19
17. Gender Diversity and Corporate Performance. Credit Suisse Research Insttute (2012).
18. IBID p.14.
0%
20%
40%
60%
80%
100%
80.7%
57.0%
2012
0%
20%
40%
60%
80%
100%
94.4%
85.4%
Business Ethics & Fraud
2012
Thematc managers select securites that deliver
products or services within defned sectors that are
directly related to the partcular theme in queston.
Some Thematc managers also integrate ESG data
in the investment process for even beter impact
performance.
Table 7 illustrates the seven priority sustainability topics
identfed for immediate proactve management in
the 2012 United Natons Conference on Sustainable
Development. Sonens Public Equity and Fixed Income
investment strategies actvely address all of these
issues, with the excepton of Oceans.
Perhaps more than ever, these challenges present
opportunites for Thematc investors to direct capital
towards solutons that align closely with global
sustainable development priorites and create new
sources of alpha for their portolios.
Whereas Sustainable impact investors pursue impact by directng capital to companies that are actvely
managing ESG risks and opportunites throughout their organizatons, Thematc investors focus on areas
where social and/or environmental needs create specifc commercial growth opportunites within broad
environmental and/or social themes, such as energy, waste management or community development.
IMPACT INVESTING IN
PUBLIC MARKETS
THEMATIC INVESTING:
INVESTING TO MEET SOCIAL & ENVIRONMENTAL NEEDS

Table 7: UN Sustainable Development Priorities
20
UN Sustainability
Theme
Sustainability Context
Employment
More than 2.3 million green jobs have been created in renewable energy sector in recent
years
Agriculture is the largest employer in the world
Clean Energy Energy is the largest contributor to climate change, accountng for 60% of global GHG
emissions
Reducing carbon intensity of energy is a key objectve in long-term climate goals
Sustainable Cites
Cites use 2% of total land area but account for up to 80% of energy consumpton and 75%
of carbon emissions
Rapid urbanizaton is stressing water supplies, sewage infrastructure and public health
Food Security and
Sustainable Agri-
culture
Projected increases in fertlizer use for food producton through 2050 could result in up to
20% more river nitrogen in coastal ecosystems
500 million small farms worldwide provide up to 80% of food consumed in least developed
countries
Agriculture contributes about 50% of total organic water pollutants globally
Water
Every day, 2 million tons of human waste are disposed of in water courses
70% of all available freshwater is used for irrigaton
Humanity will feel the impact of climate change most strongly through water
Disaster Readiness
102 million people are afected by foods annually
Drought and famine have killed nearly 600,000 people and afected 1.6 billion people, since
1980
Oceans
Over 3 billion people depend on the oceans and coastal biodiversity for their livelihoods
Up to 40% of the worlds oceans are negatvely afected by human actvites
20. United Natons. The Future We Want United Natons (2012)
Thematic Managers in Public Equity
The charts below illustrate the relevant proporton of Thematc investng in Sonens various Public Equity strategies.
Chart 18: Impact Breakdown
Chart 19: Thematic Breakdown
THEMATIC INVESTING: INVESTING TO MEET SOCIAL & ENVIRONMENTAL NEEDS
Thematic 42.7% 57.3% Sustainable Thematic 22.6% 77.4% Sustainable
6.6% Infrastructure
12.9% Energy
1.6% Other
Water 74.9%
Agriculture 0.6%
6.4% Health
7.1% Infrastructure
7.2% Water
1.9% Community Development
Energy 30.7%
Other 29.8% 9.1% Agriculture
As we do with Sustainable strategies, Sonen combines
carefully selected Thematc Public Equity managers
specializing in certain impact strategies in order to
provide for diversifed impact across the portolio.
Prominent impact themes include:
Enhancing resource optmizaton through
technologies and services that focus on energy
efciency and the availability of water;
Reducing waste through processes and
technologies for recycling and re-use;
Improving agricultural efciency and productvity,
specifcally with water and land optmizaton, and
supportng the local and organic food movements; and
Providing and improving essental infrastructure
such as updated pipelines and water distributon.

