AC

S&P/EGX ESG Index

Methodology

January 2023
S&P Dow Jones Indices: Index Methodology
Table of Contents
Introduction 3
Index Objective 3
Partnership 3
Supporting Documents 3
Eligibility Criteria 4
Index Universe 4
Eligibility Factors 4
Index Construction 5
Constituent Selection 5
Constituent Weightings 5
Index Calculations 5
Index Maintenance 6
Rebalancing 6
Additions and Deletions 6
Corporate Actions 6
Quarterly Updates 6
Ongoing Maintenance 6
Currency of Calculation and Additional Index Return Series 7
Base Date 7
Index Data 8
Calculation Return Types 8
Index Governance 9
Index Committee 9
Index Policy 10
Announcements 10
Pro-forma Files 10
Holiday Schedule 10
Rebalancing 10
Unexpected Exchange Closures 10
Recalculation Policy 10
Contact Information 10
Index Dissemination 11

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 1

 Tickers 11
Index Data 11
Website 11
Appendix I 12
Environmental, Social & Governance (ESG) Scores 12
Composite Score Calculation 12
Appendix II 13
T&D Template for Assessing Conduct on Governance of Egyptian Companies 13
Appendix III 18
T&D Template for Assessing Environmental and Social Conduct (E&S) of Egyptian
Companies 18
Appendix IV 22
Qualitative Criteria for Assessing Governance of Egyptian Companies 22
Appendix V 25
Qualitative Criteria for Assessing Environmental and Social Conduct (E&S) of
Egyptian Companies 25
Disclaimer 32
Performance Disclosure/Back-Tested Data 32
Intellectual Property Notices/Disclaimer 33

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 2

Introduction
Index Objective

The S&P/EGX ESG Index measures the performance of 30 companies listed on the Egyptian Exchange
(EGX) that are among the highest ESG scoring and also meet the requirements detailed in Eligibility
Criteria. Index constituents are ESG score weighted. ESG stands for Environmental, Social, and
Governance & Economic.

Partnership

S&P Dow Jones Indices and EGX collaborated to create the S&P/EGX ESG Index. The research,
calculation, and management of the ESG scores used in this methodology are carried out by EGX, while
S&P Dow Jones Indices provides the methodology for defining relevant ESG criteria, and developed and
calculates the index.

Supporting Documents

This methodology is meant to be read in conjunction with supporting documents providing greater detail
with respect to the policies, procedures and calculations described herein. References throughout the
methodology direct the reader to the relevant supporting document for further information on a specific
topic. The list of the main supplemental documents for this methodology and the hyperlinks to those
documents is as follows:

Supporting Document URL

S&P Dow Jones Indices’ Equity Indices Policies &
Equity Indices Policies & Practices
Practices Methodology
S&P Dow Jones Indices’ Index Mathematics
Index Mathematics Methodology
Methodology
S&P Dow Jones Indices’ Float Adjustment
Float Adjustment Methodology
Methodology

This methodology was created by S&P Dow Jones Indices to achieve the aforementioned objective of
measuring the underlying interest of each index governed by this methodology document. Any changes to
or deviations from this methodology are made in the sole judgment and discretion of S&P Dow Jones
Indices so that the index continues to achieve its objective.

EGX is a trademark of The Egyptian Exchange and has been licensed for use by S&P Dow Jones
Indices.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 3

Eligibility Criteria
Index Universe

The index universe consists of the top 100 companies listed on the EGX, as ranked by total value traded
during the 12-month period ending on the last trading day in May.

Eligibility Factors

As of each rebalancing reference date, stocks in the index universe are screened for and must satisfy the
f ollowing criteria to be eligible for index inclusion:

Liquidity. Must be ranked among the top 100 listed companies on the EGX by 12 months daily value
traded.

Domicile. Companies must be domiciled in Egypt.

Minimum ESG Qualitative Score. Companies should have a minimum score of 90.

For more information on the ESG Score calculation please refer to Appendices I and IV .

Non-Zero IWF. Must have an IWF (Investible Weight Factor) greater than zero.

For more information on IWFs, please refer to S&P Dow Jones Indices’ Float Adjustment Methodology.

Multiple Classes of Stock. All publicly listed multiple share class lines are eligible for index inclusion, subject to
meeting the eligibility criteria. All eligible share classes from a company are assigned identical ESG Scores . For
more inf ormation regarding the treatment of multiple share classes, please refer to Approach A within the Multiple
Share Classes section of the S&P Dow Jones Indices’ Equity Indices Policies & Practices Methodology.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 4

Index Construction
Constituent Selection

At each rebalancing, companies in the eligible universe are ranked in descending order by ESG score,
with the top 30 companies selected and forming the index.

If two companies have identical ranks/scores, priority is given to existing constituents. Where both or neither
company is an existing index constituent, the larger company, by float market capitalization as at the index
rebalancing reference date, is selected.

Constituent Weightings

At each rebalancing, constituents are ESG score weighted. ESG score weight is defined as the
company’s ESG score divided by the total sum of the ESG scores of all constituents.

Index Calculations

The index is calculated by means of the divisor methodology used in most S&P Dow Jones Indices’
equity indices.

For more information on index calculation, please refer to the Non-Market Capitalization Weighted Indices
section of S&P Dow Jones Indices’ Index Mathematics Methodology.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 5

Index Maintenance
Rebalancing

Annual Rebalancing. The index reconstitutes annually, effective after the close of the last business day
of July. The ref erence date for weighting purposes is seven business days prior to the rebalancing
ef f ective date. ESG scores and market-capitalization weights are reset only at the annual rebalancing.
Companies are assigned new scores each year based on their latest filings, news , and other material
inf ormation available in the public domain.

Mid-Year Review. Additionally, the EGX monitors companies’ qualitative performance on a constant
basis by assessing current controversies with potentially negative reputational or financial impacts. The
EGX monitors news coverage of assessed companies using news stories from the media and other
public sources.

On a semi-annual basis, if any constituent’s qualitative ESG score falls below 90, the EGX notifies the
Index Committee in January. The constituent is reviewed to evaluate the potential impact on the
composition of the index. If the Index Committee decides to remove a company in question, the
constituent is replaced by the highest -ranking non-constituent, using the most recently determined ESG
scores. A replacement constituent is added at the same weight as the removed constituent. Any changes
due to the mid-year review are effective after the close of the last business day in February. The
ref erence date for weighting purposes is seven business days prior to the mid-year review effective date.

