2019 Impact Report

2019 IMPACT REPORT
PUBLIC AND PRIVATE MARKETS _____ FINANCIAL AND IMPACT REPORTING

1. vv
Table of Contents
Publication Details
Publisher
03 Leadership
Perspective 29 Impact Analysis
Global Sustainable Real Assets
Sonen Capital
456 Montgomery Street, Suite 400
San Francisco, CA 94104
04 Executive
Summary 34 Impact Analysis
UN Sustainable Development Goals
07 Impact Evaluation
39 In
info@sonencapital.com
www.sonencapital.com
& Methodology Conclusion
PLEASE SEE IMPORTANT DISCLAIMERS
IN APPENDIX AT THE END OF
THIS DOCUMENT. 09 Impact Analysis
Global Fixed Income
14
This report was published in April 2020.
Impact Analysis
LEAD Author Global Public Equity
Will Morgan
Editing & DESIGN

Amando Balbuena
21 Shareholder Advocacy
& Industry Engagement
Data Source
MSCI ESG Research 25 Impact Analysis
Global Multi-Strategy
2 / Sonen Capital Impact Report 2019 sonencapital.com

Sonen Capital seeks to provide its clients competitive financial returns
with meaningful, positive social and environmental benefits.
Will Morgan
Head of Impact
Sonen’s seventh annual impact report comes at a time of great environmental, social and governance factors into security Thematic investments, allows us to collect defined, un-
human and economic suffering in our Covid-19 world. While we selection); or Thematic (goods and services that actively ambiguous and standardized impact data specific to each
are proud of our work and the positive impacts our investments address specific social and environmental challenges). underlying impact theme in which we invest. All of the data
help create, we are humbly reminded of the enormous challenges We provide qualitative examples of thematic investments that Sonen collects is IRIS compliant, and Sonen now has five
that are before us. Perhaps out of the Pandemic ashes can be across all asset classes so that we can draw a direct years of such performance data, from 2015 to 2019.
borne greater momentum for a transformation towards a more connection between a specific investment and the thematic
5. Finally, we map our four impact investment strategies’ specif-
sustainable society. The Covid-19 crisis can serve as an opportu- goods or services that it delivers.
ic contributions to the United Nations Sustainable Develop-
nity for companies to see how they can tackle an expanding range
2. Environmental, Social and Governance (ESG) key perfor- ment Goals (SDGs), evaluated through the SDGs’ respective
of environmental, social and governance challenges. We can hope
mance indicators. Sonen can describe qualitative and impact targets and impact indicators. Sonen’s strategies
that with this tragedy corporate actors realize that the stakes for
quantitative dimensions of ESG performance for its fixed make definitive contributions to eight SDGs.
sustainability have been raised. In the midst of the Pandemic, our
income and public equity investments. For our public equi- Beyond our impact investing activity, Sonen continues to work
work is more important than ever. And the reporting on our impact
ties investments, we illustrate sustainability performance alongside other like-minded investors to help influence corpo-
generation over the past year takes on even greater meaning. We
through relative comparisons across eight environmental, rate sustainability and transparency practices, through direct
hope you share this view and find in the following pages some
social and governance (ESG) key performance indicators. shareholder engagement, participation in policy campaigns
solace that together, we can make a difference.
For 2019, and for the second year in a row, Sonen’s global and through publishing articles that describe our investment
equity strategy outperforms the market benchmark on all discipline and the intended impacts of our various strategies. As
As in our past six annual reports, we illustrate the social and
eight performance indicators that we evaluate. always, our impact evaluation and reporting process continues
environmental impact of our investments by employing multiple
impact evaluation methodologies. Since we began evaluating 3. Illustrating contributions to specific social and environmen- to evolve in sophistication, largely as a result of the increasing
and reporting the impact of our investment strategies in 2013, tal challenges through Thematic investments. Thematic availability of relevant data and the improved quality of reporting
we have concluded that no single approach to impact measure- fixed income investments can often easily demonstrate how across underlying investments.
ment works sufficiently to capture the breadth of impact creation a municipal or a sovereign bond’s proceeds finance specific
across asset classes. To gain greater clarity on the impact that is social or environmental activities. Similarly, Thematic We are pleased to share with you the results of our work. We
created across distinct asset classes and investment strategies, public equity investments deliver goods or services that regularly publish the methods by which we pursue and evaluate
and even within asset classes, Sonen relies on the evaluation and directly relate to a social or an environmental issue, such as positive impact on our website, www.sonencapital.com. Thank
reporting approaches described below. healthcare, water treatment, or sustainable infrastructure. you for your interest in Sonen Capital.
Sonen uses its own typology to describe these Thematic
1. For all asset classes, we first qualify underlying investments
contributions. - Will Morgan,
as either Responsible (avoiding negative impact); Sustain-
Head of Impact
able (actively integrating non-financial variables such as
4. Our Sustainable Real Assets strategy, comprised 100% of Sonen Capital

Executive Sonen Capital seeks to provide its clients competitive financial returns with meaningful, positive social and
Summary
environmental benefits.
Sonen’s impact investments in public markets, encompassing global equity and global fixed income, offer
investors exposure to corporate and government leaders in sustainability practices (measured through specific
environmental, social and governance data). Sonen’s public markets strategies also provide investors clear expo-
sures to specific goods and services that explicitly target various social and environmental impact themes.
Our global equity holdings focus on corporations with leading sustainability practices, reflecting better manage-
ment quality which we believe leads to superior financial performance. Similarly, our fixed income investments
reflect strong corporate or government sustainability and financial profiles across municipal, corporate, sovereign
and supranational issuers. More than a third of both the public equity and fixed income strategies focus on
providing goods and services that align clearly with specific impact themes, such as health, climate change or
economic development.
Sonen’s absolute return strategy, now in its fourth year, provides investors with an intermediate liquidity profile
with low correlation to the broader markets and, typically, less volatility, and focuses on key impact themes
including renewable energy and financial services in both the developed and developing markets.
Lastly, Sonen’s global sustainable real assets strategy, now encompassing 14 investments across five impact
themes, provides investors with a clear connection to physical assets that contribute directly to global sustain-
ability imperatives. Investments are selected for their ability to provide contributions to four large-scale impact
outcomes relating to sustainability, renewability, efficiency and restoration.
In all four strategies, we draw connections between the underlying holdings and eight of the UN Sustainable
Development Goals. Doing so illustrates how our strategies provide critical alignment between investment capi-
tal and some of the world’s most pressing needs.
In 2019, Sonen’s public market strategies provided comparable, and in some cases better, financial returns
(measured against traditional market benchmarks, as opposed to sustainability indices) alongside defined social
and environmental impact value creation. Sonen’s private market strategy, designed to provide returns that are
uncorrelated to traditional markets, provided positive returns during the period, compared to negative returns for
traditional fixed income and public equity markets.

For the second consecutive year, Sonen’s global equity strategy ›› Continuing dialogue with two corporations on share- ›› Five investments in green real estate, focusing on
demonstrates better sustainability performance, relative to holder resolutions that we lead-filed, requesting greater providing environmentally sustainable housing in urban
traditional benchmarks, across all eight key performance indi- corporate disclosure of political spending and related U.S. markets and green workforce housing in South
cators that we monitor. These eight indicators include: expenditures. Africa;
›› Presenting at one corporation’s annual general meeting ›› Six investments in clean power, providing utility-scale
›› Environmental performance: Sonen maintains lower to advocate for our shareholder resolution requesting solar and wind power generation in the U.S. and Europe;
total carbon emissions and carbon intensity, alongside greater corporate disclosure of political spending. Our commercial and industrial solar power installations in
significantly better water use efficiency; shareholder resolution received 43% support from other the Northeast U.S.; and small- and large-scale clean
›› Social performance: Sonen’s holdings exhibit higher rat- shareholders, a significant show of support. power generation in sub-Saharan Africa and in South
ings for health and safety as well as labor management East Asia;
Sonen’s multi-strategy is an absolute return strategy that
and controversial sourcing; and provides exposure to a series of investments with low correla- ›› Two sustainable timber operations, including stream
›› Governance: Sonen’s global equity strategy displays tion to the public equities and the fixed income markets. We restoration and mitigation banking in the U.S.; and
greater gender diversity, board-member independence continue to expand social and environmental impact reporting
›› One investment in environmental infrastructure, focus-
and corporate ethics ratings among corporate boards among Sonen’s multi-strategy investments. Specific thematic
ing on water-related infrastructure across the U.S.
relative to its benchmark. exposures in this strategy include:
›› Financial services to help small- and medium-sized Each underlying investment in Sonen’s real assets strategy
Across global equity and global fixed income, prominent impact enterprises grow across emerging markets, including reports on specific impact indicators, which are aggregated and
themes include: Africa, Latin America and Eastern Europe; summarized in this report.
›› Health (technologies, medicine and physical infrastruc- ›› Small and regional banking based in the U.S., providing
ture); critical financial services for small businesses, farms
›› Energy (renewable and alternative energy technologies, and real estate transactions; and
energy efficiency technologies, and related infrastructure); ›› Renewable energy technologies, producers and service
›› Water (utilities, infrastructure and technologies for purifi- providers and companies focused on the conservation of
cation and re-use); natural resources across consumer goods and industrial
applications.
›› Economic development (affordable housing, small busi-
ness loans, transportation), and Last, Sonen’s sustainable real assets strategy completed its in-
›› Environmental services (large-scale infrastructure, waste vestment period at the end of 2019. Over the year, Sonen made
treatment and remediation). its final two investments for the strategy, both in clean power
(one in Europe, the other in the U.S.), bringing the strategy’s
total number of investments to 14. Underlying investments in
To support and enhance the impact of its global equity strategy,
real assets currently include:
Sonen continued its work in shareholder advocacy and engage-
ment, including:

PERFORMANCE SUMMARY SONEN GLOBAL FIXED INCOME STRATEGY (NET) SONEN GLOBAL FIXED INCOME STRATEGY (GROSS)
SONEN GLOBAL FIXED INCOME STRATEGY VS. BLOOMBERG BARCLAYS GLOBAL AGGREGATE BOND TR INDEX - SINCE INCEPTION 1/3/2013
$115
In 2019 Sonen’s Fixed Income strategy returned 7.35% gross of fees and 6.82% net of
fees vs. 6.84% for the Bloomberg Barclays Global Aggregate Index. Over the last three
years the strategy returned an annualized 4.3% gross of fees and 3.76% net of fees vs. $110
4.27% for the index. Over the last five years the strategy returned an annualized 2.39%
gross of fees and 1.86% net of fees vs. 2.31% for the index. Since inception the strate-
$105
gy has returned 1.42% gross of fees and 0.91% net of fees vs. 1.29% for the index.
SONEN GLOBAL EQUITY STRATEGY $100

In 2019, Sonen’s Global Equity strategy returned 22.85% gross of fees and 22.25% net
of fees vs. 26.35% for the MSCI ACWI IMI Index. Over the last three years the strategy
$95
returned an annualized 14.94% gross of fees and 14.38% net of fees vs. 12.1% for
the index. Over the last five years the strategy returned an annualized 10.84% gross of
fees and 10.30% net of fees vs. 8.34% for the index. Since inception the strategy has $90
returned 12% gross of fees and 11.45% net of fees vs. 9.73% for the index. Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
2012 2013 2014 2015 2016 2017 2018 2019
SONEN GLOBAL MULTI-STRATEGY

In 2019 Sonen’s Multi-Strategy’s offshore fund returned 10.56% gross of fees and SONEN GLOBAL EQUITY STRATEGY (NET) SONEN GLOBAL EQUITY STRATEGY (GROSS)
9.84% net of fees. Over the last three years the strategy returned an annualized 7.36% VS. MSCI ACWI IMI ND INDEX - SINCE INCEPTION 1/3/2013
$230
gross of fees and 6.41% net of fees. Since inception the strategy has returned 6.65% $220
gross of fees and 5.69% net of fees. In 2019 Sonen’s multi-strategy’s onshore fund $210
returned 10.63% gross of fees and 9.82%% net of fees. Over the last three years the $200
strategy returned an annualized 7.3% gross of fees and 6.33% net of fees. Since incep- $190
$180
tion the strategy has returned 6.05% gross of fees and 5.07% net of fees.
$170
$160
SONEN GLOBAL SUSTAINABLE REAL ASSETS $150
Before ending its investment period at the end of 2019, Sonen’s Global Sustainable $140
Real Assets Funds completed two new clean power investments, bringing the total $130
$120
number of investments in the strategy to 14. Sonen’s Sustainable Real Assets Fund
$110
includes investments in clean power, green real estate, sustainable timber and environ- $100
mental infrastructure. Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec Mar Jun Sep Dec
2013 2014 2015 2016 2017 2018 2019

Past performance is no indication of future results. Index returns are presented for comparative
purposes only. The returns are unmanaged and do not reflect the deduction of any fees or expenses. Investments in bonds are subject to credit, prepayment, call and interest rate risk. As interest rates rise, bond prices will decline. Credit risk
You cannot invest directly in an index. Foreign and emerging market securities involve certain risks refers to the loss in the value of a security based on a default in the payment of principal and/or interest of the security, or the perception of
such as currency volatility, political and social instability and reduced market liquidity. This perfor- the market of such a default. Data Source: Bloomberg
mance is included for informational purposes only, to demonstrate that impact investing does not
necessarily sacrifice strong investment performance. The performance shown does not necessarily
reflect the portfolio’s current performance, which may be higher or lower than the performance
shown. For the most current performance, contact Sonen.

