EQUITY RESEARCH | DAILY EDGEMonday, January 20, 2020, After Close

For Reg AC Certification and important disclosures see Appendix A of this report. Analysts employed by non-U.S. affiliates are notregistered/qualified as research analysts with FINRA in the U.S. unless otherwise noted within this report.

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Dissemination: January 20, 2020, 16:30 ET. Production: January 20, 2020, 16:14 ET.

LatAm ESGWe Are Water: More Reasons to Push for More Renewables –and Better Disclosures from Issuers

OUR TAKE: Mixed. Too much or too little water is a problem; water quality matters aswell. We highlight what issuers in Chile and Mexico (the "thirsty" countries in LatAm) aredisclosing, and the link between water scarcity and potential stranded assets in powergeneration. Social unrest and major disruptions to economic activity come to mind inextreme scenarios, but additional energy and water-related costs are likely in milderscenarios. Investors should ask issuers about direct and indirect exposure to thermalenergy, and what they are doing to manage scenarios with too much or too little water.We looked at water questionnaires from CDP.

LatAm: two "thirsty" (and carbon-intensive) countries under high water stress,four more under medium water stress; Chile is doing its job by adding morerenewables and Mexico is not. In LatAm, ~245 million people live in countries withhigh or medium-high water stress, according to Aqueduct 3.0, a tool from the WorldResources Institute (WRI). Adding more non-thermal renewables takes the strainaway from water and cuts CO2eq emissions, helping to enhance a country's NationallyDetermined Contributions (NDCs). Investing in water-related infrastructure is anopportunity.

KEY POINTS

Water-related and power generation maps in LatAm (see Exhibits 1-7): it ain'tpretty in Chile and Mexico; next in line are Guatemala, Peru, Venezuela, and Cuba.With these maps, we highlight regional details in Mexico, Colombia, Peru, and Chile,and a breakdown of the types of power generation in Chile and Mexico.

Stranded assets in power generation? Yes, stranded assets due to water scarcity isa real possibility, according to WRI: ~47% of the world's thermal power plant capacityis located in highly water-stressed areas. Hydro power is at risk as well: ~11% of theworld's hydroelectric capacity is also located in water-stressed regions, and climatechange could make matters worse.

Chile and Mexico share common problems that can be alleviated by addingmore non-thermal renewables while cutting carbon emissions; Chile's new NDCproposal, now closer to a 1°C world, puts theory into practice. This is a majorshift from our first major ESG study (March 2018) when we compared the countries'commitments to emission cuts – see the latest from UNEP, Climate Action Tracker, andthe NewClimate Institute in Appendix 1.

Are issuers in highly water-stressed countries answering water securityquestionnaires from CDP? Exhibits 15 and 16 show CDP ratings on water securityand those issuers that haven't answered the questionnaires.

What did we look for in sustainability/integrated reports by issuers that didn'tanswer water security questionnaires from CDP? We looked at Chilean and Mexicanissuers' sustainability/integrated reports for (1) a basic breakdown of water sourcesand discharges, (2) water-related intensity metrics, (3) targets, and (4) water-relatedengagement. We also disclosed other CDP ratings, if any.

ANALYST TEAM Link to ScotiaView

Francisco Suarez | Analyst52-55-9179-5209Scotiabank Inverlat

Ramon Obeso, MBA | Associate52-55-9179-5236Scotiabank Inverlat

Gabriel Himelfarb | Associate52-55-5123-1852Scotiabank Inverlat

Water Security in LatAm: Who Has It?

Exhibit 1: Approximately 245 Million People Live in LatAm Countries with High and Medium-High Water Security Risks

Source: WRI; Scotiabank GBM.

Country Risk Population, M

Chile High 18.34

Mexico High 132.33

Guatemala Medium - High 17.58

Peru Medium - High 32.93

Venezuela Medium - High 32.78

Cuba Medium - High 11.49

Dominican Republic Low - Medium 11.00

Haiti Low - Medium 11.24

El Salvador Low - Medium 6.45

Ecuador Low - Medium 17.10

Argentina Low - Medium 45.10

Bolivia Low - Medium 11.38

Costa Rica Low 5.00

Brazil Low 212.39

Colombia Low 49.85

Belize Low 0.39

Honduras Low 9.57

Panama Low 4.23

Nicaragua Low 6.35

Paraguay Low 6.98

Uruguay Low 3.48

Guyana Low 0.79

Jamaica Low 2.91

Suriname Low 0.57

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Exhibit 2: Northern and Central Mexico, Regions that Produce Most of the GDP, Are Highly Exposed to Water Supply Risks…

Source: WRI; Scotiabank GBM.

Major Regional Differences Within Each Country Puts Pressure on Issuers to Disclose Individual Exposures Where It Matters

Exhibit 3: … in Contrast, Most of Colombia’s Water Supply Risk Is Low…

Source: WRI; Scotiabank GBM.

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Exhibit 4: … While Peru’s Northern and Southern Regions Face Higher Risks

Source: WRI; Scotiabank GBM.

Exhibit 5: Chile, Particularly the North, Is Another High-Risk Region

Source: WRI; Scotiabank GBM.

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Exhibit 6: Chile’s Power Generation Breakdown in 2016 (Estimated Generation in GWh)

Source: Global Power Database WRI; Scotiabank GBM.

Thermal66%

Hydro31%

Non-Thermal Renewables

3%

Exhibit 7: Mexico’s Power Generation Breakdown in 2016 (Estimated Generation in GWh)

Source: Global Power Database WRI; Scotiabank GBM.

Thermal85%

Hydro13%

Non-Thermal Renewables

2%

Thermal Power Generation in Chile and Mexico, Countries with High-Stress Water Security

According to the Global Power Database from World Resources Institute (WRI), power generated by non-

thermal facilities in Chile and Mexico in 2016 was ~34%, and ~15%, respectively. However, considering that

both countries are the worst in LatAm in terms of water security, it is important to distinguish between hydro

and other non-thermal renewables. WRI’s database covers approximately 30,000 power plants from 164

countries and includes thermal plants (e.g., coal, gas, oil, nuclear, biomass, waste, geothermal) and

renewables (e.g., hydro, wind, solar). Each power plant is geo-located and entries contain information on

plant capacity, generation, ownership, and fuel type.