Additions and Deletions

Additions. Except for spin-offs, and any replacements made due to the mid-year review, no stocks are
added to the index between rebalancings. Spinoffs are added to the index with a zero price at the market
close of the day before the ex-date (with no divisor adjustment) and remain in the index until the
subsequent rebalancing when they are reviewed for continued index inclusion.

Deletions. Between rebalancings a constituent can be deleted from the index due to corporate events
such as mergers, takeovers, de-listings, suspensions, spin-offs/demergers, bankruptcies, or as a result of
the mid-year review. Constituents removed due to corporate events are not replaced.

Corporate Actions

For more information on Corporate Actions, please refer to the Non-Market Capitalization Weighted
Indices section of S&P Dow Jones Indices’ Equity Indices Policies & Practices Methodology.

Quarterly Updates

Changes to a constituent’s shares and IWF due to the quarterly updates are effective after the close on
the third Friday in March, June, September, and December.

Ongoing Maintenance

Changes to index constituents, such as share changes, Investable Weight Factor (IWF) changes,
dividend distributions, and price adjustments, follow the policies of the underlying index.

For more information on Share Updates, Float Adjustment, and IWFs, please refer to S&P Dow Jones
Indices’ Equity Indices Policies & Practices Methodology and S&P Dow Jones Indices’ Float Adjustment
Methodology.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 6

The index is reviewed on an ongoing basis to account for corporate events such as mergers, takeovers,
delistings, suspensions, spin-offs/demergers, or bankruptcies. Changes to index composition and related
weight adjustments are made as soon as they are effective. These changes are typically announced prior
to the implementation date.

Currency of Calculation and Additional Index Return Series

The index is calculated in U.S. dollars and Egyptian pounds.

Real-time spot Forex rates, as supplied by Refinitiv, are used for ongoing index calculation. The end -of-
day value of the index is calculated using the real-time spot exchange rate provided by Refinitiv at the
time the index is closed.

In addition to the indices detailed in this methodology, additional return series versions of the indices may
be available, including, but not limited to: currency, currency hedged, decrement, fair value, inverse,
leveraged, and risk control versions. For a list of available indices, please refer to the S&P DJI
Methodology & Regulatory Status Database.

For information on the index calculation, please refer to S&P Dow Jones Indices’ Index Mathematics
Methodology.

For the inputs necessary to calculate certain types of indices, including decrement, dynamic hedged, fair
value, and risk control indices, please refer to the Parameters documents available at
www.spglobal.com/spdji/.

Base Date

Index history availability, base date, and base value are shown in the table below.

Launch First Value Base

Base Date
Index Date Date Value
S&P/EGX ESG Index 03/22/2010 06/28/2007 06/28/2007 1000

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 7

Index Data
Calculation Return Types

S&P Dow Jones Indices calculates multiple return types which vary based on the treatment of regular
cash dividends. The classification of regular cash dividends is determined by S&P Dow Jones Indices.
• Price Return (PR) versions are calculated without adjustments for regular cash dividends.
• Gross Total Return (TR) versions reinvest regular cash dividends at the close on the ex -date
without consideration for withholding taxes.
• Net Total Return (NTR) versions, if available, reinvest regular cash dividends at the close on the
ex-date af ter the deduction of applicable withholding taxes.

In the event there are no regular cash dividends on the ex-date, the daily performance of all three indices
will be identical.

For a complete list of indices available, please refer to the daily index levels file (“.SDL”).

For more information on the classification of regular versus special cash dividends as well as the tax rates
used in the calculation of net return, please refer to S&P Dow Jones Indices’ Equity Indices Policies &
Practices Methodology.

For more information on the calculation of return types, please refer to S&P Dow Jones Indices’ Index
Mathematics Methodology.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 8

Index Governance
Index Committee

An S&P Dow Jones Indices’ Index Committee maintains the index. The Index Committee meets regularly.
At each meeting, the Index Committee reviews pending corporate actions that may affect index
constituents, statistics comparing the composition of the index to the market, companies that are being
considered as candidates for addition to the index, and any significant market events. In addition, the
Index Committee may revise index policy covering rules for selecting companies, treatment of dividends,
share counts or other matters.

S&P Dow Jones Indices considers information about changes to its indices and related matters to be
potentially market moving and material. Theref ore, all Index Committee discussions are confidential.

S&P Dow Jones Indices’ Index Committees reserve the right to make exceptions when applying the
methodology if the need arises. In any scenario where the treatment differs from the general rules stated
in this document or supplemental documents, clients will receive sufficient notice, whenever possible.

In addition to the daily governance of indices and maintenance of index methodologies, at least once
within any 12-month period, the Index Committee reviews the methodology to ensure the indices continue
to achieve the stated objectives, and that the data and methodology remain effective. In certain instances,
S&P Dow Jones Indices may publish a consultation inviting comments from external parties.

For information on Quality Assurance and Internal Reviews of Methodology, please refer to S&P Dow
Jones Indices’ Equity Indices Policies & Practices Methodology.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 9

Index Policy
Announcements

All index constituents are evaluated daily for data needed to calculate index levels and returns. All events
af f ecting daily index calculation are typically announced in advance via the Index Corporate Events
(.SDE) report, delivered daily to all clients. Any unusual treatment of a corporate action or short notice of
an event may be communicated via email to clients.

For more information, please refer to the Announcements section of S&P Dow Jones Indices’ Equity
Indices Policies & Practices Methodology.

Pro-forma Files

In addition to the corporate events file (.SDE), S&P Dow Jones Indices provides constituent pro-forma
f iles each time the indices rebalance. The pro -forma file is typically provided daily in advance of the
rebalancing date and contains all constituents and their corresponding weights and index shares effective
f or the upcoming rebalancing. Since index shares are assigned based on prices nine days prior to the
rebalancing, the actual weight of each stock at the rebalancing will d iffer from these weights due to
market movements.

Please visit www.spglobal.com/spdji/ for a complete schedule of rebalancing timelines and pro-forma
delivery times.

Holiday Schedule

The index is calculated on all days the Egyptian equity markets are open.

A complete holiday schedule for the year is available at www.spglobal.com/spdji/.

Rebalancing

The Index Committee may change the date of a given rebalancing for reasons including market holidays
occurring on or around the scheduled rebalancing date. Any such change will be announced with proper
advance notice where possible.

Unexpected Exchange Closures

For inf ormation on Unexpected Exchange Closures, please refer to S&P Dow Jones Indices’ Equity
Indices Policies & Practices Methodology.

