Coronation Fund Managers Ltd

While concerns have been expressed over the strengthening ties between the State and the private sector, we are faced with the reality that there is a need for collaboration and co-ordinated efforts, given their respective resources and expertise. It is also a fact that every business operating and employing people in South Africa requires working infrastructure and efficient administration in order to conduct their business and service their client base. In short, the State and private sector need to work together to ensure the country can sustain itself in the long term, create jobs, and grow the economy. [...] With this in mind, we do advocate for transparent public-private sector engagement and cooperation in all spheres of government. In addition to our corporate engagements, we also collaborate on numerous issues affecting the industry and country via ASISA. Here, we have input at Board level and through over 40 working groups that engage with regulators on matters affecting our industry and clients to ensure the best outcomes and avoid unintended consequences. [...] Beyond the financial services arena, Coronation is a member of and co-ordinates with several associations, including Business Leadership SA, Business Unity SA, B4SA, and the National Small Business Initiative. These organisations work extremely hard to provide the funding and resources to address the myriad issues faced by the country. These include failing State-owned enterprises and municipalities, unemployment, youth training and development, corruption in the public and private sectors, infrastructure development, and making every effort to create an environment attractive to much-needed foreign direct investment.

While concerns have been expressed over the strengthening ties between the State and the private sector, we are faced with the reality that there is a need for collaboration and co-ordinated efforts, given their respective resources and expertise. It is also a fact that every business operating and employing people in South Africa requires working infrastructure and efficient administration in order to conduct their business and service their client base. In short, the State and private sector need to work together to ensure the country can sustain itself in the long term, create jobs, and grow the economy. Aside from these business and economic imperatives, striving to contribute to a society where all people are given the opportunity to be economically active and live happy and productive lives is a goal in and of itself. Again, the government cannot achieve this in isolation and the business community and society must step up. With this in mind, we do advocate for transparent public-private sector engagement and cooperation in all spheres of government. In addition to our corporate engagements, we also collaborate on numerous issues affecting the industry and country via ASISA. Here, we have input at Board level and through over 40 working groups that engage with regulators on matters affecting our industry and clients to ensure the best outcomes and avoid unintended consequences. A recent example is the Two-Pot retirement system, which impacts every retirement saver in South Africa. After months of intensive engagement and collaboration, it was successfully implemented in September. We believe that after initial outflows have waned, the mandated preservation portion is very positive in the long term. Currently under discussion are the proposed changes to how collective investment schemes are taxed, the impact of which could have unintended consequences for South African investors and our industry. Through ASISA and the ASISA Foundation, we also participate in high-impact training programmes to develop young talent in our industry. We take great pride in our consumer financial education programme that reaches thousands of adults annually across all nine provinces and online. Beyond the financial services arena, Coronation is a member of and co-ordinates with several associations, including Business Leadership SA, Business Unity SA, B4SA, and the National Small Business Initiative. These organisations work extremely hard to provide the funding and resources to address the myriad issues faced by the country. These include failing State-owned enterprises and municipalities, unemployment, youth training and development, corruption in the public and private sectors, infrastructure development, and making every effort to create an environment attractive to much-needed foreign direct investment. We are encouraged that President Ramaphosa is the first African President of the G20, which comprises private sector representatives from G20 member states and the B20 initiatives, connecting businesses and governments regarding policy and trade agreements. We believe that this has the potential to unlock significant opportunities for our country and continent. [...] The Board has oversight of all key matters related to sustainability and delegates its authority to its subcommittees and management. [...] The responsibilities of the SET Committee include the oversight and monitoring of organisational ethics, responsible corporate citizenship, organisational transformation, ESG and environmental sustainability and the fulfilment of its statutory duties on behalf of the Group and any additional functions as delegated by the Board. The SET Charter, approved annually by the Board, more fully sets out the SET Committee's responsibilities and is available for review in the Stakeholder Relations section on www.coronation.com. The SET Committee reports formally to the Board at each meeting on each area within its mandate and on matters discussed. In addition, the chair of the Committee tables a report for consideration by shareholders at the AGM. While the SET Committee has a certain level of oversight of the investment process, particularly as it relates to the Company's position with respect to ESG and environmental sustainability, it is not accountable for trading or proxy voting decisions made by the investment team, which are operational decisions given the nature of the business. [...] The SET Committee continues to enhance its oversight over ESG matters with an emphasis on regulatory requirements relating to environmental and environmental disclosure guidance. The Committee is of the opinion that the Group complies, in all material respects, with legislation and regulations relevant to the Committee's mandate.

