A guide to responsible investingFebruary 2021

Everything’s Future.Invest today. Change tomorrow.

ContentsWhat is responsible investing? 03

Why invest responsibly? 05

Can I still make money by investing responsibly? 06

How can I invest? 07

Why invest with Aberdeen Standard Investments? 08

It starts with us 09

A handy guide to some definitions 10

03A guide to responsible investing

What is responsible investing?

We are responsible investors. Our goal is to generate sustainable, long-term returns for our clients. We aim to do so while having a positive impact on the environment, society and the wider world.Responsible investing is about ensuring that the companies you are invested in and the types of investments you hold are well governed and managed with accountability.

It takes into account environmental, social and governance (ESG) risks and opportunities when making investment decisions. These can include whether a company’s impact (positive or negative) on the environment, society and people could affect its future performance.

For example, when deciding whether or not to invest in a company, a responsible investment manager will look at a company’s energy consumption, how it disposes of waste or its carbon footprint. How it treats its employees, the transparency of its supply chains and the diversity of its board members are also important considerations, because these things can have a material influence on a company’s success.

We are active owners of our clients assets. We look to question companies on a vast array of issues, from their financial metrics and business practices, to board structure and how they remove their waste. We also encourage positive action where necessary, including guidance in areas like ESG reporting. Importantly, we vote on shareholder resolutions on our investors’ behalf, ensuring their voices are heard and interests protected.

A good way of thinking of all this is mindful investing. That is, having full awareness of the risks and opportunities offered by the companies and investments within a portfolio – and being active owners of them.

“ What we invest in today will determine the world we live in tomorrow.”Stephen BirdCEO, Standard Life Aberdeen

04A guide to responsible investing

05A guide to responsible investing

Why invest responsibly?

Every day, we face headlines highlighting the consequences of pollution, climate change, poor labour practices, corporate failures and more.The way businesses conduct themselves and how they manage their operations can contribute to some of these issues. Importantly, this can also affect their long-term success, and subsequently their investment performance.

Investing responsibly is one way of helping you avoid investing in these poorer quality companies and ensuring your money is used more conscientiously and constructively.

If you choose an investment manager that invests responsibly, they can direct money and resources towards companies and investments that are well governed and that effectively manage their environmental and social risks.

Ultimately, these are the types of companies that are more likely to deliver better value to investors like you, over the long term.

“ As responsible investors, our first priority is to generate sustainable financial returns for our clients. We aim to do that while having a positive impact on the environment and the societies in which we live.”Amanda YoungGlobal Head of Responsible Investment

05A guide to responsible investing

06 A guide to responsible investing

Can I still make moneyby investing responsibly?

Investing responsibly and selecting companies that care about the social and economic impact of their activities does not have to mean compromising on performance. In fact, quite the opposite can be true.Evidence increasingly suggests that companies that observe high standards towards ESG matters are more likely to outperform those that don’t.

ESG factors are useful indicators of a company’s overall strength, how it is likely to perform in the future, as well as risks that could impact its prospects. Responsible companies are less likely to be involved in scandals or catastrophes that could ruin their reputations and destroy value.

By understanding the full range of risks and opportunities, we believe investing responsibly is key to generating strong and sustainable returns.

All investments carry a degree of risk and responsible investments are no exception. The iron rule of investing is that the higher the potential reward, the more risk you have to take. Investments can go down in value as well as up. Unfavourable business outcomes or economic circumstances may mean that investments that previously offered an attractive return no longer do so.

06 A guide to responsible investing

07A guide to responsible investing

How can I invest?

So we know that responsible investment managers use ESG factors to determine the quality and performance potential of invest-ments. And that’s a great starting point.Beyond that, you also have options that allow you to invest in a way that closely aligns with your values or sustainability views. For example, if you have strong views on human rights or climate change, you could choose to exclude certain countries or industries that have poor track records in these areas.

Or you may want to go as far as actively seeking out investments that are positively impacting the environment or society. So you could aim to include investments linked to solar or wind farms, or those companies developing cleaner technology.

Today, it is easier than ever to invest responsibly and choose investments that have the potential to both make a difference and provide a financial return. Here are some of your options.

Values investors want their portfolios to accurately reflect their personal ethics or sustainability values. They are often keen to avoid and/or select certain industries or companies based on their beliefs.

Impactful investors want to invest in companies or other investment activities that intentionally deliver products or solutions that have a measurable and beneficial social or environmental impact.

Sustainable investors want their investments to reflect the risks to

people and the planet more clearly than traditional investments. They want to support better

business practices, and they expect links to

certain industries and behaviours to be reduced or removed.

Thematic investors want to invest in companies or other investment

activities that have a positive alignment to a specific

ESG theme.

INTEGRATEDInvestors want to know that

their investments incorporate environmental, social and governance

(ESG) risks and opportunities as standard.

THEMATIC IMPACTFUL

VALUES SUSTAINABLE

08 A guide to responsible investing

Why invest with AberdeenStandard Investments?

