NAPF STEWARDSHIP ACCOUNTABILITY FORUM

STEWARDSHIP AT AVIVA INVESTORS November 2014

This document is for Professional Clients only. It is not to be viewed by or used with retail clients.

1970s 1994 1996 1999 2000 2001 2005 2006 2010 2011 2012

ABOUT US OUR STEWARDSHIP HERITAGE

Active member of ABI (now IMA) investment committee shaping UK governance practice Aviva Investors among first asset managers to publish Corporate Governance Voting Policy. Founding member of the Corporate Governance Forum. Joined International Corporate Governance Network (ICGN) & previously on Board of Governors Joined Shareholder Voting Working Group to improve the voting process Founding member of GIGN (Global Investors Governance Network) Aviva Investors first asset manager to integrate corporate responsibility into voting policy Active member of NAPF Stewardship Advisory Committee Aviva Investors is founding signatory of the Principles for Responsible Investment Aviva Investors signed up to UK Stewardship Code Founding member of 2020 Investor Stewardship Working Party. Aviva Life signed Stewardship Code Aviva Investors founded Corporate Sustainability Reporting Coalition at Rio+20 Conference

At the forefront of shaping the industry

ABOUT US GOVERNANCE IN ACTION

Source: Aviva Investors, November 2014

Long-term, engaged, active investors

INTEGRATING ESG – OUR RIO NETWORK

PRINCIPLE 1

Developing our resources and building a Responsible Investment Officers (RIO) Network

Source: Aviva Investors, July 2014

INTEGRATING ESG – ESG DATA PROVIDERS

PRINCIPLE 1

Data as at 15/01/2014

Sourcing the best environmental, social & governance research

INTEGRATING ESG – ESG LAUNCHPAD IN BLOOMBERG

PRINCIPLE 1

Based on in-house ESG heatmap which allows us to monitor fund & index ESG risk External sources

: - Sustainability profile - Negative newsflow - Corporate Governance profile

Internal sources

: - Overview of engagement activities - Voting record Source: Aviva Investors, in-house Bloomberg ESG Launchpad, July 2014

Input for investment decisions

The information provided is for illustrative purposes only and the Information about specific securities should not be construed as a recommendation to buy or sell any securities.

VOTING - SCALE

PRINCIPLE 6

Total 22% 6% Remuneration 32% 4% Director re-election 24% 11% 72% 65% 65% Audit report 19% 1% 80% 0% 20% 40% 60% 80% 100%

Voting at over 4000 companies on over 44,000 resolutions annually

Source: Aviva Investors Jan-Dec 2013 data Against Abstention Support

ENGAGEMENT – CHANGING CORPORATE BEHAVIOUR

PRINCIPLES 3&4

FTSE250 oil & gas company agreed to withdraw from World Heritage Site, Virunga National Park in the DRC and not to operate in any World Heritage Sites in the future protecting sensitive habitats & species FTSE100 mining company appointed Chief Sustainability Officer and developed comprehensive policies to address environmental, human rights and stakeholder issues – to better manage risks and regain license to operate Catalysed Board overhaul including new CEO and remuneration structure – ensuring better Board governance and leadership and a rebound in share price

Driving more sustainable companies – enhancing value & mitigating risk

Source: Aviva Investors, November 2014

COLLABORATION

PRINCIPLE 5

Source: Aviva Investors, November 2014

Industry leadership and collaboration

COLLABORATION - ENGAGEMENT

PRINCIPLE 5

Using collaborative forums, informal networks & developing new models of engagement

Source: Aviva Investors, November 2014

POLICY ACTIVITIES

MARKET REFORM

Aviva hosted the United Nations Principles of Sustainable Insurance event on 27 June 2014. Aviva Group CEO, Mark Wilson, addressed an audience of insurers, investors, regulators and UN agencies, giving his views on how and why insurers should strive to be sustainable and unveiling a new report from Aviva Investors.

www.aviva.com/roadmap

Reforming capital markets

EXTERNAL RECOGNITION

AWARDS

Founder of the Sustainable Stock Exchanges Initiative which was named by Forbes magazine as one of the “World’s Best Sustainability Ideas” and Finalist for the 2011 & 2013 Katerva Sustainability Award “These are difficult times for the financial services sector, and the temptation for many institutions is to batten down the hatches and ride out the public relations storm. Yet Aviva dared to think big, to raise their head above the parapet and demonstrate true leadership in gathering like minded institutions into the Corporate Sustainability Reporting Coalition - an international programme with the potential to transform the way sustainability is considered by large businesses.” Simon Mills, City of London February 2013 Aviva Investors has won a Global CSR Excellence & Leadership Award in the category of Most Innovative CSR Disclosure Policy at this year’s World Corporate Social Responsibility Congress held in Mumbai

Recognised and respected by key influencers and stakeholders

Q & A

ANNEX

ABOUT US

OUR COMMITMENTS

– Founding signatories of the UN Principles for Responsible Investment (PRI): we believe that companies conducting their business in a sustainable and responsible manner are more likely to succeed over time. Our Global Responsible Investment (GRI) team works with fund managers and analysts globally and across all asset classes to integrate ESG issues into investment decision-making.