Major Technology Gains over the Past Eight Years Make Renewables Highly Competitive…

Exhibit 8: Technology Gains Include Better Capacity Factors, Yielding Further Cost Reductions in Solar…

Source: International Renewable Energy Agency (IRENA); Scotiabank GBM.

0.37

0.29

0.22

0.18 0.17

0.13 0.12

0.10 0.09

14%15%

15%

16%

17% 17% 17%

18% 18%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Solar (PV) Technology Capacity-Cost

Cost of Electricity (USD per KW/h) Capacity Factor

Exhibit 9: … and theTechnology Gains Cutting Costs of Electricity per KW/h Are Even Better in Wind

Source: International Renewable Energy Agency (IRENA); Scotiabank GBM.

0.084

0.080

0.077

0.080

0.075

0.067 0.065 0.064

0.055

27%

28% 28%

27%

29%

29%

31%

32%

34%

2010 2011 2012 2013 2014 2015 2016 2017 2018

Wind (Onshore) Technology Capacity-Cost

Cost of Electricity (USD per KW/h) Capacity Factor

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… Exposing Mexico’s Huge Historical Opportunity to Overcome Cost Inefficiencies

Exhibit 10: Renewables’ Generation Cost per KW/h in Mexico Is Well Below CFE’s Costs and Average Tariffs…

Source: Sistema de Información Energética (SIE), Ministry of Energy (SENER);

Proyectos México; CFE Company reports; Scotiabank GBM.

Calera Energía Limpia de Amistad III

Energía Limpia de Amistad IV

Tres Mesas IV

Parque Eólico Chacabal II

Parque Eólico Chacabal

CalpulalpanAbril 99El Mayo

Horus

Tastiota Bacabachi I

Ticul I

San Miguel de Allende V

MXN 1.27

-

0.50

1.00

1.50

2.00

2.50

3.00

65,000 115,000 165,000 215,000 265,000 315,000 365,000 415,000 465,000 515,000 565,000

MXN

per

KW

/h

Capacity (MW/h)

Mexico's Electricity Tariffs and Bids Under Development

Wind Projects Solar Projects

Households Tariff Commercial Tariff

Services Tariff Agricultural Tariff

Industry (Medium) Tariff Industry (Large) Tariff

CFE Average Generation Cost per KW/h (2018)

Exhibit 11: … While the Latest Auctions (2017) in Solar and Wind Were Far Cheaper than the First Ones (2015)

Source: Sistema de Información Energética (SIE), Ministry of Energy (SENER); Proyectos México; CFE Company reports; Scotiabank GBM.

Parque Eólico Chacabal

CalpulalpanAbril 99

El Mayo

Horus

TastiotaBacabachi I

Ticul ISan Miguel de

Allende V

MXN 1.27

0.20

0.70

1.20

1.70

2.20

2.70

3.20

2014 2015 2016 2017 2018

MXN

KW

/h

Mexico's Historical Electricity Tariffs, Costs, and Bidds

Commercial Tariffs Services TariffsAgricultural Tarif fs Industry (Medium) TariffsIndustry (Large) Tariffs Households TariffsWind Project Biddings Solar Project BiddingsCFE Average Generation Cost per KW/h (2018)

Exhibit 12: The Biggest Capacity Additions in 2019-2033 in Renewables in Mexico Will Take Place in 2019-2020, but Are Driven by the Latest Auction in 2017 (Auctions Were Suspended in January 2019)…

Source: Programa de Desarrollo Del Sistema Eléctrico Nacional (PRODESEN), Ministry of Energy (SENER); Scotiabank GBM.

5,947

4,916

700

2,697 2,367

914 1,768

994 1,758 1,815

2,430 2,205 2,287 2,546

4,573

3,430

522

562

790

750

678

594

870 1,443

1,235 1,740 1,740 1,713

2,051

2,277

887

520 175

1,276 100

250

202

586

975

1,193 779 990 1,028

60

114 203 82

719

854

712

151

2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033

MW

Estimated Installed Capacity Increase(PRODESEN 2019-2033)

Thermal (& Other Combustion-based) Solar Wind Hydroelectric Geothermal

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Exhibit 13: … However, in 2019, the Majority of Mexico’s Total Installed Capacity Used Fossil Fuels…

Source: Programa de Desarrollo del Sistema Eléctrico Nacional (PRODESEN), Ministry of Energy (SENER); Scotiabank GBM.

70%

14.5%

7.5%

1.1%5.1%

1.8%

Mexico's Total Installed Capacity

Thermal (& OtherCombustion-based)

Hydroelectric

Wind

Solar

Nuclear

Geothermal

Exhibit 14: … While the New Energy Program Relies Most on Combustion-Based Sources, Including the Use of Coal

Source: Programa de Desarrollo del Sistema Eléctrico Nacional (PRODESEN), Ministry of Energy (SENER); Scotiabank GBM.

57,438 61,191 59,013

12,64212,671

12,671

4,8756,591 8,128

951936 9061,985

4,440 5,644

1,608

1,608 1,60879,499

87,436 87,969

2018 2019 2020

MW

Mexico's Installed Capacity Outlook

Thermal (& Other Combustion-based) HydroelectricWind GeothermalSolar Nuclear

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Exhibit 15: Chilean Issuer Responses to Questionnaires on Water Security to CDP, and CDP’s 2018 Ratings

Source: CDP; Scotiabank GBM.

Company Country Score: Water Security

Cencosud SA Chile F

Colbun SA Chile B-

Empresas CMPC Chile B-

Empresas COPEC S.A. Chile F

Enel Americas S.A. Chile B-

Sociedad Quimica y Minera de Chile SA Chile F

Vina Concha y Toro S A Chile B-

What Issuers Are Disclosing in Chile and Mexico – Countries With High Water Stress?

In our view, an obvious route for investors is to look at questionnaires and ratings from CDP (an organization

based in the United Kingdom that supports companies and cities to disclose the environmental impact of

major corporations) on water security. Interestingly, many issuers with high ratings by CDP do not have their

reports open to the public. An issuer not answering questionnaires to CDP does not necessarily imply a

major risk; if issuers are not responding to questionnaires, investors might look at their sustainability reports.

