ESG Questionnaire Response - Fisher Investments (FI)

1. Please provide your ESG-related policies.

FI considers environmental, social and governance issues in our investment and portfolio construction process. Additionally, we regularly screen and tailor our investment approach for separately managed accounts depending on any particular social and environmental guidelines mandated by the client. Please see our ESG Policy Statement attached.

* ¹ Fisher Investments (FI) is an investment adviser registered with the Securities and Exchange Commission (SEC). As of June 30, 2022, FI managed over $213 billion CAD, including assets sub-managed for its wholly-owned subsidiaries. CAD asset values were calculated by using the USD-CAD exchange rate as of the dates indicated. Source: FactSet. All assets as of June 30, 2022 in this document are preliminary and subject to reconciliation of accounts. FI and its subsidiaries consist of four business units – Fisher Investments Institutional Group (FIIG), Fisher Investments US Private Client Group, Fisher Investments Private Client Group International, and Fisher Investments 401(k) Solutions Group. The Investment Policy Committee (IPC – the firm’s portfolio managers) are responsible for all investment decisions for the firm’s strategies. Investment in securities involves the risk of loss. Past performance is no guarantee of the future returns and no representation is made that results similar to those shown can be achieved.
² FI’s IPC and Research Analysts are generalists who devote their efforts to all of FI’s strategies. Some investment professionals also devote their efforts to other business units’ strategies.

2. Are sustainable investing and ESG factors integrated into your investment process and portfolio management decisions? If yes, please provide details.

FI evaluates and integrates Sustainability Risks and ESG factors at multiple stages throughout the investment process.

Top-Down Investment Process

Sustainability Risks and ESG factors are among the many drivers considered by FI’s Capital Markets Analysts and FI’s IPC when developing country, sector and thematic preferences. Environmental regulation, social policy, economic and market reforms, labor, and human rights are among ESG factors assessed when determining country and sector/industry allocations and shaping an initial prospect list of portfolio positions.

FI’s IPC, with the assistance of FI’s Securities and Capital Markets Analysts, determines the materiality of the ESG considerations based on the exposure among publically-traded companies in these categories. Higher materiality could imply larger ESG-related risks or opportunities, and may influence sector and country weight preferences as well as individual stock selection. The investment strategy and positioning reflects FI’s outlook over a 12-18 month horizon. 

At a client’s discretion, FI is able to refine prospective equity lists further by applying the firm’s or client provided ESG screens to the list of prospective securities  for separately managed accounts. Please reference the appendix for a sample of the firm’s screens employed for most ESG portfolios. FI’s screening process leverages MSCI ESG Research capabilities to identify and remove portfolio candidates involved in business activities deemed inconsistent with FI’s, or client-provided, screens. 

Bottom-Up Investment Process

FI’s Securities Analysts perform fundamental research on prospective investments to identify securities with strategic attributes consistent with the firm’s top-down views and competitive advantages relative to their defined peer group. The fundamental research process involves reviewing and evaluating a comprehensive set of qualitative and quantitative data, including ESG factors, prior to purchasing a security. Factors considered in portfolios include, but are not limited to: shareholder concentration, corporate stewardship, environmental opportunities & liabilities, and human or labor rights controversies. Generally, FI would choose not to invest in companies when, in its opinion, security level issues: (i) violate a client mandated ESG policy or (ii) present an inordinate risk to a company’s operational or financial performance or (iii) appear to present undue headline risk to share price performance.

A material contribution of FI’s relative performance derives from sector, country, style and thematic decisions. As such, FI does not expect security-level ESG restrictions or preferences to materially impact expected risk or return characteristics of the strategies, relative to the benchmark over a market cycle. FI believes its ESG-related research capabilities can help enhance portfolio relative performance, particularly in reducing exposure to countries, industries, and securities that may underperform as a result of their negative ESG risks.

Please see our full ESG Policy Statement.

3.a. Are you a signatory to the UNPRI?

Yes, in 2014, FI became a signatory to the UNPRI. Please find attached the latest copy of FI’s UNPRI Report. On the 2020 Assessment Report, FI received A+ scores on the Strategy & Governance, and Incorporation, and an A on the Active ownership module.

3.b. If you are signatory to other coalitions, please list them.

Please see below for a list of international coalitions that FI (or its subsidiaries) have joined:

• FI is a signatory to the UN PRI.
• FI has provided a response to the UK Financial Reporting Council Stewardship Code.
• Fisher Investments Japan Limited, a wholly-owned subsidiary of FI, is a signatory of the Japanese Stewardship Code.
• FI is a full signatory to the UN Global Compact.
• FI is a signatory to the Carbon Disclosure Project (CDP).
• FI is a signatory to the Climate Action 100+.
• FI is a supporter of the Task Force on Climate-related Financial Disclosure (TCFD).

