1 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

ALLIANCE TRUST INVESTMENTS LTD ALLIANCE TRUST SUSTAINABLE FUTURE FUNDS

Sustainable Future Global Growth Fund Sustainable Future Absolute Growth Fund Sustainable Future Managed Fund Sustainable Future Cautious Managed Fund Sustainable Future Defensive Managed Fund Luxcellence Alliance Trust Sustainable Future Pan–European Equity Fund Sustainable Future European Growth Fund Sustainable Future UK Growth Fund UK Ethical Fund

Sustainable Future Corporate Bond Fund

European SRI Transparency Code Second Statement of Commitment 01 October 2015 – 30 September 2016

2 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

EUROPEAN SRI TRANSPARENCY CODE (VERSION 2)

Date : 1st October 2015

EUROSIF Response

Statement of Commitment Sustainable and Responsible Investing is an essential part of the strategic positioning and behaviour

of Alliance Trust Investments. We have been involved in SRI since 2012 and welcome the European

SRI Transparency Code.

This is our second statement of commitment and covers the period from 1 October 2015 to 30

September 2016. Our full response to the European SRI Transparency Code can be accessed below

and is available in the annual report of the retail funds and on our web site:

www.alliancetrustinvestments.com

Compliance with the Transparency Code Alliance Trust Investments is committed to transparency and we believe that we are as transparent

as possible given the regulatory and competitive environments that exist in the countries in which

we operate. Alliance Trust Investments meets the full recommendations of the European SRI

Transparency Code.

1st October 2015

3 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

Section 1. Basic Details

The Fund Management Company

1a. Provide the name of the fund management company managing the fund(s) to which this code

apply.

Provide general information about The Fund Management Company managing the fund(s) to which this code apply (eg. name, address, website…). Name of Company: Alliance Trust Investments Registered address: 8, West Marketgait, Dundee, DD1 1QN, Scotland, UK Website: www.alliancetrustinvestments.com Alliance Trust Investments is authorised and regulated by the Financial Conduct Authority and is

entered on the FCA Register under the Firm Reference Number 479764.

Funds to which this code applies:

Sustainable Future Global Growth Fund Sustainable Future Absolute Growth Fund Sustainable Future Managed Fund Sustainable Future Cautious Managed Fund Sustainable Future Defensive Managed Fund Luxcellence Alliance Trust Sustainable Future Pan–European Equity Fund Sustainable Future European Growth Fund Sustainable Future UK Growth Fund UK Ethical Fund Sustainable Future Corporate Bond Fund Contact details: Sara Clark, Institutional Analyst Email : sara.clark@alliancetrust.co.uk Tel: 00 44 1382 321167

1b. Describe the general approach of the fund management company with regards to how it

takes environmental, social and governance (ESG) criteria into consideration.

We are dedicated to sustainability. Alliance Trust Investments is a wholly-owned subsidiary of

Alliance Trust PLC and, as a group, we have a core strategy called ‘Investing for Generations’,

through which we have identified five key areas where we will make an impact – Responsible

Investing, Shareholders & Clients, Environment, Community and People. We have a key role to

play in supporting a stable capital market and thus we manage both the impact of our investments

and of our direct operations on the environment, minimising our carbon footprint and influencing

the actions of our suppliers. We also play our part in supporting the communities in which we

operate and actively promote a sense of social responsibility in our own people to get involved and

give something back to society. Our Chief Executive, Katherine Garrett-Cox, is also Co-Chair of the

World Economic Forum Annual Meeting.

The five key areas of focus are:

1. Responsible investing – Our investment philosophy and process is centred on

sustainability. We use our influence as shareholders to improve corporate responsibility. We vote

4 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

wherever possible and we will engage with management throughout the year where we believe

their proposals are not in the best interests of their shareholders and business. Details of our

voting records can be found on our website:

http://www.alliancetrustinvestments.com/global/documents/6076/2015/May/SF-voting-Q1.pdf

2. Clients – Our clients are at the heart of everything we do. Our ethos is to be transparent with

our clients to help them understand the impact of their investments.

3. Environment – We are committed to managing the impact of our operations on the

environment and embedding environmental management and improvement into all areas of our

business.

4. Community – We aim to support the communities in which we operate. We established the

Alliance Trust Staff Foundation which supports local charities operating in Dundee, Edinburgh and

London (our office locations). Our employees also receive two annual volunteering days to use to

help support local projects or charitable initiatives.

5. People – Our goal is provide rewarding careers for the people we employ and we aim to

recruit, retain and develop the best talent in the marketplace. In addition to their strong academic

backgrounds, our dedicated team of sustainability specialists has qualifications in relevant areas

relating to sustainability.

