Foresight : Stewardship Framework June 2023

Foresight Capital

Management -

Stewardship

Framework

Effective date: 28/06/2023

Contents

Introduction	1
Purpose, strategy and culture	3
Governance, resources and incentives	4
Conflicts of interest	4Error! Bookmark not defined.
Promoting well-functioning markets	5
Review and assurance	5
Client and beneficiary needs	6
Stewardship, investment and ESG integration	6
Montoring managers and service providers	7
Engaement	7
Collaboration	8
Escalation	8
Exercising rights and responsibilities	8

Introduction

Foresight Group1 is a sustainability led investment manager, specialising in renewable energy, infrastructure and private equity in both public and private markets. Foresight Group manages c. £12.3 billion of assets (based on unaudited AUM as at 31st December 2022) for some of the World's largest institutional investors, family offices, private and high net-worth individuals. The Group's investment activities are underpinned by a strong environmental, social & governance ("ESG") focus, which meets the increasing demands of today's investors and ensures the Group is consistently working towards creating a sustainable legacy for future generations.

Foresight Capital Management ("FCM") was established as a division of Foresight Group in 2017 and comprises a dedicated team to develop and manage investment vehicles offering daily liquidity to retail and institutional investors globally. The open- ended collective investment schemes FCM manages (each a "Fund" or "Strategy", collectively referred to as "Funds" or "Strategies") are global in nature and adhere to the investment objectives and sustainability investment criteria established for each of them. FCM considers itself to be an active owner and upholds its fiduciary responsibilities through maintaining an active approach to stewardship with robust management and governance structures in place.

The Group is a responsible investor and has been a signatory to the United Nations Principles for Responsible Investment (or the "UN PRI") since 2013. As a signatory to this voluntary framework, Foresight Group submits an annual report on its responsible investment activities. For the 2020 UN PRI assessment period Foresight Group was awarded the maximum of five stars for Strategy & Governance, and the Group's Infrastructure and Private Equity divisions were also awarded the maximum of five stars within the Direct Infrastructure category. FCM was awarded four out of five stars within the Listed Equity Active Fundamental category, and three out of five stars within the Listed Equity Voting category.

The purpose of this Stewardship Framework (or the "Framework") is to transparently disclose the processes maintained and oversight in place to ensure that capital is allocated to areas that create sustainable long-term value for ultimate shareholders. Although the Group is not a Signatory to the FRC's UK Stewardship Code, FCM has devised the Framework to ensure its activities are conducted in a manner that is aligned to the Principles of the FRC's Stewardship Code. As this Stewardship Framework is aimed at Foresight Group's activities involving investing in listed companies, at the date of this document, it is relevant and shall apply only to FCM.

Purpose, Strategy and Culture

Principle 1: Signatories' purpose, investment beliefs, strategy, and culture enable stewardship that creates long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society - UK Stewardship Code.

The Group and FCM seek to invest for a smarter future, with sustainability considerations paramount to the investment decision, alongside the wider financial aspects of an opportunity. FCM's investment philosophy and approach is to invest in a manner that supports sustainable economic and social development while creating long-term value for investors and to be conscious of the contribution their investments make to the environment and society. Strategies managed by FCM incorporate their own sustainability investment criteria and companies held are continuously monitored, evaluated and engaged with to ensure their ability to generate long-term value and provide sustainable benefits for the economy, the environment and society.

1 Foresight Group (or the "Group") comprises Foresight Group Holdings Limited together with all its direct and indirect subsidiary undertakings, including Foresight Group LLP

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Governance, resources and incentives

Principle 2: Signatories' governance, resources and incentives support stewardship.

The Stewardship Framework covers FCM's stewardship approach and the effective management of its processes through the course of its investing activities. FCM's active ownership approach and stewardship responsibilities include engaging on matters considered relevant and material to the Strategy as well as utilising shareholder rights of voting on resolutions at company meetings. All members of the FCM team are incentivised and formally evaluated on sustainability objectives. FCM are committed to considering all aspects of stewardship within the investment process and have dedicated personnel on the team to support proprietary sustainability research efforts. Furthermore, Foresight Group has over 200 professionals working across investments, sustainability and administration functions and is well resourced to support investments from financial and sustainability perspectives.

The direct investment expertise of the Group is leveraged by FCM, providing private market insights and asset management expertise when evaluating publicly listed companies in similar sectors. Furthermore, FCM utilise third party proxy research and advisory services which complement internal governance research. Third party research is provided by Glass, Lewis & Co. ("Glass Lewis" or "Proxy Adviser"), a leading independent provider of global governance services. Glass Lewis specialises in providing a variety of fiduciary-levelproxy-related services to institutional investment managers, custodians, consultants, and other institutional investors. The services provided include in-depth research, global issuer analysis, record retention, ballot processing and voting recommendations.

