Impact report – Global Impact

The SDGs are based on a universal agreement adopted by 193 UN countries with the aim of mobilising efforts to improve health, reduce inequality in the world, solve the climate crisis and reduce pollution by 2030. In 2020, Global Impact invested in 120 companies world- wide. These companies were chosen for the positive impact we deem that their products and services have in relation to the fulfilment of the UN SDGs. Further- more, we place high sustainability requirements on the companies’ operations in addition to what can be directly linked to the UN SDGs.

In this report, we strive to quantify the positive effects on the environment and society from companies in which we have been a part owner in 2020.

In total, over 60 per cent of sales from the companies in which Global Impact invests are related to the SDGs through the products and services offered by these companies. This can be compared with 10 per cent inthe benchmark for the fund, the MSCI All Country World index. The fund’s investments can be organised into four global improvement themes linked to the SDGs – climate action, natural resources, empower-ment and basic needs. A considerable share of the companies’ revenue is derived from operations related to at least one of these themes. The figures below and to the right illustrate how exposure is divided between the fund’s different themes and offer a brief descrip-tion.

Source: Swedbank Robur och MSCI.

Risk informationHistorical growth is no guarantee of future yields. The value of your fund savings can both rise and fall, which is why there can be no guarantee that you will get back your original investment. Please read prospectus available on the website, swedbank.se/fondlista or through your retailer.

Global ImpactKlimat Klimat 32%Naturresurser Naturresurser 5%Grundläggande behov Grundläggande behov 20%Möjliggörande Möjliggörande 4%Totalt Totalt 61%

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Global ImpactKlimat Klimat 32%Naturresurser Naturresurser 5%Grundläggande behov Grundläggande behov 20%Möjliggörande Möjliggörande 4%Totalt Totalt 61%

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Climate action 32%The climate represents half of the fund’s exposure to the SDGs. This involves compa-nies that offer technologies for climate transition, for example, alternative energy, energy efficiency and green buildings.

Empowerment 4%Under the theme enabling are companies that finance small businesses in growtheconomies, and certain types of education companies.

Basic needs 20%Companies that contribute to the SDGs associated with basic needs operate in health, sustainable food produc-tion, sustainable cities and affordable housing as well as sanitation.

Natural resources 5%Here we find companies that, through their operations, help preserve the environment and biodiversity on land and in the oceans, for example, through technology for waste management, water treat-ment and pollution control.

Swedbank Robur Global Impact is an equity fund that focuses en-tirely on companies with operations that we deem can contrib-ute to meeting the UN’s 17 Sustainable Development Goals (SDGs) as well as to a better world. The companies must also respect international sustainability norms and conventions and not be involved in industries we consider controversial.

Read more about the UN SDGs and about the companies that Global Impact has invested in at swedbank.se/globalamalen

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What have the companies in the fund contributed to?

We strive to quantify the contributions within the areas of the environment and society from the companies in which we invested in 2020. The measurements show what Global Impact’s ownership stake (number of shares) in the companies corre-sponded to in the quantity of what the companies’ products and services produced or delivered during a fixed period. In 2020, companies in the fund have:

The examples above show the contributions of the companies in the fund, calculated on a weighted average of the fund’s holdings in 2020. For a more detailed description of the methodology behind the calculations, refer to the section on Methodology and data collection on page 7.

Produced 33,000 MWh of renewable energy. This corresponds to the annual electricity consumption of approxi- mately 2,900 Swedish households.

Processed 25,700 tonnes of material such as plastic, cardboard, used electronics and metal for re-use. This corresponds to the ag- gregate annual house- hold waste of 170,000 people going to materi- als recycling.

Treated and distrib-uted 1,010 million litres of drinking water. This corresponds to the annual water consumption of approximately 280,000 people for food and drink.

Treated 737 million litres of wastewater. This cor-responds to the amount of wastewater generated by 4,000 Swedish house-holds in one year.

Invested SEK 37.9m in medical research and development.

