Natcan’s Commitment

Definition

Responsible investing is an investment approach that utilizes standard asset management processes in addition to incorporating extra-financial analysis criteria (environmental, social, and corporate governance).

The goal of responsible investment is to favour companies that adopt a proactive approach to corporate responsibility, allowing for superior financial performance over time.

UN Principles for Responsible Investment

Natcan is a signatory of UN’s Principles For Responsible Investment (UNPRI). Established in April 2006, the Principles consists in a set of the best investment practices. By incorporating them in their management approach, financial asset managers and owners can influence, and even improve, the behaviours of public companies globally, while ensuring to remain up to date on the most recent developments, risk sources, and opportunities that may affect these companies’ financial performance.

The six Principles to which we adhere:

• We will incorporate environmental, social, and governance (ESG) issues into investment analysis and decision-making processes
• We will be active owners and incorporate ESG issues into our ownership policies and practices.
• We will seek appropriate disclosure on ESG issues by the entities in which we invest.
• We will promote acceptance and implementation of the Principles within the investment industry.
• We will work together to enhance our effectiveness in implementing the Principles.
• We will each report on our activities and progress towards implementing the Principles.

Please note that Natcan is also a signatory of the Carbon Disclosure Project (CDP).

Our Approach

Environmental, social, and governance (ESG) issues are an integral part of a company’s viability, and Natcan considers these issues when analyzing an investment. We recognize that investing on behalf of clients entail rights and responsibilities, and promote an active approach to that effect.

In addition to our internal research, we call on the services of ESG leading experts to ensure strict monitoring of these criteria. Below is a list of extra-financial criteria that we consider in our security selection and follow-up process:

• Community involvement
• Diversity
• Employee relations
• Environment
• Commercial products and practices
• Human rights
• Company management
• Controversial industries

Objective: generate long-term financial added-value by selecting publicly traded companies that endorse a strategic and proactive approach to corporate responsibility.

Shareholder Commitment

We believe it is our fiduciary responsibility to actively monitor the companies in which we invest on behalf of our clients. Our commitment process in terms of responsible investment seeks to ensure the companies in which we invest are well managed and committed to anticipating, understanding, and adapting to all pertinent facets of an ever-evolving business environment. We encourage companies to act when their policies, programs, and performances do not meet the highest standards. We believe a committed discussion process with management can contribute to improving the ESG performance of the company as well as the long-term value of our clients’ investments.