3.c. Indicate any other international standards, industry guidelines, reporting frameworks, or initiatives that guide your responsible investing practices.

Please see question 3) b) above.

4. Please describe how ESG oversight and integration responsibilities are structured at your firm, including the process for escalation of key ESG issues. How do you obtain ESG information/data (e.g. public information, third party research, reports and statements from the company, direct engagement with the company)?

Our responsible investment activities are integrated into several our of teams, including FI’s ESG Research Analysts, the IPC’s ESG Point-Person, the Senior Responsible Investment Manager, the Investor Responsibility and Engagement team, and the Client Guidelines and Assurance team. 

FI’s formal Responsible Investments Committee oversees our ESG activities and keeps apace of ESG industry developments. The Committee, which includes leadership of Fisher Investments Institutional Group (FIIG) and the Portfolio Management Group (PMG), provides oversight and alignment of ESG activities with the firms’ strategic priorities.

Investment Team and Process

Within our top-down investment framework, the Investment Policy Committee (IPC)2 reviews ESG issues and the risks they may present to the portfolio. Our ESG Specialists are responsible for staying on top of current and developing ESG trends, and briefing the IPC when appropriate. Moreover, the ESG Specialists work with our ESG data providers to help ensure that high quality, comprehensive ESG data is available for our decision-making. Our Analysts also monitor the consistent application of ongoing ESG analysis for individual securities.

Companies that do not qualify based on our pre-determined ESG guidelines are eliminated through ESG mechanical screens (including: Business Activities, Defense and Weapons, Global Sanctions and Global Norms/Conventions). Additionally, the IPC and Research Analysts conduct a final risk assessment before choosing a stock. This final risk assessment encompasses an evaluation of material ESG risks to the stock. 

Furthermore, our ongoing analysis of global political drivers can influence stock selection tied to potential political or regulatory risks companies face surrounding ESG issues. In situations where we believe any ESG issues present an inordinate risk to a company’s operational or financial performance, or if we believe it presents undue headline risk (where negative sentiment over the issue could present a material headwind to performance), we would typically choose not to invest in that company.

Compliance

Additionally, FI’s ESG Specialists work with FI’s Client Guidelines and Assurance team to help ensure the appropriate application of mechanical screens and to help identify potential ESG issues with securities using MSCI ESG database tools. The ESG Specialists also work with our portfolio engineering and client operations teams to accommodate client-mandated ESG/SRI restrictions. Portfolio guidelines compliance is monitored on a pre-trade and post-trade basis.

Third Party Providers

In addition to our internal research, FI uses ESG data from external service providers. FI currently maintains subscriptions to a variety of resources. These resources include, but are not limited to: 

• MSCI ESG Ratings & Sustainalytics ESG Risk Ratings
• MSCI ESG & Sustainalytics Business Involvement Screening
• MSCI ESG Global Norms & Controversies
• MSCI ESG Sustainable Impact Metrics
• MSCI ESG Climate Value-at-Risk & Climate Change Metrics
• MSCI ESG SFDR Adverse Impact Metrics & EU Taxonomy Alignment
• MSCI Barra Risk Metrics
• CDP (formerly Carbon Disclosure Project)
• Bloomberg
• ISS
• FactSet

5. What channels do you use to communicate ESG-related information to clients and/or the public? Do you produce thought leadership (written reports and publications)? If so, is the information available to the public? Please provide links, if applicable.

FI is a training and knowledge-oriented organization, and our service philosophy begins with a commitment to transparency and responsiveness. FI provides in-depth reporting and global market commentary and outlooks to the client, as well as regular research and educational materials and presentations. All of these materials can be fully customized to focus on ESG.

We share a large amount of investment training and global market research with our clients, and we are continually producing leading commentary and insights on ESG investment management innovation. We pride ourselves on client communication and education and make special efforts to present our views on global markets and ESG regularly.

Our client service department has the ability to provide the following:

Customized Research & Education

• Conduct customized presentations tailored to clients’ interests and topics of preference (such as ESG).
• Create ESG research and educational materials for clients as a whole or to individual members of their organizations.

Client Communication

• Provide a dedicated Portfolio Specialist and/or Relationship Manager accessible to clients for market updates and to discuss ESG aspects of the portfolio.
• Provide clear and straight-forward updates about our IPC’s thoughts on market events and ESG topics.

