Generation Investment Management

Statement of Sustainability
Our Core Values:
Commitment to Clients We are committed to providing exceptional client service – above all by
delivering superior long-term performance1 – and by ensuring that our interests are fully
aligned with those of our clients.

Integrity: Integrity and honesty are the bedrock of our business. We expect the highest ethical
standards in our work and in our personal lives.

Excellence and Innovation: We aim for excellence in all that we do, and ensure that our
investment processes encourage rigorous research, curiosity and continuous learning. We
believe inter-disciplinary, diverse teams are the most likely to yield new insights and produce
the best results for our clients over the long-term.

Teamwork: Teamwork underpins our one-firm culture. We consider each of the women and
men with whom we work as individuals entitled to respect and dignity, and we recognise and
reward their contributions on the basis of merit.

Communication: Effective communication is critical to teamwork and to our relationships. We

encourage and especially value hearing different viewpoints and respectful challenges to
consensus opinions.

Diversity: Diversity, in the broadest sense, helps drive our success. A welcoming work
environment, where individuals can bring the totality of their experience and perspectives, is an
invaluable contributor to greater economic success.

Sustainability Research: Our investment philosophy, which integrates sustainability research

with traditional financial analysis, affords us the highest opportunity to deliver outstanding
investment results.

Independence: We have chosen an independent broad-based employee-owned partnership as

an enduring business model. Similarly, we are committed to remaining a boutique investment
firm focused on continual improvement in our performance.

Responsible Citizenship: We recognise and accept our responsibility to live in accordance with
our values; to be responsible to the communities in which we live and work, and to the world
community. We aim to reduce our environmental footprint where possible; we are mindful of
ways to help our employees fulfil their personal responsibilities, and we actively encourage
philanthropic engagement.

1
Although Generation seeks to provide superior investment performance, potential investors should be aware that this
is an aspiration and there is no guarantee that this goal will be obtained.

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 Sustainable Capitalism: Through engagement with our clients, our portfolio companies and the
broader financial markets, we strive to promote a more sustainable form of capitalism. The
Generation Foundation is an important element of this work.

Introduction
Generation Investment Management LLP is a
private, owner-managed partnership
dedicated to long-term investing, integrated
sustainability research and client alignment.
Our core business is the deployment of capital
on behalf of our clients through our
investment strategies.

Our Mission
 Seek superior performance by taking a long term
investment view and integrating sustainability
research within a rigorous fundamental analysis
framework.
 Create enduring partnerships by combining
original investment insights with exceptional
client service.
 Attract, retain and develop the best professionals
within a passionate investment culture, through
a commitment to our Core Values.

Our Impact
We recognise that our activities have a direct and indirect impact upon a range of stakeholders, and
consider these in three categories:

 First Order—Direct impact from our business activities, including how we look after our
people, manage relationships with our external suppliers and minimise any negative
impacts on the environment;
 Second Order—Impact resulting from the way in which we deploy capital on behalf of our
clients into the investee companies that we select for our portfolios;
 Third Order—Impact that we have on the broader capital markets, environment and society
through our individual and collective participation, advocacy work and philanthropy.

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The following pages describe our objectives and actions with regards to managing our impact.

First Order Impacts: People and Operations

People
We are a team of investment management professionals with offices in London and
New York.
To attract, retain and develop the best professionals we seek to provide our team members with
the opportunity to:
 Interact with highly-skilled professionals in a positive workplace environment;
 Find personal fulfilment from succeeding, learning and developing in challenging roles, and
 Deliver meaningful results to our clients in a way that fulfils our Mission while maintaining
our values and ensuring that our own interests are aligned with our clients.
Our Culture, Incentive Structures and Workplace Environment are three important contributors to
achieving our objective.

Culture: Generation has developed a strong client-aligned, performance-driven, learning-oriented

culture that encourages teamwork, excellence, creativity, diversity, fairness, professional
development, openness and integrity. We are proud of our culture and we believe it will be a key
driver to our long-term success. We have tried to be thoughtful and deliberate in its development
and work hard to maintain and reinforce it.