– Over twenty years focus on governance: our Corporate Governance and Corporate Responsibility Voting Policy has evolved from over twenty years of active ownership. We are committed to the principles of the UK Stewardship Code and International Corporate Governance Network (ICGN) Global Corporate Governance Principles.

– Public commitment to international standards: We are signatories to the UN Global Compact and formally recognise international standards such as the OECD Guidelines for Multinational Enterprises, the Universal Declaration of Human Rights and the International Labour Organisation core labour standards.

– Ethical principles: Aviva fully supports the Convention on Cluster Munitions. Aviva Group has a policy not to hold securities linked to companies involved in the manufacture of cluster munitions or anti-personnel mines in shareholder funds and are working to exclude these from policyholder funds.

ABOUT US

GRI ADVISORY COMMITTEE

Professor Bob Eccles Harvard Business School

Chairman of the Sustainability Accounting Standards Board (SASB) Steering Committee of the International Integrated Reporting Committee

Professor Tim Jackson David Pitt-Watson Jonathon Porritt Sophia Tickell University of Surrey London Business School Forum for the Future Meteos

Professor of Sustainable Development Director of the Sustainable Lifestyles Research Group Previously UK Sustainable Development Commission Co-chair of UNEP Finance Initiative Treasurer of Oxfam Previously Director of Hermes Co-Director of the Prince of Wales’s Business & Sustainability Programme Previously Chair of UK Sustainable Development Commission External advisor to GSK CR committee Founder of the PharmaFutures dialogues Previously Chair of the Board at SustainAbility

Respected expert advisors in the field of sustainability and governance

Source Aviva Investors

PUBLIC TRANSPARENCY

PRINCIPLES 1 & 7

1.

2.

3.

4.

Corporate Governance & Corporate

Responsibility Voting Policy: exercise voting rights in companies in which Aviva Investors invests Active stewardship: our Stewardship Statement is audited by PwC Integration: over 80% AUM have tailored responsible investment policies in line with PRI Transparent disclosure: Policies and voting record publicly available. Quarterly client reporting.

Enhancing and protecting value through promoting good management and processes

INTEGRATING ESG – ESG PEER ANALYSIS TRACKER

PRINCIPLE 1

In-house Bloomberg ESG Peer Analysis Tracker

Highlights • and the

potential financial implications

relative to peers : Embedded within Aviva Investors Global Research Platform, Aladdin Source: Aviva Investors

Developing tailor-made solutions for fund managers

The information provided is for illustrative purposes only and the Information about specific securities should not be construed as a recommendation to buy or sell any securities.

INTEGRATING ESG – BESPOKE RESEARCH

PRINCIPLE 1

Advancing RI Integration in each asset class by developing tailored mainstream ESG research projects

–

Collaborating

with other investors where we have shared interests –

Engaging

with market participants –

Sponsoring

research thought leading ESG •

We published a joint report in July 2014 with Standard & Poor’s and Carbon Tracker: Carbon Constraints cast

a shadow over the future of the coal industry.

Source: Standard & Poor’s and Aviva Investors, July 23 rd 2014

INTEGRATING ESG

PRINCIPLE 1

It is about

 fitting with the existing investment process  gaining better insight on the risks and opportunities of an investment, educating both analysts and portfolio managers in helping make better informed investment decisions  demonstrating appropriate stewardship and oversight of the investments we make on behalf of our clients.

It is not about

× restricting the investment universe by applying systematic passive or negative ethical screens (we can apply such policies upon client requests) × taking investment decisions based only on companies’ corporate responsibility strategy without taking into account its financial performance and attractiveness.

This stems from our belief that companies which actively consider ESG factors in their strategy will outperform their peers over

MANAGING CONFLICTS

PRINCIPLE 2

Source: Aviva Investors

Comprehensive policy, robust process

VOTING – MEASURING EFFECTIVENESS

PRINCIPLE 6

Director (re)election Remuneration Corporate responsibility 0 50 100 150 200 250 Improvements (Against to Abstain or Support and Abstain to Support) 300 Source: Aviva Investors Jan-Dec 2013 data Escalation or deterioration (Support to Against or Abstain and Abstain to Against)

Robust voting but driving improvements

POLICY ACTIVITIES

MARKET REFORM

Founded Corporate Sustainability Reporting Coalition representing investors with US$ 2 trillion AUM, as well as financial institutions, professional bodies, NGO and other relevant stakeholders. Achieved Paragraph 47 in the official UN Conference outcome document Founder of the Sustainable Stock Exchanges Initiative which was named by Forbes magazine as one of the “World’s Best Sustainability Ideas” and Finalist for the 2011 & 2013 Katerva Sustainability Award Influencing EU policy to ensure better investor disclosure and drive more sustainable companies

Improving the integrity of financial markets

DISCLAIMER

Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited (“Aviva Investors”) as at 20 November 2014. Unless stated otherwise any opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment

and any income from it may go down as well as up and the investor may not get back the original amount invested.

Issued By Aviva Investors Global Services Limited, registered in England No. 1151805. Registered Office: No. 1 Poultry, London EC2R 8EJ. Authorised and regulated by the Financial Conduct Authority and a member of the Investment Management Association. Contact us at Aviva Investors Global Services Limited, No. 1 Poultry, London EC2R 8EJ. Telephone calls to Aviva Investors may be recorded for training or monitoring purposes.