Abrdn plc

At abrdn, we have a well-resourced stewardship team with dedicated proxy-voting capability that can provide escalation on climate-related matters. We have developed an approach to provide informed voting on the increasing number of climate-related shareholder resolutions. We actively analyse and consider these resolutions and do not just apply a blanket tick-box approach. We expect and encourage companies to: demonstrate that a robust methodology underpins Paris-aligned, net zero goals and targets; set targets for absolute emission reduction, not just carbon intensity, to show a clear pathway to net zero; report in alignment with the TCFD framework; link targets to remuneration and ensure they are reflected in capital expenditure and R&D plans; carefully manage climate-related lobbying by ensuring appropriate oversight, transparent disclosure, and alignment of activities with the company's strategy.

The aIML CEO has overall responsibility for ensuring that the aIML Board is kept suitably appraised of its climate and sustainability obligations. [...] In addition, in 2022 abrdn implemented a Sustainable Investing governance structure for its investment business, including aIML. The Sustainable Investing governance structure is critical for the development and implementation of abrdn's sustainability (including climate-) related strategy. This includes but is not limited to abrdn's approach to integrating sustainability (including climate-) related risks and opportunities in investment decision-making and the development of lower-carbon products to support client objectives. The Sustainable Investing governance consists of the Sustainability Council, with representation from across the business, and its Strategy Groups. The latter include the: • Climate Change Strategy Group setting abrdn's climate related strategy and escalating material issues to abrdn's senior management in relation to climate related risks and opportunities. • Sustainable Investing Strategy Group setting standards and frameworks for the investment process. • Sustainable Product Strategy Group supporting the development of the sustainability fund range [...] abrdn operates a 'three lines of defence' model in the management of sustainability, including climate-related, risks ensuring that there are clearly defined roles and responsibilities within the Enterprise Risk Management Framework: First line: Investment teams have the primary responsibility for identifying, assessing, and managing sustainability, including climate-related, risks alongside other risks to investments. Sustainable Investing governance committees, support investment desks with regards to the overall sustainability risk integration framework and its implementation and supporting investment teams in understanding the regulatory environment. abrdn appointed a Chief Sustainability Officer to lead the Sustainable Investing strategy for abrdn's Investments Vector. The Investment Vector Sustainability Group (IVSG) reports to abrdn's Chief Sustainability Officer. The IVSG consists of four specialised teams: • Sustainability Insights & Climate Strategy • Sustainable Investing • Active Ownership • Sustainability Investment Specialists The IVSG maintains strong partnerships across the abrdn Investment Teams. 2nd line: Investment Risk integrates sustainability risk analysis into the modelling and reviews of funds where data is available and considers these risks in the overall assessment of a fund's risk profile. The overall RAG status of funds as well as action taken to address moderate / high risks are reported to boards, and relevant committees as required, on a regular basis. Compliance Teams assess sustainability-related, global regulatory developments and monitor the group's compliance with those rules. Compliance teams further review fund material including marketing material to ensure that sustainability related statements are clear, fair and non-misleading. A dedicated Monitoring & Oversight team operates a risk-based programme, which incorporates sustainability-related regulations, to provide assurance to senior management over the effectiveness of controls to ensure regulatory compliance. The outcome of the reviews is reported to the relevant entity boards and other governance forums, including the Risk and Capital Committee, Group Audit Committee and Executive Leadership Team Controls meeting. Assurance activities include thematic reviews of risk or regulatory topics and focused reviews on specific regulatory or customer outcomes. 3rd line: abrdn's Internal Audit function conducts internal audits of sustainability rule implementation as part of its internal audit agenda.

#### Political Donations & Lobbying

Companies should be consistent in their public statements and not undermine these in private commentary to market participants or to politicians and regulators. We welcome transparency from companies about their lobbying activities and believe that good companies have nothing to hide in this respect. Similarly we encourage transparency of any political donations that companies deem appropriate – and we expect a clear explanation of why such donations are an appropriate use of corporate funds. [...] #### Corporate Lobbying & Political Contributions

Corporate lobbying and political contributions are a recurrent theme of shareholder resolutions, particularly in the US. These proposals typically encompass direct lobbying undertaken by the company and indirect lobbying undertaken by trade associations and other organisations of which it is a member or supporter. Proposals may also request the disclosure of more information regarding the process and rationale for political contributions. We expect companies to make transparent, consolidated disclosures of direct and indirect lobbying and political expenditure. This disclosure should be underpinned by a coherent policy that: explains public policy priorities and the rationale for associated expenditure, identifies the management positions responsible for public policy engagement, and provides appropriate mechanisms for board oversight. These measures should mitigate the risks associated with corporate lobbying and political contributions, protecting the interest of shareholders and other stakeholders.

To implement our commitments in practice, our strategy is based around three areas of focus: investment process, corporate engagement, and annual review. [...] Regular review of coal exposures by Chief Investment Officer [...] The level of existing exposure, and any active investment decisions that result in exposure to high-risk assets, will be reviewed on a regular basis by the CIO and the leadership team. Exposure needs to be justified based on the financial risks and within the context of our commitments. [...] We will undertake regular engagement with the companies that we hold that have coal exposure to better understand the risks they are exposed to and the potential impact on our investment, paying particular attention to the credibility of a company's transition plans. [...] Where progress against milestones is insufficient, we will have an escalation process in place. This includes voting action where relevant. We use potential divestment as a last resort, where we think that a failure to do so could [...] We will review our engagement and investment process on (at least) an annual basis to assess the effectiveness of our approach, scope, alignment with the thermal coal phase-out timelines, and coherency with the wider strategy. This will include a review of our coal exposures and whether to extend our approach to emerging markets. By taking this active risk-based approach, we will enhance our portfolio construction decisions, and expect to reduce our exposure to high-risk coal assets over time. We will update and strengthen our approach as appropriate.

Attach commitment or position statement(s)[…]We work with industry associations, regulators and policy makers globally to drive change, including through improving standards, driving best practice, influencing regulation and developing capital allocation strategies. We share our time, expertise and research to do this. Aligning our expectations helps to increase pressure on investee companies and drives more effective change.

For example, we actively participated in the PRA Climate Financial Risk Forum and its sub-working groups on Disclosure and Scenario Analysis. Our Head of Climate Change Strategy is also the Chair of the Investment Association TCFD Working Group. We also signed the 2021 Global Investor Statement to Governments on the climate crisis to highlight the need for more stringentclimate policies.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]We engage with (and are members of) a number of industry collaborative working groups and initiatives. Our membership of these initiatives helps drive effective change in a collaborative manner across our industry group. These collaborative commitments also ensure that our strategy is guided and aligned to best practice activity. The example noted above evidences this, as our Head of Climate Change Strategy chairs the Investment Association TCFD Working Group - which demonstrates the close link to our climate strategy and engagement activity.