Furthermore, FI produces a number of ESG reports and can customize reporting to the client’s needs. We frequently provide clients with reporting in the desired format and frequency. Below are a few examples of ESG reporting that FI currently provides: 

• Bi-annual ESG newsletter
• ESG Quality Score Reporting
• Carbon Impact Report
• Carbon Portfolio Analytics Report
• Engagement Report

We can generally provide reporting on some extra-financial/ESG aspects as part of standard reporting, and are pleased to customize reporting for our requirements whenever possible. Firm level engagement and proxy voting reports are uploaded to the company website annually.

Additionally, we publish ongoing commentary on our website for a variety of ESG topics.

Our in-house Client Reporting Team is dedicated to handling clients’ reporting requests, and we take pride in our willingness and ability to customize reporting to fit clients’ needs and preferences.

6. Do you have periodic reviews of your ESG process/approach to assess its effectiveness? What are the results? What would cause you to disregard ESG issues in your investment/analysis decisions?

FI evaluates ESG-related progress in several ways. For example, we created a Responsible Investments Committee comprised of leaders within Fisher Investments Institutional Group (FIIG) and FI’s Portfolio Management Group (PMG). This committee meets regularly with the intent of guiding and developing our ESG strategies, as well as keeping FI current with ESG industry developments. We also use client satisfaction feedback and the annual PRI Assessment to review our progress regarding responsible investment. As responsible investment is a rapidly evolving discipline, FI devotes considerable resources to help us acquire and maintain the requisite ESG knowledge and tools.

In conjunction with internal reviews, the PRI annual assessment report grants us the opportunity to determine our areas for improvement. FI’s assessment grade has improved over the last several years, which is reflective of the additional resources dedicated to firm-wide ESG efforts. On the 2020 Assessment Report, FI received A+ scores on the Strategy & Governance, and Incorporation, and an A on the Active ownership module. FI greatly values these opportunities as we are dedicated to continually improving our ESG capabilities.

Generally, we would not disregard ESG issues during investment decision-making, rather ESG issues are an integral part of overall stock analysis. If the IPC were to disagree on an ESG concern, there would be an iterative process of further information gathering and debate on the matter. This would include interaction with the Research Analysts and an effort to find information that supports or refutes both arguments. As the Co-Chief Investment Officers of the firm, Ken Fisher and Jeffery Silk have veto power, although in practice this would be utilized extremely rarely in the investment process. 

If a collective agreement or decision is not reached then we would ultimately have a lower conviction on that particular theme, weighting or stock decision.

7. Describe how you identify, assess, and manage climate-related risks.

FI considers both direct and transition risks and opportunities on the organization and its primary activities related to investment management. While the direct climate-related risks to the organization are limited, FI does consider such risks throughout the investment process. Within portfolios, for example, FI reviews the impact of climate-related legislation and shifting consumer and investor preferences on country, sector and security decisions, and the firm regularly engages companies in dialogue on climate-related risks and opportunities.

FI’s risk management process includes the identification, assessment and management of material climate-related risks in the firm’s investment decisions. FI devotes significant resources to understanding relationships and opportunities across countries/regions, monitoring for both market and systemic risks globally. FI believes the research structure in place allows the firm to capitalize on global macro trends and cross-country and sector analysis, thereby increasing the firm’s chances of achieving excess return and controlling risk in a variety of market environments. The firm continuously monitors drivers to ascertain shifts and whether the market has discounted them yet.

8. Describe the climate-related risks and opportunities you have identified over the short, medium, and long term.

FI considers both direct and transition risks and opportunities on the organization and its primary activities related to investment management. While the direct climate-related risks to the organization are limited, FI does consider such risks throughout the investment process. Within portfolios, for example, FI reviews the impact of climate-related legislation and shifting consumer and investor preferences on country, sector and security decisions, and the firm regularly engages companies in dialogue on climate-related risks and opportunities.

Further, Research Analysts monitor responsible investments thematic opportunities and risks deemed material to returns or those supporting ESG portfolio objectives:

• Environmental thematic opportunities include, but not limited to, those related to the global low carbon transition (e.g. energy efficiency, alternative energy, electrical vehicle trends, green building & sustainable water).
• Environmental thematic risks include those related to thermal coal power, resource extraction (e.g. mining labor strikes and resource nationalization) and litigation tied to environmental impact.