Table 8: Public Equities Managers Thematic Impact Strategies
Thematc Manager Thematc Impact Thesis Manager Impact Strategy
Manager A Companies that most efciently use
environmental and fnancial resources will
produce superior profts over tme.
Invest in companies that make use of
technologies, materials or services to increase
resource productvity and lower costs by
reducing raw materials usage and lowering
toxicity and amount of waste.
Manager B Environmental needs reveal revenue growth
and cost improvement opportunites for
companies addressing such problems at
scale.
Invest in companies that capitalize on
environmentally-driven growth, borne
from regulatons and incentves; advances
in technologies; and solutons related to
agriculture, health and resource scarcity.
Manager C New infrastructure and innovaton is needed
to meet rising global needs for water.
Investments in infrastructure, technologies
and utlites.
Manager D Essental resources required for economic
growth are fnite and increasingly scarce.
Invest in solutons to scarcity rather than
increasing supply; focus on efciency related
to water, energy and waste.
18.3% Project Loans
19.7% Small Business Dev.
Housing 62.0%
3.2% Water
14.4% Infrastructure
Energy 60.8%
Agriculture 2.4%
15.2% Other
Thematic 42.7% 57.3% Sustainable Thematic 22.6%
77.4% Sustainable
Thematic 26.7% 40.9% Sustainable
Responsible 32.4%
Thematic 20.1%
79.9% Sustainable
Chart 20: Impact Breakdown
Chart 21: Thematic Breakdown
Thematic Managers in Fixed Income
Thematc fxed income investng includes a full range of government bonds (from supranatonal to municipal) whose
proceeds target a wide range of social and environmental impacts. Prominent themes within Sonens Thematc Fixed
Income strategies include:
Community development projects and fnancial services for low-income regions of the United States;
Large-scale projects and infrastructure that helps the economy adapt to and mitgate the efects of climate change
through mult-sector approaches; and
Mult-sector investments that focus on agriculture, water and waste management projects around the world.
resource use efciency and help address the
stresses caused by larger and more urbanized
global populatons.
Our Thematc strategies address climate change
through energy efciency and renewable energy.
Climate Change: Energy Efciency
Companies held within Sonens Thematc manager
portolios target energy efciency across multple
dimensions:
At large scale, through retrofts of coal-burning
power generaton plants;
At the industrial and commercial levels, with fuel-
efcient motors and drive trains for entre truck
feets and industrial cook ranges that use 35% less
fuel and energy to operate; and
At the consumer level, with handheld electronics
devices that use signifcantly less energy to power
and stay powered. (Consumer electronics and
computer equipment now represent 15% of global
residental electricity consumpton, with this energy
use projected to triple by 2030 in the absence of
energy efciency improvements).
22
Thematic Investing: Exploring the Key
Underlying Themes
Climate Change
Climate change is projected to have multple and varied
impacts on water resources, natural ecosystems, food
security, human health and many other sectors of
the global economy, in unpredictable and potentally
catastrophic ways.
21
Sonens Thematc investng strategies address the issue
of climate change in multple approaches, specifcally:
By improving the resilience of regions and
populatons most vulnerable to the deleterious
efects of climate change, for example the poor,
rural communites who depend on the land for their
subsistence;
By investng in products and services that are
helping to reduce global consumpton paterns that
contribute to climate change, focusing on energy
efciency, renewable energy and waste; and
By directng investment resources to the provision
of technologies and infrastructure that not only
help to reduce GHG emissions, but also promote

21. Yamba, Moomaw, M. Kamimoto, J. Nyboer, K. Urama, and T. Weir. Special Report on Renewable Energy Sources and Climate Change Mitgaton. Cambridge
University Press, Cambridge, United Kingdom and New York, NY, USA.
22. Internatonal Energy Agency. Energy Efciency-FAQs.
Table 9: Fixed Income Managers Thematic Impact Strategies
Thematc
Manager
Thematc Impact Thesis Manager Impact Strategy
Manager A Investments that support low- and moderate-in-
come communites can strengthen communites
and satsfy a variety of investment objectves.
Invest in securites that facilitate low-income
homeownership, rental housing, healthcare and
educaton, small business growth and job creaton.
Manager B Addressing climate change requires
unprecedented global cooperaton through
instruments that facilitate public and private
sector cooperaton. Manager provides access
to innovatve investments dedicated explicitly
to addressing the efects of climate change.
Proceeds from fxed income investments are
used to mitgate climate change (low-carbon
infrastructure, clean technology, energy efciency
and renewable energy) and adapt to climate
change (water and soil erosion, food protecton,
food security and sustainable forest management).
Table 10: Climate Change Thematic Impact: Energy Efciency
Security
(Sector)
Asset Class Energy Efciency Highlights
ARM Holdings
(Informaton
Technology)
Public Equity
(US)
For every wat that is used on a CPU, one more wat is needed to cool it
down. Saving one wat on energy demand thus translates to two wats of
energy savings.
ARM makes the most energy efcient semiconductor chips in mobile devices.
ARM-based processors are expected to be found in more than 90% of the
worlds cell phones, and 22% of all laptops by 2015.
23
Borg Warner
(Consumer Cycli-
cal)
Public Equity
(Global)
Products to manage combuston engines for fuel efciency and reduced
emissions.
Major supplier to the rapidly growing clean diesel and hybrid vehicle market
worldwide.
NY State Energy
Research and
Development
Authority
(Municipal
Bond)
Fixed Income
(US)
NY State Energy Research and Development Authority (NYSERDA)
provides funding to support sustainable community development, create
opportunites for green jobs and establish a revolving loan fund. The fund
fnances energy audits and energy efciency retrofts or improvements for
the owners or occupants of residental, mult-family, small business and not-
for-proft buildings.
The statewide program promotes energy efciency and the installaton of
clean technologies to reduce energy costs and reduce GHG emissions.
Access to energy assessments, installaton services, low-cost fnancing and
training for various green-collar careers.
Private Sector
Energy Efciency
(Supranatonal)
Fixed Income
(Global)
Energy conservaton in Chinas industrial sector.
Strengthening government capacity for implementng industrial energy
efciency programs.
Estmated 4 million tons of avoided CO
2
equivalent emissions annually.
Climate Change: Renewable Energy
According to the Intergovernmental Panel on Climate
Change, energy-related GHG emissions, largely from
fossil fuel combuston for heat and electricity generaton
and transportaton, account for around 70% of total
global CO
2
and methane emissions.
24
Clearly, renewable
energy sources can supply energy on a much more
sustainable basis than conventonal fossil fuels, and will
play - indeed are already playing - a key role in long-term
climate change mitgaton. As a target for investment,
however, the renewable energy sector presents multple
challenges, and we must be circumspect about how best
to direct capital into the space.
23. Farivar, Cyrus. Smart Phone Chips Calling for Data Centers. MIT Technology Review (2011).
24. R.E.H. Sims, R.N. Schock, A. Adegbululgbe, J. Fenhann, I. Konstantnaviciute, W. Moomaw, H.B. Nimir, B. Schlamadinger, J. Torres-Martnez, C. Turner, Y. Uchi-
yama, S.J.V. Vuori, N. Wamukonya, X. Zhang, 2007: Energy supply. In Climate Change 2007: Mitgaton. Contributon of Working Group III to the Fourth Assessment
Report of the Intergovernmental Panel on Climate Change. [B. Metz, O.R. Davidson, P.R. Bosch, R. Dave, L.A. Meyer (eds)], Cambridge University Press, Cambridge,
United Kingdom and New York, NY, USA.
Sonens Thematc investments target renewable energy
by investng in:
Companies that own and operate large-scale
renewable energy infrastructure;
Companies that provide essental technology or
services to the renewable energy industry;
Companies that make productve use of waste for
re-purposing or providing energy; and
Companies that support the growth of the sector by
owning or purchasing large quanttes of renewable
energy.
Table 11: Climate Change Thematic Impact: Renewable Energy
Security
(Sector)
Asset Class Renewable Energy Highlights
ABB
(Industrials)
Public Equity
(US)
Largest provider of generators to the wind industry and the largest supplier
of power grids worldwide. 55% of revenues are related to products and
services that reduce GHG emissions.
Corporate growth policy through 2015 identfes mitgatng climate change
through renewable energy investments as key drivers of business growth.
Technologies for smart grid distributon networks include meters, building
automaton systems and high-efciency distributon transformers.
Emerson
(Industrials)
Public Equity
(Global)
Power equipment manufacturer and technology provider, with a growing
portolio of full-service solutons for design, build and management of solar,
geothermal, wind, hydroelectric and biomass power generaton facilites
worldwide.
Design and technology for wind turbines, solar farms and machine
technology for hydro plants.
Commonwealth
Financing
Authority
(Municipal
Bond)
Fixed Income
(US)
Bond proceeds to fnance grants for public and private enttes to generate
industrial improvements, specifcally for alternatve energy projects
including supportng early stage alternatve energy projects and polluton
control projects.
The program provides funds for eforts that include investments in early-
stage actvites to develop and implement alternatve energy and energy
efciency technologies; grants to certain coal electric generatng or co-
generaton units for polluton control projects; and grants, loans or rebates
to individual residents or small businesses for solar energy projects.
Geothermal
Power
Generaton
(Supranatonal)
Fixed Income
(Global)
Green Bond fnancing for a 150MW geothermal power plant in Indonesia to
reduce dependence on coal-fred power generaton.
Reducing estmated annual of 1.1 million tons of CO
2
equivalents annually.
Resource Efciency and Waste
According to the US government, global society has
consumed more natural resources in the last 50 years
than all previous history.
25
And of all the raw materials
consumed in the US over the last 100 years, more than
half were consumed in the last 25 years.
26
With the
size of the global economy expected to double and the
world populaton to increase by one-third by 2030, the
pressure on natural resources, the environment and the
worlds carrying capacity will only intensify.
27