• Is the fund management company approach towards ESG criteria aligned or inspired by its

corporate social responsibility approach?

Yes/No. If yes, insert a link to the company’s CSR policy. If not, explain why not.

Yes.

http://investor.alliancetrust.co.uk/ati/investorrelations/our-vision-values.htm

http://www.alliancetrust.co.uk/pdfs/alliance-trust-report-and-accounts-year-ended-311214.pdf

http://www.alliancetrustinvestments.com/institutional/about-us/corporate-

governance/stewardship-code

Alliance Trust Investments manages a broad suite of equity and fixed income assets which conform

to our stringent sustainability and ethical criteria. These criteria are available at:

http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-

sustainability.pdf

http://www.alliancetrustinvestments.com/private-investor/about-us/corporate-governance/

Has the fund management company signed the Principles for Responsible Investment? If yes, please insert the link to the answer to the PRI questionnaire.

Yes.

http://investor.alliancetrust.co.uk/ati/investorrelations/unpri.htm

http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/UNPRI_integratio

n_release_FINAL.pdf

We have been a signatory to the United Nations Principles for Responsible Investment (UN PRI)

since 2011. We incorporate ESG screening across all our strategies and assets under management.

5 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

Alliance Trust PLC has an asset owner signatory status, and as such we report on our progress

annually through a Responsible Investment Transparency Report.

• Is the fund Manager a signatory or a member of other international and/or national initiatives

supporting SRI practices? Please answer if you deem this information to be useful.

Yes.

We are signatories to the following organisations which support Sustainable and Responsible

Investment practices:

UKSIF http://uksif.org/

UK Stewardship Code https://www.frc.org.uk/Our-Work/Publications/Corporate-Governance/UK-

Stewardship-Code-September-2012.pdf

Carbon Disclosure Project (CDP) https://www.cdp.net/en-US/Pages/HomePage.aspx

Delphi: integrated analysis (of ESG)

http://www.dvfa.de/fileadmin/downloads/Verband/Kommissionen/Project_Delphi/Project_Delphi

_Overview_Feb_2012.pdf

IRRC Investor Group http://www.irrcinstitute.org/

• Has the fund management company established an ESG engagement policy? If yes, describe the

policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the

policy. If not, explain why not.

Yes.

We meet regularly with companies we hold and take the opportunity to better understand their

business as well as chastise or praise them on how they manage the social, environmental and

governance aspects of their business. We are actively engaged in a full range of industry initiatives,

through both our sustainable equity team and our stewardship programme. Beyond the

organisational and initiative memberships listed above and below, we also play key roles in

Sustainable Supply Chain engagement, in particular our action on Bangladesh; Integration through

our Chair of the UNPRI Integration Working Group; and Natural Capital valuation through

publication and stimulus research.

Signatory to :

UNPRI

Stewardship Code

Global Investor Statement on Climate Change

CDP Climate Change, Water & Forests Programmes

Centre for Social Justice’s Call for Transparency in Supply Chains

Investor Statement on Bangladesh

The Montreal Pledge

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Neil Brown – Immediate Past Chair of UNPRI Working Group on Integration

Justin Atkinson, Head of Corporate Governance - UNPRI’s Policy & Research Steering Committee

Justin Atkinson – CFA Society of the UK Corporate Governance Working Group

Member of :

UKSIF

UNPRI’s Policy & Research Steering Committee

World Business Council for Sustainable Development – Alliance Trust is the only financial company

member

Scottish Forum on Natural Capital

Lead Sponsor - World Forum on Natural Capital

Sponsor of and contributing panellist at Natural Capital Initiative – Valuing our Life Support Systems

Participant in Tomorrow’s Company Annual Parliamentary Reception on Responsible Investment

Presented at UN Global Compact LEAD meeting

Participant at PRI in Person 2014

Participant at UNCTAD World Investment Forum 2014, including the Sustainable Stock Exchanges

Global Dialogue

Participant at One Young World 2014

Co-Chair World Economic Forum 2015

Engagement of note in which we have been involved:

Ongoing engagement with Energy Futures Project, working alongside civil society, equity research

teams and corporations to address issues of Stranded Assets

Arctic Oil Drilling – Convened a debate between NGOs and oil industry experts to inform investors

of overlooked risks. We remain in contact with NGOs

Ongoing engagement with UK banks to understand and encourage improved risk controls.