This Stewardship Framework includes an explanation of the Shareholder Engagement and Voting approach managed by FCM and outlines the principles by which stewardship efforts will be conducted. The Stewardship Framework will be updated as required to reflect changes in processes, regulation and/or guidelines, following regular reviews of the effectiveness of FCM's stewardship approach. Oversight of the Framework is jointly led by the Group's Sustainability and Risk functions while FCM is responsible for executing on the stewardship efforts. FCM will publish its inaugural Stewardship Report in 2024, to provide investors further insight on stewardship activity conducted during the year.

Conflicts of interest

Principle 3: Signatories manage conflicts of interest to put the best interests of clients and beneficiaries first.

FCM takes all reasonable steps to avoid conflicts of interest and, when they cannot be avoided, manages, monitors and (where applicable) discloses those conflicts of interest to prevent them from adversely affecting the interests of the Funds and their respective shareholders. It also seeks to ensure that shareholders are fairly treated. A conflict may arise at any time while FCM is managing a Fund, which might result in:

• Foresight Group or FCM gaining a benefit and possibly causing a disadvantage to another fund and/ or the investors in that fund; or
• one fund makes a gain or avoids a loss where there is a potential associated loss to another fund.

No third-party product provider or supplier has a material shareholding or financial interest in Foresight Group such as to be able to influence the Group's operating decisions to the detriment of any Fund, or underlying investors interests. The Group and FCM take all reasonable steps to identify conflicts of interest arising and to manage potential conflicts in a way that is fair to the funds managed by Foresight Group or FCM and their underlying investors and in accordance with the Group's Conflicts of Interest Policy.

Conflict of interest arrangements across the business are monitored by the Group's Compliance Team as per the FCA's requirements. Foresight Group has put arrangements in place that demonstrate the appropriate steps have been taken to prevent a conflict from adversely affecting the interests of the Group's managed investment vehicles and their underlying investors and they include:

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• information or physical barriers to ensure that relevant staff providing dealing, advice and management services are restricted from accessing confidential or non-public information available within the Group;
• a remuneration policy which sets out the arrangements put in place to ensure that compensation arrangements will not give rise to conflicts;
• a personal account dealing policy for staff that sets out conditions under which staff may engage in investment activity for their own personal accounts;
• an Inducements, Gifts and Hospitality policy which sets out arrangements for accepting and giving gifts and hospitality;
• all Investment Committee and Weightings Committee papers should include a description of any conflicts associated with an investment decision and describe the mitigants in place to manage any conflicts;
• disclosures may be used as a last resort to manage the conflict. Alternatively, the Group may decline to act for a client; and
• recording of conflicts in the Conflicts Register, along with the mitigating controls.

Promoting well-functioning markets

Principle 4: Signatories identify and respond to market-wide and systemic risks to promote a well-functioning financial system.

Systemic and market wide risks are managed and assessed through the lens of each Fund's sustainability investment criteria and stated investment objectives. Each Strategy managed by FCM is underpinned by the common driver which centres around providing capital to areas of the economy that support a decarbonised sustainable future and well-functioning societies. As such, positive impacts relating to climate change, social development and sustainable growth are inherent objectives of each Strategy managed by FCM. Through active management and a sustainability minded investment philosophy, FCM seeks to reduce risks associated with climate and societal change while promoting longevity and sustainability of returns for investors.

FCM manages the investment process to consider macro and micro risks associated with its investment activities and where possible seeks to manage these risks effectively. Furthermore, the Group's Risk Committee assesses business and regulatory risks in which FCM also participates. The Funds primarily invest in OECD countries, reducing currency, political and economic risks. However, where underlying portfolio companies have exposure to developing countries FCM will undertake enhanced due diligence to ensure the risks are understood and managed appropriately. FCM is a long-only investor and mitigates risks by diversifying, reducing or avoiding exposures to areas as required. Where exposures cannot be mitigated, FCM will engage with investee companies, other industry participants and regulators, as necessary.

Review and Assurance

Principle 5: Signatories review their policies, assure their processes and assess the effectiveness of their activities.

On an annual basis, FCM will review the Framework to ensure it clearly reflects practices undertaken on a day-to-day basis. Oversight of FCM's investment activities and adherence to investment objectives outlined in each Fund's prospectus are monitored by the Group's Compliance Team and also by the Fund administrators. Internal oversight of FCM's adherence to the Stewardship Framework review of the Stewardship Report will be conducted independently by the Group's Sustainability and Risk Committees. The Stewardship Framework and the processes managed by FCM have also been approved by the Group's Executive Committee. Furthermore, FCM will be providing a submission, alongside the Group, at the next UNI PRI reporting round in 2023. This provides investors further assurance on the processes maintained and managed by FCM.

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