To promote a more sustainable use of materials, the
UN has adopted the concept of Sustainable Materials
Management (SMM) - a systematc approach to using
and reusing materials more productvely over their
entre lifecycles. SMM seeks to:
Use materials in the most productve way with an
emphasis on using less;
Reduce toxic chemicals and environmental impacts
throughout the material life cycle; and
Assure we have sufcient resources to meet todays
needs and those of the future.
28

Sonens Thematc investments pursue the principles of
SMM in a variety of ways, including:
Investng in companies whose main business is
promotng the re-use of materials;
Investng in companies that provide responsible
and appropriate disposal of hazardous industrial
materials; and
Investng in waste disposal infrastructure that
minimizes environmental impact.
25. Sustainable Materials Management. SMM Basic Informaton. Environmental Protecton Agency. May 23, 2013.
26. IBID.
27. Sustainable Materials Management. Green Growth Policy Brief. Organizaton for Economic Co-operaton and Development (2012).
28. Sustainable Materials Management. SMM Basic Informaton. Environmental Protecton Agency. May 23, 2013.
Table 12: Thematic Impact: Resource Efciency and Waste
Security
(Sector)
Asset Class Resource Efciency and Waste Highlights
LKQ
(Consumer Cycli-
cal)
Public Equity
(US)
Natonwide provider of recycled auto engines.
Over 500 facilites collect, dismantle and re-sell replacement parts from
salvaged vehicles and trucks.
82% of each salvaged vehicle is recycled.
Recycling and refurbishing eforts resulted in GHG reductons of 1 million
metric tons (2011).
18 million pounds of automotve bateries recycled and reused (2011).
2.2 million tres reused, recycled or recovered for energy (2011).
Pilot program to recycle foam from seats, which is currently difcult to
recycle.
Pennon Group
(Utlites)
Public Equity
(Global)
Actvely maximizes the value of residual waste through recycling and
transforming to energy where possible. Pennon subsidiary Viridor operates in
the UK and focuses on transforming waste into a resource.
Viridor recycled 37% of all materials in 2013 (up from 35% in 2012), totaling
2.6 million tons of recovered material and 240,463 tons of organic waste
composted.
Renewable energy from waste sources (landfll gas and biogas) totaled 820
GWh in 2013, up from 760 GWh in 2012.
New Jersey
Environmental
Infrastructure
Trust
(Municipal
Bond)
Fixed Income
(US)
2012 Series bonds provide low-cost fnancing for the constructon of
environmental infrastructure projects, including wastewater, nonpoint source
polluton controls and safe drinking water.
To safeguard water quality, landflls are eligible for fnancing, including
constructon, closure and restoraton to prevent, reduce control or treat
leachate.
Municipal Solid
Waste Infra-
structure
(Supranatonal)
Fixed Income
(Global)
Green Bond fnancing to increase solid waste management from 0% to 80%
in Amman.
Reduces CO
2
emissions by 212 metric tons and produces 6 MWhs of
electricity annually.