Recalculation Policy

For inf ormation on the recalculation policy, please refer to S&P Dow Jones Indices’ Equity Indices
Policies & Practices Methodology.

For information on Calculations and Pricing Disruptions, Expert Judgment and Data Hierarchy, please
refer to S&P Dow Jones Indices’ Equity Indices Policies & Practices Methodology.

Contact Information

For questions regarding an index, please contact: [email protected].

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 10

Index Dissemination
Index levels are available through S&P Dow Jones Indices’ Web site at www.spglobal.com/spdji/major
quote vendors (see codes below), numerous investment-oriented Web sites, and various print and
electronic media.

Tickers

The table below lists headline indices covered by this document. All versions of the below indices that
may exist are also covered by this document. Please refer to the S&P DJI Methodology & Regulatory
Status Database for a complete list of indices covered by this document.

Index (Currency) Bloomberg

S&P/EGX ESG Index (USD) PR SPESEGUP
S&P/EGX ESG Index (EGP) PR SPESEGEP

Index Data

Daily constituent and index level data are available via subscription.

For product information, please contact S&P Dow Jones Indices, www.spglobal.com/spdji/en/contact-us.

Website

For f urther information, please refer to S&P Dow Jones Indices’ Web site at www.spglobal.com/spdji/.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 11

Appendix I
Environmental, Social & Governance (ESG) Scores

All companies in the selection universe are subjected to a scoring process which incorporates ESG
indicators against which the company’s disclosure practices are evaluated (i.e. the transparency and
disclosure [“T&D”] methodology). There are two screens: one focusing on environmental & social
indicators, and the other focusing on corporate governance indicators.

During the initial index development, the environmental and social screens were based on the output
obtained from the mapping of the Global Reporting Initiative (GRI), UN Global Compact (GC), and UN
Sustainable Development Goals (SDGs) (see Appendix III). The governance screen (see Appendix II)
was adapted from the S&P Global corporate governance methodology current at that time.

The screening process ultimately yields a score for each of the companies in the universe. The scoring
process seeks information relating to companies’ disclosures of the ESG screen indicators available in
the public domain, such as a company’s annual report, Web site, bulletins, and/or disclosures made to
stock exchanges. The f inal aim is to determine whether a company has made transparent disclosure in
such methodologies on any of the indicators that are part of the ESG screening system.

In cases where a company discloses a relevant ESG public indicator, it is awarded a score of one; if the
company did not, it is awarded a score of zero. Similarly, public disclosure of ‘extra-point’ indicators is
awarded a score of three.

For more information on the relevant ESG public indicator and extra point, please refer to the following
Appendices.

Composite Score Calculation

Each company is assigned a composite score, determined as follows:

1. Quantitative Score. Each of the companies in the selection universe is assigned a quantitative
ranking based on two factors – transparency and disclosure (T&D) of (1) corporate governance and
(2) environmental practices & social governance (E&S). Raw values for each factor are calculated for
each company in the index. These values are then standardized. The two standardized values are
summed, and the companies are ranked in descending order.
2. Qualitative Score. Companies in the selection universe are then assigned a qualitative score.
Independent sources of information, news stories, websites, and Corporate Social Responsibility
CSR f ilings are used to evaluate the actual performance of the company on a scale of 1 to 5, with 1
being the lowest and 5 being the highest. A final qualitative score is determined for each company.
3. Composite Score. A composite score is calculated for each company by summing the qualitative
score and the quantitative score.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 12

Appendix II
T&D Template for Assessing Conduct on Governance of Egyptian Companies

Ownership Structure and Shareholder Rights

Shareholder Capital

Disclosure of:
1. The number of issued and outstanding ordinary shares disclosed.
2. The number of issued and outstanding other shares disclosed (preferred nonvoting).
3. The par value of each ordinary share disclosed.
4. The identity of the largest shareholder.
5. The identity of holders of all large stakes (blocking :> 25%, controlling :> 50%).
6. The identity of shareholder holding at least 25% of voting shares in total.
7. The identity of shareholders holding at least 50% of voting shares in total.
8. The identity of shareholders holding at least 75% of voting shares in total.
9. The number and identity of shareholders each holding more than 10%.
10. Shareholding in the company by individual senior managers.
11. Shareholding in the company by individual directors.
12. The description of share classes provided.
13. A review of shareholder by type.
14. Cross-ownership.

Extra Point Question

Disclosure that:
1. Company's articles of association or by-laws are accessible over the Web.

Shareholder rights

Disclosure of:
1. The contents of any corporate governance charter or code of best practices.
2. Existence of a Code of business conduct and ethics.
3. The contents of the Code of business conduct and ethics.
4. The changes in company’s articles of association.
5. The existence of voting rights for each voting or nonvoting share.
6. The transparency of the way that shareholders nominate directors to the board.
7. The transparency of the way by which shareholders convene an extraordinary general meeting.
8. The transparency of the procedure for initiating inquires with the board.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 13

 9. The transparency of the procedure for putting forward proposals at shareholders meetings.
10. A f ormalized dividend policy.
11. The existence of a review of the last shareholders meeting.
12. Full general shareholders meeting (GSM) minutes.
13. The existence of a calendar of important shareholders dates.

Financial and Operational Information

Financial Information

Disclosure of:
1. The company’s accounting policy.
2. The accounting standards it uses for its accounts.
3. Whether the accounts meet local accounting standards.
4. Annual f inancial statements according to an internationally recognized accounting standard
(IFRS/U.S. GAAP).
5. Notes to annual financial statements according to IFRS/U.S. GAAP.
6. Independent auditors report with regard to annual financial statements according to IFRS/U.S.
GAAP.
7. Unqualif ied (clean) audit opinion with regard to annual financial statements according to
IFRS/U.S. GAAP.
8. Disclosure of related party transactions (RPTs): sales to/purchases from, payables to/receivables
f rom related parties.
9. Indication that RPTs are made on market or non-market terms.
10. Interim (quarterly or semiannual) f inancial statements according to an internationally recognized
accounting standard (IFRS/U.S. GAAP).
11. Notes to such financial statements.
12. Whether these f inancial statements are audited or at least reviewed.
13. A basic earnings forecast of any kind.
14. A detailed earnings forecast.
15. Financial inf ormation on a quarterly basis.
16. Segment analysis (results broken down by business line).
17. Revenue structure (detailed breakdown).
18. Cost structure (high degree of detail).
19. The name of company’s auditing firm.
20. A copy of the auditor’s report.
21. How much the company pays in audit fees to the auditor.
22. Non-audit fees paid to the auditor.
23. Whether there are consolidated financial statements or whether only the parent or holding
company is audited.
24. Methods of asset valuation.
25. Inf ormation about the method of calculating fixed-asset depreciation.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 14

 26. A list of affiliates in which the company holds a minority stake.
27. The ownership structures of affiliates.

Extra Point Questions

Disclosure that:
1. Company's independent auditor reports directly to an independent audit committee (at least
66% independent).
2. Auditor does not also provide non audit services greater in value than 25% of total audit fees.
3. Auditor does not provide any non-audit services.

