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PRI reporting framework 2017

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(B) Implementation: Thematic

FI 11. Thematic investing - overview

11.1. Indicate the type of sustainability thematic funds or mandates that your organisation manages.

11.2. Indicate whether you invest in 'green' or 'climate' bonds

11.3. Indicate whether you apply criteria (your own or those of a third party) to decide whether a bond can be considered a ‘green’ bond.

11.4. Describe your organisation’s approach to all sustainability-themed fixed income investing and the criteria you apply to determine whether a bond can be considered for a thematic fund, mandate or similar.

A combination of environmental and social themes is applied to our actively managed fund, i.e. climate change, water, land, health and vitality, and living. ACTIAM identifies companies that contribute negatively and positively to these themes. The negative contributors are excluded from investment in the actively managed fund; the positive contributors receive an upgrade in their ESG score, thereby increasing the likelihood of being selected for investment.

ACTIAM has a specific policy for green or climate bonds. This policy requires bonds to be issued according to the Green Bond Principles, as well as criteria for the use of proceeds, reporting and the achievability of the projects and targets. The policy includes a blacklist of activities that we do not want to finance through green/climate bonds. Social or environmental impact needs to be measured / there need to be credible indicators, such as CO2 reduction or avoided CO2. ACTIAM wants to prevent the locking in of money in less ambitious projects. As part of our energy transition policy, we use green bonds to stimulate renewable energy and energy efficiency. The impact is monitored each year. If the impact is not concrete enough or if we see possible improvements, we will start engagement with the issuer. Bonds that are labelled 'green' by the in-house ESG ream receive an upgrade in their ESG score.

11.5. Additional information [OPTIONAL]

FI 12. Thematic investing - themed bond processes

12.1. Indicate whether you encourage transparency and disclosure relating to the issuance of themed bonds as per the Green Bonds Principles:

          We ask issuers to formulate disclosure targets (such as carbon reduction targets).

12.2. Describe the actions you take when issuers do not disburse bond proceeds as described in the offering documents.

There are two different processes. For our thematic overlay (climate change, land, water, living, health), the ESG team researches the issuer and excludes or upgrades bonds issued by that party based on their negative or positive contribution to one of our themes.

For green bonds, the bond is analysed primarily at bond level (however, we take into account whether the issuer makes real efforts towards an energy transition and more sustainability to avoid green washing). The bond needs to meet the criteria of ACTIAM's green bond policy at the minimum. If this is not the case, the bond will not be registered as a green bond in ACTIAM's system, thereby decreasing the likelihood that this bond will be bought - if the bond is still bought, it will not be registered as a green bond and will not be included in ACTIAM's administration of green bonds.

12.3. Additional information. [Optional]

FI 13. Thematic investing - assessing impact

13.1. Indicate how you assess the environmental or social impact of your thematic investments

13.2. Additional information. [Optional]

Part of our green bond policy is that issuers need to report at least annually. These requirements are different for the other thematic bonds, as they are excluded or upgraded based on the analysis of the issuer, not the bond.

We have had an independent audit conducted on the carbon footprint of our FI (and equities) investment funds early 2017 (over 2016 data).