Water
According to the United Natons, the success of
the worlds economy depends on the sustainable
management of water resources and on providing
adequate water supply and sanitaton services to the
worlds growing populaton.
29
Water not only provides
the most basic sustenance for human survival, but it
also directly afects energy, food security and human
health. Some forecasts predict that under current
economic growth rates, and without efciency gains, by
2030 global water demand will exceed available water
resources by 40%. And in developing countries, this
defcit could reach 50%.
30
By 2015, an average annual investment of $772 billion
will be required for water and wastewater services
around the world just to keep pace with populaton
growth, urbanizaton and industrial water needs.
31
In
the US alone, much of the water delivery system was
frst installed afer World War II and is nearing the end
of its useful life. An estmated 7 billion gallons of water
are lost daily due to leaky pipes in the US; with 240,000
water mains rupturing every day.
32
Restoring existng
water systems and expanding new systems to serve a
growing populaton will cost at least $1 trillion over the
next 25 years in the US alone.
33

According to the World Economic Forums Water
Initatve, improving water infrastructure for cites,
energy and industry will become urgent across
all economies, especially in Asia. Poor quality and
inefcient water supply services will be seen as a brake
on economic growth. Private fnance will be required, as
public funds will not be able to fll the water investment
gap.
34
Sonens Thematc investments in water address global
water issues by:
Investng in infrastructure that ensures the efcient
delivery and availability of water in our aging and
growing cites, partcularly in regions with high rates
of populaton growth;
Supportng emerging innovatons that promote a
more efcient use of this limited resource; and
Investng in projects that build water resilience
within disadvantaged populatons, reducing the
risk of fooding as well as mitgatng erosion and
denudaton from severe climate events.
29. United Natons Water, and Rio+20 Summit. Water in a Green Economy. Rio+20 Summit Conference Book (2012).
30. Chartng Our Water Future. 2030 Water Resources Group (2009).
31. Samans, Richard and Dominic Waughray. The Bubble is Close to Burstng. World Economic Forum (2009).
32. 2013 Report Card for Americas Infrastructure. Americas Society of Civil Engineers (2013).
33. Buried No Longer: Confrontng Americas Water Infrastructure Challenge. American Water Works Associaton (2012).
34. Samans, Richard and Dominic Waughray. The Bubble is Close to Burstng. World Economic Forum (2009).

Table 13: Thematic Impact: Water Infrastructure and Utilities
Security
(Sector)
Asset Class Water Infrastructure and Utlites
Danaher
(Industrials)
Public Equity
(US)
Danahers water quality and treatment business provides instrumentaton
and disinfecton systems to help analyze and manage the quality of ultra-
pure, potable water and wastewater in residental, commercial and industrial
applicatons.
UV disinfecton systems cost 80% - 90% less than other treatments, does
not require chlorine and can meet the US EPAs increasingly stringent quality
standards for micro-organisms.
UV facility in New York is the largest in the world, capable of treatng 2.2 billion
gallons/day.
Copasa
(Utlites)
Public Equity
(Global)
Copasa supplies 14.1 million people in Minas Gerais, Brazil, with water, an
increase of 3.1% since 2011. Copasas sewage infrastructure serves 8.8 million
customers, 6.2% higher than in 2011.
Copasa is investng nearly $4 billion to expand water and sewage services to
100% of the populaton in the service area.
In partnership with the local government, Copasa is expanding basic water and
sewage services in parts of the state with lower human development indices.
Riverside
Sewer Fund
(Municipal
Bond)
Fixed Income
(US)
Build America Bonds fnance capital projects to upgrade local water
infrastructure that support local populaton growth.
Riversides Green Acton Plan calls for increasing the use of recycled water by
30% by 2020, through water re-use from the treatment plant and by shifing a
large water customer to recycled water.
Flood Man-
agement and
Mitgaton
(Suprana-
tonal)
Fixed Income
(Global)
Green Bond fnancing for food management infrastructure improvements to
improve Chinas Huai River Basins resilience to the impacts of climate change.
Berms, channels and irrigaton infrastructure protect 9,500 square km and 6.6
million people from fooding and disasters that occur every three to fve years.
Wastewater collecton, treatment and watershed management in Xining
Municipality.
Reduces the annual food vulnerability of 400,000 people.
Eliminates 2 million tons of untreated wastewater fow into rivers and 900,000
tons of soil erosion.
In support of increasing the availability and quality of one of the worlds most limited and stressed resources, Sonens
Thematc investments target companies that develop and distribute technologies that improve water efciency and re-
use, including purifcaton and treatment.
Table 14: Thematic Impact: Water Efciency and Technologies
Security
(Sector)
Asset Class Water Efciency and Technologies Highlights
Pall
(Industrials)
Public Equity
(US)
Multple technologies to conserve and re-use water, and restore wastewater to
environmentally safe levels before discharge.
Mobile water treatment systems can produce drinking water from virtually any
raw water source and are ofen deployed afer natural disasters or unantcipated
disruptons to municipal supplies.
Kurita
(Industrials)
Public Equity
(Global)
Ultrapure water producton systems.
Wastewater treatment for industrial and commercial uses.
Water reclamaton and re-use from industrial uses.
Soil and groundwater remediaton.
Hilton Head
Public
Service Dis-
trict
(Municipal
Bond)
Fixed Income
(US)
Bond proceeds used to refund outstanding debt and fnance improvements to
the local water treatment system.
Infrastructure includes a reverse osmosis treatment facility and aquifer storage
and recovery well.
100% of residental and commercial wastewater is distributed to wetlands and
used for irrigaton (1 billion gallons/year).
Water Re-
source Man-
agement
(Suprana-
tonal)
Fixed Income
(Global)
Water management system and infrastructure investments in Tunisia, a region
with severe water scarcity, have allowed the country to capture over 80% of
useable water.
Irrigaton infrastructure for over 25,000 hectares.
10,000 households provided with drinking water.
Community Development and Poverty Alleviaton
Beyond investng for environmental impacts on climate
change and resource efciency, Sonens strategies also
provide investors with direct exposure, across asset
classes, to various social impact investments. Sonens
Public Equity strategies provide a range of consumers with
goods and services that can enhance their lives, such as
access to basic fnancial services and infrastructure.
Fixed Income strategies ofer direct exposure to
investments that target disadvantaged populatons
in the US, specifcally providing access to afordable
homeownership, small business development loans
and pooled investments into community facilites that
provide care for low-income seniors.