Coronation is committed to being transparent in its reporting of activities and implementation of this ESG Policy. We regularly report to clients on how we fulfil our responsibilities, in line with our status as a signatory to the PRI, and our support for CRISA and the UK Stewardship Code. We keep a complete record of all ESG engagements in a comprehensive database. When requested by clients, Coronation will produce a presentation which covers all relevant ESG issues dealt with in a defined period. In addition, as a matter of course, we include an ESG section in all report back presentations to institutional clients. This allows us to provide feedback to clients about our ESG engagements in any given period, on an ad hoc or more formal periodic basis. We also disclose our complete voting record history on the Coronation website, which is updated on a quarterly basis. In addition, our Stewardship Report provides an annual summary of our engagement and voting activities. [...] The Chief Investment Officer oversees the implementation of this ESG Policy in the investment process. [...] The owner of this Policy in relation to the investment process, ownership policies and practices and the collaboration with investors and other stakeholders is the Chief Investment Officer. The Policy shall be reviewed by the Chief Investment Officer or designate at least annually and such review shall include input from representatives from the Institutional Business, Legal and Compliance teams. Post such annual review, the Policy shall be provided to the Group Board for final review and approval.

We established a dedicated Sustainability Committee to enhance formal governance and oversight of sustainability practices within our organisation. This committee ensures that sustainability considerations are integrated into all our decision-making processes. [...] Our Sustainability Committee (SusCom): The SusCom comprises of the Chief Investment Officer, Global Head of Institutional Business, Global Head of Risk and Compliance, Company General Counsel and a senior portfolio managers. The SusCom is responsible for formal governance and oversight of the design, implementation, monitoring and reporting of Coronation's approach to the integration of ESG factors into its investment process, as well as associated alignment with codes, standards, disclosure obligations and regulatory requirements. [...] Coronation's Chief Investment Officer is responsible for implementation of these policies. Policies are reviewed periodically, and our Board of Directors is responsible for final review and approval.

Coronation engages with key stakeholders, such as leading investment associations, regulators and government bodies to support an effective financial services industry. Our efforts are underpinned by our ESG Policy and our Proxy Voting Policy, the responsibility for which rests with our investment team. This drives our long-standing practice of integrating ESG factors into our investment process. We publish this Stewardship Report annually to keep our stakeholders informed of our stewardship activities, including examples of material ESG issues that have arisen during the year, and to outline our efforts to promote the long-term sustainability of our investments. [...] As members and active participants in BLSA, we engaged with key stakeholders in government, labour and civil society to ensure that the business community played a meaningful role, where possible, in assisting with the Covid-19 response, such as advocating for measures to ease the lockdowns, input into the economic recovery strategy, and assistance with the vaccine rollout. [...] Through our membership of ASISA, we engaged actively with regulatory authorities to help stabilise financial markets during the height of the liquidity crisis that followed the first lockdown. We initiated a process to enhance the regulatory infrastructure governing potential liquidity constraints in the local collective investments industry, which led to the creation of a new regulatory instrument. This enables funds to prioritise the payment of contractual obligations, such as regular retirement income payments.