Impact Since Sonen’s inception in 2011, we have learned that there is no single way to evaluate the impact of an
Evaluation &
investment portfolio. Different asset classes express impact in different ways, and even within asset classes,
impact creation can vary considerably. Because of this challenge, Sonen employs multiple approaches to impact
evaluation and reporting. These approaches are described below.
Methodology 1. For all asset classes, we first qualify underlying investments as Responsible (avoiding negative impact);
Sustainable (actively integrating non-financial variables such as environmental, social and governance
factors into security selection); or Thematic (goods and services that actively address specific social and
environmental challenges). Sonen’s four investment strategies provide a core focus on Sustainable and
Thematic investments.
Traditional Responsible Sustainable Thematic Impact First

Investing Impact Investing Impact Investing Impact Investing Investing Philanthropy
Competitive ESG Risk ESG Maximum-Impact Solutions

Returns Management Opportunities
Seeks financial Investments are Sustainability Targeted themes Social and Financial returns
returns regardless screened out based factors and and financial environmental disregarded in
of Environmental, on ESG risk financial returns returns drive considerations take favor of social and
Social or Governance drive investment investment precedence over environmental
(ESG) factors selection selection financial returns solutions
Negative Screens: Factors Considered: Solutions For: Support For:

Tobacco Carbon footprint Climate change Innovation & Risk Taking
Alcohol Resource use Population growth Proof of Concept/Pilots
Weapons Waste reduction Urbanization Enabling Environments
Gambling Compensation Water scarcity Commercial Capital Leverage
Pornography Product safety Food systems
Nuclear Energy Gender equality
2. Environmental, Social and Governance (ESG) data. We employ ESG data to understand how
companies or governments conduct their business. Within fixed income investing, underlying is-
suers are selected for their ESG profiles – governments that manage ESG risks are typically more
sound investments that carry a lower risk of financial default or underperformance. Within public
equity investments, relative sustainability performance, and indeed impact, is best illustrated
ESG
through performance comparisons across eight environmental, social and governance (ESG) key
performance indicators. For the second year in a row, Sonen’s global equity strategy outperforms
the market benchmark on all eight performance indicators that we evaluate. Within both asset
classes, Sonen provides specific qualitative and quantitative examples of how underlying invest-
ments exhibit strong sustainability performance, relayed through various ESG dimensions.

3. Thematic exposure across asset classes. While ESG data describes how companies or governments conduct their business, thematic
investments describe what underlying investments are actually doing. Thematic investments produce goods and services, or underwrite
projects, that clearly contribute to specific impact themes, including energy efficiency, water access, and economic development. In
Sonen’s typology, public equities are classified as Thematic when at least 50% of their revenues are clearly linked to various social or
environmental impact themes.
Fixed income investments are often easily linked to the projects the bond proceeds underwrite or finance, and we can readily demon-
strate how a municipal or a sovereign bond’s proceeds help finance specific social or environmental activities. To provide greater clarity
on how impact is generated in the fixed income space, we break down these investments into sub-asset classes (i.e. municipal bonds,
corporate bonds, sovereign bonds or supranational bonds, typically development finance institutions like the World Bank) and provide
examples of how finance supports specific social or environmental objectives.
4. Some asset classes enable investors to collect standardized and unambiguous impact data from underlying investments. Sonen collects
such data for our Sustainable Real Assets strategy, which is comprised of 100% Thematic investments across four impact themes. In
this case, our data is based on the Impact Reporting and Investment Standards (IRIS) taxonomy, which enables us to aggregate data
across investments and report impact at the portfolio level. We’re proud to note that Sonen team members were among IRIS’ earliest
practitioners and have not only applied the framework across philanthropic and social investments but also helped build the IRIS
catalog of impact indicators.
5. We map our four impact investment strategies’ specific contributions to the United Nations Sustainable Development Goals (SDGs). The
SDGs encompass 17 ambitious targets aimed to bring the planet to social, economic and environmental sustainability by 2030. SDGs
include underlying impact objectives as well as over 270 proposed impact indicators to evaluate collective progress. Upon publication of
our 2015 Annual Impact Report, Sonen became one of the first asset managers to incorporate the SDGs into its impact evaluation and
reporting. We have since continued to deepen our analysis of how our investments can advance the UN SDG agenda. In 2019, Sonen’s
four strategies made direct contributions to eight of the SDGs.
6. Proprietary Impact Frameworks. Sonen’s Impact Frameworks identify specific social and environmental outcomes that we seek in specific
investment themes. After articulating our intended outcomes, we identify appropriate impact investment strategies across public and
private markets as well as measurement approaches that provide the information necessary to evaluate performance. These frameworks
also include specific guidelines to help our investments avoid business activities that undermine our impact goals. To date, Sonen has
published impact frameworks covering energy, water, sustainable agriculture, green real estate, sustainable infrastructure and financial
services. An additional framework for health/healthcare is underway, and we are beginning to formulate a framework for ethical mining
and resource extraction. Our Impact Frameworks are available to the public in the Thought Leadership section of Sonen’s website.
ADDITIONALITY
7. Sonen’s AIMSTM framework describes four key dimensions to impact creation across asset classes, including Additionality, Intentionality,
Measurability and Scale. Because impact creation is not a binary choice (i.e. it exists or not), the AIMS Framework is a useful tool in un-
SCALE
1
INTENTIONALITY derstanding how impact creation varies across and among asset classes. Sonen originally published this framework in our 2014 Annual
2
3 Impact Report starting on page 12.
MEASURABILITY

Global The Sonen Global Fixed Income strategy seeks to produce competitive risk-adjusted returns while providing
Fixed
clear, meaningful and measurable social and environmental impact. 62% of the strategy includes broad based
exposure to global bonds issued from municipal governments, corporations and sovereign governments that
exhibit leadership through Environmental, Social and Governance (ESG) factors. 34% of this strategy is qualified
as Thematic, providing exposure to specific social or environmental impacts through municipal, corporate and
Income
supranational (such as the World Bank) bonds.
Sonen evaluates the social and environmental impacts within its fixed income investment strategy by assessing
the strategy’s holdings and the specific activities that they underwrite. This approach allows us to identify the
specific social and environmental impact created, ensure consistency with our impact frameworks and map the
contributions to the UN Sustainable Development Goals.
Sonen determines the impact results of the portfolio through the following processes:
A. Classifying the underlying securities as either Responsible, Sustainable or Thematic;
B. Identifying fixed income sub asset classes (e.g. sovereign bonds versus municipal bonds) and the key
activities the bond proceeds support;
C. Detailing key impact themes and how they relate to global sustainability issues; and
D. Evaluating key contributions to the United Nations Sustainable Development Goals (please see the SDG
analysis on page 34).
A. Sonen Global Fixed Income Impact Classification

The chart below illustrates the proportion of Responsible, Sustainable and Thematic holdings in Sonen’s Global
Fixed Income strategy.
IMPACT CLASSIFICATION
62.1% Sustainable
Thematic 34.2%
Global Fixed Income

3.7% Non-Impact Strategy

B. Sonen Global Fixed Income Sub-Asset Classes and Key Impact Themes
The four sub-asset classes in Sonen’s fixed income strategy consist of municipal bonds, corporate bonds, sovereign bonds and supranational bonds. The table below describes examples of Sustainable
and Thematic securities among each fixed income sub-asset class.
SUB-ASSET CLASS SUSTAINABLE THEMATIC TOTAL
Municipal Bonds 1.6% 7.0% 8.6%

Corporate Bonds 3.0% 6.5% 9.4%
Sovereign Bonds 57.2% 4.1% 61.3%
Supranational Bonds 0.4% 16.7% 17.0%
Non-Impact - - 3.7%
TOTAL 62.1% 34.2% 96.3%
SUB-ASSET CLASS SUSTAINABLE THEMATIC
Investment ›› Municipal bonds, or bonds issued by regional governments, selected for government Proceeds used to underwrite specific social or environmental projects, such as local transporta-
Approach ESG profile or general sustainability performance. tion, water/sewerage infrastructure, schools or local economic development.
Weight 1.6% 7.0%

ATLANTIC CITY, NJ GENERAL OBLIGATION BOND COLORADO HEALTH FACILITIES AUTHORITY
Municipal
›› Bonds originally issued in 2013 used for various capital improvements across ›› Impact Theme: Community Development
Bonds
the city, including improvements to city-owned buildings, fire stations and the ›› Issued in 2012, bond proceeds are used to construct a Continuing Care Retirement
boardwalk. Community, called Casey’s Pond, in Steamboat Springs, CO. This is the only retirement
Example
›› Atlantic City received a Bronze certification (2nd highest) from Sustainable Jersey, community of its kind in this region.
reflecting its commitment to sustainability. Initiatives include a city-wide energy ›› Casey’s pond includes 66 skilled nursing beds, 25 assisted living units, 15 memory care
efficiency program, city-wide community gardens, and a bicycle and pedestrian plan units and 47 independent living units.
to increase non-motorized traffic.1

Investment ›› General obligation bonds selected for corporate sustainability profile, evaluated Corporate green bonds whose proceeds underwrite projects with defined environmental benefits,
Approach through ESG performance. such as clean power generation energy efficiency upgrades.
Weight 3.0% 6.5%
Corporate GEORGIA POWER COMPANY HYUNDAI CAPITAL (Green Bond)

›› As a utility, Georgia Power has comprehensive initiatives to grow its renewable ›› Impact Theme: Energy/Energy Efficiency
Bonds
energy portfolio, particularly in comparison to industry peers. ›› Green bond proceeds provide new car installment financing and loans for hybrid vehicles
Example ›› Strong efforts to reduce water use relative to peers. and electric vehicles manufactured by Hyundai and Kia.
›› Comprehensive employee engagement strategy, and internal promotions through
training and professional development.
›› Lags industry peers in board gender diversity, although 93% of board is independent.

Thematic sovereign bonds finance investments in discrete impact themes, typically energy
Investment ›› Bonds issued by national governments, selected for social, environmental and eco-
efficiency, transportation infrastructure, and technologies related to waste management, water
Approach nomic sustainability attributes and evaluated through ESG performance.
treatment and pollution purification facilities.
Weight 57.2% 4.1%

Sovereign
Bonds DENMARK GOVERNMENT BOND KfW (State owned development bank in Germany)
›› Denmark tops the 2019 SDG Index, tracking all countries’ performance on the SDGs. ›› KfW’s Renewable Energies bond portfolio aims to promote the development of electricity and
›› Copenhagen targets becoming the world’s first carbon neutral capital city by 2025. heat from renewable resources in order to reduce greenhouse gas emissions.
Example
›› Leads the world in gender equality due to labor freedoms and women’s participation ›› Eligible projects include: photovoltaic equipment; wind power plants; hydroelectric power
in the workforce.2 stations; biogas generation equipment; and geothermal equipment.
›› Example project: Brandenburg Wind Park. 34,000 MWh of wind power produced annually.