Global Fixed Income investments provide access to
World Bank and European Central Bank Green Bonds,
whose proceeds are explicitly used for adaptng to and
mitgatng the efects of climate change. These bonds
ofen maintain a focus on poor, rural populatons who
are most vulnerable to the impacts of climate change
such as fooding and disruptons in subsistence farming.
Table 15: Thematic Impact: Community Development and Poverty Alleviation
Security
(Sector)
Asset Class Community Development and Poverty Alleviaton Highlights
Visa
(Financials)
Public Equity
(US)
Visas fnancial inclusion program includes greater access to basic fnancial
services through a broad electronic payments network and fnancial educaton
programs.
Partnerships with mobile payments providers expand Visas reach. In Zambia
alone, 10% of the natonal GDP is business-to-business mobile payments.
Actve services throughout Latn America, Africa, India and Southeast Asia.
27 million people in 30 countries use Visas fnancial literacy tools.
Sabesp
(Utlites)
Public Equity
(Global)
Water and sewage services to residental and commercial use throughout So
Paulo State, Brazil. Sabesp provides water to 27 million people and sanitaton to
20 million people in the So Paulo metropolitan area.
By 2020, Sabesp plans to make 1.6 million new water connectons and 1.65
million sewage connectons toward its long-term goal of universal sanitaton
services in its market.
Target to reduce infrastructure water losses by 45% through 2019 (from 2013
levels).
35
Capital Green
Apartments
(Project Loan)
Fixed Income
(US)
Financing for low-income mult-family housing.
All vacant units must be leased to households earning no more than 50% of
adjusted median income for the area.
Urban In-
frastructure
and Financial
Services
(Suprana-
tonal)
Fixed Income
(Global)
Improve availability and fuel efciency of public transportaton feet in
metropolitan Colombia, where 75% of the populaton relies on such service.
Improve air quality and reduce CO
2
emissions by 250,000 metric tons/year.
Catastrophe risk insurance in Macedonia and Serbia increases farmers, home-
owners and governmental agencies access to fnancial protecton from regional
climate change hazards, facilitatng the growth of catastrophic risk insurance in
vulnerable communites.
35. Sabesp Financial Statements, 31 December, 2013.
1. Politcal Spending greater transparency in how
corporatons spend resources on lobbying eforts;
2. Sustainable Governance establishing board-level
sustainability commitees, greater disclosure and
reportng on sustainability risks and opportunites;
3. Environment reducing electronic waste, increasing
takeback and recycling programs, reducing
packaging and sustainable palm oil policies;
4. Board Diversity/Equal Employment Opportunity
(EEO) greater diversity in corporate boards or in
the workplace;
5. Climate and Energy greater disclosure on
company risks related to climate change and
disclosure on energy and water use;
6. Human Rights/Decent Work increasing scrutny
and reportng on human rights conditons
throughout supply chain; and
7. Other internet privacy, data security.
Shareholder engagement and advocacy are important elements of impact investors eforts to infuence
corporate policy towards greater social, economic and environmental sustainability. In 2013, 51 companies
in Sonens equity strategies were subject to 65 various shareholder advocacy actons, including shareholder
resolutons and direct corporate engagement intended to induce specifc changes in management practces.
Sonens managers voted on or partcipated directly in 35 of these actons. Actons were withdrawn for
approximately 28 of these eforts due to agreement from management to address the issue in queston. The
most common issues in 2013s shareholder resolutons include:
IMPACT INVESTING IN
PUBLIC MARKETS
SHAREHOLDER ENGAGEMENT &
ADVOCACY

0
5
10
15
20
Other Human
Rights
Climate &
Energy
Board
Diversity/EEO
Environment Sustainable
Governance
Political
Spending
18
2
16
10
11
7 7
4
6
3
4
0
3
2
Total Shareholder Actions
Number Withdrawn
Chart 22: Subjects of Sonen Public Markets Shareholder Engagement (2013)
Elicitng corporate policy change through such eforts is
ofen a long-term propositon. It is also an incremental
one that typically begins with eforts to induce
corporate management to provide basic disclosures
on its actual practces followed by codifying desired
policies in corporate bylaws and governing documents.
While some shareholder victories may seem small, they
can actually be quite signifcant, partcularly when large
industry leaders (such as Nike, see example in Table
16 on the following page) implement policies that set
standards that industry peers feel compelled to follow.
Alongside other insttutonal shareholders and advocacy
groups, a number of notable policy successes were
achieved in 2013 for a variety of holdings in Sonens
Public Equity strategies (see Table 16 on the following
page).
In 2014, Sonen expects additonal shareholder
resolutons and engagements on similar topics, leading
with proposals on politcal spending, followed by a
push for greater responsiveness to climate change and
energy use and board-level sustainability reportng to
shareholders. Sonen monitors ongoing shareholder
and proxy votng actvity in order to solidify its
understanding of the holistc impact created through
Sustainable and Thematc investng, and how ESG issues
and impact themes are further reinforced through
shareholder actons.
SHAREHOLDER ENGAGEMENT AND ADVOCACY
Table 16: Examples of Corporate Policy Shifts Resulting from Shareholder Engagement
Company Issue and Request Result
3M Politcal Spending - Proposals requestng beter
lobbying policies, disclosure and oversight,
including indirect initatves through trade
associatons and think tanks.
Agreed to add specifc language to policy that
requires clarity on what groups may be sponsoring
contentous legislaton. Withdrew from membership
in American Legislatve Exchange Council (ALEC).
Lincoln Elec-
tric
Sustainable Governance - Sustainability
Reportng - Proposal that Lincoln adopt
quanttatve company-wide goals for reducing
GHG emissions from operatons and report on
its plans to achieve these goals by fall 2014.
Dialogue resulted in agreement to set GHG reduc-
ton targets and increase sustainability reportng
signifcantly in 2014.
United
Natural
Foods
Other Environment - Resoluton for company to
issue a report assessing water risk in their supply
chain and actons to mitgate the impact of
water scarcity on long-term shareholder value.
In 2013, United Natural Foods delivered on its
commitment to conduct and report on a water
risk assessment in its Alberts Organics division.
The companys management reported that water
analysis tools could help the company evaluate
existng and prospectve supplier relatonships.
Starbucks Other Environment - Request that Starbucks
set a target date for sourcing 100% Certfed
Sustainable Palm Oil or for purchasing
GreenPalm certfcates covering 100% of
sourced palm oil, with plans to verify suppliers
compliance with the policy.
Agreed to source 100% from sustainable sources by
2015.