Incentive Structures: Generation’s incentive structures are designed to align our interests with
those of our clients in the delivery of superior long-term investment performance. In addition to
the remuneration component of our incentive structure, we provide a number of benefits aimed at
looking after the health and well-being of team members and their families, now and into the
future. Included in this are employer-pension contributions, health, travel and life insurance, health
assessments, subsidised gym membership, flexible working arrangements and generous
maternity/paternity provisions.

Workplace: We aim to create a productive, safe and healthy work environment. We have been
thoughtful about the design of our working environment. Our offices include an open-plan office
space, meeting rooms, a quiet room and our London facility has cycle-racks, a quiet room, shower
facilities, and a communal eat-in-kitchen with a wide range of complimentary healthy-eating
options provided.

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Operations
The environmental impact of our operations is most materially built up through our
offices and business travel. In consuming natural resources, including energy, water
and natural materials, externalities such as carbon emissions, wastewater and
landfill are generated.
We seek to reduce the direct negative environmental impacts of our activities, and influence the
indirect negative impacts through our sourcing, usage, and offsetting decisions. We achieve this by:

 Responsible sourcing decisions

 Minimising our resource usage through conscious choices
 Offsetting what we see as the emissions from our operations on an annual basis.

Sourcing: Our most significant sourcing choice is that of our offices, of which the majority of the
Generation team is based out of London. Our offices in London and New York were purpose-built
with sustainability in mind.

In London, our office at 20 Air Street was built expressly to achieve the highest standards in energy
performance, achieving the “Excellent” rating by BREEAM (Building Research Establishment
Environmental Assessment Method). A proportion of energy and heat is sourced from photovoltaic
cells, thermal stores and combined cooling, heat and power units. In addition to a rainwater
harvesting system, an intelligent lighting system is in place as to maximise natural light and limit
wastage.

Generation consciously designed the London office fit-out to further minimise the environmental
impact of its operation and achieved the gold Ska rating. Technologies include personalised energy
feedback systems, heat recovery processes, low VOC paints, and the use of sustainability certified
or recycled wood wherever possible.

Our New York office at One Bryant Park is one of the most energy efficient, ecologically friendly
buildings in New York. In addition, the office occupies a space that received a Platinum LEED
(Leadership in Energy and Environmental Design) certification for Commercial Interior Design. It
was the first skyscraper to achieve a Platinum LEED certification for environmental excellence.

To help us make the most of the office features we have installed, we commissioned a consultant
during 2013 to analyse areas we might be able to further reduce the energy consumption of our
London office and enhance information sharing across the Firm. As part of this process, the
consultant collected, analysed and reported energy use of the London office.

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Both offices work with building managers on an ongoing basis to prioritise energy efficiency and
sustainable practices. Other business-related sourcing decisions include local travel and office
supplies, and we source environmentally-friendly suppliers for these wherever possible.

Usage: We look to actively manage our environmental impacts from our business activities. Our
largest impact arises from business air travel. While we regard travel as a necessary part of our
business for investment and client-service purposes, we encourage our team to constantly evaluate
their travel arrangements and where possible, develop efficient travel itineraries and use alternate
forms of communication such as video and teleconference facilities. During 2013 we increased the
number of teleconference facilities available and are working with a technology specialist to help us
enhance their quality.

Carbon Offsets: As a firm, we are committed to offsetting what we see as the unavoidable
emissions of Generation works with a portfolio of off-set providers to purchase the highest
standard of carbon offset instruments. On an annual basis, we choose to more than sufficiently
cover not only the emissions from electricity use, commuting and business travel, but also the
footprint generated by Generation team members and their families in the course of their personal
lives

Second Order Impacts: The Deployment of Capital

Clients and Investee Companies
Clients
We manage assets on behalf of clients, including institutional investors,
foundations, family offices, endowments and high-net-worth individuals from
around the world. Our clients hold us to the highest standards of performance and
sustainability research.
To develop enduring client partnerships through the pursuit of superior investment performance,
original investment insights and exceptional client service we seek to:

 Diligently implement our investment process;

 Align our commercial interests with those of our clients;
 Provide insights on sustainability topics; and
 Operate a robust compliance, administration and risk management system to protect our
mutual interests.