›› Supranational bonds are issued by banks whose equity is owned by multiple sover- Multi-lateral development banks and national government-based institutions. Proceeds are used
Investment
eign states. Bond issues generally support economic and social progress through for various development projects primarily in emerging economies, typically multi-sector covering
Approach
finance and investment. multiple impact themes.
Weight 0.4% 16.7%
Supranational AFRICAN EXPORT-IMPORT BANK (AFREXIMBANK) EUROPEAN INVESTMENT BANK (EIB) CLIMATE AWARENESS BONDS
Bonds ›› Afreximbank offers financing, underwriting, factoring and credit protection among ›› EIB Awareness Bonds underwrite projects in: renewable energy, specifically projects in wind,
other services to stimulate the expansion and development of African trade. hydro, solar and geothermal production, and
Example ›› Comprehensive environmental and social reviews precede any project financing. ›› Energy efficiency projects such as district heating, co-generation, and increased building
›› Expanding role in financing Small & Medium Enterprises (SMEs) through factoring. efficiency through insulation and energy loss reduction.
›› Anti-corruption safeguards are nascent, but need strengthening due to geographical
risks.
TOTAL SUSTAINABLE = 62.1% THEMATIC = 34.2%

C. Sonen Global Fixed Income Thematic THEMATIC SECTORS AND SUB-SECTORS IN SONEN’S GLOBAL FIXED INCOME STRATEGY
Investments Economic Development 4.2%
Issuers in fixed income are evaluated

by what products and services they
Education 0.1%
produce, or how underlying projects
financed by investors contribute Energy 0.6%
to specific social or environmental Health 0.2%
objectives. Thematic investing in fixed Waste & Pollution 0.9%
income provides one of the clearest,
12.4% Other
most tangible connections between Water 1.1%
an investor’s resources and underlying ABS/MBS/SBA Economic
business activity that creates positive 7.0% Development 0.4%
social or environmental impact.
Supranational
16.7% Environmental
The chart to the right illustrates the Service 1.2%
four fixed income sub-asset classes in
Sonen’s fixed income strategy (inner Corporate
circle) as well as the impact themes Bond
evident within each sub-asset class 6.5%
(outer circle). Energy 2.1%
Sovereign
Bond
4.1%
Water 2.4%
Other 0.3%
Economic Development 1.4%

4.2% Economic Development
Energy 0.1%
Environmental Services 0.1%
2.5% Other

KEY IMPACT THEMES IN SONEN’S GLOBAL FIXED INCOME The table below provides qualitative examples from Sonen’s Fixed Income Strategy that typify each impact theme.
STRATEGY
Thematic Total: 34.2% IMPACT THEME 2019 SAMPLE IMPACT FROM GLOBAL FIXED INCOME STRATEGY
15.24% Other Economic ›› Consists of three sub-themes, including community development (small business loans), housing (mort-
Economic Development 10.30%
Development gage-backed securities, senior housing), and transportation (roadways, public transport).
Education ›› Municipal bonds that refinance local schools’ bond payments or construct new charter school facilities.
›› Corporate bonds that finance renewable energy projects, primarily clean power generation
Energy ›› Corporate bonds and municipal bonds that finance renewable energy infrastructure (such as transmis-
sion and distribution); energy efficiency improvements among corporate operations.
Education 0.10% Environmental
›› Sovereign and corporate bonds that invest pollution/waste reduction and treatment.
Services
Environmental ›› Municipal bond financing to finance upgrades to regional hospitals
Health
Services 1.33% ›› Financing to regional retirement and assisted living community with inpatient services.
Energy 2.76%
›› Multilateral development banks’ green bonds financing projects that adapt to and mitigate the effects of
Health 0.17%
climate change globally
Other
Waste & Pollution 0.90% ›› Sectors include clean power generation, energy efficiency retrofits, technical support for small scale agricul-
3.40% Water
tural producers and public transportation.
Waste and ›› Municipal bond financing the acquisition and upgrading of community-level recycling and waste man-
Pollution agement facilities.
›› Municipal bonds that finance water and sewerage infrastructure in the U.S.
Water ›› Municipal bonds that finance waterway management, flood protection, wastewater treatment and
disposal in Europe.
D. Sonen Fixed Income: Sustainable Development Goals A more thorough analysis can be found in the SDG analysis on page 34.
Analysis
Sonen’s Global Fixed Income strategy contributes to the

following United Nations Sustainable Development Goals:
›› SDG 6 – Clean Water
›› SDG 7 – Clean Energy
›› SDG 9 – Industry and Infrastructure
›› SDG 11 – Sustainable Cities and Communities
›› SDG 12 – Responsible Consumption and Production
›› SDG 15 – Life on Land

Global The Sonen Global Equity strategy seeks to produce competitive risk-adjusted returns while providing clear, mean-
Equity
ingful and measurable social and environmental impact. 58% of the strategy pursues investments with broad
based exposure to global equity securities with Environmental, Social and Governance (ESG) leadership qualities
(i.e. sustainable investments) and 35% of the strategy provides highly thematic exposures with specific impacts
along social and environmental dimensions. The balance, 7.1%, is held in cash or highly liquid positions. For the
second consecutive year, Sonen’s Global Equity strategy demonstrates better sustainability performance, relative
to traditional benchmarks, across all eight key performance indicators that we monitor.
Sonen’s approach to evaluating the social and environmental impacts within its global equity strategy is similar
to our fixed income approach. Specifically, our impact evaluation process includes:
A. Classifying underlying securities as either Responsible, Sustainable or Thematic;
B. Comparing the strategy’s relative performance with its market benchmark (the MSCI ACWI) on specific
Environmental, Social and Governance (ESG) key performance indicators;
C. Detailing the key impact themes across the strategy and how those themes relate to sustainability issues
of global importance; and
D. Evaluating key contributions to the United Nations Sustainable Development Goals.
A. Sonen Global Equity Impact Classification

The chart below illustrates the proportion of Responsible, Sustainable and Thematic holdings in Sonen’s
Global Equity strategy.
IMPACT CLASSIFICATION
58.3% Sustainable Thematic 34.6%
Global Public Equity

7.1% Non-Impact Srategy

B. Sonen Global Equity Sustainable Investment Analysis ›› To evaluate securities’ (at individual or portfolio level) respective contribution to the United Nations Sustainable Development
Sonen compares relative environmental, social and gov- Goals. In some cases, proposed impact indicators for the SDGs map well to various ESG data, and, where possible, allow inves-
ernance (ESG) performance of the global equity strategy’s tors to evaluate portfolio contributions to the SDGs.
holdings against conventional financial benchmarks using We believe that companies that exhibit higher performance on various ESG dimensions are simply better investments, reflecting
aggregated ESG data and ratings. Because of the strat- strong management quality and proactive business practices that enhance business sustainability.
egy’s overall composition and global diversification, we
benchmark its financial and impact performance against The following ESG analysis compares the sustainability performance of Sonen’s global equity strategy to that of the MSCI ACWI
the MSCI All Country World Investable Market Index (MSCI benchmark along eight separate ESG indicators. Where possible, Sonen includes previous years’ performance analysis in order to
ACWI), which we feel provides an accurate and appropriate illustrate longitudinal sustainability performance. For the second year in a row, Sonen’s public equity strategy outperforms the MSCI
representation for comparison given the global focus of the ACWI benchmark on all ESG indicators.
strategy.
Environment: Highlights on ESG Performance
ESG performance indicators allow for direct comparisons Sonen evaluates the climate performance of its global equity strategy using two key performance indicators relating to carbon emission:
across industries, sectors or market benchmarks. Sonen Total Weighted Carbon Emissions and Average Carbon Intensity. The chart below illustrates both indicator’s performance for Sonen’s
uses such aggregated ESG data and performance ratings in global equity strategy and the MSCI ACWI.
several ways:
›› To communicate the relative sustainability performance Total Weighted Carbon Emissions: In FY 2018, the most recent year for which data is available, Sonen’s strategy released only 15% of
of the strategy’s holdings, selected specifically for their total carbon emissions, on a weighted basis, emitted by the companies in the MSCI ACWI (797,074 tons vs 5,254,775 tons).
sustainability attributes and contributions to the global
sustainable development agenda; SONEN GLOBAL EQUITY STRATEGY
TOTAL WEIGHTED CARBON EMISSIONS FY2012 - FY2018
MSCI ACWI IMI INDEX
›› As a tool to reduce and ultimately eliminate exposure 9M
to poor ESG performers, such as labor rights violations, 8.14M
disproportionate carbon emissions or ethical scandals 8M
at the board level;
7M 6.55M
›› To compare sustainability performance between indus- 5.96M 5.84M
6M
tries and sectors over time, using data sets that can 5.45M 5.25M
4.99M
Tons CO2
reveal related trends regarding how well a company or 5M

portfolio may be improving such performance; and
4M
3M
2M
1M 1.09M
709k 788k 734k 560k 797k
0 390k
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018

Average Carbon Intensity relays the amount of carbon released Total weighted water withdrawals illustrate the total amount of Social: Highlights on ESG Performance
per unit of sales, a metric used to compare companies in different annual water consumption by companies on a weighted basis. Sonen evaluates social performance along three key performance in-
industries and companies with different market capitalizations. In dicators which we believe are most relevant to impact investors and
SONEN GLOBAL EQUITY STRATEGY
FY 2018 the average carbon intensity was approximately 33% less are important proxies for gauging the overall workforce wellbeing
MSCI ACWI IMI ND INDEX
than its benchmark for every dollar of sales (104 tons versus 313 across large and complex supply chains. These indicators include:
tons. TOTAL WEIGHTED WATER WITHDRAWAL
›› Workforce Health and Safety (i.e. managing workplace risk
FY2012 - FY2018
AVERAGE CARBON INTENSITY of injury);
200M
FY2012 - FY2018 173M ›› Labor Management (reflecting workforce satisfaction and
175M 163M
500
150M
benefits, for example); and
140M 136M
429 125M 125M
125M
›› Controversial Sourcing (the degree to which companies rely
Metric Tons
400 104M
369 114M
100M on raw materials that originate from regions with human
Tons CO2 per $MM sales
307 313
300 281 286 279 75M rights or labor abuses, or whose sourcing may actually
67M
262 50M 57M encourage such conflicts).
47M
200 209 25M 31M
201
0
973K 1M The charts on the next page illustrate the percentage of companies
129 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
100 112 101 104 in the global equity strategy that earn higher ratings than the
Average water withdrawal intensity illustrates water with- average benchmark score for 2019 (as well as previous years’ scores
0 from earlier impact reports). For 2019, and for the second year in a
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 drawals relative to total sales, which allows for a meaningful
comparison across companies of disparate sizes and scales of row, a larger proportion of securities in Sonen’s global equity strategy
SONEN GLOBAL EQUITY STRATEGY earn scores that exceed the average benchmark score for each social
operation.
MSCI ACWI IMI ND INDEX key performance indicator. In previous years, Sonen slightly under-
AVERAGE WATER WITHDRAWAL INTENSITY performed in Labor Management and Controversial Sourcing.
FY2012 - FY2018
Sonen’s global equity strategy continues to outperform the market 150,000 Sonen is monitoring the apparent decline in our Health & Safety
benchmark on both measures and has done so since we began 135,000 130k
scores over the last three years. We believe that the decline in 2019
tracking these measurements in our 2014 Annual Impact Report. 120,000
(from 75% to 53.8% YoY) is due to limited availability of related
Metric Tons per $MM sales
115k
105,000
88,029 data at the time of analysis.
90,000
In addition to measuring carbon emissions, Sonen also evaluates
75,000 66,700
corporate use of water resources. Sonen evaluates water sustain- 60,129 A. Health and Safety: Higher rankings are attributable to
60,000
ability by measuring Average Weighted Water Withdrawals and Av- 45,000 40,738 comprehensive policies to mitigate safety risks, training,
47,787
erage Water Withdrawal Intensity. The chart on the right compares 30,000 27,378 26,790 39,601
operational audits, and improvement targets.
29,581
relative performance for both indicators between Sonen’s global 15,000
2144 318 13,385
equity strategy and the MSCI ACWI Index. 0
Example – Kingspan Group: Kingspan manufactures high-per-
FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018
formance building insulation that increases buildings’ environ-
In both cases, Sonen’s strategy reflects lower total water use mental performance.
and lower rates of water use intensity every year since 2012
›› The company has industry-leading health and safety
(with the exception of water withdrawal intensity for FY2016).