FI assesses the risk of climate change in the security selection process, examining specific climate change sources such as carbon emissions, fossil fuel production, and fossil fuel use when deemed material. Within ESG portfolios, carbon-related risks are more directly targeted by restricting various coal-fired utilities and mining companies involved in thermal coal extraction. Within sustainable equity portfolios, FI explicitly targets a carbon footprint reduction relative to a benchmark.

FI continually reevaluates companies within the ESG portfolio for policy compliance, ensuring securities held in the ESG portfolio maintain socially responsible business practices. Such assessments seek to improve the probability of alpha generation or to support the non-financial objectives mandated by FI’s clients.

Short term: Regulatory, Environmental Stewardship, & Business Activities

Short term risks and opportunities are those where businesses may be negatively impacted by regulation or poor environmental stewardship or positively impacted through a business activity (e.g. energy efficient products and services.) Such risks and opportunities are idiosyncratic and mostly within the firm’s investment horizon (12-18 months).

Medium term: Regulatory & Reputational

Medium term risks and opportunities are those where country policy or shifting consumer preferences may have more general impact (positively or negatively). Such risks and opportunities are sometimes idiosyncratic, and sometimes within the firm’s investment horizon.

Long term: Climate Change Transition Risks

Long term risks and opportunities are those mostly associated with a broader transition from a carbon-based economy. These risks and opportunities may be sizeable but slower to mature. Such long-term risks and opportunities are monitored to help ensure shorter-term opportunities and risks are appropriately identified.

9. Describe the resilience of your investment strategy, taking into consideration different climate-related scenarios.

FI became a supporter of the TCFD in late 2019 and we have conducted scenario analysis/climate risk stress testing on very limited basis to date, we also plan to publish a TCFD-aligned report by year-end. The firm has engaged with data providers (e.g. MSCI ESG, Sustainalytics, ISS) to assess various climate scenario/stress test offerings. We expect our capabilities to complete more formal climate scenario analysis to increase over time. We do regularly review carbon foot print data (e.g. Carbon Emissions/Carbon Intensity) as part of efforts to monitor carbon related portfolio risks.

FI believes ESG investors are best served by an investment process considering both top-down ESG issues, as well as those same ESG issues from a bottom-up perspective. FI believes integrating ESG analysis at the country, sector and security levels consistent with the clients’ investment goals and ESG policies increases the likelihood of achieving desired performance and improving environmental and social conditions globally. FI works to incorporate ESG practices into the investment process in a manner that focuses on long-term results (rather than immediate returns) and allows for repeatability in the application of our investment process. At the industry level, responsible investing proposes investing in companies that meet the needs of the present without compromising the ability of future generations to meet their needs.

10. Do you track the carbon footprint of portfolio holdings?

Yes

If yes, please describe the methodology and metrics used, and whether you have a set target for reducing the portfolio's footprint.

Yes, FI is able to measure the carbon footprint for individual portfolios, including Scope 1, 2, and 3 emission data. We utilize MSCI ESG Carbon Portfolio Analytics to measure the carbon intensity and carbon footprint of the portfolio. The portfolio has had a lower carbon footprint than the benchmark for several years, which is a direct result of our security selection and our views on the sectors responsible for a disproportionate amount of carbon emissions. We do not, however, actively target a particular carbon footprint in non-Impact strategy portfolios.

We are able to partner with our clients to accommodate specific carbon mandates or produce specific carbon reporting. FI considers the risk of potential climate related legislation and the risk of carbon emissions primarily by restricting various coal fired utilities and mining companies involved in thermal coal extraction. FI assesses the risk of climate change in the portfolio screening process, examining specific climate change sources such as toxic emissions, fossil fuel production, and fossil fuel use. FI continually re-evaluates companies within the ESG portfolio for policy compliance, ensuring securities held in the ESG portfolio maintain socially responsible business practices.

FI considers both direct and transition risks and opportunities on the organisation and its primary activities related to investment management. While the direct climate-related risks to our organisation are limited, FI does consider such risks throughout the investment process. Within portfolios, for example, we review the impact of climate-related legislation and shifting consumer and investor preferences on country, sector, and security decisions. Within ESG portfolios, carbon-related risks are more directly targeted by restricting various coal-fired utilities and mining companies involved in thermal coal extraction. Within Low Carbon and Impact portfolios, FI explicitly targets a carbon footprint reduction relative to a benchmark. FI continually re-evaluates companies within the ESG portfolio for policy compliance, ensuring securities held in the ESG portfolio maintain socially responsible business practices. Such assessments are meant to improve the probability of alpha generation and are not driven by ideological preferences.