Our Approach: Digging Through Sustainability Reports from Issuers That Do Not Answer

Questionnaires on Water Security from CDP

As usual, we wanted to understand if meaningful key performance indicators (KPIs) are disclosed by

issuers, and how aware their Boards are of such information. For instance, intensity KPIs are useful

because they can be comparable among the same industries while highlighting structural differences across

industries. Also, disclosing vulnerability risks in water supply is important because, in extreme scenarios, it

could lead to major business disruptions, or could lead to higher costs or capex in milder scenarios. A time

series on those KPIs that are relevant for management are helpful, while addressing the rationale in short

and long-term targets in water intensity, and absolute withdrawals and discharges are also important. In

certain industries, the risks and opportunities may be across the supply chain.

Exhibit 16: Mexican Issuer Responses to Questionnaires on Water Security to CDP, and CDP’s 2018 Ratings

Source: CDP; Scotiabank GBM.

Company Country Score: Water Security

Alfa SAB de CV Mexico F

Arca Continental, SAB de CV Mexico B

CEMEX Mexico F

Coca-Cola Femsa Sab-Ser l Mexico B

Fresnillo plc Mexico C

Gruma SAB Mexico F

Grupo Bimbo, S.A.B. de C.V. Mexico B-

Grupo Carso S.A. Mexico F

Grupo Lala Mexico F

Grupo Mexico S.A.B. de CV Mexico F

Grupo Televisa S.A. Mexico D

Kimberly-Clark de México S.A.B. de C.V. Mexico B-

Orbia Advance Corporation Mexico F

Walmart de Mexico Mexico B-

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We looked for specific KPIs and other information, including:

Breakdown of an issuer’s water sources and water discharges. For instance, water sources as a

percentage of water consumed and withdrawn per year between surface waterbeds or from underground

sources or by third parties is a very basic approach to begin to understand if there is a potential threat to

water supply in a country or region with limited water. We think that information in regions or countries

that are not at risk from water scarcity is not needed – unless the company wants to disclose that as a

strength in its business profile compared with its peers. The names of those major basins that investors

should pay attention to might add value, but it is better, we think, to put that information with water-

related intensity metrics – see below.

Water-related intensity metrics are a basic way in which investors can measure financial model

scenarios for cost, capex, and ultimately valuation. To begin with, an issuer can disclose the percentage

of its annual capacity or yearly sales in those regions that are currently or might be under water stress in

the future. Also, the cost of water as a percentage of sales or of total costs can help investors

understand how relevant the problem, if any, might be. For certain industries, knowing the volume of

water consumed and withdrawn per volume produced per year or per yearly capacity is helpful. Also,

capex in water-related investments as a percentage of total capex in a given year or as a percentage of

yearly sales could be helpful. Should major assets near a river basin or a coast be at risk of flooding, it

should be quantified as well, as a percentage of total capacity or as a percentage of sales or

consolidated volumes.

Targets. In some industries, firms may have short and long-term targets in certain water-related KPIs. In

our view, when externalities, good or bad, related to water are material for an industry or for a company,

those targets might be as relevant as the firm’s yearly guidance to markets. We think that as years go by

and water threats become more relevant, that will be the case in those regions at risk. The quality of

those targets matter: do third parties verify the information? Are those targets aligned with Sustainability

Development Goals (SDGs)? Do such targets have business-related expectations on capex/opex

increases/declines over the period or major expectations on changes in the firm’s most relevant KPIs?

Do water-related capex/opex plans bring long-term benefits in margins or avoid margin pressure? Do

those targets use sound climate-related scenarios?

Disclosure of how a company engages with relevant communities in regions or countries with

limited water is crucial; engagement with regulators, academia, and key non-governmental

organizations (NGOs) is also important. The way we see it, if communities believe that their access to

water is under threat by a business nearby, that could be a potential risk. Conversely, a community could

be a valuable partner if a business can help the community to improve its water security. Ultimately, we

want a proactive approach by management.

What We Found in Sustainability Reports in Chilean and Mexican Issuers That Did Not

Answer Water Security Questionnaires from CDP

Chilean Issuers

Cencosud does not answer questionnaires on climate change, forests, and water security from CDP.

We looked at Cencosud’s 2018 integrated report that follows Global Reporting Initiative (GRI) standards; it

was the firm’s first year of publishing an integrated report. Water-related statistics are limited compared with

emission-related KPIs reported. For instance, the company discloses absolute water capture statistics but

no intensity metrics, and no other metrics related to discharges nor a breakdown of the sources of water

supply. One good thing is that the company reports 100% coverage.

Empresas COPEC answered questionnaires on climate change to CDP (a “D” rating in 2018; the

questionnaire is not public).

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We look at Arauco’s 2018 sustainability report that uses GRI standards. The company’s awareness looks

sound, with a focus on its forestry business on responding to fires in its footprint, forest protection, and the

effects on its business on events of extreme weather conditions, including water scarcity in Chile. However,

we saw a very limited set of water-related intensity KPIs in contrast to greenhouse gas (GHG) emissions or

biodiversity, waste management, and other forestry-related KPIs, for instance. This gap should be

addressed with the firm’s current efforts to holistically improve the monitoring of air and water conditions.

Water-related intensity metrics we found were related to water discharges, along with several projects to

increase capacity of effluent treatment, and also on water withdrawals divided between pulp and timber.

Sociedad Quimica y Minera de Chile (SQM) does not answer questionnaires on climate change and water

security from CDP.

We reviewed SQM’s 2018 sustainability report that follows the newest GRI standards, a report that is

unverified. In SQM’s materiality matrix, the company states that water-related factors have relatively low

impact on the company, and is not a major concern to SQM’s stakeholders. We saw several engagement

activities with communities on water-related factors, including barrier placements to isolate reservoirs from

unwanted chemicals that could affect biotic properties at such basins, or the use of seawater in regions with

scarce fresh water. A breakdown of major water sources per operations was in the report, along with

reutilization figures (low relative to water withdrawn). We did not find a breakdown of water discharges or

KPIs related to the quality of water discharged.

Mexican Issuers

Cemex (CX) answered the climate change questionnaire from CDP (with a “B” rating in 2018) but did not

answer the water security questionnaire from CDP.

We reviewed CX’s 2018 integrated report that follows GRI standards under the comprehensive option.