management policies and programs in place to reduce risks ›› Awarded “Best Company to Work For” in Argentina, Chile date conformance with RMAP standards.
of workplace accidents and injuries. (MSCI) and Uruguay in 2018.
›› More than 60% of products and raw materials are external-
›› Kingspan places a high priority on workplace in workplace ›› 46% of the workforce is covered by trade unions or ly certified by agencies with the most stringent standards
Health and Safety, investing nearly $2.2M in 2019 to collective agreements. (MSCI) for excluding conflict minerals from suppliers. (MSCI)
enhance health and safety processes and culture across the
LABOR MANAGEMENT
business and across contractors. The company’s lost time
PERCENT REPORTING ABOVE AVERAGE BENCHMARK SCORE CONTROVERSIAL SOURCING
incident rate fell by almost 7% in 2019 (Kingspan). PERCENT REPORTING ABOVE AVERAGE BENCHMARK SCORE
60%
48.2% 70% 51.0% 50.3%
›› Other related initiatives include safety culture surveys and 48.1% 49.2%
45.3% 50.2% 53.8% 47.4%
50% 48.2% 66.7% 66.7%
questionnaires, poster campaigns, guest speakers who 50.0% 50.2% 49.0%
47.7% 60% 57.0%
45.3% 53.6%
shared their experiences of living with an injury and e-learn- 40%
50.3%
50% 48.2% 49.2% 52.0% 66.7%
ing training platforms. (Kingspan) 50.0%
30%
SONEN GLOBAL EQUITY STRATEGY 40%
40.0%
MSCI ACWI IMI ND INDEX 20%
30% 33.3%
HEALTH & SAFETY 10% 25.0%

20%
PERCENT REPORTING ABOVE AVERAGE BENCHMARK SCORE 0.0%
0%
100% 2013 2014 2015 2016 2017 2018 2019 10%
86.3% 85.3% 85.3% Data not available for 2013
81.6% 79.7%
80% 75.0% 0%
81.5% 2013 2014 2015 2016 2017 2018 2019
76.0%
C. Controversial Sourcing: Higher rankings attributable to
60% 53.8%
54.4% 56.6%
52.9% 51.6% 51.6%
companies able to trace the origin of their raw materials Governance: Highlights on ESG Performance
40% and certify that they were obtained in a way that minimizes Sonen evaluates three indicators on corporate-level governance that
social harm (e.g. slave labor, funding for groups engaged in we believe reflect best practices. These indicators include:
20% human rights violations).
1. Gender diversity on corporate boards: apart from the principle
of corporate boards that should better reflect the population
0% Example: Analog Devices: Analog Devices designs, man-
2013 2014 2015 2016 2017 2018 2019 at large, Sonen takes note that corporations with more gender
ufactures, and markets a broad line (>1,000 products) of
diverse boards exhibit improved financial performance (as
B. Labor Management: Higher rankings attributable to high-performance integrated circuits (ICs) and supercon-
measured by Return on Equity and higher Earnings per Share
providing competitive compensation, benefits or perfor- ductors.
(see this link for 2016 research).
mance incentives; efforts to develop formal communications ›› Ranked among Top Five Industry Leaders on minimizing
channels with employees. risks of conflict minerals within the supply chain (MSCI) 2. Board ethics and fraud rankings, reflecting a company’s ex-
posure to insider trading or ongoing litigation that may reflect
Example – Mercado Libre: Latin America’s most popular ›› Analog reports that 81% of smelters or refiners in poor judgement and corporate leadership; and
e-commerce site. the company’s supply chain were compliant with the
Responsible Minerals Assurance Process (RMAP), an 3. Board Independence, which evaluates the proportion of board
›› MercadoLibre leads industry peers on employee manage-
independent third-party assessment of smelter/refiner members that are independent of corporate management.
ment with training programs focused on skill development,
leadership programs, and university degree support. management systems and sourcing practices to vali-

A. Gender Diversity on Corporate Boards B. Business Ethics and Fraud Rankings Overall ESG Profile of Sonen’s Global Equity Strategy
The chart below illustrates the average percentage of women With the exception of 2016 and 2017, Sonen’s global equity The chart below illustrates the distribution of overall ESG
on corporate boards. For the last four years, Sonen’s global strategy maintains a higher proportion of companies with rankings for Sonen’s global equity strategy compared to the ACWI
equity strategy has maintained a higher average represen- better ratings for managing business ethics and fraud. benchmark. Such rankings are a composite score that reflects a
tation of women on corporate boards as compared to its BUSINESS ETHICS AND FRAUD RANKINGS: comprehensive view of overall ESG performance and related risks.
benchmark. PERCENT REPORTING ABOVE AVERAGE BENCHMARK SCORE The data demonstrates a greater proportion of higher-rated com-
GENDER DIVERSITY ON CORPORATE BOARDS: 100% panies (AAA) among Sonen’s Global Equity strategy as compared
94.4%
AVERAGE PERCENTAGE OF WOMEN ON CORPORATE BOARDS to the benchmark, which is consistent with our focus and process
81.6% 80.8% 80.2% 82.2%
30% 80% 84.7%
80.9%
77.4% 70.4% to hold what we believe are the best-in-class ESG performers
78.3% 76.5% 78.6% 79.6%
75.9% among global equities.
25.8%
25% 60%
23.1% SONEN GLOBAL PUBLIC EQUITY
19.8% 19.5%
20.3% 40% ESG PROFILE
20% 18.7%
19.5% 30%
16.1% 18.0% 26.7%
15% 16.5% 20%
15.2%
13.9% 14.3% 25%
13.4% 22.4% 22.4% 23.0%
0%
10% 2013 2014 2015 2016 2017 2018 2019 20.3%
20%
19.0%
5% C. Percent of Independent Corporate Board Members 17.6%
15%
The chart below illustrates the percentage of independent 14.7%
0% board members (i.e. those members that are not part of the 10.3%
2013 2014 2015 2016 2017 2018 2019 10%
company’s management) among Sonen’s global equity holdings 9.6%
The chart below illustrates the percentage of companies report- compared to the MSCI ACWI. For this indicator, Sonen reflects a 4.4%
5% 5.2%
ing zero women on the board. Sonen’s global equity strategy consistently higher percentage of independent board members
2.6% 1.7%
consistently reports significantly fewer companies that exhibit for the period (2013 and 2014 data is not available) which we 0%
AAA AA A BBB BB B CCC
no board-level gender diversity compared to the benchmark. believe exhibits corporate governance best practices.
COMPANIES REPORTING ZERO WOMEN ON CORPORATE BOARDS INDEPENDENT CORPORATE BOARD MEMBERS D. Sonen Global Equity Thematic Investments
PERCENT REPORTING ABOVE AVERAGE BENCHMARK SCORE
35% Similar to our process in fixed income, Thematic equity secu-
31.4% 80% 77.2% 76.9%
30% 71.0% 70.8% 70.8% rities are evaluated by the extent to which business activities
27.8% 70%
25.6% 25.1% 66.0% 66.7%
align with specific social or environmental objectives. Sonen’s
25% 60% 64.6%
21.9% 59.7% Thematic global equity investments are intended to provide
57.9%
19.5%
20% 50% diverse, complementary and highly targeted impact expo-
17.0%
15%
40% sures that address key sustainability issues, such as climate
13.7% 30% change, resource scarcity and community development. Sonen
10% 11.2% 11.8%
9.8%
20%
also evaluates and reports where thematic investments make
7.8%
5% 6.1% 5.8% various contributions to the UN SDGs.
10%
0%
2013 2014 2015 2016 2017 2018 2019 0%
2015 2016 2017 2018 2019

At the end of 2019, Sonen’s global equity investment strategy maintained thematic exposures in six key areas: Health, Energy, Water, Economic Development, Waste and Pollution, Environmental Services
and Food and Agriculture. Examples of specific underlying holdings for each theme are provided in Table on the next page.
THEMATIC SECTORS AND SUBSECTORS IN SONEN’S PUBLIC EQUITY STRATEGY

Financial Services 0.66%
0.88% Water Utilities Transportation 0.16%
Alt Energy Transportation 0.16%
2.48% Water Treatment
Clean Power Generation 1.15%
Energy Efficiency4.72%
2.42% Water Technology
0.66% Water Infrastructure Economic

Water Development
Treatment & 6.44% 0.82%
Energy Alt Energy Tech 0.30%
1.51% Services Environmental
6.33%
Infrastructure 0.71%
0.14% Technology Waste & Environmental Green Real Estate 0.77%

Pollution Services
1.65% 1.48%
Food & Agriculture Technology
0.72% and Equipment 0.72%
12.49% Other
Health Technology 4.68%

17.17%

GLOBAL EQUITY
IMPACT THEME KEY IMPACT ACTIVITIES OF SONEN’S GLOBAL EQUITY STRATEGY
THEMATIC EXAMPLE
›› Varian treats cancer through a range of oncology treatments. Varian commands over 50% worldwide market share for radiation therapy
HEALTH VARIAN
treatment. (Varian)
FOOD AND ›› CHR Hansen produces cultures, enzymes, probiotics and natural colors used for food, human health and agricultural production. Products
CHR HANSEN HOLDINGS
AGRICULTURE help food producers increase production efficiency and reduce the use of synthetic chemicals and additives. (CHR)
ENVIRONMENTAL ›› Arcadis offers design, consulting and engineering services worldwide for sustainable urban development. The company provides compre-
ARCADIS
SERVICES hensive approaches to urban planning and design, smart transportation and urban regeneration.
›› Siemens is a leading supplier of wind power solutions globally. Siemens maintains a total capacity of 99 GW of wind power, including
ENERGY SIEMENS GAMESA
onshore and offshore installations.
ECONOMIC ›› Credicorp is the largest financial services holding company in Peru. Credicorp provides traditional banking services such as commercial and
CREDICORP consumer loans, credit facilities, insurance and wealth management, but it also has steadily increased its microfinance services throughout
DEVELOPMENT
the region through a key subsidiary, MiBanco.
WASTE AND ›› Stericycle specializes in waste disposal services for multiple industries. Services include hazardous medical and industrial waste treatment
STERICYCLE
POLLUTION and disposal; household and retail hazardous waste; and pharmaceutical waste.
›› H2O Innovations provides technological solutions for drinking water, wastewater and water reuse applications. Municipal drinking water
WATER H2O INNOVATIONS
solutions include nanofiltration and reverse osmosis applications.
E. Sonen Global Equity Sustainable Development Goals

Analysis
Sonen’s global equity strategy contributes to the following
United Nations Sustainable Development Goals:
›› SDG 3 – Health
›› SDG 6 – Clean Water
›› SDG 11 – Sustainable Cities and Communities
Further detail on the Sonen Global Equity strategy’s contribution
to the SDGs can be found in the SDG analysis on page 34.

Shareholder As we have noted in previous reports, Sonen believes that it is critical that the corporate world under-
Advocacy
stands the importance of social and environmental sustainability. Sonen’s work to encourage and support
ESG leadership, disclosure and transparency among the companies in our portfolios is performed through
a blend of dialogue, engagement on key issues and shareholder advocacy.
& Industry
We consider shareholder advocacy a critical lever to express investor Intentionality and Additionality in
public markets (see Sonen’s AIMSTM framework3 for reference). Over 2018 and 2019, our efforts generally
focused on improving corporate sustainability policy given our belief in the importance of ESG perfor-
mance through four areas of activity:
Engagement A. Lead-filing or co-filing shareholder resolutions in order to engage other shareholders or to elicit
a response from corporate management. In 2019, Sonen continued its work on three shareholder
resolutions that it lead-filed to encourage greater transparency on corporate political spending.
Often, filing such resolutions leads to direct dialogue with corporations and can lead to a mutu-
ally agreeable solution. In 2019, Sonen presented its resolution to one annual general meeting,
and maintained active dialogue with two other companies on issues relating to political spending
disclosures.
B. Public advocacy and Industry Affiliations: Sonen regularly lends our voice and AUM to a global
group of like-minded investors and nongovernment organizations to support key topics across E,
S and G issue areas. Affiliations range broadly from animal welfare to chemical safety in products
to gender diversity within corporate leadership.
C. Proxy voting through direct ownership of corporate stock.
A. Lead-Filing or Co-Filing Shareholder Resolutions

In addition to our general advocacy efforts (highlighted in the following section), direct shareholder
engagement is part of Sonen’s active management process. In instances where we identify gaps
within ESG leadership in our portfolios, our first attempts at engagement are made through direct
corporate dialogue, resorting to filing shareholder resolutions with a company if efforts to come to a
mutual agreement are unsuccessful.
In 2019, Sonen continued dialogue with four corporations on shareholder resolutions that it lead-filed
seeking greater transparency in corporate political spending. Highlights of each can be found in the
table on the next page.