11. What are your firm's emissions? Please demonstrate how/whether you are taking steps to reduce these emissions.

FI’s most recent assessment on carbon emissions for our primary headquarters located in Camas, Washington was completed in summer of 2019. The Energy Star benchmark report was provided through the Department of Energy and the Environmental Protection Agency’s Portfolio Manager Platform. Results showed carbon emissions annually for Building 1 was 17.3 pounds of CO2 per square foot and the building is 114,000 square feet. For Building 2, it was 9.44 pounds of CO2 per square foot annually and the building is also 114,000 square feet.

FI has also implemented the following internal environmental efforts:

• Carbon Off-Set Programme: Starting in 2019 we began purchasing carbon offsets for all FIIG business travel. We are also a member of Conservation International and are a member of the emerald circle of Conservation International.
• Camas, Washington Offices Self-Dimming Sustainable Lighting: System controls shut lights off in unused conference rooms and adjusts the brightness of internal lighting so that areas near windows that require less light, receive less light.
• The Camas, Washington offices feature customised windows that reduce solar heat and lower power usage for heating/cooling, and feature HVAC systems that use only outside air 80% of the time to provide cooling.
• The Camas, Washington offices utilise a storm water handling system that purifies water from the parking lots and the roads, through natural bio-swales and large filters.
• Camas, Washington corporate campus and associated office buildings, built between 2010 and 2014: The offices were built with the natural habitats in mind, to preserve and enhance the wetlands and surrounding environment. For example, FI was able to maintain over 130 acres of on-site wetlands, clear fewer than 40 trees while preparing the land for development, and plant over 5,000 wetland plants, 2,000 shrubs and 400 trees during development. Further, the Camas office buildings meet Leadership in Energy and Environmental Design (LEED) Silver Requirements, are the most energy-efficient commercial buildings in the surrounding Clark County (according to Clark Public Utilities).

12. For the mandate you manage for Queen’s, what percentage of equity holdings (if applicable) have credible net zero commitments?

Measuring and monitoring ‘Paris Alignment’ poses some challenges for the investment community today including those related to differing underlying assumptions of various models/tools and challenges related to the timeliness and accuracy of carbon data as well as the veracity of corporate commitments. Despite these challenges, we support the industry’s continued pursuit of improved carbon disclosures and Net Zero/Paris-aligned equity strategies. Fisher Investments has been a supporter of the Task Force on Climate-Related Financial Disclosures (TCFD) since 2019, we are assessing the feasibility of becoming a signatory to the Net Zero Asset Managers Initiative, and we are actively developing Net Zero/Paris-aligned strategies. Additionally, FI does engage with companies to encourage alignment with the Paris Climate Agreement when relevant. Finally, in separately managed accounts we have the capability to include further custom Paris-alignment and Net Zero targets in pursuit of a client’s particular climate-related objectives.

13. How do you assess the credibility of a company’s emission reduction targets?

FI is able to measure the carbon footprint for individual portfolios. We utilize MSCI ESG Research tools and data to measure the carbon intensity and carbon footprint of the portfolio. We are able to partner with our clients and accommodate specific carbon mandates. FI considers the risk of potential climate related legislation and the risk of carbon emissions primarily by restricting various coal fired utilities and mining companies involved in thermal coal extraction. FI assesses the risk of climate change in the portfolio screening process, examining specific climate change sources such as toxic emissions, fossil fuel production, and fossil fuel use. FI continually reevaluates companies within the ESG portfolio for policy compliance, verifying securities held in the ESG portfolio maintain socially responsible business practices.

In general, we view climate change as a longer term market consideration with the potential to create winners and losers primarily through legislative action and innovative energy efficient solutions from private enterprise. Political examples would include multi-nation agreements on carbon reduction and various countries deemphasizing the use of coal in favor of alternative and cleaner energy sources. We believe the winners moving forward will likely be companies finding innovative and sustainable solutions for efficient energy production and consumption, in turn unlocking shareholder value.

14. What forward-looking metrics do you use to assess an investment’s alignment with global temperature goals?

FI considers both direct and transition risks and opportunities on the organization and its primary activities related to investment management. While the direct climate-related risks to the organization are limited, FI does consider such risks throughout the investment process. Within portfolios, for example, FI reviews the impact of climate-related legislation and shifting consumer and investor preferences on country, sector and security decisions, and the firm regularly engages companies in dialogue on climate-related risks and opportunities.