According to CX’s materiality matrix, updated in 2017, water management has a relatively low impact on CX,

and is not a major concern to CX’s stakeholders, something that, in our view, might be different in regions

with limited water. However, CX planned to update its water stress assessment during 2019, key for the

company’s intention to have water management plans in 100% of all of water-scarce regions for 2030 –

something we are particularly interested in. Interestingly, on water consumption, CX’s net value to society is

disclosed at US$65 million, but there is no major disclosure to understand the drivers behind that conclusion

that follows KPMG’s true value methodology. We found a sound breakdown of water sources (surface,

ground, municipal, rain, sea, and “other”), and water discharges (including a breakdown per major business

activity). We also found interesting pilot programs and new products linked to water.

Femsa answered climate change and water security questionnaires to CDP in 2017 and received a “B-” and

a “B” rating, respectively; those questionnaires are not public. In 2018, FEMSA did not answer

questionnaires on climate change, water security, or forests. Coca-Cola Femsa (KOF) answered

questionnaires from CDP on climate change (a “C” rating in 2018), and water security (a “B” rating in 2018);

those questionnaires are not public.

Gruma does not answer questionnaires on climate change, forests, and water security from CDP.

We reviewed Gruma’s 2014 sustainability report, the latest we found; this report follows GRI standards. We

also looked at Gruma’s 2018 annual report for environmental metrics, however, we could not find any

relevant information.

Grupo Carso does not answer questionnaires on climate change, forests, and water security to CDP.

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We reviewed GCARSO’s 2016 sustainability report, the latest we found; this report followed GRI (G4)

Standards. We also saw GCARSO’s 2018 annual report that has a brief environmental section that did not

have the water-related KPIs that matter to us. In its sustainability report, we saw a sound breakdown of

water sources and discharges that included information for every business division. We also found some

water-related KPIs related to water quality in discharges and per business line, including hazardous

components.

Grupo Lala does not answer questionnaires on climate change, forests, and water security from CDP.

Grupo Lala’s 2018 sustainability report follows GRI standards. Water-related statistics and emission-related

KPIs reported are limited. For instance, the company discloses water consumption (litre per kg of product) or

the amount of reused and recycled water, but there are no data on absolute water capture statistics nor

intensity metrics, and no other metrics related to discharges nor a breakdown of the sources of water supply.

GMEXICO has answered questionnaires from CDP on climate change since 2017, and received a “C” rating

in 2018, up from “D” in 2017.

We reviewed GMEXICO’s 2018 sustainability report that follows GRI standards under the “core” option.

GMEXICO’s materiality matrix was updated in 2018. We found a solid breakdown of water sources in its

mining division, with recovery rates and goals for 2022 related to updating the base year for all mining

operations and improving overall basin monitoring capabilities. A basic breakdown in its rail division was

found, but it does not cover 100% of assets: Texas Pacifico (TXP) is excluded. In its infrastructure division,

we also found a breakdown of water sources divided into its major subsidiaries. Discharges in this division

are reported in aggregate. According to the company, the materiality of water-related factors is low in its

infrastructure and transportation divisions. The company uses seawater in regions with scarcity of fresh

water.

Industrias Peñoles answered the 2018 questionnaire on climate change from CDP (with a “D” rating); this

questionnaire is not public. Industrias Peñoles does not answer questionnaires on forests and water security

from CDP. Fresnillo answered climate change and water security questionnaires from CDP, and received

“D” and “C” ratings in 2018, respectively. Those questionnaires are not public.

Orbia Advance Corporation answered climate change questionnaires from CDP, and received a “C” rating

in 2018; this questionnaire is not public.

Orbia’s 2018 sustainability report follows GRI standards. The company provides good disclosure of sources

of water supply (since 2015) and the amount of water recycled and reused (since 2015). In 2018, the

company started to disclose the water discharge breakdown and water discharge quality.

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Appendix 1: Linking Declining Costs in Renewables, Storage, and the Ability to Enhance a Country’s Commitments to Cut CO2eq Emissions

For us, cutting GHG emissions is about creating solid policies affecting supply and demand for such

GHG emissions along the entire value chain. Emission factors matter a lot: for instance, some fossil fuels

are considerably better than others. A solid policy, in our opinion, needs to be economically and

technologically viable, otherwise it will fail. Carbon Storage and Sequestration (CSS) is also part of the

solution.

Declining costs in renewables: renewables are cheaper than thermal generation, paving the way for the

decommissioning of the most inefficient (and polluting) thermal plants.

In the transition, it would make sense to keep efficient thermal power plants that use the least harmful

fuels (like natural gas, compared with coal-fired or fuel oil-fired plants), and also with the best

technologies that also reduce the strain on water in regions where fresh water is scarce – see Appendix

2.

Although costs in power storage need to decline further to cut the need for redundant thermal power

plants, competitive costs in power storage might not take too much time, according to some studies –

see, for instance, Cost Projections for Utility-Scale Battery Storage by the National Renewable Energy

Laboratory, published in June 2019.

Investing in the grid also helps to cut faster thermal generation and manage the transition to a greener

power source of any given country.

Once cheaper and more reliable renewable-based power generation has been created (with policies

focusing on cutting GHG emissions from energy), policies can focus on demand for fossil fuels; e.g.,

faster substitution of vehicles that use fossil fuels with electric vehicles.

With the above, countries are likely to have more leeway to improve their nationally determined

contributions (NDCs). Notably, those NDCs need to be updated and communicated regularly beginning

in 2020.

In the case of Chile and Mexico, GHG emissions coming from the power and transportation industries

account for a material portion of their emissions, thus this route could result in lower future emissions (see

Exhibits 17 and 18).

Exhibit 17: GHG Emissions (2017) in LatAm…

Source: Muntean, M., Guizzardi, D., Schaaf, E., Crippa, M., Solazzo, E., Olivier, J.G.J., Vignati, E. Fossil CO2 emissions of all world countries - 2018 Report, EUR 29433 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-97240-9, doi:10.2760/30158, JRC113738.; Scotiabank GBM.

-

100

200

300

400

500

Brazil Chile Colombia Mexico Peru

MtC

O2eq / y

ear

Exhibit 18: … and the Sources of Such Emissions

Source: Muntean, M., Guizzardi, D., Schaaf, E., Crippa, M., Solazzo, E., Olivier, J.G.J., Vignati, E. Fossil CO2 emissions of all world countries - 2018 Report, EUR 29433 EN, Publications Office of the European Union, Luxembourg, 2018, ISBN 978-92-79-97240-9, doi:10.2760/30158, JRC113738.; Scotiabank GBM.