The figures for calculating the positive impact of the companies’ products and services show a historical snapshot of the portfolio companies’ production in these areas in relation to the ownership stake of the fund (number of shares) in the companies. The values will vary in pace with the changes to the companies’ production, but also through changes to the composition of the portfolio. Changes in exchange rates also affect the measurement. It must be noted that the link between the actual effect of investing in the fund and the measurements presented is an indirect one, via the ownership stakes in the portfolio companies. Accordingly, we advise against the measurements being used, for example, for climate compensation.

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Challenge: A large part of the world’s population lacks access to electricity while, at the same time, global demand for energy is expected to increase 37 per cent by 2040. A large portion of our greenhouse gas emissions stems from the way we extract, convert and use fossil energy.

Solution: By changing how we produce and consume energy, we can secure access to electricity and energy services for all without harming our planet. Renewable energy solutions are becoming more affordable, more dependable and more effective every day.

Affordable and clean energy – First SolarAccess to sustainable, dependable, and renewable energy and clean fuel is essential for meetingmany of the challenges the world faces today, including poverty, climate change and inclusive growth.

Challenge: By 2030, substantially increase water-use efficiency across all sectors and ensure sustainable withdrawals and supply of freshwater to address water scarcity and substantially reduce the number of people suffering from water scarcity. To reduce the proportion of untreated wastewater by 50 per cent and substantially increase recycling and safe reuse glob-ally. To achieve universal and equitable access to safe and affordable drinking water for all.

Solution: Aguas Andinas is a Chilean water company that treats and distributes drinking water and collects and treats wastewater so that it can be released into nature again. Chile is one of the driest countries in the world, plagued by recurrent periods of water shortage – a situation exacerbated by climate change.

Clean water and sanitation – Aguas Andinas Water is a prerequisite for all life on Earth and therefore a prerequisite for peoples’ health andsustainable development. Water is also a prerequisite for the world’s food production and energy production. A shortage of water can therefore become a cause for conflict, both within and among countries.

Study

Below we describe in more detail the challenges we face and the solutions the com-panies in the fund can contribute to to fulfil some of the SDGs.

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First Solar is one of the world’s largest solar panel companies and has designed its own advanced technology to manufacture energy-efficient photovoltaic modules at one of the lowest costs per manufactured watt on the market. The new module (Series 6) demonstrates cost reductions of 40 per cent compared with earlier modules and has been extremely well received in the market. In addition to solar panel production, the company also oper-ates and maintains solar power plants.

Aguas Andinas applies a circular business model andstrives to achieve greater efficiency in production, processes and use of resources to modify operationsto new circumstances brought about by climate change. One example is the recent use of new mega tanks that enable continuity during heavy rain periods when groundwater becomes muddy. Another example is that residual products that arise during wastewater treatment are now used as fertilizers for agriculture and to produce energy, instead of being sent to landfills.

Challenge: Rapid, large-scale relocation to cities presents new demands that need to be met in a green, economic and socially sustainable manner.

Solution: Swire Properties is a Hong Kong-based construction company that develops and manages properties primarily in Hong Kong and China. Almost all of the company’s buildings are certified green buildings in accordance with, for example, BEAM, Hong Kong’s certification model for green buildings, or LEED, a US model. The certifications embrace strict environmen-tal requirements for the buildings and Swire Proper-ties works to minimise energy use, reduce waste and reduce water consumption in both the construction and use phases of the buildings. It has also started a programme to promote biological diversity in urban settings by, for example, planning green areas com- prised of carefully selected plant species.

Sustainable cities and communities – Swire PropertiesMore than half of the world’s population lives in urban areas, a figure expected to rise to 70 percent by 2050. Growing cities can generate new potential for economic growth but can also contribute to greater social gaps and stress on the ecosystem. Sustainable urban development includes, for example, sustainable construction and sustainable residential zoning. Inclusive and innovative urban planning is paramount to make cities safe and sustainable for the future.

Challenge: The transition to sustainable consump-tion and production of goods is essential if we are to lower our negative impact on the climate, the environ- ment and people’s health.