Further, Research Analysts monitor responsible investments thematic opportunities and risks deemed material to returns or those supporting ESG portfolio objectives: 

• Environmental thematic opportunities include, but not limited to, those related to the global low carbon transition (e.g. energy efficiency, alternative energy, electrical vehicle trends, green building & sustainable water).
• Environmental thematic risks include those related to thermal coal power, resource extraction (e.g. mining labor strikes and resource nationalization) and litigation tied to environmental impact.

FI assesses the risk of climate change in the security selection process, examining specific climate change sources such as carbon emissions, fossil fuel production, and fossil fuel use when deemed material. Within ESG portfolios, carbon-related risks are more directly targeted by restricting various coal-fired utilities and mining companies involved in thermal coal extraction. Within sustainable equity portfolios, FI explicitly targets a carbon footprint reduction relative to a benchmark.

FI continually reevaluates companies within the ESG portfolio for policy compliance, ensuring securities held in the ESG portfolio maintain socially responsible business practices. Such assessments seek to improve the probability of alpha generation or to support the non-financial objectives mandated by FI’s clients.

15. Please provide the composition of your senior leadership team and board of directors, including women and visible minorities. How do you encourage diversity of perspectives and experience?

Our culture values and supports inclusivity and diversity. We hire from all educational and professional backgrounds and from locations around the world, creating diversity of thought and experience. While our work is not done, we are proud of the progress we've made:

• Senior Leadership Team: 33% identify as women or minority*
• Management: 40% identify as women or minority*
• Global Workforce: 44% identify as women or minority*
• Global Portfolio Management Group: 48% identify as women or minority*

We believe to succeed as a firm we must have an inclusive culture that encourages diversity and fosters an environment where all feel welcome and supported. Such a culture enables each employee to build a lifelong career and helps us better the investment universe. Embodying these values across our organization is crucial to our vision, culture, and success.

FI maintains a Diversity & Inclusion Team dedicated to the advancement of our D&I program. The Head of Diversity & Inclusion leads the team, has overall accountability for the program, and reports to the CEO in this capacity. The Head of D&I meets with the CEO on a regular basis to review ongoing initiatives, progress, and to ensure D&I is appropriately resourced and prioritized among the firm’s strategic goals. The D&I team is supported by a D&I Advisory Committee, which consists of four other executive members of Fisher. The D&I Advisory Committee provides additional insight, perspective, and support to the program when needed. The D&I Team and D&I Advisory Committee meet on a monthly basis. Additionally, we maintain an external partnership with an industry-leading D&I consulting firm, Russell Reynolds Associates, whose role is to support us in the design and implementation of D&I initiatives, which includes an in-depth review of our Talent Management processes (Recruiting, Development, and Retention) for opportunities to adapt to strengthen and improve existing processes.

Our D&I Team, under the direction of our CEO, sets annual goals for D&I Program advancement. Core components of the Program include: Training, Recruiting, Resources, Communication, Benchmarking, and Employee Lifecycle.

Our D&I Program encompasses a variety of initiatives which include, but are not limited to:

Our D&I Commitment

• Our Company Vision Statement reflects our long-term D&I commitment: To succeed, we must have an inclusive culture, actively developing and supporting diversity across the vast spectrum of human differences, creating a place of authentic belonging for all.
• Our “Values in Action” document provides employees tangible examples our cultural values. Regarding D&I, it states:

     - Actively develop and support diversity and inclusion

     - Equitably recruit, hire, develop and retain employees with diverse backgrounds and perspectives

     - Seek diverse perspectives and celebrate differences

     - Create a place of authentic belonging and inclusion

• D&I is one of a handful of firm-wide goals set by our CEO. 2022’s goal is to: “Continue to make material progress on our multi-year journey to be an industry diversity and inclusion leader.”
• We send out regular firm-wide communications on progress toward our D&I goals.
• We maintain a partnership with an industry-leading D&I consulting firm, who supports us in the design and implementation of D&I initiatives and appropriate benchmarking.
• We regularly maintain a firm-wide Diversity & Inclusion Policy.

Assessments of Employee Engagement and Inclusion

• We conduct the annual “Great Place to Work” survey to gather anonymous employee feedback on their experience working at the firm.
• We partnered with an industry-leading D&I consulting firm to administer their Inclusion Index Survey to all employees in 2019, 2020 and 2021. Employees anonymously completed the survey and assessed factors such as their sense of belonging, workplace respect, organizational fairness, and leveraging different perspectives.
• We use insights from these surveys to create and prioritize D&I and other human capital related initiatives.
• In 2018, completed listening tour of 23 employee focus groups across our various offices on D&I to perform a qualitative assessment to hear from employees directly.