2019 SONEN SHAREHOLDER RESOLUTIONS
NATURE OF
COMPANY PROPOSAL STATUS / OUTCOME
ENGAGEMENT
Resolution withdrawn after dialogue with the company revealed little or no related expen-
FORTUNE Proposal requesting disclosures on political spending and
Lead-Filed Resolution ditures, and an agreement to make this policy explicit in the company’s first annual ESG
BRANDS lobbying expenses
report. Finalized in Q1 2019.
INGERSOLL Proposal requesting disclosures on political spending and Resolution withdrawn after dialogue with the company resulted in specific language being
Lead-Filed Resolution
BRANDS lobbying expenses posted to the company website and annual report about political spending and disclosure.
Presented at annual shareholder meeting June 2019. While company management voted
ROPER Proposal requesting disclosures on political spending and
Lead-Filed Resolution against the resolution, 43% of shareholders supported Sonen’s resolution. Sonen will deter-
TECHNOLOGIES lobbying expenses
mine if lead-filing a similar resolution will generate desired results from Roper.
Proposal requesting disclosures on political spending and

HENRY SCHIEN Lead-Filed Resolution Negotiations are ongoing.
lobbying expenses
B. Public Advocacy and Industry Affiliations

As part of Sonen’s engagement and advocacy efforts in sustainability, and in partnership with 11 industry working groups, we continue to participate in initiatives that work to increase transparency
in corporate practices and policies. Overall, these advocacy activities lend our voice, as a sustainability-minded asset manager, by combining our total assets under management with a global group
of investors who advocate for increased transparency and improved performance on key ESG issue areas. The table below highlights Sonen’s various industry affiliations.
Sonen Industry Affiliation PDC is a multi-stakeholder initiative that seeks to support and
catalyze the transition to a low-carbon economy by encourag-
ing and mobilizing institutional investors to decarbonize their
investment portfolios.
CERES: Investor Network on Climate Risk: Represent $20 trillion Chemical Footprint Project: Represents $2.8 trillion in CFP
in assets from 130 institutional investors to advance invest- Signatories assets (investors, retailers, large-scale purchas-
ment practices, corporate engagement strategies and policy ers, and NGOs) that encourage manufacturers and brands to
solutions to build an equitable, sustainable global economy and participate by revealing chemicals of concern that exist within
planet. CDP: Sonen is an investor signatory to CDP. CDP is a not- supply chains or products.
for-profit charity that runs the global disclosure system for
investors, companies, cities, states and regions to manage their
environmental impacts. Sonen encourages companies it owns to
participate in CDP’s annual surveys on carbon emissions, water
use and deforestation-related matters. Farm Animal Investment Risk and Return: Sonen is a founding
Portfolio Decarbonization Coalition: Represents $800 billion in member. The FAIRR Initiative aims to ensure that investors
assets across 32 investors with decarbonization commitments. understand the risks and opportunities that emerge from

intensive livestock farming and poor animal welfare standards,
and to support investors to assess these issues as part of their
investment processes. Sonen’s position on sustainable agricul-
ture and its related investment process is highlighted in a 2018
FAIRR case study. Sustainable Stock Exchanges Initiative: The Sustainable Stock
B-Corps (2016 Best of the World recognition): B-Corps is
Exchanges (SSE) Initiative is a peer-to-peer learning platform
to business what Fair Trade certification is to coffee or USDA
for exploring how exchanges, in collaboration with investors,
Organic certification is to milk. B-Corps are for-profit companies
regulators, and companies, can enhance corporate transparency
certified by the nonprofit B Lab to meet rigorous standards of
– and ultimately performance – on ESG issues and encour-
social and environmental performance, accountability, and
age sustainable investment. The SSE is organized by the UN
Business Benchmark on Farm Animal Welfare: The Business transparency. See Sonen’s score here.
Conference on Trade and Development (UNCTAD), the UN Global
Benchmark is the first global measure of company performance Compact, the UN Environment Program Finance Initiative (UNEP
on animal welfare and, since its inception in 2012, has estab- FI), and the Principles for Responsible Investment (PRI). (More
lished itself as a catalyst for influencing change in corporate info here)
practices on animal welfare management and reporting. BBFAW
invites signatories to sign letters to consumer brands and lend
voice and AUM from an investor in support of best practices. As
GIIRS Platinum Ratings: (Now B Analytics) GIIRS Ratings are
a result of such benchmarking, the number of companies with
the emerging standard for impact measurement in impact
published animal welfare policies has increased from 46% in
investing. They are rigorous, comprehensive, and provide com-
2012 to 75% in 2016. UN Principles for Responsible Investment: Sonen is a signa- parable ratings of a company or a fund’s social and environ-
tory to the UNPRI. The PRI is the world’s leading proponent of mental impact. The GIIRS Rating measures the overall impact of
responsible investment. It works to understand the investment a business on all of its stakeholders. Sonen received the highest
implications of environmental, social and governance (ESG) possible GIIRS Rating in its last assessment. See this Link to
factors and to support its international network of investor sig- Sonen GIIRS rating for more details and to access the actual
natories in incorporating these factors into their investment and ratings report.
Thirty Percent Coalition: The Thirty Percent Coalition seeks ownership decisions. The PRI acts in the long-term interests of
senior leadership in companies and the corporate boardroom its signatories, of the financial markets and economies in which
to reflect the gender, racial and ethnic diversity of the United they operate and ultimately of the environment and society as a
States workforce. The mission of the Thirty Percent Coalition whole. It encourages investors to use responsible investment to
is to promote gender diversity, including women of color, on enhance returns and better manage risks.
corporate boards. Board diversity has been broadly identified as
one of the leading measurements on which there is a compel-
ling correlation with improved shareholder value and company
performance.

Sonen’s Public Participation in Sustainability Issues the current shareholder proposal process works and
2019 Shareholder Proposals by Type
During 2019, Sonen lent its voice in multiple different letter does not need changing. It also identifies significant
writing campaigns alongside other institutional investors, results from this process that have strengthened capital
non-government organizations and private sector companies markets and improved corporate behavior on environ- 20 19
expressing support for a wide range of sustainability issues mental, social and governance matters. More informa-
including climate change, investor rights, human rights and tion from US SIF is available here.
animal welfare.
C. Proxy Voting 15
1. Investor Statement in support of ending forced arbitra-
tion for sexual harassment claims. Under the leadership As part of our ongoing portfolio monitoring, Sonen tracks
of the RISE (Return on Investment and Social Equity) and reports all proxy voting activity. During 2019, compa-
coalition, Sonen, alongside other investors representing nies in Sonen’s strategies were subject to 31 shareholder
proposals, split across various environmental, social and 10 15
$54 billion in assets, asked publicly traded companies
to end the practice of forced arbitration for employee governance topics (depicted on the right).
sexual harassment claims by the end of 2020. Forced
arbitration, among other things, prevents investors from Issues relating to governance practices were most common
5
having access to a company’s history of harassment amongst shareholder proposals, and largely focused on en-
hancing shareholder rights (such as reducing the threshold 3
claims and how they were handled. More information
available here. for shareholders to call a special meeting). Shareholder
proposals relating to employment diversity policies and
0
2. Investor Alliance for Human Rights. Alongside insti- reporting on gender pay gaps were also introduced this year Environmental Social Governance
tutional investors representing $1.2 trillion, Sonen and supported by Sonen’s proxy votes. Over 2019, Sonen’s
submitted recommendations for the most recent review voting record supported 68% of shareholder proposals,
process of the Equator Principles. The Equator Princi- generally supporting votes that we believe are in the best
ples (EP) are a risk management framework used by long-term interests of the company, shareholder value and
financial institutions to identify and manage social sustainability performance. Our voting record is available to
and environmental risks in project finance. Signatories our clients by request.
commit to implementing the EPs in internal policies
and procedures. In 2019, Sonen encouraged an updated
Sample E, S and G issue areas among 2019’s shareholder proposals.
EP framework that insists on Free, Prior and Informed
Consent (FPIC) for any project that affects indigenous ENVIRONMENT SOCIAL GOVERNANCE
peoples. More information available here.
Consider sustainability performance in Consider price reductions for essential Reduce ownership threshold to call a
3. Investors Rights Forum from US Sustainable Investment
executive compensation medications shareholders’ special meeting
Forum (US SIF): Sonen participated in a letter alongside
129 other investors representing $525 billion in assets Report on climate change impact on Prepare reports and policies on employee
Provide report on political expenditures
to express its concern about proposed SEC rules that business operations diversity
would alter the thresholds for filing and/or resubmitting Prepare reports and policies on gender
shareholder proposals. The letter makes the case that pay gaps

Global Sonen’s Global Multi-Strategy (“GMS”) is an absolute return strategy that seeks to invest in assets that
Multi-
have a low correlation to the global equity and fixed income markets, while at the same time achieving
unique and direct social and environmental impact.
Strategy
The Strategy’s focus on highly thematic impact exposures provides a complement to our equity and fixed
income strategies because of its intermediate liquidity profile and low correlation to traditional liquid
assets. The impact focus helps drive global sustainability through two key themes: environmental equity
(renewable energy and natural resource optimization) and trade finance, particularly financial services to
small- and medium-sized enterprises within emerging economies.
IMPACT THEMES WITHIN SONEN GLOBAL MULTI-STRATEGY

40% 38.3%
35%
30.5%
30%
25%
20%
14.2% 15.3%
15%
10%
5%
1.7%
0%
Fossil Free Environmental Trade Finance/ Community Cash
Multi Strat Equity SME Growth Banking
IMPACT SUMMARY FOR SONEN GLOBAL MULTI-STRATEGY
KEY SOCIAL AND ENVIRONMENTAL

EXPOSURE DESCRIPTION
IMPACTS
Provides capital to local finan- ›› Increased access to financial
Trade Finance / cial institutions in emerging and services for small-scale enterprises
Small and Medium underserved markets to stimulate in developing countries.
Enterprise Growth economic growth by supporting ›› Enterprise and employment growth.
SMEs. ›› Focus on women-led businesses.

