RESPONSIBLE INVESTING ACTIVELY DESIGNING SOLUTIONS FOR THE FUTURE

Image: The Caribbean Sea and Curacao

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OUR APPROACH

At Russell Investments, we consider true responsible investing as a long-term approach that accounts for a wide range of complex environmental, social and governance factors.

We believe that responsible investing and performance can be complementary. Our responsible investment opportunities aim to capture the right exposure without jeopardising return.

OUR RESPONSIBLE INVESTING SOLUTIONS WILL HELP YOU TO:

Ensure your investments are not unknowingly exposed

to companies contrary to your organisation’s values,

such as those involved in the production or manufacture

of cluster ammunitions, nuclear weapons and/or

tobacco.

Proactively invest in companies with good governance,

transparency and a focus on sustainability.

Generate consistent returns through an investment

portfolio designed with your organisation’s risk profile in

mind.

Provide key stakeholders (including shareholders,

customers, unions, lobby groups, and funding bodies)

with clear and comprehensive reports, demonstrating

where your investments have resulted in positive

sustainable practices and solutions.

NOT ALL RESPONSIBLE INVESTMENT SOLUTIONS ARE CREATED EQUAL

Different organisations define ‘responsible investment’ in different ways, creating considerable confusion in the market. Whether you are targeting responsible investment to align with stakeholder values, mitigating risk or complying with regulation, you want to choose a solution with real integrity and impact.

Image: Farm machines harvesting corn for feed or ethanol.

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OUR DIFFERENCE

ACTIVELY LOOKING TO THE FUTURE

As the focus of sustainability best practice shifts over

time, we stay committed to adapting our funds to suit the

changing global landscape. You can be sure your capital

remains invested in the latest sustainability strategies,

without continuously changing funds.

OUR CURRENT RESEARCH AGENDA INCLUDES INVESTIGATING:

Water intensity metrics in a broader definition of

resource efficiency.

The impact of transport-related greenhouse gas

emissions on the carbon emission supply chain.

We are also developing proprietary ESG scores,

informed by the financially material sustainability

metrics identified by the Sustainability Accounting

Standards Board (SASB), and the subcomponents of

ESG associated with the UN Sustainable Development

Goals.

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When designing responsible investment solutions,

we go beyond standard exclusions to identify asset

characteristics that are most relevant to you. Our

solutions focus on exposures that are sustainable as well

as material to your organisation’s investment goals. This

allows clients to both remove unwanted characteristics

but also proactively support organisations’ positive

contribution to research, innovation and leading best

practices.

Our approach captures a broad universe of measures to

help protect our clients from unintended consequences.

For example, within our decarbonisation strategy, we

don’t just remove all oil and gas companies based on

their carbon footprint, but look deeper to understand

how these companies support renewable energy. Only

then, by understanding the complete picture, do we

determine the value of the investment in our low carbon

funds.

FULLYINTEGRATEDWe believe responsible investing is intelligent investing.

As a result, we have embedded responsible investment

practices and ESG beliefs within our investment

approach. This ensures that all our investment

professionals are accountable for considering ESG factors

within our funds and investment processes. To support

our responsible investment efforts we have a virtual team

of ESG specialists who are situated in offices across the

globe. They are dedicated to championing the integration

of ESG characteristics, evaluating the latest trends,

performing research, and updating the business on

changing client needs as the industry grapples with the

complexity of this continually evolving area.

SEARCHING BEYOND THE STANDARD

WE BRING YOU A CAREFULLY CONSIDERED AND ROBUST APPROACH ALIGNED WITH YOUR NEEDS

Image: Solar panels in a farm in Abruzzo, Italy

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OUR BELIEFS

RESPONSIBLE INVESTING IS INTELLIGENT INVESTINGAt Russell Investments we believe that a sound awareness of ESG factors and a robust process can help to deliver strong investment returns and meet objectives over the long-term.

To reflect this, we have developed a set of four beliefs upon which our responsible investing practice is founded. These beliefs are as follows.

1ESG factors impact security prices. These factors can vary by company, industry, and region and their importance can vary through time.

2A deep understanding of how ESG factors impact security prices is value-adding to a skillful investment process.

3Embedding ESG considerations into a firm’s culture and processes improves the likelihood of prolonged and successful investing.

4Active ownership of securities is an effective tool for improving investment outcomes.

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RUSSELL INVESTMENTS ACHIEVES “A+” IN

PRI 2017 ASSESSMENT.

