SRI OWNERSHIP & ESG INSIGHTS SOFIA IR CONFERENCE 25 SEPTEMBER 2015 Miguel Santisteve Associate Director SRI & ESG Research & Advisory Services

WHY SUSTAINABILITY MATTERS TO INVESTORS Who are Sustainable and Responsible Investors? outstanding level of integration of Environmental, Social and Governance performance factors in their investment decisions long term investment horizon committed to actively engage with companies and maintain a constructive dialogue with them on sustainability issues. Why does Sustainability and Governance matter to these investors? Increasing importance of intangible assets vs. tangible assets. Financial risk management: financial metrics do not offer a holistic view on a company Reputational risk management Opportunities to invest in companies embracing sustainability as these will be more likely to overcame current/future sustainability challenges Empirical evidence that ESG creates portfolio alpha on the long-term Retail investors and pension fund savers

%SRI Share of Equity Market SRI EQUITY AuM & SHARE OF EQUITY MARKET %SRI Share of Equity Market Environmental, Social and Governance integration and SRI themed funds have more than quadrupled their assets under management since 2010, having achieved a 28.4% annualized growth rate during the period. In line with this SRI market growth in absolute terms, Nasdaq currently estimates that Sustainable and Responsible investors that fully integrate ESG manage 6.0% of all equity assets invested globally.

BEST SOURCES FOR ESG INSIGHTS

IRO’S OPPORTUNITY TO COMMUNICATE ESG Discussing Environmental, Social and Governance (ESG) company performance and strategy with sustainable and responsible investors (SRI) is quickly becoming an essential part of the roles of senior executives and IROs. A ¼ of listed companies globally already include some aspects of ESG in their communication with investors ESG represents a new language to most IROs Expertise and specialization as communication with SRI investors grows Most companies with a higher operational risk profile is a must, others see the opportunity side Demand of ESG data on emerging markets continues to grow