Operational Information

Disclosure of:
1. Details of the kind of business the company engages in.
2. Output in physical terms (values of sales for services sector companies).
3. Characteristics of fixed assets employed.
4. Ef ficiency indicators.
5. Any industry-specific ratios.
6. A discussion of corporate strategy.
7. Any plans for investment in the coming years.
8. Detailed information about investment plans in the coming years.
9. An output forecast of any kind.
10. An overview of trends in its industry.
11. The market share f or any or all of the company’s businesses.

Board and Management Structure and Process

Board and Management Information

Disclosure of:
1. The list of board members (names).
2. Details about directors other than name and title.
3. Details about other employment and position of independent directors.
4. Details about the directors’ previous employment and positions.
5. When each director joined the board.
6. A named chairman listed.
7. Details about the chairman, other than name and title.
8. Details about role of the Board of Directors at the company.
9. A list of matters reserved for the board.
10. A list or board committees.
11. Names of all members of each existing committee.
12. Whether there are internal audit f unctions besides the Audit Committee.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 15

 13. Attendance record for board meetings.
14. The list of senior managers not on the Board of Directors.
15. The backgrounds of senior managers.
16. The non-f inancial details of the CEO’s contract.
17. The number of shares held in other affiliated companies by managers.

Extra Point Questions

Disclosure that:
1. Independent directors constitute more than 33% of the board.
2. Independent directors constitute more than 50%of the board.
3. Independent directors constitute more than 67% of the board.
(Note here the incremental buildup of points if all three are answered positively, which is
another way to provide weightings of independence. This should be regardless of whether or
not the CEO is also Chairman)
4. Board size is no less than 7 and no more than 18.
5. CEO and Chair is not the same person.
6. Voting in AGM's takes place by poll rather than by a show of hands.
7. Audit committee is over 50% independent.
8. Audit committee is at least 66% independent.
9. Audit committee is 100% independent.
10. Nomination or governance committee is over 50% independent.
11. Nomination or governance committee is at least 66% independent.
12. Nomination or governance committee is 100% independent.
13. Compensation committee is over 50% independent.
14. Compensation committee is at least 66% independent.
15. Compensation committee is 100% independent.
16. A risk management committee exists at the board level.
17. No directors sit on more than 3 other public company boards.
18. All board members have attended more than 75% of board meetings.
19. All board members have attended more than 90% of board meetings.
20. Board conducts regular self-evaluation.
21. Independent board members regularly meet together independently of the company's
executive management.
22. Board meets more than 4 times per year.

Board and management remuneration

Disclosure of:
1. The decision-making process for directors’ pay.
2. The specifics of directors’ pay, including the salary levels.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 16

 3. The f orm of directors’ salaries, such as whether they are in cash or shares.
4. The decision-making process for determining managerial (not board) pay.
5. The specifics of senior management (not board) pay, such as salary levels and bonuses.
6. Perf ormance related indicators guiding senior management compensation.

Extra Point Question

Disclosure that:
1. Board has a formal training program for directors or provides external training.

Business Ethics and Corporate Responsibility

Corporate Governance

Disclosure of:
1. Policy and procedures on whistle blowing.
2. Policy and procedures on insider trading.
3. Contribution to political parties.

Corruption

Disclosure of:
1. Disclosure on policy and procedures on bribery and corruption.

Leadership

Disclosure of:
1. Stated commitment to recognize corporate responsibility standards.
2. CEO statement regarding corporate governance.
3. CEO statement regarding corporate responsibility/CSR.
4. Signatory to recognized global CSR conventions (e.g. Global Compact, Global Sullivan).

Business Ethics

Disclosure of:
1. Publication of CSR report.
2. CSR report audited or independently assured.
3. Report under GRI f ramework.
4. Social and environmental performance in operational MD&A or operational analysis.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 17

Appendix III
T&D Template for Assessing Environmental and Social Conduct (E&S) of Egyptian Companies

Environment

Environmental Pollution

Disclosure of:
1. Emissions of greenhouse gases.
2. Emissions of ozone-depleting substances.
3. NOx, SOx and other emissions.
4. Physical or regulatory risks associated with climate change.
5. Policy on management of emissions or regulatory risks associated with climate change.

Extra Point Question

Disclosure of:
1. Def ined targets relating to emission.
2. A committed carbon credit program.

Natural Resources Use

Disclosure of:
1. Energy consumption broken down by primary energy source.
2. Use of renewable resources of energy.
3. Total energy saved due to conservation and efficiency improvements.
4. Initiatives to reduce energy consumption or energy audit.
5. Def ined targets relating to energy conservation.
6. Type of raw materials used.
7. Percentage of materials used that are recycled.
8. Initiatives to improve efficiency of material usage.
9. Policies/Initiatives for management of water use.
10. Total water used.
11. Total water used by source.
12. Policy/initiatives taken for management of hazardous waste.
13. Policy for management of (waste) water discharged.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 18

 Extra Point Question

Disclosure of:
1. Production of energy efficient products (e.g. solar panels).

Social

Management Policy and Performance Indicators

Disclosure of:
1. Inf ormation relating to product life cycle.
2. Incidents of, and fines or non-monetary sanctions for, non-compliance with applicable
environmental regulations.
3. Environmental impact of type of transportation used for logistical purposes.
4. Explicit environmental policy.
5. Ef forts to preserve biodiversity (e.g. plantation of tree).
6. Management system/certification regarding environmental practices (that is status on ISO 14001
certif ication).
7. Policy on disaster management.

Extra Point Question

Disclosure of:
1. EMS in all location/facilities and 100% ISO 14001 certification.