CONTINUED: IMPACT SUMMARY FOR SONEN GLOBAL MULTI-STRATEGY
EXPOSURE DESCRIPTION KEY SOCIAL AND ENVIRONMENTAL IMPACTS

Invests in solutions to global sustainability issues, through technologies that offer alter- ›› Optimizing the use of natural resources
Environmental Equity
natives to, or make more efficient use of, natural resources, particularly clean energy. ›› Expanding alternatives to carbon-intensive energy production.
Small and regional banks are the primary lenders to U.S. small businesses,
Invests in small and regional banks in the U.S. that provide critical financial services to
Community Banking farms and rural real estate transactions. Sonen is currently exploring impact
small businesses and households.
evaluation.
Fossil Free Provides diversification and the potential for attractive risk-adjusted returns due to ›› Exposure to multiple asset classes with no direct exposure to fossil fuels or
Multi-Strategy exposure to a variety of specialized investment strategies. the fossil fuel industry.
A. Trade Finance / Small and Medium Enterprise Growth most acute. The third related strategy focuses on small and related to job creation; wage increases; creating new access
Financial services including credit, savings, insurance and pay- regional banks based in the U.S., which are the primary lenders to markets and finance; and productivity increases among
ment platforms play a critical role in global social and economic to small businesses, farms and real estate transactions. (In the enterprises receiving financial support. In the latest report, the
development. Evidence shows that expanding financial services U.S., more than 30 million small businesses create nearly half of sub-advisor reports that it provides financial assistance to 11
reduces poverty and expands economic opportunity across all all employment across the country, fueling economic growth for SMEs that collectively created and maintained 1,450 jobs. A
socioeconomic groups. millions of Americans (U.S. Small Business Administration)).9 sample investment, West Kenya Sugar Company Limited, is
highlighted on the next page.
Small and Medium Enterprises (SMEs) play a critical role in Key impacts across all three financial inclusion services-related
economic growth in all economies as a significant source of investments are (i) increased access to financial services, (ii)
employment generation (50% of employment worldwide)4 and enterprise and employment growth, especially for women-led
output growth across the globe. SMEs contribute 50% of total businesses, and (iii) wage growth and increased disposable
GDP in high-income countries5 and 40% of GDP in emerging income.
economies.6 Despite their central role in global economic growth Sample Investment: Trade Finance / Small- and
and employment, SMEs are systematically under-financed by Medium-Sized Enterprise
over $5 trillion annually,7 largely due to the perception from One of GMS’s sub-advisors provides financing to small and
conventional banks that such enterprises are not creditworthy. medium enterprises (SMEs) in Africa, where a shortfall of
According to the World Bank, 600 million new jobs will be such funding constrains the region’s economic growth. SMEs
needed by 2030 in order to absorb the growing global work- comprise the backbone of Africa’s economy, accounting for
force – making SME development a high priority for the global approximately 90% of all companies and providing nearly 80%
sustainability agenda.8 of the region’s employment. A study conducted by Investisseurs
GMS includes three separate investments that expand access & Partenaires found that 40% of SMEs in Africa identified the
to finance, facilitate job growth and provide local economic primary factor constraining their growth as accessing finance.
stimulus. Two of the underlying investments focus on SME Some estimates put the current funding gap at more than
US$140 billion.10 WKS sugar processing facility, where local suppliers bring raw
growth in emerging economies (Africa, Latin America and
sugar cane.
Eastern Europe) where the need for this kind of financing is
One of GMS’s trade finance sub-advisors gathers impact data

West Kenya Sugar Company Limited (WKS) AGGREGATE IMPACT RESULTS FOR TRADE FINANCE IN GMS structure, focusing on the transport of natural gas;
WKS operates the second largest sugar mill in Kenya, com-
IMPACT INDICATOR: TRADE SUB-ADVISOR SUB-ADVISOR ›› One of the world’s largest purveyors of organic and non-
manding ~15% of market share by total production volume.
FINANCE (A) 1 (B) 2 (C) GMO foods and plant-based beverages (such as almond
The sugar industry in Kenya, the second largest contributor
Total Number of SMEs milk);
to the country’s GDP, supports more than 6 million small- 7,192 19
Supported
scale Kenyan sugar producers, sustaining livelihoods for ›› A producer of natural, organic pesticides made from
16% of the Kenyan population. Many of the small-scale Average Financial Support $4,889 $542,230 plant extracts that provide alternatives to typical crop
producers for WKS, estimated to number more than 60,00011 production chemicals such as glyphosate. Products help
Percent Women-Employees 34% 54%
benefit from agricultural extension services provided by farmers improve yields, reduce costs, reduce environ-
the company, including training on crop husbandry and Jobs Maintained at Financed
169,197 (D) 3,268 (E) mental impact and provider healthier food to consum-
soil health. WKS provides numerous community programs, Enterprises
ers. (Manager);
including medical care, education and local infrastructure
A. Total number of SMEs supported: For Sub-Advisor 1 this
development (such as roads and bridges that increase ›› A Canadian-based retail electricity energy provider
figure is cumulative. For Sub-Advisor 2, this number reflects the
accessibility for local communities and suppliers). that offers over 1.1 million residential and commercial
number of SMEs currently received financial support.
consumers with energy, including an option to purchase
B. Data as of 3/31/2019
GMS includes two investment strategies focusing on ex- 100% renewable energy; and
C. Data as of 12/31/2019
tending financial services to SMEs in emerging economies.
D. This includes jobs supported (existing jobs within the SMEs) ›› A company that provides an energy efficient desalination
Together during 2018 these two strategies generated the
as well as new jobs created among those SMEs. process through reverse osmosis, as well as wastewater
impact results illustrated in the table on the right:
E. This includes jobs maintained at financed enterprises only. treatment and water reuse solutions in regions with lim-
ited access to potable water. The company also sells a
point-of-use, bottle-free water filtration system for res-
B. Environmental Equity idential and commercial uses. The company estimates
Environmental Equity in GMS focuses on optimizing the that these systems kept more than 22 million plastic
use of natural resources and expanding alternatives to water jugs from entering the waste stream in 2016.
conventional, carbon-intensive energy production. The
C. Community Banking
strategy invests in small- and mid-cap global equities that
have direct relationships to these themes. Drivers of impact In support of increasing financial services within the U.S.,
returns during 2019 included greater consumer demand GMS has an investment that provides exposures to small
for distributed power generation (i.e. rooftop solar) in the and regional banks across the country. Such community
United States and decreased costs for solar electricity due banks provide vital banking services to local households,
to falling production costs. The strategy’s other focus areas nonprofit organizations and small businesses. These banks
include organic foods, plant-based beverages, meatless often offer a personalized and non-standardized lending
foods, smart cities and transportation logistics. process that reflects the needs of the community in which
each bank operates. Perhaps most importantly, however, is
WKS employees at a local school built by the company.
The largest positions in this strategy at the end of 2019 the role that such banks play for small businesses across
included: the United States – small banks devote the greatest share
of their assets to small business loans.12 Small banks are
›› Railroad, aviation and multi-modal transportation infra-

the primary lenders to small businesses, farms and real estate transactions that create jobs and fuel economic growth for millions of Americans.13 Such institutions provide the low-cost banking,
community support and financial education that larger institutions do not. In rural communities in the U.S., community banks account for 58 percent of all banking offices and 49% of all deposits.14
Case Study: SonaBank Community Believers

Many small and regional banks provide traditional banking services to community nonprofit organizations. Southern National Bancorp of Virgina (SonaBank), within Sonen’s GMS strategy, is one such
bank. SonaBank’s Community Believers program offers specialized banking services for nonprofit organizations, including financial education, free checking accounts and loan programs (such as
bridge payments while organizations await grant support). SonaBank also offers nonprofit employees free checking accounts with assorted other perks.
C. D. Fossil Fuel Free Multi-Strategy

GMS includes an investment in a fossil-free multi-strategy portfolio that we regard as impact neutral. This specialized strategy invests across multiple asset classes in order to generate non-correlated
investment returns, but avoids investment in any business or industry related to fossil fuels, including the extraction, production, transmission or distribution of carbon-related energy.
E. Sonen Global Multi-Strategy Sustainable Development Goals Analysis
Sonen’s global GMS strategy contributes to the following United Nations Sustainable Development Goals:
›› SDG 8 - Decent Work and Economic Growth
Further detail on the Sonen Global Equity strategy’s contribution to the SDGs can be found in the SDG analysis on page 34.

Global
Investing in real assets is designed to help investors increase portfolio diversification, generate stable cash
flow, and hedge future inflation risks. However, investing in real assets typically can also bring exposure to
oil, gas, and/or other extractive industries with deleterious environmental impact. Sonen’s Global Sustain-
able Real Assets (“GSRA”) investment strategy, launched in 2014, provides investors with the benefits of
Sustainable
real assets along with an explicit and unambiguous connection to key sustainability themes such as climate
change, natural resource management and resource efficiency. Through its investments in sustainable real
assets, GSRA seeks to accelerate the transition to a low-carbon economy, promote resource use efficiency
and increase the stock of land, water and trees under sustainable management. Upon completing its final
Real Assets
two investments at the end of 2019, GSRA is now fully committed.
Investments in GSRA are all aimed at optimizing financial returns as well as providing clear, measurable im-
pact that relates to the Strategy’s four intended impact outcomes: Sustainable, Efficiency, Renewability and
Restoration. Our progress in achieving these outcomes is monitored and reported using a set of 19 specific
impact indicators, described in detail on page 32 of this report.
Investments in the strategy focus on four sectors: Green Real Estate, Clean Power, Sustainable Timber,
and Environmental Infrastructure. Over the course of the investment period, Sonen was unable to identify
suitable investments for the strategy’s fifth and sixth target sectors, Land and Water and Sustainable Agri-
culture. The charts below illustrate the geographic and sector exposures as of December 31, 2019, as well as
the geographic and impact sector target exposures.
CURRENT GSRA IMPACT EXPOSURE
13% Envt’l Infrastructure Sustainable Timber 18%
42% Green Real Estate Clean Power 27%
Ethiopia - Corbetti Project: Water well to

provide supply of potable water for people
and livestock in a very dry region.

CURRENT GSRA GEOGRAPHIC EXPOSURE
IMPACT SECTOR GEOGRAPHY SONEN SUSTAINABLE REAL ASSETS INVESTMENT STRATEGY 12/31/18
18% Emerging Markets North America 75% ›› Large working landscapes and mitigation banks with high conservation value in the
Sustainable Timber United States U.S. and Canada. Permanent land protection through sale of working forest conserva-
tion easements.
International
7% Developed ›› Acquisition and development of green residential and supporting commercial real
Green Real Estate Africa
estate for middle-income households.
›› Transitioning of well-located properties suffering from poor management or under-
Green Real Estate United States capitalization to value growth and income generating properties through capital
improvements focused largely on sustainability features and tenant amenities.
›› Development and construction of renewable energy generation assets across Sub-
Clean Power Africa
Saharan Africa, including small hydro, wind, geothermal and solar production.
During 2019, Sonen added two new investments to the strategy, ›› Development, acquisition or financing of utility-scale solar energy projects operating
Clean Power United States
both focused on clean power generation (one in the U.S. and under long-term power purchase agreements.
another in Ireland). This brings a total of fourteen investments
›› Commercial solar opportunities in the U.S., including rural and economically under-
as of year-end 2019, and the strategy is now fully committed. Clean Power United States
served geographies.
All investments are summarized in the table on the right, listed
›› Acquisition and refurbishment of distressed residential properties in New York City
in the order in which they were made.
Green Real Estate United States with consideration for efficient energy and water use, as well as safety and upkeep in
continued operations.
›› Renewable energy projects in South and Southeast Asia including small hydro, wind,
Clean Power Asia
geothermal and solar.
›› Development and maintenance of affordable green housing for low-income popula-
Green Real Estate United States tions and senior citizens, as well as improving properties from both environmental
and social perspectives.
›› Real estate investments focused in Europe, incorporating energy, water and waste
Green Real Estate Europe
strategies but also an explicit focus on the health well-being of residents.
›› 1.1 million acres of high quality, sustainably managed native pine timberlands in
Sustainable Timber United States East Texas with protections in place for various sensitive species and permanently
conserved land.
Environmental ›› U.S.-based water infrastructure focused on water transport, treatment and utilities.
United States Impact focus on expanding service, improving efficiency and relieving pressure on
Infrastructure
burdened water resources.
›› Investment made in Q4 2019, focusing on utility-scale solar assets in the United
Clean Power United States States. Current pipeline projects more than 200 billion KWh of clean power generation
over assets’ use.
›› Investment made in Q4 2019, focused on development of solar and wind renewable
Clean Power Europe energy projects in Ireland, targeting approximately 1,000MW of renewable energy
capacity.