The Board has oversight of all key matters related to sustainability and delegates its authority to its subcommittees and management. Board of Directors Risk Committee Audit Committee Remuneration & Nominations Committee Social, Ethics & Transformation Committee Management Executive Committee Sustainability Committee Group IT Committee Operations Committee Control functions [...] The responsibilities of the Social, Ethics and Transformation (SET) Committee includes the oversight and monitoring of organisational ethics, responsible corporate citizenship, organisational transformation, ESG and environmental sustainability and the fulfilment of its statutory duties on behalf of the Group and any additional functions as delegated by the Board. The SET Charter, approved annually by the Board, more fully sets out the SET Committee's responsibilities and is available for review in the Stakeholder Relations section on www.coronation.com. The SET Committee reports formally to the Board at each meeting on each area within its mandate and on matters discussed. In addition, the chair of the Committee tables a report for consideration by shareholders at the AGM. While the SET Committee has a certain level of oversight of the investment process, particularly as it relates to the Company's position in respect of ESG and environmental sustainability, it is not accountable for trading or proxy voting decisions made by the investment team, which are operational decisions given the nature of the business. [...] The SET Committee relies on management to implement strategies and initiatives, of which the primary contributors are the management team and the Employment Equity and CSI Committees. The activities of these Committees are formally reported to the SET Committee at each meeting. The SET Committee met twice during 2023, and each meeting was fully attended by its members. In its deliberations during the year, the SET Committee considered substantive local and international regulations and frameworks, as well as leading industry practice. Furthermore, the SET Committee received feedback on the monitoring, assessment and measurement of Group activities as they relate to social and economic development, transformation and ethics, including the Group's standing in terms of the goals and purposes of, inter alia, the following: The Companies Act No.71 of 2008 UN Global Compact 10 Principles Organisation for Economic Co-operation and Development recommendations regarding corruption The ILO protocols on Decent Work and Working Conditions The Employment Equity Act, No. 55 of 1998 The B-BBEE Act, No. 53 of 2003 [...] The SET Committee reviewed a summary of engagements with material stakeholders, including the numbers and method of engagement, and the nature of discussions held. No material matters requiring the focus of the SET Committee were noted during the year.

**3.2.** **Sustainability Committee**

A Sustainability Committee was established by Coronation's Group Executive Committee ("EXCO"), in consultation with the Chief Investment Officer, Senior Portfolio Managers and the Head of Institutional Business.

The Sustainability Committee's primary function is to provide oversight of the ESG activities of Coronation in acting as a responsible investor including the design, implementation, monitoring and reporting of Coronation's approach to the integration of ESG factors into its investment process, as well as associated alignment with codes, standards, disclosure obligations and regulatory requirements. The Sustainability Committee consists of the following members:

- Chief Investment Officer

- Senior Portfolio Managers (the number and appointments to be determined by the EXCO)

- Head of Institutional Business

- Head of Compliance

- General Counsel

- Any other members of staff appointed by the EXCO.

**3.3.** **Ownership and Governance**

The owner of this Policy is the Chief Investment Officer, who oversees its implementation. The Policy shall be reviewed by the Chief Investment Officer or designate at least annually, and such review shall include input from the Sustainability Committee. Post such annual review, the Policy shall be provided to the Group Board for final review and approval.

Oversight The Board has oversight of all key matters related to sustainability and delegates its authority to its subcommittees and management. Board of Directors Risk Committee Audit Committee Remuneration & Nominations Committee Social, Ethics & Transformation Committee Management Executive Committee Sustainability Committee Group IT Committee Operations Committee Control functions [...] The Board of Directors (Board) provides oversight over climate-related risks and opportunities The Board and Risk Committee rely on the Executive Committee, which provides managerial oversight of climate-related risks and opportunities with responsibilities delineated as follows CIO: ensures the integration of climate issues into the investment process Sustainability Committee: oversight of investment stewardship activities [...] The responsibilities of the Social, Ethics and Transformation (SET) Committee includes the oversight and monitoring of organisational ethics, responsible corporate citizenship, organisational transformation, ESG and environmental sustainability and the fulfilment of its statutory duties on behalf of the Group and any additional functions as delegated by the Board. The SET Charter, approved annually by the Board, more fully sets out the SET Committee's responsibilities and is available for review in the Stakeholder Relations section on www.coronation.com. The SET Committee reports formally to the Board at each meeting on each area within its mandate and on matters discussed. In addition, the chair of the Committee tables a report for consideration by shareholders at the AGM. While the SET Committee has a certain level of oversight of the investment process, particularly as it relates to the Company's position in respect of ESG and environmental sustainability, it is not accountable for trading or proxy voting decisions made by the investment team, which are operational decisions given the nature of the business.