Employees

Employee Relations/Job Creation

Disclosure of:
1. Programs for career development.
2. Initiatives to involve employees in decision making (including intra-management level
communication etc.).
3. Inf ormation on policy/rules relating to non-financial benefits to employees (including housing etc.).
4. Inf ormation on policy/rules relating to healthcare.
5. Policy/Rules relating to employee separation and lay off.
6. Policy/Rules for profit sharing (stock options etc.) with lower management/employee.

Labor Rights

Disclosure of:
1. Management system/certification regarding employment and labor practices (that is status on SA
8000 certif ication).
2. Policy on code of conduct for protecting human rights.
3. Initiatives to enforce the above policy.
4. Number of strikes/lockouts and the number of employees involved.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 19

 Extra Point Question

Disclosure of:
1. SA 8000 certif ication at all locations/facilities.
2. Ref erence to ILO core convention in code of conduct.
3. Code of conduct applies to supply chain, as well.

Employee Health & Safety (H&S)

Disclosure of:
1. Explicit health and safety policy.
2. Incidents of work-related injury/accidents.
3. Initiatives on employee health and safety.
4. Dissemination of health-based knowledge and training including awareness about HIV/AIDS.
5. Management system/certification regarding health and safety practices (that is status on OHSAS
18000 certif ication).

Extra Point Question

Disclosure of:
1. OHSAS 18000 certification at all locations/facilities.

Equal Opportunity

Disclosure of:
1. Explicit statement about equal opportunity employer (gender, caste, religion etc.).
2. The gender breakdown of total workforce.
3. Number of employees by ethnicity or caste (whatever applicable).
4. Initiatives for promoting employment of women and/or disabled people.
5. Policy on discrimination in employment/treatment of employees affected with HIV/AIDS.
6. Policy/Rules to address incidence of sexual harassment and recourse.

Extra Point Question

Disclosure of:
1. The Board of Directors has an independent women director.

Union Relations

Disclosure of:
1. Number or percentage of employees that are unionized.

Community

Human Rights

Disclosure of:

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 20

 1. Policy or code of conduct on addressing human rights (e.g. child labor, forced labor, bonded
labor, etc.).

Community Investment

Disclosure of:
1. Explicit policy/statement regarding community investment.
2. Initiatives on community awareness or education.
3. Company participation in public-private initiatives for community development.
4. Description/Amount of total contributions/donations to charitable initiatives (health, education
etc.).

Customers/Product

Product Safety

Disclosure of:
1. Policy/procedures on recall of product.

Anti-trust

Disclosure of:
1. Policies covering fair practices and monopolistic practices.

Customer Outreach and Product Quality

Disclosure of:
1. Annual expenditure incurred on customer awareness initiatives.
2. Number of customer satisfaction surveys conducted in a year.
3. Mechanism for redressing grievances and feedback from customer.
4. Policy/procedures for protection of customer confidentiality/privacy.
5. Procedures and programs for adherence to laws, standards, and voluntary codes related to
marketing communications including advertising, promotion and sponsorship.
6. Policy/procedures on customer education regarding product/service provided.
7. Management system/certification regarding product quality (status on ISO 9000/Six Sigma).

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 21

Appendix IV
Qualitative Criteria for Assessing Governance of Egyptian Companies

Corporate Governance

These guidelines on corporate governance and business ethics are intended to complement the more
mechanical T&D analysis to provide a more qualitative assessment of a company’s corporate governance
perf ormance. Given that the T&D analysis focuses primarily on aspects of corporate governance structure
and processes, the qualitative guidelines largely focus on what a company has actually done to
demonstrate poor performance from an ESG perspective. Much of the data for this form of qualitative
assessment stems from a company’s own corporate actions — and possibly followed-up with
commentary from the media and interested civil society groups or corporate governance watchdogs.

As with the E&S dimensions of our analysis, the qualitative analysis of the governance, or G, component
is guided by the principle of materiality. Small events that do not have a significant impact on the
company’s shareholders or other stakeholders are not unduly weighted in this context. This requires
judgment on the part of the analysis, and all analysts are on guard about overemphasizing aspects of
governance performance that might have populist or mass media appeal, but which may not be of
significant overall impact to the company, its shareholders or stakeholders.

Ownership Structure and Shareholder Rights:

Ownership Structure
Score The company (has):
1 • Clear evidence or judicial/regulatory conclusion that a significant related party transaction or other
corporate action is working to the benefit of controlling shareholders at the expense of minority
shareholders.
• Clear evidence or that a significant related party transaction or other corporate action occurred
without prior notification or consent of minority shareholders.
2 • Clear evidence or judicial/regulatory conclusion that a small related party transaction or other
corporate action is working to the benefit of controlling shareholders at the expense of minority
shareholders.
• Minority shareholders or shareholder activists file complaints or make statements suggesting
impropriety or a misalignment of interests with controlling shareholders.
• The ownership structure of the company changes without it being clear who the new underlying
owners actually are.
3 • No changes or new information

Shareholder Rights
Score The company (has):
1 • The company alters its by-laws or articles of association against the wishes of its minority
shareholders in a way that significantly reduces minority shareholder rights. Indicative shareholder
rights could include: voting rights, pre-emption rights, supermajority clauses, or dividend rights.
• Dividends for the same class of stock are paid to the controlling shareholder ahead of minority
shareholders.
2 • The company’s notice period for its annual general meeting (AGM) is less than 21 days.
• The AGM takes place at a date or location which is clearly inconvenient to its minority
shareholders—and is the source of minority shareholder complaint.
• Dividends declared have not been paid in a timely fashion (at least within 6 months of declaration).
3 • No changes or new information

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 22

Financial and Operational Information:

Transparency, Disclosure and Audit

Score The company (has):
1 • Accounting restatements result in a significant (over 10%) loss of value for shareholders.
• Minority shareholders vote against the reappointment of the company’s auditor, but are outvoted
by the controlling shareholder.
2 • The annual report and financial statements are not published within 6 months of the company’s
fiscal year end.
• Accounting restatements result in a loss of value (less than 10%) for shareholders.
• The auditor’s report is qualified.
• Changes in accounting policies are unexplained.
• The company replaces its auditor with a new auditor that does not appear to have the scop e or
depth of capabilities to responsibly conduct a quality audit given the company’s size and business
condition.
3 • No changes or new information

Board and Management Structure:

Board Structure and Effectiveness

Score The company (has):
1 • The board changes such that there are no independent directors.
• CEO succession occurs without prior consultation of minority directors.
• Average director attendance at board meetings is less than 50%.
• Clear evidence of CEO or other senior management receiving disproportionately high levels of
compensation relative to peers, at the same time when the company’s financial performance
metrics are poor.
• Evidence that independent directors have no voice in deciding CEO/senior management
compensation.
2 • The board changes such that independent directors constitute less than 25% of the total board.
• The size of the company’s board changes so that it is smaller than 7 members or greater than 18
members.
• Average director attendance at board meetings is less than 50%
• Independent directors receive option grants.
• Clear evidence of CEO or other senior management receiving disproportionately high levels of
compensation relative to peers.
3 • No changes or new information

Management
Score The company (has):
1 • Clear evidence that the company has adopted an aggressive business model whose benefits may
not be equally shared by all shareholders or which might be at the expense of the company’s
creditors. This could involve expansion into new or unproven business li nes or markets.
2 • Minority shareholders or shareholder activists file complaints or make statements suggesting
impropriety or a misalignment of interests with controlling shareholders.
• Unexpected/unexplained departures of senior management.
• Material litigation and legal disputes against the company.
• Significant changes to business strategy are unexplained publicly.
3 • No changes or new information

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 23

Business Ethics and Corporate Responsibility:

Business Ethics
Score The company (has):
1 • Paid substantial fines/penalties/settlements for involvement in controversial or illegal activities,
such as insider trading, conflicts of interest, corporate tax avoidance or other accounting related
controversies, bribery, money laundering, embezzlement and political lobbying.
• Been the subject of a pattern of fines/penalties/settlements for involvement in any of the above
issues.
• Board members either waive the company’s code of ethics or there is evidence that the board is
violating its code of ethics.
2 • Sustained minor fines/penalties/settlements for involvement in any of the above issues.
• Is the subject of ongoing major/certified class action litigation in relation to the above issues.
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders for
involvement in any of the above issues.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
the above issues.
• Been the subject of minor or one-off protests by NGOs or other stakeh olders in relation to
involvement in any of the above issues.
4 • Is the subject of an official investigation in relation to involvement in any of the above issues.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to
involvement in any of the above issues.
5 • No information
• No ethical issues/incidents in the past 3 years.

Other
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to significantly negative or protracted
ethical controversies not covered by the above category.
• Been the subject of a pattern of fines/penalties/settlements in relation to significantly negative
or protracted ethical controversies not covered by the above category.
2 • Sustained minor fines/penalties/settlements in relation to significantly negative or protracted
ethical controversies not covered by the above category
• Is the subject of ongoing major/certified class action litigation in relation to ethical issues not
covered by the above category.
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders in
relation to significantly negative or protracted ethical controversies not covered by the above
category.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
ethical issues not covered by the above category.
• Been the subject of minor or one-off protests by NGOs or other stakeholders in relation to
significantly negative or protracted ethical controversies not covered by the above category.
4 • Is the subject of an official investigation in relation to significantly negative ethical controversy
not covered by the above category.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to significantly
negative ethical controversies not covered by the above category.
5 • No information
• No customer/product-related issues or controversies not covered by the above categories in the
past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 24

Appendix V
Qualitative Criteria for Assessing Environmental and Social Conduct (E&S) of Egyptian
Companies

Environment:

Environmental Pollution
Score The company (has):
1 • Sustained significant liabilities for hazardous waste.
• Paid substantial fines/penalties/settlements related to environmental pollution (to air, land
and/or water).
• Been the subject of a pattern of fines/penalties in relation to this issue over several years.
2 • Sustained minor fines/penalty/settlements in relation to pollution incidents.
• Been the subject of long-standing and vociferous stakeholder protests in relation to this issue.
• Is the subject of ongoing major/certified class action litigation in relation to this issue.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits in relation to
this issue.
• Been the subject of minor or one-off stakeholder/activist protests in relation to this issue.
4 • Is the subject of an official investigation.
• Is the subject of minor litigation in relation to the issue or subject to other, as yet unproven,
allegations.
5 • No information
• No negative environmental pollution issues/incidents in the past 3 years.

Natural Resources Use

Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to natural resources use (e.g. water,
land, trees, fish, coal etc.).
• Been the subject of a pattern of fines/penalties/settlements in relation to this issue over several
years. For example, water sources and related h abitats/livelihoods significantly negatively affected
by a company’s water usage.
2 • Sustained minor fines/penalties/settlements in relation to the management of natural resources.
• Is the subject of ongoing major/certified class action litigation in relation to this issue.
• Been the subject of long-standing and vociferous stakeholder protests in relation to this issue.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits in relation to
this issue.
• Been involved in a minor or one-off stakeholder/activist protests in relation to this issue.
4 • Is the subject of an official investigation.
• Is the subject of minor litigation in relation to the issue or subject to other, as yet unproven,
allegations.
5 • No information.
• No negative issues/incidents related to the use of natural resources in the past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 25

Other
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation a significantly negative or protracted
environmental-related controversy not covered by the above categories.
• Been the subject of a pattern of fines/penalties/settlements in relation to a significantly negative
or protracted environmental-related controversy not covered by the above categories.
2 • Sustained minor fines/penalties/settlements in relation to the environment-related controversy
not covered by the above categories.
• Is the subject of ongoing, major/certified class action litigation or multiple individual lawsuits
in relation to the environment-related controversy not covered by th e above categories.
• Been the subject of long-standing and vociferous stakeholder protests in relation to the
environment-related controversy not covered by the above categories.
3 • Is the subject of purported class action litigation in relation to the environment-related
controversy not covered by the above categories.
• Been involved in a minor or one-off stakeholder/activist protests in relation to the environment-
related controversy not covered by the above categories.
4 • Is the subject of an official investigation in relation to the environment-related controversy not
covered by the above categories.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to the
environment-related controversy not covered by the above categories.
5 • Not applicable.