A. Impact Analysis – Private Markets Long-Term Target Impact Outcomes for Sonen’s Real Asset Strategy
The Impact We Seek in Sustainable Real Assets Investing
Impact
Definition
Outcome
Sonen has identified four long-term environmental outcomes
›› Investing in environmental infrastructure and natural assets that promote resource optimization
that are intended to result from the underlying investment
and the conservation of limited natural resources that can be managed by local communities
activities of GSRA: Sustainability, Efficiency, Renewability Sustainability
and Restoration. These four outcomes form the foundation ›› Satisfying essential human and ecological needs amidst growing demand for natural resources,
food, energy and urbanization alongside an ever-increasing global population
from which underlying investments are considered and
evaluated for impact performance. The table on the right
›› Investing in the infrastructure, technologies and services that optimize the use of limited natural
provides a definition of each intended impact outcome. resources and that are created, owned and managed at the community level
Ongoing impact measurement captures GSRA’s progress Efficiency
›› Meeting the growing demand for energy and natural resources while continually decreasing the
toward achieving these outcomes. impact and footprint of the use of these resources
Sonen also employs its own internal ‘Impact Frameworks’
›› Expanding availability of locally-managed, distributed renewable energy sources as part of the
that identify desired specific social or environmental
growing global demand for electricity and related infrastructure, particularly in emerging market
outcomes in explicit, discrete impact themes. Beyond economies, where demand will be greatest
Renewability
identifying the intended impact that Sonen wishes to
›› Increasing the use of recycled and repurposed materials and resources to reduce waste and require
create, such Impact Frameworks provide guidance in the fewer raw materials for production
investment decision-making process, helping to identify
suitable investments. To date, Sonen has published impact ›› Protecting land and water resources from the pressures of population growth and urbanization,
frameworks covering the following impact themes: and retaining sustainable land use practices for local communities
Restoration
›› Increasing the global stock of natural ecosystems that provide vital ecosystem services for the
1. Energy
climate and for current and future generations
2. Water
3. Sustainable Agriculture
4. Green Real Estate
5. Sustainable Infrastructure
6. Financial Services (Q4 2019)
7. Health (Q2 2020)

Sonen is currently completing additional Impact Frameworks
covering Healthcare and Ethical Mining.

Impact Measurement: IRIS Indicators
For each of GSRA’s investment sectors, Sonen collects quantitative

and qualitative impact data at regular intervals. Quantitative data
is comprised of core impact indicators and supplemental indica-
tors (all IRIS-compliant – see previous impact reports for more
detail on IRIS or visit iris.thegiin.org) that relate directly to the four
intended impact outcomes previously described.
Sonen began collecting impact data from GSRA investments in

2015. 2019 marks the fifth consecutive year that Sonen collects,
monitors and reports impact data uniformly across all underlying
investments in the strategy. Impact data for 2019 was not yet
available at the time of this publication.
Core and Supplemental IRIS Impact Indicators for Sustainable Real Assets
INVESTMENT SECTOR CORE IMPACT INDICATORS SUPPLEMENTAL IMPACT INDICATORS
›› MWh generated through renewable sources

›› Number of people with access to clean power
Clean Power ›› GHG offsets through renewable production (tons)
›› Clean power beneficiaries, by income strata or geographic region
›› Geographic location and type of renewable energy source
›› Ecological Restoration Management Area (acres)

Sustainable ›› Total land area under sustainable management
›› Operational certifications
›› Trees planted (native species)
Timberland ›› Land permanently conserved
›› Units/Volume of sustainable timber sold
›› Jobs maintained at supported enterprises
›› Energy saved/conserved (KWh) via property improvements

›› Percent of properties located in low-income geographies/census tracts, or providing
Green Real Estate ›› Total area with energy efficiency improvements (m2)
services to disadvantaged populations (e.g. elderly, low-income)
›› Percentage of property with sustainable certification
›› Volume of clean water provided through upgraded water infrastructure

(gallons)
›› Percent of water provided that would otherwise come from depleted
Environmental ›› Jobs created by supported enterprises
resources
›› Toxic emissions reduction
Infrastructure ›› Water saved due to reductions in water losses (gallons)
›› Number of clients served
›› Clean power generated (MWh)
›› Total reduction in GHG emissions (CO2e)
›› Amount of waste diverted from landfill

C. Impact Measurement: Sustainable Development Goals
GSRA provides investors with an excellent opportunity to align resources with the UN Sustainable Development Agenda. The Strategy has explicit and definitive contributions to five SDGs, most
notably through its investments in environmentally friendly infrastructure, green real estate and land conservation and restoration. Impact is delivered primarily to the following SDGs:
›› SDG 6: Clean Water and Sanitation
›› SDG 7: Clean Energy
›› SDG 9: Industry and Infrastructure
›› SDG 11: Sustainable Cities and Communities
›› SDG 15: Life on Land
Sonen measures alignment with the SDGs not by their broad goals, but by how well we can report on specific impact indicators that are suggested by the UN.15 We believe this approach provides a
more authentic and accurate test of an investment’s contribution to respective SDGs. Our SDG analysis can be found in the following section of this Report.

UN
Sonen was among the first investment firms to track the contribution of its investments to the Sustainable Development
Goals (SDGs) in its 2015 Annual Impact Report. Sonen continues to deepen its SDG analysis to better understand
the contribution our investments make to the SDGs. We examine specific impact indicators suggested by the UN and
Sustainable
perform a granular examination of how investments across asset classes make definitive contributions to specific SDGs
through each goal’s stated targets and impact indicators.
The table below illustrates eight SDGs where Sonen’s strategies make contributions to each goal’s respective impact
Development
targets. Where these contributions are evident, we provide a short profile of typical, actual investments in each strategy
that will help achieve the SDGs.
Goal Analysis
SONEN STRATEGY GOAL 3: GOOD HEALTH AND WELL-BEING
›› End AIDS, tuberculosis, malaria and other communicable diseases

›› Provide universal health coverage
SDG Impact Targets
›› Reduce the number of deaths and illnesses from hazardous chemicals and air, water
and soil pollution and contamination
Sonen Fixed Income

›› Municipal bonds that finance healthcare facilities, including senior care, in the U.S.
Strategy
›› Investments in pharmaceutical companies leading the industry in providing access to

critical medicine in poor regions
Sonen Global Equity ›› Holdings include top performers in the Access to Medicines Index, including Merck
Strategy KGaA (#4) and NovoNordisk (#6)
›› Multiple holdings in environmental remediation, pollution abatement and pollution
mitigation technologies
Sonen Multi-Strategy ›› No exposure to SDG 3
Sonen Global
Sustainable Real ›› No exposure to SDG 3
Assets

GOAL 7: ENSURE ACCESS TO AFFORDABLE, RELIABLE, SUSTAINABLE
SONEN STRATEGY GOAL 6: CLEAN WATER AND SANITATION SONEN STRATEGY
AND MODERN ENERGY FOR ALL
›› Provide universal access to water, sanitation and hygiene ›› Universal access to affordable, reliable and modern energy services
›› Improve water quality ›› Increase the share of renewable energy in global energy mix
SDG Impact Targets SDG Impact Targets
›› Increase water-use efficiency ›› Double the rate of global energy efficiency
›› Protect and restore water-related ecosystems ›› Expand renewable energy infrastructure in developing economies
›› Municipal bonds in the U.S. focusing on water infrastructure,

›› Bonds that finance commercial, industrial and utility-scale renew-
Sonen Fixed Income efficiency and water savings Sonen Fixed Income able power production across the U.S. and Europe
›› Development bank bonds that finance climate change and adapta-
Strategy Strategy ›› Corporate bonds that finance energy efficiency initiatives in products
tion, focusing on water management, water quality and ecosystem
and operations
restoration
›› Technology that increases water efficiency for residential, commer-

cial and industrial uses; sanitization and purification technologies
›› Clean power generation infrastructure and distribution
›› Water infrastructure, including storm water, sewage treatment
Sonen Global Equity ›› Energy efficiency technologies across commercial, industrial and
Sonen Global Equity globally
residential applications
Strategy ›› Utilities that provide access to water and sanitation, particularly Strategy
›› Lower energy intensity and total carbon emissions relative to bench-
in some emerging economies such as Brazil
mark (see page 16 for carbon emissions data)
›› Lower water intensity and consumption relative to market bench-
mark (see page 16 for data on water consumption)
›› Long/Short strategy focused on renewable energy producers, related

Sonen Multi-Strategy ›› No exposure to SDG 6 Sonen Multi-Strategy
technologies and industry
Sonen Global ›› IFC EDGE-certified green building standards reduce water use by a Sonen Global
minimum 20%/year. ›› Utility scale clean power generation in the U.S., Africa and SE Asia
Sustainable Real Sustainable Real
›› Watershed restoration and mitigation banking within continental ›› Commercial and industrial rooftop solar in the U.S. and Europe
Assets U.S. on 117 acres during 2018 Assets

GOAL 8: PROMOTE SUSTAINED, INCLUSIVE AND SUSTAINABLE GOAL 9: BUILD RESILIENT INFRASTRUCTURE, PROMOTE INCLUSIVE
SONEN STRATEGY SONEN STRATEGY
ECONOMIC GROWTH, FULL EMPLOYMENT AND DECENT WORK AND SUSTAINABLE INDUSTRIALIZATION AND FOSTER INNOVATION
›› Facilitate sustainable and resilient infrastructure that facilitates

›› Promote job creation and growth of small and medium sized enter- affordable and equitable access, particularly in Africa
prises, including through access to financial services ›› Increase access to financial services for SMEs in developing
SDG Impact Targets SDG Impact Targets
›› Improve global resource efficiency in consumption and production countries
›› Achieve full employment and decent work for women and men ›› Enhanced resource-use efficiency and adoption of environmentally
sound technologies and industrial processes.
›› Development bank bonds finance large-scale infrastructure projects

Sonen Fixed Income Sonen Fixed Income that adapt to and mitigate the effects of climate change in emerging
›› Financial services companies providing finance for local
markets
Strategy businesses Strategy
›› Limited exposure in financial services companies that provide
finance for small local businesses
›› Environmental planning for large-scale urban areas; water infra-

Sonen Global Equity structure in emerging economies
Sonen Global Equity ›› Limited exposure in financial services companies providing finance
›› Limited exposure in financial services companies providing software,
Strategy for SMEs and retail customers Strategy
finance and business software for SMEs
›› Technologies to enhance resource efficiency and re-use
›› Financial services to small and medium sized enterprises in Africa,

Latin America, Eastern/Western Europe. Services to nearly 7,211
SMEs in 2018 ›› Financial services to small and medium sized enterprises in Africa,
Sonen Multi-Strategy ›› Focus on women-led enterprises and employers Sonen Multi-Strategy Latin America, Eastern/Western Europe. Nearly 7,211 SMEs received
›› Recent investment in community and regional banks in the U.S. financial services in 2019.
will support small business growth and job creation.
›› Utility scale clean power generation and distribution in the U.S.,

›› Limited exposure to SDG 8. Sonen’s real asset strategy reports
Sonen Global Sonen Global Africa and SE Asia
job creation numbers within timber operations in the U.S., and
›› Commercial and industrial rooftop solar in the U.S. and Europe
Sustainable Real large-scale infrastructure projects in emerging economies provide Sustainable Real
›› Affordable, sustainable housing construction in South Africa empha-
Assets employment opportunities, although that data is not reported by Assets sizing energy savings, water savings and reduced materials use.
Sonen

GOAL 11: MAKE CITIES AND HUMAN SETTLEMENTS MORE GOAL 12: ENSURE SUSTAINABLE CONSUMPTION AND PRODUCTION
SONEN STRATEGY SONEN STRATEGY
INCLUSIVE, SAFE, RESILIENT AND SUSTAINABLE PATTERNS
›› Increase access to safe and affordable housing; focus on sustain-
›› Sustainable management and efficient use of natural resources
able buildings and local materials
›› Reduce waste generation through prevention, reduction, recycling
›› Access to safe, affordable and accessible sustainable public
SDG Impact Targets SDG Impact Targets and reuse
transport systems
›› Reduce chemical and toxic wastes emissions and human exposure
›› Reduce environmental impact of cities, namely air quality and
›› Encourage companies to adopt sustainable practices
waste management
›› Affordable housing, small business loans in low-income communi-

ties in the U.S.
Sonen Fixed Income ›› Sovereign, municipal and development bank bonds that finance Sonen Fixed Income ›› Government bonds finance improved waste management practices
Strategy local transportation, including roadways and railways Strategy and facilities, including waste-to-energy technology
›› Development bank bonds that finance public transportation in
Europe and various emerging economies
›› Technologies that enhance resource efficiency and re-use