Solution: DS Smith is one of the largest cardboard and paper packaging producers in Europe. They collect more than five million tonnes of recyclable paper every year that is converted into new packaging instead of using new raw material. They have a well-established and effective recycling process in which the time from when cardboard is manufactured and used until it is recollected, recycled and pressed into new cardboard can be as little as 14 days. Further-more, they strive to replace disposable plastic in the food industry with fibre-based alternatives such as fast-food packing, polystyrene containers and multi-pack packaging for beverages.

Responsible consumtion and production – DS SmithOur planet has provided us with an abundance of natural resources, but we have not utilized them responsibly and currently consume far beyond what our planet can provide. Realising a situation of sustainable development demands that we lower our climate footprint by changing how we produce and consume goods and resources.

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Challenge: Investments in health through preventive measures and modern and effective care for all ben- efits society’s development in general and cultivates the conditions for people’s fundamental rights to well- being. Byno later than 2030, end the epidemics of HIV/AIDS, tuberculosis, malaria, and neglected tropical diseases as well as combat hepatitis, water-borne diseases and other communicable diseases.

Solution: Hologic is a US medical technology com- pany that, among other things, develops different types of diagnostic tests. They have molecular diagnostic tests to discover diseases such as HIV, hepatitis B and hepatis C. Furthermore, in 2020, the company developed COVID-19 tests in record time. The com- pany recently received approval from the WHO to use a new, simplified sample testing technol-ogy that is used primarily in Africa. Use of this technol-ogy will improve access to HIV diagnostics and care, particularly among populations living in remote areas.

Good health and wellbeing – HologicGood health is an essential factor in enabling people to reach their full potential and contribute tosociety’s development. People’s health is affected by economical, ecological and social factors and Goal 3 includes all dimensions and people of all ages.

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ESG ratingESG stands for Environment, Social and Governance. The aggregate ESG rating weighs together a number ofsustainability factors that combined constitute a rating (between 1 and 10). Companies are rated based on how they perform in these factors in relation to other companies within the same sector.

The aggregate ESG rating for Global Impact is more than 15 per cent higher than for the fund’s benchmark index. According to this measurement method, this means that the combined level of sustainability activity among the companies in the fund is higher than in the MSCI All Country World Index. An analysis is always performed when the fund invests in new companies. It considers the company’s activities pertaining to the environment and climate, human rights, work conditions and business ethics. The lowest performing companies within each sec-tor are excluded. In addition to the ethical aspect of investing in companies that assume responsibility for people and the environment, sustainability factors are elements that can adversely influence the company’s risk and financial performance if these are mismanaged. We believe that companies that are aware of and manage their sustainability risks in a good manner will be the financial winners in the long term.

The aggregate ESG rating at Global Impact and MSCI All Country World Index respectively:

ESG data

In addition to the positive effect of the sold products and services, the companies in the fund also have an environmental and social effect through their operations.

Carbon footprintScope 1 and 2 refer to greenhouse gas emissions generated directly from the operations of the companiesin the fund, including energy consumption. Scope 1 includes use of fossil fuels, for example, in manufacturing activities at company factories or emissions from company vehicles and machinery. Scope 2 includes indirect greenhouse gas emissions from the use of electricity, district heating and district cooling.

The carbon footprint shows the fund portfolio’s exposure to carbon-intensive companies. In addition to the com- pany’s carbon emissions, there are two other factors that may be used to compare the portfolio with a bench-mark index: the company’s sales and the company’s portfolio weight. This means that a decline in sales will result in a higher company carbon intensity, and an overweight of carbon-intensive companies in the portfolio will result in a higher carbon footprint in the portfolio relative to the index.