Employees:

Employee Relations
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to a significantly negative or protracted
employee or union relations issue(s), e.g. employee lockouts or anti -union actions by the
company.
• Been the subject of a pattern of fines/penalties/settlements in relation to a significantly negative
or protracted employee or union relations issue.
2 • Sustained minor fines/penalties/settlements in relation to an employee relations issue, e.g.
failed to consult with employee representatives as legally required.
• The company has a pattern of poor union relations resulting in prolonged or repeated strike
action. N.B. Industry-wide strikes (i.e. those that are not focused on a particular company) s hould
not be scored.
• Is the subject of ongoing major/certified class action litigation by current or former employees
or unions.
3 • Is the subject of purported class action litigation or multiple individual lawsuits by current or
former employees or unions.
• Been involved in a minor or one-off employee or union protests.
4 • Is the subject of an official investigation in relation to an employee or union relations issue.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to an
employee or union relations issue.
5 • No information
• No negative employee relations issues/incidents in the past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 26

Labor Rights
Score The company (has):
1 • Been involved in egregious labor standards controversies (at company-owned or supplier
facilities), for example, “sweatshop” labor cases that involve worker deaths or serious injury; or
child/forced/compulsory labor infractions.
• Been involved in several labor standards controversies, e.g. “sweatshop” cases,
child/forced/compulsory labor infractions, excessive hours, minimum wage violations, forced
overtime, forced pregnancy tests, etc. AND has made little or no effort to address the allegations
or conditions.
• Paid fines/penalties/settlements in relation to labor standards violations.
2 • Been involved in multiple labor standards controversies , e.g. “sweatshop” cases,
child/forced/compulsory labor infractions, excessive hours, minimum wage violations, forced
overtime, forced pregnancy tests, etc.
• Been the subject of long-standing and vociferous protests in relation to labor rights issues.
3 • Been involved in multiple labor standards controversies , e.g. “sweatshop” cases,
child/forced/compulsory labor infractions, excessive hours, minimum wage violations, forced
overtime, forced pregnancy tests, etc. AND has made a credible effort to address the allegations
and conditions.
• Is the subject of purported class action litigation or multiple individual lawsuits in relation to
labor rights.
4 • Been the subject of minor or one-off stakeholder/activist protests in relation to these issues.
• Is the subject of an official investigation in relation to labor rights issues.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to labor
rights.
5 • No information
• No labor rights issues/incidents in the past 3 years.

Employee Health & Safety (H&S)

Score The company (has):
1 • Paid substantial fines/penalties/settlements for violations of H&S regulations, particularly in
relation to accidents resulting in worker fatalities.
• Been the subject of a pattern of fines/penalties/settlements/major incidents in relation to this
issue, e.g. fatalities to direct employees or sub-contractors.
2 • Sustained minor fines/penalties/settlements in relation to this issue.
• Is the subject of ongoing major/certified class action litigation in relation to this issue.
• Been the subject of long-standing and vociferous protests by employees or other stakeholders
in relation to H&S issues.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
this issue.
• Been the subject of minor or one-off incident or protest by employees or other stakeholders in
relation to this issue.
4 • Is the subject of an official investigation in relation to H&S.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to H&S.
5 • No information
• No H&S violations or issues in the past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 27

Equal Opportunity
Score The company (has):
1 • Paid substantial fines/penalties/settlements for violations of equal
opportunities/discrimination/harassment regulations.
• Been the subject of a pattern of fines/penalties/settlements in relation to these issues, e.g.
disability, gender or caste issues.
2 • Sustained minor fines/penalties/settlements in relation to these issues
• Been the subject of long-standing and vociferous protests by employees or other stakeholders
in relation to these issues.
• Is the subject of ongoing major/certified class action litigation in relation to these issues.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
these issues.
• Been the subject of minor or one-off issue or protests by employees or other stakeholders in
relation to these issues.
4 • Is the subject of an official investigation in relation to discrimination/equal
opportunities/harassment.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to these
issues.
5 • No information.
• No equal opportunities/discrimination/harassment issues in the past 3 years.

Other
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation a significantly negative or protracted
employee-related controversy not covered by the above categories.
• Been the subject of a pattern of fines/penalties/settlements in relation to a significantly negative
or protracted employee-related controversy not covered by the above categories.
2 • Sustained minor fines/penalties/settlements in relation to the employee-related controversy not
covered by the above categories.
• Is the subject of ongoing major/certified class action litigation in relation to the employee-
related controversy not covered by the above categories.
• Been the subject of long-standing and vociferous stakeholders’ protests in relation to the
employee-related controversy not covered by the above categories.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
the employee-related controversy not covered by the above categories.
• Been involved in a minor or one-off stakeholders/activist protests in relation to the employee-
related controversy not covered by the above categories.
4 • Is the subject of an official investigation in relation to the employee-related controversy not
covered by the above categories.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to the
employee-related controversy not covered by the above categories.
5 • Not applicable.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 28

Community:

Human Rights
Score The company (has):
1 • Been involved in egregious violations of international human rights regulations/norms/
conventions at company-owned or supplier facilities. For example, the company is involved in
major controversies that breach international human rights norm and conventions, such as the
United Nations Declaration of Human Rights (UNDHR). These rights include equal rights, freedom
from arbitrary arrest, freedom of association and assembly etc. It also covers the infringement of
indigenous peoples’ rights, e.g. deaths while protesting, forcible removal from tribal lands etc.
• Been involved in several human rig hts controversies AND has made little or no effort to address
the allegations or conditions.
• Paid fines/penalties/settlements in relation to human rights violations. Note: it is very unlikely
that a human rights controversy would incur a fine or penalty, o r be the subject of litigation, so if
this happened at all it would be particularly noteworthy.
2 • Been involved in multiple human rights controversies.
• Been the subject of long-standing and vociferous protests in relation to human rights issues.
3 • Been involved in multiple human right controversies AND has made a credible effort to address
the allegations and conditions.
• Is the subject of purported class action litigation or multiple individual lawsuits in relation to
human rights.
4 • Been the subject of minor or one-off stakeholder/activist protests in relation to human rights
issues.
• Is the subject of an official investigation in relation to human rights issues.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to human
rights.
5 • No information
• No human rights issues/incidents in the past 3 years.

Other
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to a significantly negative or protracted
community-related controversy/controversies not covered by the above category.
• Been the subject of a pattern of fines/penalties/settlements in relation to a significantly negative
or protracted community-related controversies not covered by the above category.
2 • Sustained minor fines/penalties/settlements in relation to community-related controversies not
covered by the above category.
• Is the subject of ongoing major/certified class action litigation in relation to the community-
related controversy not covered by the above category.
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders in
relation to community-related controversies not covered by the above category.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
the community-related controversy not covered by the above category.
• Been the subject of minor or one-off protests by NGOs or other stakeholders in relation to
community-related controversies not covered by the above category.
4 • Is the subject of an official investigation in relation to a community-related controversy not
covered by the above category.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to community-
related controversies not covered by the above category.
5 • No information
• No community-related issues/incidents not covered by the above category in the past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 29

Customers/Product:

Product Safety and Quality

Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to product safety or labeling issue(s) or
incident(s).
• Been the subject of a pattern of fines/penalties/settlements in relation to a significantly negative
or protracted product safety or labeling issues or incidents.
2 • Sustained minor fines/penalties/settlements in relation to product safety or labeling issues or
incidents.
• Is the subject of ongoing major/certified class action litigation in relation to product safety or
labeling issue(s) or incident(s).
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders in
relation to product safety or labeling issue(s) or incident(s) possibly resulting in boycotts.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
these issues.
• Been the subject of minor or one-off protests by NGOs or other stakeholders in relation to a
product safety or labeling issue or incident.
4 • Is the subject of an official investigation in relation to a product safety or labeling issue or
incident.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to a product
safety or labeling issues or incidents.
5 • No information
• No product safety or labeling issues/incidents in the past 3 years.