Training

• We facilitate D&I training for all new employees
• We facilitate Inclusive Leadership Development Workshops for all managers.
• “Inclusive Leadership” is an evaluation factor for all manager reviews.
• “Values Differences” is a core competency expected of all employees to help ensure we’re hiring and developing employees who value and foster diverse perspectives.
• We provide mandatory D&I training for all employees, which includes topics such as Introduction to D&I for new employees, Inclusive Leadership for managers, and Unconscious Bias training for all employees.

Recruiting

• Expanded recruiting alliances and targeted recruiting campaigns with diverse organizations and associations, which now include:

     - Partnering with DirectEmployers, a non-profit association, that provides us with targeted job post distribution to over 60 sites catering to diverse job seekers.
     - Our alliances with 100 Women in Finance, Fairy Godboss, American Business Women’s Association (ABWA), National Association for Black Accountants (NABA), Society of Hispanic Professional Engineers (SHPE), Girl Geek, HirePurpose (Veteran Outreach), Career Eco, Hispanic Serving Institutions (HSI) Collaborative, MyGwork (LGBTQ+), and DirectEmployers.
     - Actively seeking job applicants at 62 Historically Black Colleges and Universities (HBCUs), 103 Hispanic-serving institutions, 27 Women’s colleges and 151 Asian American/Native American Pacific Islander-serving institutions. Maintaining a strategic sponsorship with Fairy Godboss, offering a women's career community, practical career advice, job openings and company reviews to help women advance their careers.

• Implemented DataPeople (formerly TapRecruit) software to ensure job descriptions are inclusive and avoid biased language.
• Added a dedicated Diversity & Inclusion page on our external careers website (fishercareers.com) to highlight our culture, values, and commitment to D&I; encouraging a diverse applicant pool and making clear that all are welcome.

Employee Resources

• Established a part-time work program available to all employees, globally, along with testing different work from home options.
• Expanded resources to provide employees with access to robust emotional health support options globally, including third-party, confidential assistance to help them with a wide variety of life’s challenges.
• Expanded the Affinity Group Tests which now include MOSAIC: Race & Ethnicity, Pride: LGBTQ+, GEM: Gender Equality Matters, and Able: Disabled and Differently Abled. To date, almost 400 employees are participating in our Affinity Group tests.
• We celebrate diversity by sharing information about different cultural and religious holidays or commemorations such as Juneteenth, Pride Month, Diwali, and Black History Month.

2022 Strategic goal set by CEO: Continue to make material progress on our multi-year journey to be an industry diversity and inclusion leader. Specific objectives under this goal include:

D&I Team

• Continue to measure and report on our progress toward our multi-year goal of being an industry D&I leader.
• Support and advise Human Capital in making improvements to the candidate recruiting and onboarding experience.
• Continue D&I training across the firm; support Human Capital in training specific to hiring managers.
• Promote BU alignment with corporate D&I program. Put together a well-defined communication strategy and plan.
• Continue testing and iterating affinity groups.
• Evaluate third party validators for D&I program success.

Human Capital

• Collaborate with D&I team to improve overall reporting.
• Improve recruiting and onboarding experience including enhanced communication on our D&I "why", better candidate expectation-setting on interview and assessment process, and introduction of D&I resources during on-boarding; develop overall plan.
• Enhance sourcing and selection processes by reviewing all current diversity relationships for opportunities, exploring use of diverse interviewer slates and driving more consistency in interview assessment; develop overall plan.
• Continue next phase of D&I training strategy with new focuses on interview training and building diverse and inclusive teams; rollout new interview training.
• Create more transparency around career opportunities and employee movement through new career development resources and guidance along with greater transparency for career opportunities; first rollout of new resources.

* As of January 1, 2022. FI collects diversity data on an employee-voluntary basis, in accordance with applicable local laws and regulations. The numerators do not double count (e.g. an ethnic minority female is only counted once). FI and its subsidiaries do not collect ethnicity information for non-US employees. “Managers” defined as Team Leaders, Program Managers with direct reports and up. “Senior Leadership Team” defined as Senior EVP and up.

16. What proportion of the time do you vote with or against management on shareholder resolutions, board appointments, and auditor appointments? What proportion of the time do you vote with or against management on ESG issues? How does this break down for climate, diversity, and remuneration issues?

FI utilizes a third-party proxy voting service, ISS as an advisory service and to manage the proxy voting process. ISS provides a vote recommendation, helping to ensure each agenda item is evaluated according to the client’s policy guidelines, and then helps ensure the ballot shares are counted by the corporate issuer.