ESG considerations have been an integral part of our investment decision-making for almost 30 years. By putting ESG factors at the heart of our investment process, we believe we can generate better outcomes for all our clients.We believe we have the right people, with the right talent and experience to deliver for our clients.

Our central ESG Investment team of 20 professionals supports all of the asset classes in which we invest. In those asset classes, we have more than 50 responsible investment analysts and champions carrying out research and making investment decisions. The impact of Covid-19 makes this goal even more important. Now, more than ever, we need to work together for a more sustainable future.

Truly active engagementWe actively and regularly engage with the companies in which we are invested or may have a financial interest. We also seek to encourage best practice standards through this dialogue, as well as by exercising voting rights at company annual general meetings. We believe that driving better corporate behaviour will provide better returns for our clients over the longer term.

Leading the conversation We believe it is important to be clear and informative on all the major ESG issues of today. As such, we seek to drive the debate by producing thought-leading and insightful research. Recent papers include “Investing in a changing climate” and “Strategic Asset Allocation: ESG’s new frontier” and “Climate Scenario Analysis: a rigorousframework for managing climate financial risks and opportunities”. We also publish comprehensive quarterly updates on our team’s activities. All of these can be found at aberdeenstandard.com/en/responsible-investing.

Paris Climate Agreement – our commitmentASI strongly supports the objectives of the Paris Agreement and the ambitious global goal of net zero 2050. We are committed to playing a constructive role in the decarbonisation of the global economy. We advocate for stronger policy and corporate action to achieve the goals of the Paris Agreement and we develop net zero directed investment solutions to enable our clients to meet their climate goals. ASI’s position statement on Paris alignment is available on our website.

Accreditations and affiliations

09A guide to responsible investing

It starts with us

We are a

Living Hours and

Living Wage employer

In 2020, our total charitable contribution

was £2m benefiting over

54,000 people

We are

carbon neutral

We will reduce our emissions from energy use by

50% by 2030

Where we procure electricity, we will use

100% renewable electricity in our offices

As well as our financial responsibilities, we also take a sustainable and responsible approach to our operations. This helps ensure that we manage and control the environmental impact of all that we do as a business and that we foster a fair and inclusive culture for our people.

As a company, we aim to lead by example, striving for the same high standards that we expect, indeed demand, from investee companies.

10 A guide to responsible investing

A handy guide to some definitions

Responsible Investing

(n) an approach that aims to invest in companies and other investments that are well-governed and managed with accountability, while seeking to provide a financial return. It allows you to invest conscientiously with the opportunity to make money

ESG

(n) ESG stands for environmental, social and governance (ESG). How a company manages these aspects of its business can be a really useful indication of its overall quality. Investment managers can use ESG criteria to identify potential risks and opportunities that could affect the performance of a company

Active ownership

(n) investment managers have a duty of care to their clients. Active ownership is about carefully supervising, managing and taking care of those investments made on a client’s behalf. Engagement and voting (see below) are part of being active owners of clients’ money

Engagement

(n) an investment manager can try to influence change through discussions and meetings with the companies in which it invests. At these meetings, they can help encourage company management towards better policies or conduct on ESG issues. They can also directly question firms on any less-than-exemplary practices. In addition, engagement can be undertaken collaboratively with other investment managers and can involve targeting policymakers on pressing matters

Voting

(n) an investment manager can cast votes on behalf of investors on various matters relating to the companies in which they invest. This might include a company’s governance, its tax practices, the diversity of its board, its labour standards, how it approaches climate change and how it limits bribery and corruption in its organisation

Important InformationThis information is to help you understand more about responsible investing, how to invest responsibly and the risks involved.

The value of investments, and the income from them, can go down as well as up and investors may get back less than the amount invested. Past performance is not a guide to future results.

The above marketing document is strictly for information purposes only and should not be considered as an offer, investment recommendation, or solicitation, to deal in any of the investments or funds mentioned herein and does not constitute investment research. Aberdeen Standard Investments does not warrant the accuracy, adequacy or completeness of the information and materials contained in this document and expressly disclaims liability for errors or omissions in such information and materials.

Any research or analysis used in the preparation of this document has been procured by Aberdeen Standard Investments for its own use and may have been acted on for its own purpose. The results thus obtained are made available only coincidentally and the information is not guaranteed as to its accuracy. Some of the information in this document may contain projections or other forward looking statements regarding future events or future financial performance of countries, markets or companies. These statements are only predictions and actual events or results may differ materially. The reader must make their own assessment of the relevance, accuracy and adequacy of the information contained in this document and make such independent investigations, as they may consider necessary or appropriate for the purpose of such assessment. This material serves to provide general information and is not meant to be investment, legal or tax advice for any particular investor. No warranty whatsoever is given and no liability whatsoever is accepted for any loss arising whether directly or indirectly as a result of the reader, any person or group of persons acting on any information, opinion or estimate contained in this document. Aberdeen reserves the right to make changes and corrections to any information in this document at any time, without notice.Tax treatment depends on the individual circumstances of each investor and may be subject to change in the future. Professional advice should be obtained before making any investment decision.