›› Environmental planning for large-scale urban areas; water infra-
›› Environmental remediation technologies for industrial emissions,
Sonen Global Equity structure in emerging economies
Sonen Global Equity water treatment and waste sorting/treatment/recycling
›› Energy efficient public transportation and railway infrastructure
Strategy Strategy ›› Companies within the strategy exhibit superior sustainability pro-
›› Environmental remediation technologies for industrial emissions,
files, relative to benchmark, as measured through carbon emissions
water treatment and waste sorting/treatment/recycling
and water use
›› Various investments focus on more sustainable consumption through

Sonen Multi-Strategy ›› Limited exposure to SDG 11 Sonen Multi-Strategy resource efficiency, organic food production, and compostable
products
›› Utility scale clean power generation and distribution in the U.S.,
Sonen Global Africa and SE Asia Sonen Global
›› Limited exposure through sustainable timber, land conservation and
Sustainable Real ›› Affordable, sustainable housing construction in South Africa Sustainable Real
mitigation banking in the U.S.
Assets emphasizing energy savings, water savings and reduced materials Assets
use

GOAL 15: LIFE ON LAND: PROTECT, RESTORE AND PROMOTE
SONEN STRATEGY
SUSTAINABLE USE OF TERRESTRIAL ECOSYSTEMS
›› Ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater ecosystems, in particular forests, wetlands, mountains and drylands
›› Restore degraded land and soil
SDG Impact Targets
›› Reduce the degradation of natural habitats, the loss of biodiversity and extinction of threatened species
›› Mobilize resources to conserve and sustainably use biodiversity and ecosystems
Sonen Fixed Income ›› Green bonds issues by development banks and supranationals (such as World Bank and IFC) emphasize ecological restoration and conservation within climate change
Strategy mitigation projects
Sonen Global Equity ›› Limited Exposure to SDG 15

›› One underlying investment provides environmental consulting including rare species identification and management, ecosystem mapping, impact and damage assess-
Strategy
ments, and restoration solutions including river bank stabilization and in-stream and terrestrial habitat reconstruction
Sonen Multi-Strategy ›› No exposure to SDG 15.
Sonen Global ›› Restoration of wetlands and riparian areas in the U.S.

›› Permanent conservation of high-conservation value landscapes
Sustainable Real
›› Habitat protection for threatened species in the U.S.
Assets ›› Combining private and public finance for long-term and permanent landscape conservation

In Summary Sonen Capital believes that investment capital can help meet large-scale global challenges. This belief
is in our DNA and is behind every investment decision we make. In this Report, Sonen’s seventh annual
publication, we continue to validate how our investment process can achieve the financial and impact
results expected by our clients. We begin by describing how Sonen defines sustainability and impact,
then examine our investments using this framework, and then report on the impact creation of our
investment decisions. We also continue to deepen our analysis and alignment with the UN Sustainable
Development Goals to specifically illustrate where we are providing measurable and meaningful contri-
butions to the SDG’s underlying targets. The results of our work demonstrate that the ESG character-
istics and impact creation of our investment decisions, whether it be in decreased carbon emissions,
improved health and safety standards, more efficient use of natural resources or greater financial
inclusion, to name a few, are indeed helping investment capital meet large-scale global challenges.
Going forward, Sonen continues to see significant opportunities in how impact evaluation and re-
porting can be enhanced. In particular, as the SDGs continue to get attention from local and federal
governments, as well as corporations, investors will benefit from more data on contributions to specific
SDGs. In fixed income investing, we also see potential in gathering more specific data on the projects
that bonds underwrite, helping investors gain a better understanding of the impact they are helping
to create. Over 2020, Sonen will explore how its impact reporting aligns with the Impact Management
Project’s five dimensions of impact. Lastly, we will continue to author and publish impact frameworks
that identify urgent needs and investment solutions across specific impact sectors.
Learn More about Sonen Capital

Sonen regularly publishes information on impact investing in both public and private markets, includ-
ing theme-specific “impact frameworks” that identify how we prioritize investments among specific
impact themes such as water, energy, sustainable agriculture and green real estate. Sonen also keeps
readers informed of our growing impact measurement and evaluation methodologies, as well as regular
publications and speaking engagements. Please visit www.sonencapital.com for more information.

SOURCES maturity and be denominated in one of 23 eligible currencies. in this report from third-party sources that it believes to be reliable,
but such information has not been independently verified and makes
1. Sustainable Jersey Community Certification Report for Atlantic City; 2015.
MSCI ACWI - The MSCI ACWI Index is a free float-adjusted market no representation as to its accuracy or completeness is made. Except
2. Harnessing the Power of Data for Gender Equality: The 2019 EM2030 SDG
capitalization weighted index that is designed to measure the equity as otherwise indicated, the information provided herein is based on
Gender Index,” Equal Measures 2030, https://data.em2030.org/wp-content/
market performance of developed and emerging markets. The MSCI matters as they exist as of fiscal year 2019 and not as of any future
uploads/2019/05/EM2030_2019_Global_Report_ENG.pdf
ACWI consists of 45 country indices comprising 24 developed and date. This presentation will not be updated or otherwise revised to
3. See Sonen’s 2014 Annual Impact Report, page 12, for an introduction to the
21 emerging markets country indices. The developed market country reflect information that may become available, or based upon any
AIMS framework.
indices included are: Australia, Austria, Belgium, Canada, Denmark, change in circumstance occurring after the date that appears on the
4. World Bank; Small And Medium Enterprises Finance; https://www.world-
Finland, France, Germany, Greece, Hong Kong, Ireland, Israel, Italy, cover of this presentation.
bank.org/en/topic/smefinance
Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain,
5. Ayyagari; Ayyagari, M., Demirgüç-Kunt, A. and Maksimovic, V. (2011),
Sweden, Switzerland, the United Kingdom and the United States. The MSCI Source Data: Neither MSCI nor any other party involved in or
Small vs. Young Firms Across The World – Contribution to Employment, Job
emerging markets country indices included are: Brazil, Chile, China, related to compiling, computing or creating the MSCI data makes any
Creation, and Growth, Policy Research Working Paper 5631 (The World Bank
Colombia, Czech Republic, Egypt, Hungary, India, Indonesia, Korea, express or implied warranties or representations with respect to such
Development Research Group).
Malaysia, Mexico, Morocco, Peru, Philippines, Poland, Russia, South data (or the results to be obtained by the use thereof), and all such
6. World Bank: https://www.worldbank.org/en/topic/smefinance
Africa, Taiwan, Thailand and Turkey. parties hereby expressly disclaim all warranties of originality, accuracy,
7. Athena: The Missing Middle of SME Finance; p.17
completeness, merchantability or fitness for a particular purpose with
8. World Bank; Small And Medium Enterprises Finance; https://www.world-
DISCLOSURES respect to any of such data. Without limiting any of the foregoing, in
bank.org/en/topic/smefinance
no event shall MSCI, any of its affiliates or any third- party involved
9. https://www.sba.gov/advocacy/small-businesses-drive-job-growth-us Limited Purpose of the Report: This document is provided for infor-
in or related to compiling, computing or creating the data have the
10. London Stock Exchange Africa Advisory Group; Challenges and Opportuni- mational and educational purposes only. Any reference to a particular
liability for any direct, indirect, special, punitive, consequential or any
ties of SME Financing in Africa; 2018; https://www.lseg.com/sites/default/ investment, portfolio does not constitute a recommendation or an offer
other damages (including lost profits) even if notified of the possibility
files/content/documents/Africa_SMEfinancing_MWv10.pdf by Sonen Capital to buy, sell or hold such investment or security. This
of such damages. No further distribution or dissemination of the MSCI
11. Business Daily; West Kenya Sugar Company Statement on Contraband report does not constitute a solicitation or offer to provide any advice or
data is permitted without MSCI’s express written consent.
Imported Sugar; June 19, 2018; https://www.businessdailyafrica.com/ services in any jurisdiction, including without limitation, any jurisdic-
releases/West-Kenya-Sugar-Company-statement-on-contraband-import- tion in which such a solicitation or offer is unlawful or to any person to
Assumptions: Certain analyses contained in this report are based on
ed-sugar/1941082-4620372-1kmj02z/index.htm whom it is unlawful.
a number of assumptions which, if altered, could materially affect the
12. LaVecchia, Olivia. 2015. “Small Business Loans as a Share of Assets,
conclusions reached in this report. Sonen Capital reserves the right to
2014,” Institute for Local Self-Reliance, https://ilsr.org/small-business- No Financial, Investment, Tax or Legal Advice: The information herein
change any opinions expressed, or assumptions made, herein without
loans-as-share-of-assets-2014/ is not intended to provide, and should not be construed as, financial,
notice.
13. https://www.fdic.gov/bank/analytical/qbp/2016jun/qbp.pdf investment, tax or legal advice. The information contained herein
14. https://www.kansascityfed.org/publicat/econrev/Pdf/2q03hoen.pdf does not take into account the particular investment objectives or
Copyright Notification: No part of this report may be reproduced
APPENDICES financial circumstances of any particular recipient, or whether or not
except as authorized by written permission from Sonen Capital.
any recommendation, investment, security or strategy described herein
Bloomberg Barclays Global Aggregate Bond Index – A broad-based
is suitable or appropriate for the reader’s investment objectives and fi-
measure of global Investment Grade fixed-rate debt investments. The Past performance is not an indicator of future results.
nancial situation. Recipients of this report are strongly urged to consult
index covers the most liquid portion of the global investment grade
with their own advisers regarding any potential strategy, investment or
fixed-rate bond market, including government, credit, and collateral-
transaction.
ized securities. The liquidity constraint for all securities in the index
is $300 million. Securities included will have at least 1 year until final
Third-Party Sources: Sonen Capital has obtained certain information


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PUBLIC AND PRIVATE MARKETS _____ FINANCIAL AND IMPACT REPORTING

Editing & DESIGN

2 / Sonen Capital Impact Report 2019 sonencapital.com

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SONEN GLOBAL EQUITY STRATEGY $100

SONEN GLOBAL MULTI-STRATEGY

2013 2014 2015 2016 2017 2018 2019

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Traditional Responsible Sustainable Thematic Impact First

Competitive ESG Risk ESG Maximum-Impact Solutions

Negative Screens: Factors Considered: Solutions For: Support For:

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A. Sonen Global Fixed Income Impact Classification

Global Fixed Income

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SUB-ASSET CLASS SUSTAINABLE THEMATIC TOTAL

Municipal Bonds 1.6% 7.0% 8.6%

SUB-ASSET CLASS SUSTAINABLE THEMATIC

Weight 1.6% 7.0%

10 / Sonen Capital Impact Report 2019 sonencapital.com

Weight 3.0% 6.5%

Corporate GEORGIA POWER COMPANY HYUNDAI CAPITAL (Green Bond)

SUB-ASSET CLASS SUSTAINABLE THEMATIC

Weight 57.2% 4.1%

SUB-ASSET CLASS SUSTAINABLE THEMATIC

TOTAL SUSTAINABLE = 62.1% THEMATIC = 34.2%

11 / Sonen Capital Impact Report 2019 sonencapital.com

Issuers in fixed income are evaluated

Economic Development 1.4%

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Sonen’s Global Fixed Income strategy contributes to the

13 / Sonen Capital Impact Report 2019 sonencapital.com

A. Classifying underlying securities as either Responsible, Sustainable or Thematic;

D. Evaluating key contributions to the United Nations Sustainable Development Goals.

A. Sonen Global Equity Impact Classification

58.3% Sustainable Thematic 34.6%

Global Public Equity

14 / Sonen Capital Impact Report 2019 sonencapital.com

reveal related trends regarding how well a company or 5M

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HEALTH & SAFETY 10% 25.0%

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THEMATIC SECTORS AND SUBSECTORS IN SONEN’S PUBLIC EQUITY STRATEGY

0.66% Water Infrastructure Economic

0.14% Technology Waste & Environmental Green Real Estate 0.77%

Health Technology 4.68%

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E. Sonen Global Equity Sustainable Development Goals

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C. Proxy voting through direct ownership of corporate stock.

A. Lead-Filing or Co-Filing Shareholder Resolutions

21 / Sonen Capital Impact Report 2019 sonencapital.com

Proposal requesting disclosures on political spending and