We established a dedicated Sustainability Committee to enhance formal governance and oversight of sustainability practices within our organisation. This committee ensures that sustainability considerations are integrated into all our decision-making processes. [...] Our Sustainability Committee (SusCom): The SusCom comprises of the Chief Investment Officer, Global Head of Institutional Business, Global Head of Risk and Compliance, Company General Counsel and a senior portfolio managers. The SusCom is responsible for formal governance and oversight of the design, implementation, monitoring and reporting of Coronation's approach to the integration of ESG factors into its investment process, as well as associated alignment with codes, standards, disclosure obligations and regulatory requirements. [...] Coronation's Chief Investment Officer is responsible for implementation of these policies. Policies are reviewed periodically, and our Board of Directors is responsible for final review and approval.

The Chief Investment Officer oversees the implementation of this ESG Policy in the investment process. [...] The owner of this Policy in relation to the investment process, ownership policies and practices and the collaboration with investors and other stakeholders is the Chief Investment Officer. The Policy shall be reviewed by the Chief Investment Officer or designate at least annually and such review shall include input from representatives from the Institutional Business, Legal and Compliance teams. Post such annual review, the Policy shall be provided to the Group Board for final review and approval.

All formal company engagements are stored in a central database that records the details of who participated, the event or issue that led to the engagement, our concerns or objectives, the company's response, and how the issue was resolved. Depending on the situation and context, an effective company response could be providing us with more information or clarification on an issue, accepting the validity of our concerns, agreeing to make modifications to its business or policies, or making other commitments to address the issue. [...] Unusual or contentious issues, such as hostile takeovers or proposals not considered to be in the interests of shareholders, must be discussed with the CIO and other senior investment managers. Furthermore, we access the research and voting recommendations provided by a large third-party proxy voting advisor. Our analysts review this data to gain additional information on complex votes so that we are aware when we are taking views that are not in line with the broader market and are comfortable with the rationale for doing so. [...] In order to ensure that our stewardship approach is implemented effectively, we have adopted a set of internal policies that establish our approach, required processes and oversight responsibilities. Our ESG Policy sets the guiding principles behind our stewardship approach, and our Proxy Voting Policy outlines the principles that we apply when voting on company resolutions. Coronation's Chief Investment Officer is responsible for implementation of these policies. Policies are reviewed periodically, and our Board of Directors is responsible for final review and approval. [...] To add formal governance and oversight, we are establishing a Sustainability Committee (comprising the Chief Investment Officer, Global Head of Institutional Business, Global Head of Risk and Compliance, Company General Counsel and a number of senior portfolio managers), which is responsible for overseeing the implementation, monitoring and reporting of our stewardship activities in accordance with our policies.

The Board has oversight of all key matters related to sustainability and delegates its authority to its sub-committees and management. [...] The Board and Risk Committee rely on the Executive Committee, which provides managerial oversight of climate-related risks and opportunities with responsibilities delineated as follows: CIO: integrating climate issues into the investment process and oversees appropriate level of engagement on climate-related issues with our investee companies [...] Engagement with investee companies is a key part of managing climate risks and driving meaningful environmental change. This is favoured over divestment to drive decarbonisation. If engagements fail, however, investment cases and valuations will be re-assessed. Letters and emails have been sent to 90 investee companies to urge them to adopt the recommendations of the TCFD. In 2021 an increase of 82% in environmental engagements with companies was largely driven by our efforts to encourage companies to adopt TCFD-aligned reporting. The letters instigated 20 substantial engagements with 15 companies. Of the 90 companies, 55 are implementing (or committed to implementing) the TCFD recommendations, 11 are committed to partial TCFD-aligned disclosure and 7 are assessing the TCFD or other frameworks to improve their disclosures. [...] The SET Committee reports formally to the Board on each area within its mandate and makes recommendations to the Board for approval. The SET Charter, approved annually by the Board, more fully sets out the SET Committee's responsibilities and is available for review in the Stakeholder Relations section on www.coronation.com [...] The SET Committee oversees the promotion of an ethical culture, equality and prevention of unfair discrimination, including monitoring adherence to the Code of Ethics and related policies. [...] The SET Committee reviewed a summary of engagements with material stakeholders, including the numbers and method of engagement, and the nature of discussions held.