0%

20%

40%

60%

80%

100%

Brazil Chile Colombia Mexico Peru

Power Industry Buildings Transport Other Industrial Combustion Other Industries

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A Paper from the NewClimate Institute: the Case of Chile

In a paper published on May 27, 2019, the authors mention that the costs of renewables and batteries have

declined since Chile’s first NDC. The lower cost of batteries helps increase the market penetration of electric

vehicles. New technologies in renewables increase its competitiveness relative to thermal power, and the

combination could yield lower future emissions. Chile generated GHG of 93 Mt CO2eq in 2007. Chile’s

unconditional NDC for 2030 was 131 Mt CO2eq; its conditional target was as low as 103 Mt CO2eq and as

high as 121 Mt CO2eq. The paper concludes “…considering technology cost developments of wind, solar

photovoltaic (PV) and batteries, Chile could increase the ambition of its NDC targets.”

Theory in Practice: Chile’s Proposal to Update its NDC, and the Upgrade from Climate Action

Tracker (CAT)

Chile submitted a proposal to update its NDC in October 2019, an updated version from Chile’s 2016 NDC.

As a result, CAT upgraded Chile’s efforts to comply with the Paris Agreement, should the proposal become

official. Worth highlighting:

Both the conditional and unconditional NDCs are more ambitious.

The new unconditional NDC proposed aims for GHG emissions of 97 Mt CO2eq, a 26% decline from its

2016 unconditional NDC.

The quality of the unconditional NDC improved: now it focuses on absolute targets, peak years, covers

black carbon, includes governance measures, and includes a set of more ambitious targets in

reforestation and considers land degradation as well.

CAT’s rating of Chile’s unconditional NDC could improve to “Insufficient” (in line with Mexico’s

unconditional NDC) from “Highly Insufficient.”

CAT’s rating of Chile’s conditional NDC could improve to “1.5°C Paris Agreement Compatible” from

“Highly Insufficient.” Notably, the new proposed target implies a decline in emissions ranging from 25%

to 41% from its 2016 conditional NDC.

CAT’s View on Mexico’s Current Policies

In contrast to the improvements seen in Chile, the outlook for Mexico is different. In CAT’s view:

No climate change action plan in place for the short-term: this makes Mexico less likely to meet its

commitments.

A step backwards on climate by favouring fossil fuels over renewable energy generation. This includes

the construction of a new oil refinery and a new budget allocation to the “modernization” of coal, diesel,

gas, and oil-fuelled power plants, some of which the previous administration had already scheduled for

retirement. After fast tracking permits, the construction of the “Dos Bocas” refinery in Tabasco started in

June 2019. The move has come at the expense of a successful renewable energy program.

Cancellation of Mexico’s 2018 “Long-term electricity auctioning” round in January 2019.

Favouring fossil fuel generation over renewable energy now puts Mexico on a path that is even more

inconsistent with the steps needed to achieve the Paris Agreement's 1.5°C limit.

Preliminary rules for Mexico’s carbon market: deviating from the Paris Agreement. The official start was

originally scheduled for 2021, but has been delayed multiple times; the official start will begin in 2023.

Mexico’s emissions trading system (ETS) cap will be based on the reported historical emissions of

participants and Mexico’s NDC. Defining the ETS cap on historical emissions puts the program at risk of

not achieving substantial emissions reductions.

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The United Nations Environment Program (UNEP) – A U-Turn in Mexico’s Commitments

In the words of the United Nations Environment Program (UNEP), Mexico has made a U-turn in its

commitments (see pages 17-18, Emissions Gap Report 2019). However, according to UNEP, not all is lost;

Mexico still can improve the country’s ambitions (see page 37, Emissions Gap Report 2019).

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Appendix 2: Not All Fossil Fuels Are Equal, Nor Are All Thermal Power Plants

How Can CO2, NO2, and SO2 Emissions Be Reduced Substantially?

Global Warming Potential (GWP). Not all GHG emissions are equal either; some of them last longer and

have the ability to increase temperatures more. GHGs are compared over a 100-year GWP; for example,

one kg of methane (CH4) is equivalent to 25 kg of CO2. In the case of nitrous oxide (NO2), one kg is

equivalent to 298 kg of CO2, according to the U.S. Energy Information Administration (EIA).

The European Environment Agency (EEA) explains why emissions of CO2, NO2, and SO2 dropped over the

1990-2004 period despite an increase of 33% of electricity and heat over the same period:

Newer plants. Closure of old, inefficient power plants and the introduction of new plants based on more

efficient combined cycle technologies. The document mentions that during 1990-2004, there was a 15%

reduction in the fossil fuel input per unit of electricity produced from fossil fuels.

SO2 can be cut by using low-sulphur fuels, and the use of flue gas desulphurization (FGD).

NO2 can be cut by using the newer technologies (low NO2 burners) and flue gas treatment; combined,

this cut emissions by 49% over the 1990-2004 period.

Exhibit 19: Natural Gas Is Less Polluting

Source: EIA; Scotiabank GBM.

-

35

70

105

Kg C

O2 /

MB

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Appendix A: Important Disclosures

Company Disclosures (see legend below)*

CEMEX M10, M11, VS0150, VS0151Empresas Copec M16Fresnillo M16, M9, VS0630Grupo Mexico M16, M9, VS0140, VS0460Lala VS0428, VS0430Peñoles M16, M9, VS0533Sociedad Quimica y Minera de Chile VS0246

I, Francisco Suarez, certify that (1) the views expressed in this report in connection with securities or issuers that I analyzeaccurately reflect my personal views and (2) no part of my compensation was, is, or will be directly or indirectly, related to the specificrecommendations or views expressed by me in this report.

This document has been prepared by Research Analysts employed by The Bank of Nova Scotia and/or its affiliates. The Bank of NovaScotia, its subsidiaries, branches and affiliates are referred to herein as "Scotiabank." "Scotiabank" together with "Global Banking andMarkets" is the marketing name of the global corporate and investment banking and capital markets business of The Bank of NovaScotia and its affiliates. Scotiabank, Global Banking and Markets produces research reports under a single marketing identity referredto as "globally branded research" under U.S rules. This research is produced on a single global research platform with one set of ruleswhich meet the most stringent standards set by regulators in the various jurisdictions in which the research reports are produced. Inaddition, the Research Analysts who produce the research reports, regardless of location, are subject to one set of policies designed tomeet the most stringent rules established by regulators in the various jurisdictions where the research reports are produced.