Company Issue and Request Result
Nike Sustainable Governance Sustainability
Reportng - Shareholders request that the Board
of Directors take the steps necessary to require
the companys signifcant suppliers to each
publish an annual, independently verifable
sustainability report that the company makes
available to its shareholders.
Withdrew a co-fled resoluton that pushed ESG
transparency through supply chain. Nike agreed to
a phased-in approach that will encourage major
suppliers to publish their own sustainability reports.
Target Other Environment - Request to implement
electronics recycling policies, take back
programs and preventon of e-waste exportng.
Proposal withdrawn due to companys agreement
to address the issues.
Mondelez
Interna-
tonal
Human Rights - Decent Work
1. Extended producer responsibility increase
rates of packaging recycling to reduce
related carbon emissions.
2. Request that company produce annual
sustainability report, focusing specifcally
on gender equality throughout the supply
chain.
1. Company now determines the percentage
of post-consumer recycled material package
design, including energy and carbon dioxide
emissions required to create packaging.
2. Company agreed to conduct and publish
third-party impact assessments on women
in supply chains and sign on to UN Womens
Empowerment Principles.

Table 16: Examples of Corporate Policy Shifts Resulting from Shareholder Engagement (continued)
Environmental, Social and Governance performance
data show that Sonens collecton of public markets
securites have materially outperformed relevant
market benchmarks on Key Performance Indicators such
as carbon emissions, environmental polluton and water
use. Sonens public markets securites also illustrate
outperformance in social and governance KPIs such as
worker health and safety, raw material sourcing free of
confict, corrupton and board diversity.
Thematc investments in all asset classes focus on
climate change, specifcally through products and
technologies that increase energy efciency and
promote renewable energy use. Other Thematc
focus areas include resource efciency, waste and
polluton and social and community development for
disadvantaged populatons.
The various impacts across Sustainable and Thematc
investments are synergistc and mutually reinforcing,
and are further amplifed by the actons taken on
the part of asset owners who advocate for greater
In this inaugural impact report, we have atempted to illustrate how impact is being created across our
public markets strategies. Through a careful and deliberate process of Impact Implementaton, comprising
rigorous manager selecton, an integraton of Responsible, Sustainable and Thematc impact investment
approaches, and the development and evaluaton of actual aggregated performance data, we believe
we have demonstrated an ability to deliver genuine breadth and depth of impact across our frms public
markets investment platorm.
IMPACT INVESTING IN
PUBLIC MARKETS
LOOKING AHEAD

sustainability, transparency and responsibility to all
stakeholders from companies in their portolios.
Impact Looking Forward
Over the long term, Sonen will seek to explore the
relatonship between the ESG KPIs that we examine and
the related fnancial returns of underlying securites. We
will build on the work of others in the industry who are
exploring sustainability reportng standards, and build
on the premise of the positve relatonship between
impact returns and fnancial returns.
This report consttutes only the frst iteraton of
Sonens impact reportng framework. As we contnue to
innovate on impact reportng and evaluaton for clients,
we antcipate more client-focused impact dashboards
that refect specifc and customized interest areas. We
are implementng plans to ensure a more thorough data
collecton process across strategies to inform clients
of the impact they are creatng, and provide further
knowledge for Sonens ongoing impact evaluaton.
In 2014, Sonen will expand impact reportng to include
high-impact private strategies. We believe that the
private markets provide compelling opportunites
to target specifc social and environmental impact
themes and objectves while striving to meet long-term
investment objectves. As such, our private markets
investments are optmized to deliver both atractve
fnancial returns and explicit, meaningful impact.
Private markets investng with Thematc exposure
gives investors an opportunity to direct their resources
to enterprises that generate explicit social or
environmental benefts. These benefts are typically
delivered through goods, services or technologies
provided to the marketplace, and can typically be
expressed by specifc outputs that map to broader
social or environmental objectves. The ability to
express such outputs clearly provides an excellent
opportunity for impact investors to connect their
investng with specifc social or environmental actvites
and outcomes. Such impacts can be further enhanced
by:
A. Selectng managers and funds that are highly
aligned with specifc or intended social or
environmental objectves; and
B. Working with managers to strengthen their own
data collecton and reportng capabilites.
We seek to create portolios that meet specifc target
allocaton and diversifcaton needs across geography,
sectors, investment stage and fund management teams
while providing comprehensive coverage of critcal
social and environmental impact themes. The focus
sectors of Sonens private markets strategies e.g.,
sustainable tmberland and agriculture, clean power,
environmental infrastructure, healthcare and access
to fnancial services refect the areas in which we
believe impact and investment objectves are not only
compatble but also mutually reinforcing.
Appendix I: Acronyms and Abbreviations
ALEC: American Legislatve Exchange Council
EICC: Electronic Industry Citzenship Coaliton
EEO: Equal Opportunity Employment
EPA: Environmental Protecton Agency
ESG: Environmental, Social and Governance
GHG: Greenhouse Gas
GRI: Global Reportng Initatve
GWh: Gigawat Hour
H&S: Health and Safety
KPI: Key Performance Indicator
MWh: Megawat Hour
NOx: Nitrogen Oxide
PRI: Program Related Investments
RFP: Request for Proposal
SMM: Sustainable Materials Management
SOx: Sulfur Oxide
WBGB: World Bank Green Bond
VOC: Volatle Organic Compound
Appendix II: Glossary of Terms
Controversial Sourcing KPI: This Key Performance
Indicator evaluates the extent to which companies rely
on materials that originate in regions associated with
human rights or labor abuses. While the issue afects
many industries, controversial sourcing is of partcular
importance for the technology industry, where
electronic components for mobile phones, tablets,
computers and electronic circuits ofen require minerals
such as tn, tungsten and copper.
GHG: Greenhouse Gases are gases in an atmosphere
IMPACT INVESTING IN
PUBLIC MARKETS
APPENDICES