Source: Swedbank Robur och MSCI. 6

per 2020-12-31 Global ImpMSCI All Country CO2 (ton/mUSD) 129,1682 154,6626 16% lägreESG-score 6,969652 5,934022 15% högre

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The carbon footprint provides a basis for assessing certain climate-related financial risks, such as carbon pricing, and makes it easier to engage with companies in regard to reducing their emissions, for example by requiring emission-reduction targets, risk management, business strategies and transpar-ency. The metric should be considered in the context of the fund management company’s overall sus-tainability agenda. The carbon footprint provides a historic snapshot of emissions from the companies in the fund’s share portfolio. The values will vary as the emissions of the companies change, but also as the composition of the portfolio changes. Changes in exchange rates also affect the measurement. Please note that the carbon footprint does not show the total environmental impact of the investments due to the following factors, for example:

● only some emissions are included. Indirect emissions from suppliers are not always included in the calculations, nor are the usually extensive emissions derived from using a company’s products,

● emissions data from companies is not complete,

● only some asset classes are measured,

● emission reductions through products and services are not included,

● information about fossil reserves is not included,

● the metric does not show the portfolio’s positioning in, or contribution to, the transition to a low- carbon economy.

per 2020-12-31 Global ImpMSCI All Country CO2 (ton/mUSD) 129,1682 154,6626 16% lägreESG-score 6,969652 5,934022 15% högre

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More information about the fund can be found at swedbank.se/globalimpact

Global Impact’s carbon footprint shows that the fund’s aggregate holdings are more carbon-efficient than the fund’s benchmark index. The difference compared with the fund’s benchmark index is because the fund’s invest- ment strategy abstains from investing in companies in certain sectors that have high carbon footprints, such as fossil fuels. Nonetheless, a large share of the fund is invested in energy-intensive sectors such as manufacturing and power production, although the choice of company within each sector helps to lower the fund’s carbon foot- print. Yet another explanation is the fund’s thematic orientation, with a large portion of companies active within the area focused on basic needs. This produces an overweight in the healthcare sector, which has low carbon emissions.

The carbon footprint of Global Impact compared with MSCI All Country World Index (Scopes 1 and 2, tonnes of CO2e per USDm):

Source: Swedbank Robur och MSCI. 7

Exposure to the SDGs Exposure to the SDGs was determined by examining how much of the companies’ operations can be linked tothe SDGs. For example, if a company gets 80 per cent of its sales from green properties and the remainder from properties that have not been eco-friendly modified, it is deemed that 80 per cent of the operations contribute to meeting the SDGs. These figures were then weighed together based on each company’s weight in the fund and benchmark index. When collecting data to quantify the positive impact of the companies’ products and services, we limited ourselves to using data that the companies themselves report.

The reason we have chosen to get the information directly from the companies is that we believe this to be the most reliable source although there is no standardised reporting method. Many companies publish data of this type that is related to the effects of services and products they sell without compiling it at an overall corporate level. Information has been published in annual reports, sustainability reports or directly on the companies’ web-site, or provided by the company itself on request. When available, we used data for 2020. Otherwise, we referred to previously released data. While coverage is good, there are a few cases where we were unable to find available data and did not receive feedback from the companies. In these cases, we opted to not make an estimate and to instead exclude the companies from the calculations. Subsequently, the figures per category are low estimates and can be assumed to be higher in reality.

ESG dataFor the section concerning sustainability, data related to ESG rating and greenhouse gas emissions was collect-ed from MSCI. For companies lacking such data, a weighted average of the other companies’ data was usedto perform the calculations at portfolio level. To calculate the portfolio’s greenhouse gas emissions, we used a method called “Weighted Average Carbon Intensity”, a method based on the intensity of carbon (greenhouse gases) from each company in the portfolio which is then multiplied by the company’s weight in the portfolio toreach a weighted average value. The Task Force on Climate-related Financial Disclosures (TCFD) recommendsthis method.

Methodology and data collection

The figures in the report show the contributions of the companies in the fund to the SDGs, calculated on a weighted average of the fund’s holdings in 2020. The environ-mental and social impact is reported with the companies’ aggregate ESG rating and greenhouse gas emissions and is calculated based on the fund’s holdings at the end of 2020.