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Investment process: We integrate sustainability research with fundamental analysis in our
investment process. Our investment philosophy is based on our conviction that sustainability risks
and opportunities directly affect long-term profitability. We believe that the interests of
shareholders, over time, will be best served by companies that maximise their financial return by
strategically managing their economic, social and environmental preference.

We look to invest in high-quality companies and management teams that are well positioned for
the long-term, and who responsibly manage the relevant and material sustainability opportunities
and challenges they face.

As a result of broadening the spectrum of information we consider in the investment process, we

are likely to have a unique perspective on a company’s management quality, business quality and
valuation. We believe that our investment process enhances the opportunity to deliver long-term
superior investment performance to our clients.

Client Alignment: We fundamentally believe in the importance of linking our own incentive
structures to our clients’ interests, and have established our commercial arrangements in such a
way that ensures that we are aligned with our clients’ long-term performance results. This is also
evidenced in the way we remunerate our investment team according to their long-term
performance; that we provide opportunities for staff to be invested in our funds alongside our
clients through direct investment or employee incentive plans; and that all partners participate in
the profitability of the firm.

Investment and Sustainability Insights: We are fortunate to have an engaged and like-minded
client community who hold us to the highest standards of investment performance and
sustainability research. To encourage discussion, action and engagement, we look to provide our
clients with research insights into global sustainability topics, and convene a global conference
approximately every 18-24 months to share thinking and perspectives on sustainability issues. In
addition, we actively share the work of the Generation Foundation, and have recently launched the
circulation of periodic “Sustainability Research” to facilitate the transfer of our research to our
clients and engaged stakeholders. During early 2014, we organised our inaugural Women’s
Leadership Summit to encourage discussion and idea sharing with our clients around the different
leadership roles of women, and how policies and practices can support the promotion of women
within business organisations.

Compliance and Control: A core tenet of Generation is that success is built upon the quality of its
people, its investment process and its controls. The Firm’s organisation and governance structure
ensures there is clear segregation of responsibilities and accountability at all levels. The integrity
and experience of our people combined with the broad knowledge provided by external industry
professionals ensure compliance and internal controls are executed at the highest standard.

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Investee Companies
In seeking to achieve our goal of delivering superior long-term investment
performance, we deploy capital into a number of companies that we consider to be
part of the solution to some of the world’s key sustainability challenges.
We seek to:

 Invest with a long-term investment horizon

 Be responsible owners
 Develop long-term relationships with our investee companies that enable constructive
dialogue

Long-term Horizon: We operate with a long-term view because we believe that the majority of a
company’s value is derived over a long-term investment horizon, and that short-termism can lead
to poor and misaligned business decisions. As shareholders investing with a longer-term horizon we
can support and encourage companies to focus more on their business objectives and less on
quarterly metrics. We believe that this will ultimately result in more sustainable and aligned
business decisions, and to the overall sustainability of capital markets.

Responsible Ownership: We take our responsibilities as shareholders very seriously. Of particular

importance to this commitment is our approach to corporate governance. For example, each
analyst is responsible for voting the proxies of the companies they follow. While we have access to
specific external voting recommendations, we do not automatically adopt them. We believe each
analyst should review the relevant corporate governance issues on a case-by-case basis and
exercise his or her best judgment given their knowledge of the companies under their coverage.

Constructive Dialogue: We engage with companies as a means of enhancing and protecting our
investments. Our analysts are responsible for maintaining an ongoing constructive dialogue with
investee companies, interacting with management teams on a regular basis and engaging them on
topics that include relevant and material sustainability issues as well as traditional business-related
matters. We also hold Board seats on a number of companies within our Climate Solutions Fund.
Through these privileged positions we are able to have significant influence on the topics we
consider relevant to our investments. Our interest and engagement with companies across all
levels provides the opportunity to promote positive corporate behavior, develop stronger long-
term relationships, reduce risks and enhance our company-specific research.