Scotiabank relies on information barriers to control the flow of non-public or proprietary information contained in one or more areaswithin Scotiabank into other areas, units, groups or affiliates of Scotiabank. In addition, Scotiabank has implemented procedures toprevent research independence being compromised by any interactions they may have with other business areas of The Bank of NovaScotia. The compensation of the Research Analyst who prepared this document is determined exclusively by Scotiabank ResearchManagement and senior management (not including investment or corporate banking).

Research Analyst compensation is not based on investment or corporate banking revenues; however, compensation may relate tothe revenues of Scotiabank as a whole, of which investment banking, corporate banking, sales and trading are a part. ScotiabankResearch will initiate, update and cease coverage solely at the discretion of Scotiabank Research Management. Scotiabank Researchhas independent supervisory oversight and does not report to the corporate or investment banking functions of Scotiabank.

For Scotiabank, Global Banking and Markets Research Analyst Standards and Disclosure Policies, please visitwww.gbm.scotiabank.com/disclosures.

For additional questions, please contact Scotiabank, Global Banking and Markets Research, 4 King Street West, 12th Floor, Toronto,Ontario, M5H 1A1.

Time of dissemination: January 20, 2020, 16:30 ET. Time of production: January 20, 2020, 16:14 ET. Note: Time of disseminationis defined as the time at which the document was disseminated to clients. Time of production is defined as the time at which theSupervisory Analyst approved the document.

*Legend

M10 Francisco Suarez, an analyst, prepared this report and is an employee of the Research Department of Scotiabank InverlatS.A., which forms a part of Grupo Financiero Scotiabank Inverlat.

M11 Ramon Obeso, an analyst, prepared this report and is an employee of the Research Department of Scotiabank Inverlat S.A.,which forms a part of Grupo Financiero Scotiabank Inverlat.

M16 Jose M. Quintana, an analyst, prepared this report and is an employee of the Research Department of Scotiabank InverlatS.A., which forms a part of Grupo Financiero Scotiabank Inverlat.

M9 Alfonso Salazar, an analyst, prepared this report and is an employee of the Research Department of Scotiabank Inverlat S.A.,which forms a part of Grupo Financiero Scotiabank Inverlat.

VS0140 Research Analyst Alfonso Salazar visited Ray Mine, an operating mine, on April 2, 2014. No payment was received from theissuer for the travel-related expenses incurred by the Research Analyst to visit this site.

VS0150 Research Analyst Francisco Suarez visited the New Braunfels, Texas, cement facilities, on November 20, 2012. Partialpayment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.

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VS0151 Research Analyst Francisco Suarez visited the Monterrey, Mexico, cement facilities, on January 23, 2013. No payment wasreceived from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.

VS0246 Research Analyst Ben Isaacson visited Nueva Victoria, an operating iodine mine, in December 2014. Partial payment wasreceived from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.

VS0428 Research Analyst Felipe Ucros visited Grupo Lala's main production plant and the dairy farm of one of its key suppliers inTorreon on May 23, 2016. No payment was received from the issuer for the travel-related expenses incurred by the ResearchAnalyst to visit this site.

VS0430 Research Associate Juan Guzman visited Grupo Lala's main production plant and the dairy farm of one of its key suppliers inTorreon on May 23, 2016. No payment was received from the issuer for the travel-related expenses incurred by the ResearchAssociate to visit this site.

VS0460 Research Analyst Alfonso Salazar visited the La Caridad Mining Complex and the Buenavista Cobre mine from May 8-10,2017. Full payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit thissite.

VS0533 Research Analyst Alfonso Salazar visited the Velardena mine and Met-Mex complex in Torreon, Mexico on May 22-23, 2018.Partial payment was received from the issuer for the travel-related expenses incurred by the Research Analyst to visit this site.

VS0630 Research Analyst Alfonso Salazar visited mines and processing plants in the Fresnillo mining district (Fresnillo, Saucito, andJuanicipio) on September 19 and 20, 2019. Partial payment was received from the issuer for the travel-related expensesincurred by the Research Analyst to visit this site.

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Definition of Scotiabank, Global Banking and Markets Equity Research RatingsScotiabank has a three-tiered rating system, with ratings of Sector Outperform, Sector Perform, and Sector Underperform. EachResearch Analyst assigns a rating that is relative to his or her coverage universe or an index identified by the Research Analyst thatincludes, but is not limited to, stocks covered by the Research Analyst.

The rating assigned to each security covered in this report is based on the Scotiabank, Global Banking and Markets Research Analyst’s12-month view on the security. Research Analysts may sometimes express in research reports shorter-term views on these securitiesthat may impact the price of the equity security in a manner directly counter to the Research Analyst’s 12-month view. These shorter-term views are based upon catalysts or events that may have a shorter-term impact on the market price of the equity securitiesdiscussed in research reports, including but not limited to the inherent volatility of the marketplace. Any such shorter-term viewsexpressed in research report are distinct from and do not affect the Research Analyst’s 12-month view and are clearly noted as such.Ratings

Sector Outperform (SO)The stock is expected to outperform the average 12-month totalreturn of the analyst’s coverage universe or an index identifiedby the analyst that includes, but is not limited to, stocks coveredby the analyst.

Sector Perform (SP)The stock is expected to perform approximately in line withthe average 12-month total return of the analyst’s coverageuniverse or an index identified by the analyst that includes, butis not limited to, stocks covered by the analyst.

Sector Underperform (SU)The stock is expected to underperform the average 12-monthtotal return of the analyst’s coverage universe or an indexidentified by the analyst that includes, but is not limited to,stocks covered by the analyst.

Focus Stock (FS)As of April 29, 2019, Scotiabank, Global Banking and Marketsdiscontinued the Focus Stock rating. A stock assigned thisrating represented an analyst’s best idea(s); stocks in thiscategory were expected to significantly outperform the average12-month total return of the analyst’s coverage universe or anindex identified by the analyst that included, but was not limitedto, stocks covered by the analyst.

Other RatingsTender – Investors are guided to tender to the termsof the takeover offer.

Under Review – The rating has been temporarilyplaced under review, until sufficient information hasbeen received and assessed by the analyst.