Throughout this process, members of FI's Securities Operations team review the ballot handling and vote recommendations to help ensure the accuracy of the ballot reporting, and that the shares are being voted in line with the appropriate policy. FI reserves the right to override ISS-provided recommendations. Please find the following voting results on the requested items:

Voting on Shareholder resolutions, Board appointments, and Auditor appointments

With management: 88.29%, Against management: 11.71%.

Voting on ESG Issues

With management: 48.80%, Against management 51.20%.

Voting on Climate/Health

With management: 54.74%, Against management: 45.26%.

Voting on Diversity

With management: 39.60%, Against management: 60.44%.

Voting on Remuneration Issues

With management: 80.49%, Against management: 19.51%.

17. What proportion of all independent ESG shareholder resolutions do you support?

FI has voted in support of 57.39% of shareholder ESG resolutions.

18. What proportion of remuneration packages do you vote in favour of? In your view, is the current level of executive remuneration too high, too low, or about right? How is this view reflected in your voting record on remuneration?

FI voted for 79.10% of executive remuneration proposals. It’s not possible to make general statements about the absolute levels (too high, too low, or about right) of packages as each remuneration package should be reviewed in the context of the individual company, relative to peer companies and with respect to the alignment of said remuneration package to creating shareholder value.

19. Have you ever co-filed an ESG-related shareholder resolution? If so, how many and with what frequency?

FI has not filed or co-filed an ESG-related shareholder resolution.

20. Have you ever voted against a director for explicitly ESG-related reasons? If so, why? If not, would you consider doing so in the future?

FI currently does not track this data through our third-party proxy voting service, ISS. We generally vote for director nominees, except under the circumstances of insufficient board independence, diversity, expertise, responsiveness, accountability to shareholders.

21. How many companies do you engage with? What proportion of your engagements focus on environmental and social issues? What are your engagement goals? Are these goals outcome/action- based (e.g. decreases in emissions or increases in number of women on the board) or means-based (reporting on emissions or number of women on the board)?

For the past 12 months ending June 30, 2022, FI initiated engagement dialogue with 8 companies held in the Queen’s University Small Cap Value portfolio. On a firm-wide basis, for the past 12 months ending June 30, 2022, FI engaged with 98 companies. Typically, two-thirds of our engagements focus on environmental or social issues. FI participated in an environmental disclosure co-engagement initiative in Q2 2022 that elevated the proportion of engagements focused on environmental and social issues to 75%.

Before undertaking an engagement, FI defines the engagement’s objective and a plan for follow up with the company. The objectives include goals and milestones to measure progress, and if they are not met, we reengage with the company. FI determines on a case-by-case basis whether an outcome/action-based or means-based goal is applicable for a company being engaged. All engagement interactions are documented in the firm’s Engagement Tracker, and we produce a quarterly engagement report.

22. What is your policy around the escalation of engagement; how and why might this happen and what is the ultimate tool you might use (e.g. voting against board re-election, etc.)?

Our experience shows ESG issues are usually best addressed by direct, confidential contact with company officials, whether at the board or management level as appropriate. Thus, we prefer engagement over divestment.

In situations where a portfolio company is either unresponsive despite repeated inquiries or continues to perform poorly against the engagement objective, FI may seek to escalate the engagement dialogue. The escalation criteria include the materiality of the issue, the company’s record of previous responsiveness, and if escalation serves our clients’ best interests. If we activate escalation, we inform the management of our decision as well as our rationale.

Based on the evaluation, the IPC may take any of the following escalation action, at its discretion:

• Seek additional meetings with company management or board,
• Intervene in concert with other institutions on the issue,
• Vote in support of related shareholder proposals,
• Withhold our support from one or more board members, or
• Divest our holdings.

We take proxy voting very seriously and have long devoted substantial research and management time and resources to ensuring we make good voting decisions. The IPC maintains full responsibility for all voting activity. However, because many proxy issues fall into well-defined, standardized categories, we utilize ISS, an independent, third-party proxy voting service, as a resource in making informed proxy voting decisions. If the views of the IPC vary from ISS as applied to corporate governance standards, we vote shares in alignment with our view of the best interests of our clients — and not necessarily with management. Voting decisions are on the basis of our internal evaluation in each case and may rely on our own company-specific research or other outside research group — in addition to the views of ISS.

Additionally, we have partnered with ISS to create a custom voting policy consistent with our ESG policies that is made available to all of our clients. We frequently engage with company management on proxy voting issues. FI also provides the option for clients to retain proxy voting capabilities. These options best facilitate the views of FI’s investors being represented when casting votes.