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Third Order Impacts: Our Broader Impacts
Capital Markets, Society and the Global Environment
Capital Markets
As an investment manager, we are an industry participant in the capital markets.
We recognise our responsibility to the industry to help maintain its integrity by
being a good corporate citizen. We also recognise the opportunity we have to
promote the business case for sustainable investing - and thus promote a more
sustainable form of capitalism.
To play our part in maintaining the integrity of the industry; to promote the business case for
sustainability investing, and to change capitalism’s current operating model to one that integrates
sustainability throughout the value chain we seek to:

 Operate a best-practice control environment

 Promote the business case for sustainable investing through the Generation Foundation

Control Environment: Generation recognises that as a market participant it has a duty to operate
with the highest ethical standards. Our control environment has been developed to ensure
compliance with securities regulations, industry best practice and client guidelines in the execution
of its responsibilities. Independent external professionals provide expert advice, compliance
monitoring services and audit functions to ensure Generation has strong controls which are being
consistently applied.

Sustainable Investing: We believe that integrating sustainability research into a traditional

investment process has the potential to deliver superior long-term investment performance for our
clients. We regularly promote the discussion of sustainability topics with fellow capital market
participants, and engage the broader financial community through the development and
dissemination of advocacy pieces through the Generation Foundation.

Society
We recognise that as individuals we have a responsibility to live in accordance with
our values and to be responsible to the communities in which we live and work. We
recognise that we have the resources to make a positive contribution to the
development of sustainable societies – both in our local communities and abroad.

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The objective of the Generation Foundation is to achieve the mainstream adoption of sustainability
throughout global markets. In addition to the Foundation’s agenda around working to mainstream
sustainable capitalism, the Foundation encourages team members to pursue their philanthropic
interests through match-giving and community service programs. For further information, please
visit the Generation Foundation website: http://genfound.org/

Global Environment
Each of us is a beneficiary of and participant in the global environment, and has a
moral responsibility to future generations to protect it. Of the many global threats,
we believe the climate crisis is the most urgent and we recognise that we have a
role in promoting public awareness of this challenge, and how to solve it - and in
supporting the transition from a high-carbon to a low-carbon economy.
We are advocates of promoting awareness of the global threats to the environment and believe
strongly in the development of solutions that will address these issues. We continue to represent
our views as signatories and participants in many global initiatives, as well as to produce advocacy
pieces on the topic. A full list of these initiatives and our thought leadership can be found at our
website: http://www.generationim.com/citizenship/partnerships.html

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Important Information

Generation Investment Management LLP ("GenerationIM") which is authorised and regulated by

the Financial Conduct Authority of the United Kingdom is the parent company of Generation
Investment Management US LLP ("GenerationUS"), an investment adviser located in New York and
registered with the United States Securities and Exchange Commission under the Investment
Advisers Act of 1940. Registration as an investment adviser with the SEC does not imply a certain
level of skill or training. GenerationIM and GenerationUS only may transact business in any state,
country, or province if they first are registered, or excluded or exempted from registration, under
applicable laws of that state or province. In particular, GenerationIM does not conduct business in
the United States and persons in the United States should engage with Generation US only.

This material is for information only and for the use of the recipient. It is not to be reproduced or
copied or made available to others. Under no circumstances is it to be considered as an offer to sell,
or a solicitation to buy any investment or to provide a service. While the information contained
herein is from sources believed reliable, we do not represent that it is accurate or complete and it
should not be relied upon as such. Generation accepts no liability for loss arising from the use of
this material. Any opinions expressed are our current opinions only.

This document is not meant as a general guide to investing, or as our specific investment
recommendations, and makes no implied or express recommendations concerning the manner in
which any client's accounts should or would be handled. The value of investments may fall as well
as rise. Generation seeks to provide “superior” investment performance but potential investors
should be aware that is an aspiration and there is no guarantee that this goal will be obtained.

Generation Investment Management LLP ARBN 116 045 526.

Generation Investment Management LLP is a limited liability partnership registered in England and
Wales.

Registered No: OC307600. Registered office: 20 Air Street, London W1B 5AN

© Generation Investment Management LLP 2014

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