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Renewable energyWe calculate that the companies in Global Impact in 2020, based on the fund’s ownership stake in each company,produced 33,000 MWh renewable energy. The calculation includes companies in the fund that have renewable energy production or that are otherwise part of the process to produce renewable energy. The energy comes from biomass, solar power, wind power and hydropower, as well as waste incineration. The following companies are included:

● Acciona – wind power, solar power and hydropower as well as biomass

● Aguas Andinas – waste incineration (waste to energy)

● Brookfield Renewable Corp – wind power and biomass

● Brookfield Renewable Partners – solar power, wind power and biomass

● China Conch Venture – waste incineration (waste to energy)

● China Everbright Environment Group – solar power, biomass and waste incineration (waste to energy)

● Cleanaway Waste Management – waste incineration (waste to energy)

● Hera SpA – waste incineration (waste to energy), solar power, hydropower and thermal energy from renewable sources

● Huaneng Renewables - wind and solar power

● John Laing Group – solar power, wind power and biomass

● Mercury – geothermal energy, hydropower

● Nextera Energy Partners – wind and solar power

● Ormat Technologies - geothermal, recyclable energy

● Ørsted – wind power

● Sims Ltd – solar power

● Suez – waste incineration (waste to energy)

● TerraForm Power – wind and solar power

● Transalta Renewables – wind power, solar power and hydropower

Appendix – Summary

We have compiled how much the companies included in Global Impact in 2020 produced in total in their operations within the categories below that contribute to the SDGs. We then calculated the fund’s ownership stake in these companies based on a weighted average of the fund’s holding in 2020. In this manner, we were able to determine how much has been produced that can be attributed to the fund. The categories below are only a selection of the operations of the companies in the fund that contribute to the SDGs, and all the companies in the fund are not evident in the summary.

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Treated and distributed drinking waterWe calculate that the companies in Global Impact in 2020, based on the fund’s ownership stake in each company,treated and distributed 1.01 billion litres of drinking water. The calculation includes companies in the fund that treat and distribute drinking water. The following companies are included:

● Acciona

● Aguas Andinas

● Hera SpA

● Inversiones Aguas Metropolitanas

● Suez

Recycled materialWe calculate that the companies in Global Impact in 2020, based on the fund’s ownership stake in each company,recycled 25.7 tonnes of material. The calculation includes companies in the fund that have waste and material recycling as part of their operations. The following companies are included:

● Cleanaway Waste Management

● Commercial Metals Company

● Dowa Holdings – metal recycling

● DS Smith – recycled paper and plastic material for packaging products

● Hera SpA – waste management for material recycling

● Sims Ltd – electronics recycling, metal recycling

● Suez – waste management for material recycling

● Umicore – recycling of special and precious metals, batteries, etc.

Medical research and developmentWe calculate that the companies in Global Impact in 2020, based on the fund’s ownership stake in each company,invested SEK 37.9m in medical research and development. The calculation includes companies in the fund that operate in the healthcare sector. The following companies are included:

● Amgen Inc.

● Astellas Pharma

● Biogen

● Bristol-Myers-Squibb

● Edwards LifeSciences Corporation

● H Lundbeck A/S

● Incyte

● Insmed

● Ipsen

● Jazz Pharmaceuticals

● Ligand Pharmaceuticals

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● Merck

● Otsuka Holdings

● Sarepta Therapeutics

● Sino Biopharmaceutical

● Swedish Orphan Biovitrum

● Takeda Pharmaceutical Company

● Ultragenyx Pharmaceutical

● United Therapeutics

● Varian Medical Systems

● Vertex Pharmaceuticals

● Yuhan

Treated wastewater We calculate that the companies in Global Impact in 2020, based on the fund’s ownership stake in each company,contributed to the treatment of 737 million litres of wastewater. The calculation includes companies in the fund that treat wastewater so that it can be released into nature again. The following companies are included:

● Acciona S.A

● Aguas Andinas

● China Everbright Environment Group

● Hera SpA

● Inversiones Aguas Metropolitanas

● Suez

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