that absorb and emit radiaton within the thermal
infrared range. This process is the fundamental cause of
the greenhouse efect.
Health and Safety KPI: This Key Performance Indicator
monitors the degree to which underlying securites
maintain related policies and procedures in the
workplace in order to ensure worker safety. This is of
partcular concern overseas, where such management
may be less stringent or labor standards may be more
relaxed.
Impact Implementaton: The combinaton of
investment approaches that themselves provide
diversifed and complementary impacts within and
across asset classes, and that includes impact actvites
beyond security selecton, such as proxy votng and
shareholder advocacy actvites that can amplify the
Sustainable and Thematc outcomes from various
investment strategies.
Impact Scorecard: A dashboard used to track the
integrated impact due diligence process to evaluate
managers and strategies along quanttatve and
qualitatve levels.
MSCI ACWI: The MSCI ACWI Index is a free foat-
adjusted market capitalizaton weighted index that is
designed to measure the equity market performance
of developed and emerging markets. The MSCI
ACWI consists of 45 country indices comprising 24
developed and 21 emerging market country indices.
The developed market country indices included are:
Australia, Austria, Belgium, Canada, Denmark, Finland,
France, Germany, Greece, Hong Kong, Ireland, Israel,
Italy, Japan, Netherlands, New Zealand, Norway,
Portugal, Singapore, Spain, Sweden, Switzerland, the
United Kingdom and the United States. The emerging
market country indices included are: Brazil, Chile,
China, Colombia, Czech Republic, Egypt, Hungary,
India, Indonesia, Korea, Malaysia, Mexico, Morocco,
Peru, Philippines, Poland, Russia, South Africa, Taiwan,
Thailand and Turkey.
Private Markets (Not Marked-to-Market): Investments
that cannot be exchanged or converted to cash easily
without a substantal loss in value.
Public Markets (Marketable Securites): Investments
that can be converted to cash quickly at a reasonable
price.
Responsible Investng: Investments which avoid
specifc industries or business lines with excessive ESG
risks, or include objectonable business actvites.
Russell 3000 Index: The Russell 3000 Index measures
the performance of the largest 3000 US companies
representng approximately 98% of the investable US
equity market. The Russell 3000 Index is constructed
to provide a comprehensive, unbiased and stable
barometer of the broad market and is completely
reconsttuted annually to ensure new and growing
equites are refected.
Supply Chain Labor Management KPI: This Key
Performance Indicator evaluates the extent to which
companies adhere to internatonal norms on labor,
including the eliminaton of child labor, provision of safe
work environments and provision of compensaton in
accordance with local law.
Sustainable Investng: Investng in securites across
asset classes that exemplify high performance along
APPENDICES
Environmental, Social and Governance (ESG) standards
and criteria.
Thematc Investng: Investment approach in which
asset owners direct their resources to specifc social and
environmental impact themes and related needs that
refect issues of global urgency.
Appendix III: Important Disclaimers
Limited Purpose of the Report: This document is
provided for informatonal and educatonal purposes
only. Any reference to a partcular investment, portolio
or security contained in this report does not consttute
a recommendaton or an ofer by Sonen Capital to buy,
sell or hold such investment or security. This report
does not consttute a solicitaton or ofer to provide any
advice or services in any jurisdicton, including without
limitaton, any jurisdicton in which such a solicitaton
or ofer is unlawful or to any person to whom it is
unlawful.
No Financial, Investment, Tax or Legal Advice: The
informaton herein is not intended to provide, and
should not be construed as, fnancial, investment, tax or
legal advice. The informaton contained herein does not
take into account the partcular investment objectves
or fnancial circumstances of any partcular recipient,
or whether or not any recommendaton, investment,
security or strategy described herein is suitable or
appropriate for the readers investment objectves and
fnancial situaton. Recipients of this report are strongly
urged to consult with their own advisers regarding any
potental strategy, investment or transacton.
Third-Party Sources: Sonen Capital has obtained
certain informaton in this report from third-party
sources that it believes to be reliable, but such
informaton has not been independently verifed and
no representaton as to its accuracy or completeness is
made. Except as otherwise indicated, the informaton
provided herein is based on maters as they exist as
of fscal year 2012 and not as of any future date. This
presentaton will not be updated or otherwise revised
to refect informaton that may become available, or
based upon any change in circumstance occurring afer
the date that appears on the cover of this presentaton.
MSCI Source Data: Neither MSCI nor any other party
involved in or related to compiling, computng or
creatng the MSCI data makes any express or implied
warrantes or representatons with respect to such data
(or the results to be obtained by the use thereof), and
all such partes hereby expressly disclaim all warrantes
of originality, accuracy, completeness, merchantability
or ftness for a partcular purpose with respect to any
of such data. Without limitng any of the foregoing, in
no event shall MSCI, any of its afliates or any third-
party involved in or related to compiling, computng
or creatng the data have the liability for any direct,
indirect, special, punitve, consequental or any other
damages (including lost profts) even if notfed of the
possibility of such damages. No further distributon or
disseminaton of the MSCI data is permited without
MSCIs express writen consent.
MSCI ESG Research:
This document and all of the informaton contained
in it, including without limitaton all text, data,
graphs, charts (collectvely, the Informaton) is the
property of MSCl Inc. or its subsidiaries (collectvely,
MSCI), or MSCIs licensors, direct or indirect
suppliers or any third party involved in making or
compiling any Informaton (collectvely, with MSCI,
the Informaton Providers) and is provided for
informatonal purposes only. The Informaton may
not be reproduced or redisseminated in whole or in
part without prior writen permission from MSCI.