Risk RankingThe Speculative risk ranking reflects exceptionallyhigh financial and/or operational risk, exceptionallylow predictability of financial results, andexceptionally high stock volatility. The Directorof Research and the Supervisory Analyst jointlymake the final determination of the Speculative riskranking.

Scotiabank, Global Banking and Markets Equity Research Ratings Distribution*

Distribution by Ratings and Equity and Equity-Related Financings*

44.1%49.7%

6.2%

21.4% 21.4% 11.4%Sector Outperform Sector Perform Sector

Underperform

0%

20%

40%

60%

* As of December 31, 2019. Source: Scotiabank GBM.

Percentage of companies covered byScotiabank, Global Banking and Markets EquityResearch within each rating category.

Percentage of companies within each ratingcategory for which Scotiabank, Global Bankingand Markets has undertaken an underwritingliability or has provided advice for a fee withinthe last 12 months.

For the purposes of the ratings distribution disclosure FINRA requires members who use a ratings system with terms differentthan “buy,” “hold/neutral” and “sell,” to equate their own ratings into these categories. Our Sector Outperform, Sector Perform,and Sector Underperform ratings are based on the criteria above, but for this purpose could be equated to buy, neutral andsell ratings, respectively.

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General Disclosures

This document is for distribution only as may be permitted by law. It is not directed to, or intended for distribution to or use by, anyperson or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution,publication, availability or use would be contrary to law or regulation or would subject Scotiabank to any registration or licensingrequirement within such jurisdiction. It is published solely for information purposes; it is not an advertisement nor is it a solicitation or anoffer to buy or sell any financial instruments or to participate in any particular trading strategy.

No representation or warranty, either express or implied, is provided in relation to the accuracy, completeness or reliability of theinformation contained in this document except with respect to information concerning Bank of Nova Scotia (TSX: BNS; NYSE: BNS).This document is not intended to be a complete statement or summary of the securities, markets or developments referred to in thisdocument. Scotiabank does not undertake to update or keep current the information contained herein, nor make any commitment as tothe frequency of publication.

If you are affected by MiFID II, you must advise us in writing at trade.supervision@scotiabank.com

Any opinions expressed in this document may change without notice and may differ or be contrary to opinions expressed by otherbusiness areas or groups of Scotiabank. Any statements contained in this document attributed to a third party represent Scotiabank’sinterpretation of the data, information and/or opinions provided by that third party either publicly or through a subscription service, andsuch use and interpretation have not been reviewed by the third party. Nothing in this document constitutes a representation that anyinvestment strategy or recommendation is suitable or appropriate to an investor's individual circumstances or otherwise constitutes apersonal recommendation. Investments involve risks, and investors should exercise prudence and their own independent judgement inmaking their investment decisions and carefully consider any risks involved.

The financial instruments that may be described in this document may not be eligible for sale in all jurisdictions or to certain categoriesof investors. Instruments such as options, derivative products, and futures are not suitable for all investors, and trading in theseinstruments is considered risky. Mortgage and asset-backed securities may involve a high degree of risk and may be highly volatile inresponse to fluctuations in interest rates or other market conditions. Foreign currency rates of exchange may adversely affect the value,price, or income of any security or related instrument referred to in this document. For investment advice, trade execution, or otherenquiries, clients should contact their local sales representative. The value of any investment or income may go down as well as up,and investors may not get back the full amount invested. Past performance is not necessarily a guide to future performance.

To the full extent permitted by law, neither Scotiabank nor any of its directors, employees or agents accepts any liability whatsoeverfor any direct or consequential loss arising from any use of the information or this document. Nothing in this document constitutesfinancial, investment, tax, accounting or legal advice. Investors should seek their own legal, financial and tax advice regarding theappropriateness of investing in any securities or pursuing any strategies discussed in the document. Any prices stated in this documentare for information purposes only and do not represent real-time valuations for individual securities or other financial instruments. Thereis no representation that any transaction can or could have been effected at those prices, and any prices do not necessarily reflectScotiabank's internal books and records or theoretical model-based valuations and may be based on certain assumptions. Differentassumptions by Scotiabank or any other source may yield substantially different results. All pricing of securities in reports is based onthe closing price of the securities' principal marketplace on the night before the publication date, unless otherwise explicitly stated.

The Research Analyst(s) responsible for the preparation of this document may interact with trading desk personnel, sales personneland other parties for the purpose of gathering, applying and interpreting market information.

In the normal course of offering investment and banking products and services to clients, Scotiabank may act in several capacities(including issuer, market maker, underwriter, distributor, index sponsor, swap counterparty, and calculation agent) simultaneously withrespect to a product, giving rise to potential conflicts of interest. Scotiabank uses controls such as information barriers to manageconflicts should they arise. Scotiabank and its affiliates, officers, directors, and employees may have long or short positions (includinghedging and trading positions), trade as principal and buy and sell in instruments or derivatives identified herein; such transactions orpositions may be inconsistent with the opinions expressed in this document.

Recipients of this document should expect that Scotiabank will from time to time perform services (including investment banking orcapital market services) in connection with the services and activities described in this document and that they may perform services forand engage in transactions with other market participants, including the issuers of certain of the investments underlying the transactionsherein.

The information in this document has been prepared without taking into account any investor's objectives, financial situation or needs,and investors should, before acting on the information, conduct independent due diligence when making an investment decision andconsider the appropriateness of the information, having regard to their objectives, financial situation and needs. For further information,please contact your sales representative.

Scotiabank specifically prohibits the redistribution of this document in whole or in part without Scotiabank's prior written permission, andScotiabank accepts no liability whatsoever for the actions of third parties in this respect. Images may depict objects or elements that areprotected by third-party copyright, trademarks and other intellectual property rights.

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Equity research reports published by Scotiabank are initially and simultaneously made available electronically to intended recipientsthrough its proprietary research website, ScotiaView, e-mail, and through third-party aggregators. The mediums in which researchis disseminated to clients may vary depending on client preference as to the frequency and manner of receiving research reports.Institutional clients with questions regarding distribution of equity research or who wish to access the proprietary model used to producethis report should contact Scotiabank at 1-800-208-7666.

A list of all investment recommendations in an equity security or issuer that have been disseminated during the preceding 12 months isavailable at the following location: gbm.scotiabank.com/disclosures.

Additional Disclosures

Australia: This report is provided in Australia by the Bank of Nova Scotia, an APRA-regulated Authorised Deposit-Taking Institution(Foreign Bank ADI) holding an Australian Financial Services License (AFSL).