Anti-trust
Score The company (has):
1 • Paid substantial fines/penalties/settlements for engaging in price-fixing, cartel or monopolistic
behavior.
• Been the subject of a pattern of fines/penalties/settlements for engaging in price-fixing, cartel or
monopolistic behavior.
2 • Sustained minor fines/penalties/settlements for engaging in price-fixing, cartel or monopolistic
behavior.
• Is the subject of ongoing major/certified class action litigation in relation to anti-trust.
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders for
engaging in price-fixing, cartel or monopolistic behavior.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
anti-trust.
• Been the subject of minor or one-off protests by NGOs or other stakeholders in relation to anti-
trust.
4 • Is the subject of an official investigation in relation to anti-trust.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to anti-trust.
5 • No information
• No anti-trust issues/incidents in the past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 30

Other
Score The company (has):
1 • Paid substantial fines/penalties/settlements in relation to significantly negative or protracted
customer/product-related controversies not covered by the above categories.
• Been the subject of a pattern of fines/penalties/settlements in relation to a customer/product-
related controversy not covered by the above categories.
2 • Sustained minor fines/penalties/settlements in relation to customer/product-related
controversies not covered by the above categories.
• Is the subject of ongoing major/certified class action litigation in relation to a customer/product-
related controversy not covered by the above categories.
• Been the subject of long-standing and vociferous protests by NGOs or other stakeholders in
relation to customer/product-related controversies not covered by the above categories.
3 • Is the subject of purported class action litigation, or multiple individual lawsuits, in relation to
a customer/product-related controversy not covered by the above categories.
• Been the subject of minor or one-off protests by NGOs or other stakeholders in relation to
customer/product-related controversies not covered by the above categ ories.
4 • Is the subject of an official investigation in relation to customer/product-related controversies not
covered by the above categories.
• Is the subject of minor litigation, or other, as yet unproven, allegations in relation to
customer/product-related controversies not covered by the above categories.
5 • No information
• No customer/product-related issues or controversies not covered by the above categories in the
past 3 years.

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 31

Disclaimer
Performance Disclosure/Back-Tested Data

Where applicable, S&P Dow Jones Indices and its index-related affiliates (“S&P DJI”) defines various
dates to assist our clients in providing transparency. The First Value Date is the first day for which there is
a calculated value (either live or back-tested) for a given index. The Base Date is the date at which the
index is set to a f ixed value for calculation purposes. The Launch Date designates the date when the
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the values of an index are known to have been released to the public, for example via the company’s
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31, 2013, the Launch Date (which prior to May 31, 2013, was termed “Date of introduction”) is set at a
date upon which no further changes were permitted to be made to the index methodology, but that may
have been prior to the Index’s public release date.

Please ref er to the methodology for the Index for more details about the index, including the manner in
which it is rebalanced, the timing of such rebalancing, criteria for additions and deletions, as well as all
index calculations.

Inf ormation presented prior to an index’s launch date is hypothetical back-tested performance, not actual
perf ormance, and is based on the index methodology in effect on the launch date. However, when
creating back-tested history for periods of market anomalies or other periods that do not reflect the
general current market environment, index methodology rules may be relaxed to capture a large enough
universe of securities to simulate the target market the index is designed to measure or strategy the index
is designed to capture. For example, market capitalization and liquidity thresholds may be reduced. In
addition, forks have not been factored into the back-test data with respect to the S&P Cryptocurrency
Indices. For the S&P Cryptocurrency Top 5 & 10 Equal Weight Indices, the custody element of the
methodology was not considered; the back-test history is based on the index constituents that meet the
custody element as of the Launch Date. Back-tested performance reflects application of an index
methodology and selection of index constituents with the benefit of hindsight and knowledge of factors
that may have positively affected its performance, cannot account for all financial risk that may affect
results and may be considered to reflect survivor/look ahead bias. Actual returns may differ significantly
f rom, and be lower than, back-tested returns. Past performance is not an indication or guarantee of future
results.

Typically, when S&P DJI creates back-tested index data, S&P DJI uses actual historical constituent-level
data (e.g., historical price, market capitalization, and corporate action data) in its calculations. As ESG
investing is still in early stages of development, certain datapoints used to calculate certain ESG indices
may not be available for the entire desired period of back-tested history. The same data availability issue
could be true for other indices as well. In cases when actual data is not available for all relevant historical
periods, S&P DJI may employ a process of using “Backward Data Assumption” (or pulling back) of ESG
data f or the calculation of back-tested historical performance. “Backward Data Assumption” is a process
that applies the earliest actual live data point available for an index constituent company to all prior
historical instances in the index performance. For example, Backward Data Assumption inherently
assumes that companies currently not involved in a specific business activity (also known as “product
involvement”) were never involved historically and similarly also as sumes that companies currently
involved in a specific business activity were involved historically too. The Backward Data Assumption
allows the hypothetical back-test to be extended over more historical years than would be feasible using
only actual data. For more information on “Backward Data Assumption” please refer to the FAQ. The
methodology and factsheets of any index that employs backward assumption in the back-tested history
will explicitly state so. The methodology will include an Appendix with a table setting forth the specific

S&P Dow Jones Indices: S&P/EGX ESG Index Methodology 32

data points and relevant time period for which backward projected data was used. Index returns shown
do not represent the results of actual trading of investable assets/securities. S&P DJI maintains the index
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10% on a US $100,000 investment for a 12-month period (or US $10,000) and an actual asset-based fee
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net return would be 8.35% (or US $8,350) for the year. Over a three-year period, an annual 1.5% fee
taken at year end with an assumed 10% return per year would result in a cumulative gross return of
33.10%, a total fee of US $5,375, and a cumulative net return of 27.2% (or US $27,200).

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