The Informaton may not be used to create
derivatve works or to verify or correct other data or
informaton. For example ( but without limitaton),
the Informaton many not be used to create indices,
databases, risk models, analytcs, sofware, or in
connecton with the issuing, ofering, sponsoring,
managing or marketng of any securites, portolios,
fnancial products or other investment vehicles
utlizing or based on, linked to, tracking or
otherwise derived from the Informaton or any
other MSCI data, informaton, products or services.

The user of the Informaton assumes the
entre risk of any use it may make or permit
to be made of the Informaton. NONE OF THE
INFORMATION PROVIDERS MAKES ANY EXPRESS
OR IMPLIED WARRANTIES OR REPRESENTATIONS
WITH RESPECT TO THE INFORMATION (OR THE
RESULTS TO BE OBTAINED BY THE USE THEREOF),
AND TO THE MAXIMUM EXTENT PERMITTED BY
APPLICABLE LAW, EACH INFORMATION PROVIDER
EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES
(INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF ORIGINALITY, ACCURACY,
TIMELINESS, NON-INFRINGEMENT, COMPLETENESS,
MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE) WITH RESPECT TO ANY OF THE
INFORMATION.
Without limitng any of the foregoing and to the
maximum extent permited by applicable law, in
no event shall any Informaton Provider have any
liability regarding any of the Informaton for any
direct, indirect, special, punitve , consequental
(including lost profts) or any other damages even
if notfed of the possibility of such damages. The
forego ing shall not exclude or limit any liability that
may not by applicable law be excluded or limited,
including without limitaton (a s applicable), any
liability for death or personal injury to the extent
that such injury results from the negligence or
wilful default of itself, its servants, agents or sub-
contractors.

Informaton containing any historical informaton,
data or analysis should not be taken as an indicaton
or guarantee of any future performance, analysis,
forecast or predicton. Past performance does not
guarantee future results.

None of the Informaton consttutes an ofer to sell
(or a solicitaton of an ofer to buy) , any security,
fnancial product or other investment vehicle or any
trading strategy.

MSCIs indirect wholly-owned subsidiary
Insttutonal Shareholder Services, Inc. (ISS)
is a Registered Investment Adviser under the
Investment Adv isers Act of 1940. Except with
respect to any applicable products or services
from ISS (including applicable products or services
from MSCI ESG Research Informaton , which
are provided by ISS), none of MSCIs products
or services recommends, endorses, approves or
otherwise expresses any opinion regarding any
issuer, securites, fnancial products or instruments
or trading strategies and none of M SCIs products
or services is intended to consttute investment
advice or a recommendaton to make (or refrain
APPENDICES
from making) any kin d of investment decision and
may not be relied on as such.

The MSCI ESG Indices use ratngs and other data,
analysis and informaton from MSCI ESG Research.
MSCI ESG Research is produced by ISS or its
subsidiaries. Issuers mentoned or included in any
MSCI ESG Research materials may be a client of
MSCI, ISS, or another MSCI subsidiary, or the parent
of, or afliated with, a client of MSCI, ISS, or another
MSCI subsidiary, including ISS Corporate Services,
Inc., which provides tools and services to issuers.
MSCI ESG Research materials, including materials
utlized in any MSCI ESG Indices or other products,
have not been submited to, nor received approval
from, the United States Securites and Exchange
Commission or any other reg ulatory body.
Any use of or access to products, services or
informaton of MSCI requires a license from MSCI.
MSCI, Barra, RiskMetrics, ISS, CFRA, FEA , and
other MSCI brands and product names are the
trademarks, service marks, or registered trademarks
or service marks of MSCI or its subsidiaries in
the United States and other jurisdictons. The
Global Industry Classifcaton Standard (GICS)
was developed by and is the exclusive property
of MSCI and Standard & Poors. Global Industry
Classifcaton Standard (GICS) is a service mark of
MSCI and Standard & Poors
Assumptons: Certain analyses contained in this report
are based on a number of assumptons which, if altered,
could materially afect the conclusions reached in this
report. Sonen Capital reserves the right to change
any opinions expressed, or assumptons made, herein
without notce.
Russell 3000: Russell 3000 is a registered trademark
of Russell Investments. They have not reviewed or
verifed in any way the informaton presented in this
report.
Copyright Notfcaton: No part of this report may be
reproduced except as authorized by writen permission
from Sonen Capital.

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2013 ANNUAL IMPACT REPORT

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