Canada: Distributed to eligible Canadian persons by Scotia Capital Inc. a registered investment dealer in Canada.

Chile: This report is distributed by Scotia Azul Corredores de Bolsa Ltda and Scotia Corredora de Bolsa Chile S.A., subsidiaries of TheBank of Nova Scotia.

Colombia: This report is distributed in Colombia by Scotiabank Colpatria, S.A. as authorized by the Superintendencia Financiera deColombia to The Bank of Nova Scotia (“Scotiabank”). Scotiabank and Scotia Capital Inc. promote and advertise their products andservices through Scotiabank Colpatria, S.A. This document does not contain any type of investment advice nor does it aim to provideadvice. This report is prepared by analysts employed by The Bank of Nova Scotia and certain of its affiliates, including Scotia CapitalInc.

Hong Kong: This report is distributed by The Bank of Nova Scotia Hong Kong Branch, which is authorized by the Securities and FutureCommission to conduct Type 1, Type 4 and Type 6 regulated activities and regulated by the Hong Kong Monetary Authority.

Japan: This research report is provided for information purposes only and it is not intended to solicit any orders for securitiestransactions or commodities futures contracts. While we believe that the data and information contained in this research report is areobtained from reliable sources, we do not guarantee the accuracy or completeness of the data and information.

Mexico: The information contained in this report is for informational purposes only and is not intended to influence the decision of theaddressee in any way whatsoever with respect to an investment in a certain type of security, financial instrument, commodity, futurescontract, issuer, or market, and is not to be construed as an offer to sell or a solicitation of an offer to buy any securities or commoditiesfutures contracts. Scotiabank Inverlat Casa de Bolsa, S.A. de C.V. is not responsible for the outcome of any investment performedbased on the contents of this research report.

Peru: This report is distributed by Scotia Sociedad Agente de Bolsa S.A., a subsidiary of The Bank of Nova Scotia. This report isprepared by analysts employed by The Bank of Nova Scotia and certain of its affiliates including Scotia Capital Inc.

Singapore: For investors in the Republic of Singapore, this document is provided via an arrangement with BNS Asia Limited pursuant toRegulation 32C of the Financial Advisers Regulations. The material contained in this document is intended solely for accredited, expertor institutional investors, as defined under the Securities and Futures Act (Chapter 289 of Singapore). If there are any matters arisingfrom, or in connection with this material, please contact BNS Asia, located at 1 Raffles Quay, #20-01 North Tower, One Raffles Quay,Singapore 048583, telephone: +65 6305 8388.

This document is intended for general circulation only and any recommendation that may be contained in this document concerningan investment product does not take into account the specific investment objectives, financial situation, or particular needs of anyparticular person, and advice should be sought from a financial adviser based in Singapore regarding the suitability of the investmentproduct, taking into account the specific investment objectives, financial situation, or particular needs of any person in receipt of therecommendation, before the person makes a commitment to purchase the investment product.

BNS Asia Limited and/or its affiliates may have in the past done business with or may currently be doing or seeking to do business withthe companies or issuers covered in this report. The information provided or to be provided or actions taken by or to be taken by BNSAsia Limited and/or its affiliates in such circumstances may be different from or contrary to the discussion set out in this report.

United Kingdom and the rest of Europe: Except as otherwise specified herein, this material is distributed by Scotiabank Europe plcto persons who are eligible counterparties or professional clients. Scotiabank Europe plc is authorized by the Prudential RegulationAuthority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

United States: Distributed to U.S. persons by Scotia Capital (USA) Inc. or by an authorized subsidiary or affiliate of The Bank of NovaScotia that is not registered as a U.S. broker-dealer (a ‘non-U.S. affiliate’) to major U.S. institutional investors only. Scotia Capital (USA)Inc. accepts responsibility for the content of a document prepared by its non-U.S. affiliate (s) when distributed to U.S. persons by ScotiaCapital (USA) Inc. To the extent that a U.S. person wishes to transact in the securities mentioned in this document through Scotiabank,such transactions must be effected through Scotia Capital (USA) Inc., and not through a non-U.S. affiliate. The information in thisdocument has not been approved, disapproved, or recommended by the U.S. Securities and Exchange Commission (“SEC”), any statesecurities commission in the United States or any other U.S. or non-U.S. regulatory authority. None of these authorities has passed on

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or endorsed the merits or the accuracy or adequacy of this document. Any representation to the contrary is a criminal offense in theUnited States.

™ Trademark of The Bank of Nova Scotia. Used under license, where applicable. Scotiabank, together with "Global Banking andMarkets," is a marketing name for the global corporate and investment banking and capital markets businesses of The Bank ofNova Scotia and certain of its affiliates in the countries where they operate, including Scotia Capital Inc., Scotia Capital (USA) Inc.,Scotiabanc Inc., Citadel Hill Advisors L.L.C., The Bank of Nova Scotia Trust Company of New York, Scotiabank Europe plc, Scotiabank(Ireland) Designated Activity Company, Scotiabank Inverlat S.A., Institución de Banca Múltiple, Scotia Inverlat Casa de Bolsa S.A. deC.V., Scotia Inverlat Derivados S.A. de C.V. – all members of the Scotiabank Group and authorized users of the mark. The Bank ofNova Scotia is incorporated in Canada with limited liability. Scotia Capital Inc. is a member of the Canadian Investor Protection Fundand regulated by the Investment Industry Regulatory Organization of Canada. Scotia Capital (USA) Inc. is a broker-dealer registeredwith the SEC and is a member of FINRA, NYSE, NFA and SIPC. Scotiabank Europe plc is authorized by the Prudential RegulationAuthority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Scotiabank Inverlat, S.A., ScotiaInverlat Casa de Bolsa, S.A. de C.V., and Scotia Derivados, S.A. de C.V., are each authorized and regulated by the Mexican financialauthorities.

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This report and all the information, opinions, and conclusions contained in it are protected by copyright. This report may not bereproduced in whole or in part, or referred to in any manner whatsoever, nor may the information, opinions, and conclusions containedin it be referred to without the prior, express consent of Scotiabank, Global Banking and Markets. The Bank of Nova Scotia, Scotiabank,and Global Banking and Markets logo and names are among the registered and unregistered trademarks of The Bank of Nova Scotia.All rights reserved.

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