1. Socially Responsible Investing (SRI) and TRI Presented by: Paul A. Hilton, Director, Advanced Equities Research Date: February 12, 2008

2. 1 Original Definition: Investing with your values Evolving Definition: Integrating analysis of social, environmental, and governance criteria with traditional financial analysis What is SRI?

3. 2 Growth in SRI US Socially Screened Mutual Funds 199555 2005201 Source: “2005 Report on Socially Responsible Investing Trends in the United States”, Social Investment Forum, 2006. US SRI Assets Under Professional Management (in USD billions)

4. 3 Interest in SRI  54% of those not in SRI funds would now be interested in one, up from 40% in 1999.  Nearly 9/10 (87%) would consider if they knew the rate of return was the same.  29% have investments in SRI funds, up from 25% in 2002.  Investors seek companies that: –Operate with higher levels of integrity (30%) –Do not harm the environment (26%) –Are not involved in sweatshop labor (15%) *“Attitudes Toward Socially Responsible Investing,” Yankelovich Study, conducted on behalf of Calvert, January 2006.

5. 4 ESG and the Bottom-Line Proactive management of ESG can influence financial performance:  Brand value/ customer loyalty/ reputation  Compliance posture  Cost structure  Insurance (property & casualty, D & O)  Ability to attract and retain employees  Right to operate (e.g.: community allowing expansion of plant) Major public pension funds are taking notice: CalPERS, State of New York, and Connecticut have pledged to incorporate ESG factors into investments as part of the United Nation’s Principles of Responsible Investments (PRI).

6. 5 Academic Research Suggests Link with Performance * The Journal of Investing, Fall 2005, “Answers to Four Questions,” Lloyd Kurtz, p. 125-139. A review of academic studies in The Journal of Investing shows there is no performance cost to SRI on a risk adjusted basis*  ESG factors may in fact show a positive connection with financial metrics and/or stock price  Environment  Workplace  Corporate Governance  Reviews major studies including “Moskowitz Prize” winners, an annual industry award for the best academic study on SRI

7. 6 Academic Research Suggests Link with Performance For example: “Corporate Social and Financial Performance: A Meta-Analysis”  Based on Marc Orlitzky's 1998 doctoral dissertation  Received industry award (“Moskowitz Prize”) in 2004 for best academic study on SRI  Covered all major SRI studies from 1972-1997  52 studies looked at relation between corporate social performance (CSP) data and corporate financial performance (CFP) metrics (stock market returns, P/E ratio, ROE, ROA, ROA-T-bill rate)  Finds a positive association between CSP and CFP “across industries and across study contexts" Source: Orlitzky, Marc, Frank L. Schmidt, and Sara L. Rynes. "Corporate social and financial performance: A meta-analysis." Organization Studies, 24, 2003.

8. 7 ESG and the Bottom-Line Major Wall Street Firms, such as Citigroup, Goldman Sachs, and UBS, are Producing Research on ESG and Materiality as part of the Enhanced Analytics Initiative (EAI). Research Provider TitleDateRegion CitigroupSolar Energy: Rise of a New Power Generation June 2006Europe Goldman SachsIntroducing GS Sustain June 2007Multi-Region Lehman Brothers The Business of Climate Change I and II February, September 2007 Global UBSAlternative Alpha: Land – The Long View July 2006Multi-Region

9. 8 Need for Comparable Data  Most environmental ratings based in part on environmental performance metrics.  Companies are providing more data through voluntary reporting: GRI Reports  Need more verified third party data.  Few vendors specializing in processing government data.  Wish list: shorter lag-time, company level data, forward-looking data, toxicity weightings, international data, peer to peer comparisons.

10. 9 For more information on any Calvert fund, please contact your financial advisor or call Calvert at 800.368.2748 for a free prospectus. An investor should consider the investment objectives, risks, charges, and expenses of an investment carefully before investing. The prospectus contains this and other information. Read it carefully before you invest or send money. Calvert mutual funds are underwritten and distributed by Calvert Distributors, Inc., member FINRA, a subsidiary of Calvert Group, Ltd. #xxx-200802 May lose value. Not FDIC Insured. No Bank Guarantee. Not NCUA/NCUSIF Insured. No Credit Union Guarantee. A Note on Mutual Fund Investment Risk Mutual funds can offer the advantages of diversification and professional management. But, as with other investment choices, investing in mutual funds involves risk, including the possible loss of principal invested. Different funds carry different types of risks. For example, stock funds are subject to stock market risk. Stock markets are volatile and can decline significantly in response to adverse issuer, political, regulatory, market, or economic developments. Bond funds, for example, are subject to interest rate risk, the risk that the market value of the bonds will go down when interest rates go up, and credit risk, the possibility that companies or other issuers whose bonds are owned by the fund may fail to pay their debts. Before you invest, be sure to read a fund's prospectus to learn about its investment strategy and the potential risks. Not all Funds may be available at all firms. Disclosure