This material is not to be reproduced in whole or in part without the prior written consent of Aberdeen Standard Investments.

This content is available in the following countries/regions and issued by the respective entities detailed below:*

*(entities as at 1 January 2021)

Europe, Middle East and AfricaUnited Kingdom (UK): Aberdeen Asset Managers Limited, registered in Scotland (SC108419) at 10 Queen’s Terrace, Aberdeen, AB10 1XL. Standard Life Investments Limited registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Both companies are authorised and regulated in the UK by the Financial Conduct Authority. Austria, Belgium, Cyprus, Denmark, Finland, France, Germany, Gibraltar, Greece, Iceland, Ireland, Italy, Luxembourg, Netherlands, Norway, Portugal and Sweden: Aberdeen Asset Managers Limited, registered in Scotland (SC108419) at 10 Queen’s Terrace, Aberdeen, AB10 1XL. Standard Life Investments Limited registered in Scotland (SC123321) at 1 George Street, Edinburgh EH2 2LL. Both companies are authorised and regulated in the UK by the Financial Conduct Authority. Switzerland: Aberdeen Standard Investments (Switzerland) AG. Registered in Switzerland (CHE-114.943.983) at Schweizergasse 14, 8001 Zürich. Abu Dhabi Global Market (“ADGM”): Aberdeen Asset Middle East Limited, 6th floor, Al Khatem Tower, Abu Dhabi Global Market Square, Al Maryah Island, P.O. Box 764605, Abu Dhabi, United Arab Emirates. Regulated by the ADGM Financial Services Regulatory Authority. For Professional Clients and Market Counterparties only. South Africa: Aberdeen Asset Managers Limited (“AAML”). Registered in Scotland (SC108419) at 10 Queen’s Terrace, Aberdeen, AB10 1XL. AAML holds a Category I financial services provider (FSP) licence in terms of the Financial Advisory and Intermediary Services Act, 2002, (FAIS) under licence 43675.

Asia-PacificAustralia and New Zealand: Aberdeen Standard Investments Australia Limited ABN 59 002 123 364, AFSL No. 240263. In New Zealand to wholesale investors only as defined in the Financial Markets Conduct Act 2013 (New Zealand). Hong Kong: Aberdeen Standard Investments (Hong Kong) Limited. This document has not been reviewed by the Securities and Futures Commission. Indonesia: PT Aberdeen Standard Investments Indonesia, an investment manager license holder registered and supervised by the Indonesia Financial Services Authority (OJK). Japan: Aberdeen Standard Investments (Japan) Limited Financial Instruments Firm: Kanto Local Finance Bureau (Kinsho) No.320 Membership: Japan Investment Advisers Association, The Investment Trusts Association, Type II Financial Instruments Firms Association, Japan Securities Dealers Association. Malaysia: Aberdeen Standard Investments (Malaysia) Sdn Bhd, Company Number: 200501013266 (690313-D). This document has not been reviewed by the Securities Commission of Malaysia. The People’s Republic of China (“PRC”): Aberdeen Standard Asset Management (Shanghai) Co., Ltd in the PRC only. Taiwan: Aberdeen Standard Investments Taiwan Limited, which is operated independently, 8F, No.101, Songren Rd., Taipei City, Taiwan Tel: +886 2 87224500. Thailand: Aberdeen Standard Asset Management (Thailand) Limited. Singapore: Aberdeen Standard Investments (Asia) Limited, Registration Number 199105448E.

AmericasBrazil: Aberdeen Standard Investments is the marketing name in Brazil for Aberdeen do Brasil Gestão de Recursos Ltda. Aberdeen do Brasil Gestão de Recursos Ltda. is an entity duly registered with the Comissão de Valores Mobiliários (CVM) as an investment manager. Canada: Aberdeen Standard Investments (“ASI”) is the marketing name in Canada for Aberdeen Standard Investments (Canada) Limited, Aberdeen Standard Investments Luxembourg S.A., Standard Life Investments Private Capital Ltd, SL Capital Partners LLP, Standard Life Investments Limited, Aberdeen Standard Alternative Funds Limited, and Aberdeen Capital Management LLC. Aberdeen Standard Investments (Canada) Limited, is registered as a Portfolio Manager and Exempt Market Dealer in all provinces and territories of Canada as well as an Investment Fund Manager in the provinces of Ontario, Quebec, and Newfoundland and Labrador. United States: Aberdeen Standard Investments is the marketing name for the following affiliated, registered investment advisers: Aberdeen Standard Investments Inc., Aberdeen Asset Managers Ltd., Aberdeen Standard Investments Australia Ltd., Aberdeen Standard Investments (Asia) Ltd., Aberdeen Capital Management LLC, Aberdeen Standard Investments ETFs Advisors LLC and Aberdeen Standard Alternative Funds Limited.

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