Russell Investments has received the highest

possible grade of “A+” in an annual assessment

report from the United Nations-supported

Principles for Responsible Investing (PRI)

organization for each of the eight categories on

which the firm reports data. This across-the-

board glowing assessment covered the firm’s

focus on strategy & governance, direct active

management, manager selection, manager

appointment and manager monitoring.

Launched in April 2006, the PRI is an investor

initiative developed in partnership with the

United Nations Environment Program Finance

Initiative and the United Nations Global

Compact. They are global best practices

that challenge investors to acknowledge

environmental, social, and corporate governance

(ESG) issues.

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OUR CAPABILITIES

RESPONSIBLE INVESTING PRACTICES EMBEDDED WITHIN ALL FUNDS

1 2 3 4

PORTFOLIO MANAGEMENT PROCESS

We research and rank thousands of

investment products on their ability

to add value to portfolios, and we

integrate an ESG score into the

manager ranks. As such, all manager

reviews include an assessment of

how ESG is implemented within the

investment managers’ policy, process,

awareness and offering.

We also regularly survey managers and

calculate our funds’ ESG and carbon

metrics for use by our analysts and

portfolio managers.

OUR RESPONSIBLE INVESTMENT APPROACH

We earned our A+ rating from PRI by consistently applying our integrated investment approach:

INSIGHTS & RESEARCH

Our research actively looks towards

the future. To understand how best

to add long-value for clients, we

evaluate manager products both on

an individual basis and an industry

basis. We advocate for best practices

in specialised products such as low-

carbon portfolios, governance-driven

strategies, greenbonds and impact

investing.

This helps to continually improve our

own product offerings in these areas

and offer best-in-class strategies.

ACTIVE OWNERSHIP & ENGAGEMENT

Russell Investments believe voting

is a part of a share’s value-creation

process. We aim to improve the

long-term investment outcomes of

assets through our active stewardship

and voting policy by promoting

four core principles: transparency,

accountability, independence and

long-term value. As stewards, we

monitor the effectiveness of company

management on an ongoing basis.

As share owners, we aim to exert

influence on corporate governance,

social and environmental practices

through our votes.

INDUSTRY COLLABORATION

We provide education throughout the

year and are involved with advising

governments and industry bodies

across the world. As part of this we

are signatories to the United Nations-

backed Principles for Responsible

Investment and members of numerous

industry associations (refer to Industry

Commitments on back page).

Image: Crude oil tanker under cargo operations on Thailand shore station. Oil & Gas companies are amongst the highest contributors to renewable energy research.

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INDUSTRY COMMITMENTS

A+ RATINGIN ALL 8 MODULES

PRI: Russell Investments became a signatory of the

Principles for Responsible Investment (PRI) back in 2009.

A+ rating in all eight modules that we were assessed

against by the PRI in 2017. Access the full assessment at

https://russellinvestments.com/-/media/files/emea/legal/2017-

assessment-report-for-russell-investments.pdf

CDP Climate Change: Russell Investments became a signatory

of the Carbon Disclosure Project’s (CDP) climate change program

back in 2010.

Institutional Investors Group on Climate Change (IIGCC): In 2010,

Russell Investments, presented a carbon footprint methodology for

an IIGCC-specified portfolio, with two other ESG data providers.

FIND OUT MORE For more information:

Call Russell Investments on +44 (0)20 7024 6000 or visit russellinvestments.com

IMPORTANT INFORMATION

For Professional Clients Only.

This material does not constitute an offer or invitation to anyone in any jurisdiction to invest in any Russell product or use any Russell services where such offer or invitation is not lawful, or in which the person making such offer or invitation is not qualified to do so, nor has it been prepared in connection with any such offer or invitation. Unless otherwise specified, Russell Investments is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Any opinion expressed is that of Russell Investments, is not a statement of fact, is subject to change and does not constitute advice. The value of investments and the income from them can fall as well as rise and is not guaranteed. You may not get back the amount originally invested. Any past performance figures are not necessarily a guide to future performance. Issued by Russell Investments Limited. Company No. 02086230 and Russell Implementation Services Limited Company No. 3049880. Registered in England and Wales with registered office at: Rex House, 10 Regent Street, London SW1Y 4PE. Telephone +44 (0)20 7024 6000. Authorised and regulated by the Financial Conduct Authority, 25 The North Colonnade, Canary Wharf, London E14 5HS.

AMST-00388. First used: January 2018. Updated: December 2017 Expires: December 2018