Labour rights – Led investor trip to Bangladesh

Ongoing engagement - Bangladesh Fire and Safety Accord, part of global ICCR coalition

Direct engagement with ASOS (lead engager) and H&M - Q4 2013

Lead/Co-signatory of letters to apparel and technology businesses asking to discuss the

sustainability of their global supply chains

Co-signatory of letter to the UK Government calling for the inclusion of proportionate supply chain

reporting requirements in the Modern Slavery Bill

Co-signatory of letter to the UK Government calling for clarification of the law regarding fiduciary

duty

Subscriber to Ethix’s cluster munitions and landmine research

Ongoing direct engagement with a London-listed pharmaceuticals business about its business

conduct, including its sales practices and approach to enabling wider access to its products.

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The policy itself is not public but our engagement activities are published here :

www.alliancetrustinvestments.com/sri-hub/

We disclose all our engagement activities to our clients in quarterly reports.

• Has the fund management company established a voting policy? If yes, describe the policy by outlining its objectives and its methodology and/or, if it is public, insert a link to the policy. If not, explain why not.

Yes.

We also use our shareholder votes to encourage management to improve how their business is run

and hold them to account where necessary.

The members of our investment team are active shareholders and were pioneers in using the votes

associated with share ownership to influence companies on material sustainability issues at their

previous employer, Aviva Investors. Now at Alliance Trust Investments, the team also engages with

global policy makers in order to make capitalism work better. This engagement activity is the key

way in which the team can promote more sustainable corporate behaviour and encourage the shift

to a more sustainable economy.

Members of our team attend company meetings with mainstream analysts and will establish a list

of engagement questions based on our ESG analysis and sustainability matrix score for the

company in question. We track company responses to our key engagement queries in our database

to ensure they are showing key performance indicators against the objectives set.

The investment team votes extensively and explicitly includes social and environmental issues. For

voting the team uses the Institutional Shareholder Services (ISS) voting system, which recommends

voting choices at AGMs, according to its pre-agreed criteria.

Details are available at the following addresses:

http://www.alliancetrustinvestments.com/institutional/about-us/corporate-

governance/stewardship-code (Part 6 for Voting)

http://www.alliancetrustinvestments.com/global/documents/6076/2015/May/SF-voting-Q1.pdf

All votes are disclosed and listed by company and proposal.

• Describe how the fund management company or the group contributes to the promotion and

the development of SRI.

Alliance Trust Investments’ Sustainable Future team plays a key role in the implementation of

Responsible Investment and Stewardship policies not only on behalf of our clients, but also in the

broader interests of society and the long-term shareholders of the companies in which we invest.

The team has a long track record of working to drive change through share ownership. Alliance

Trust Investments’ investment team utilises its role as a shareholder and proactively seeks to

engage with companies to bring SRI related issues to the forefront of their thinking. The team has

shown itself to be a leader in engagement through working with the UNPRI in launching a

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collaborative engagement initiative on the Global Compact whilst at Aviva Investors. Neil Brown,

investment manager on the SRI team, is the immediate past Chair of the UNPRI ESG Integration

Working Group.

We convened a group of 8 European investors to respond to the factory collapse in

Bangladesh and have carried out site visits – please see further details on this below. We hosted a

meeting between the investors and NGOs War on Want and ShareAction to discuss the issues and

then a second meeting with MSCI to understand the company exposures. We also contacted the US

collaboration to share information as we began the process of engagement with Inditex and

Adidas.

Alliance Trust Investments also signed the Investor Statement on Bangladesh -

http://www.alliancetrustinvestments.com/institutional/news-and-

views/news/2013/42879/Investor-Statement-on-Bangladesh

The UNPRI Integration Working Group reviews current best practice in the Integration of

Environmental, Social and Governance factors into fundamental equity analysis. –

http://www.alliancetrustinvestments.com/institutional/news-and-

views/news/2013/February13/UN-PRI-Integration

Toxic Chemicals – we are engaging with other UK investors on the phasing out of unsafe

chemicals involving meetings with NGOs, independent research providers and through direct

engagement with Johnson Matthey and Umicore.

Delphi – We are active members of the Delphi project, a collaboration between a range of

investors and research providers to identify key ESG factors and their impact on valuations. This

work is ongoing.

Sustainable Palm Oil - We have an ongoing engagement with NBPO and Unilever on

working practices and biodiversity.

Investment in Conflict Zones - We are a member of the Sudan Working Group, engaged

with companies in Sudan on UNPRI visit.

Labour Rights - Chair of the Oxfam Better Returns in a Better World labour rights group,

engaged with Inditex and Foxconn. Signatory to the Investor Statement on Bangladesh.

We played an important role following the collapse of the Rana Plaza in Bangladesh in 2013. Many

of those who died were employed in the garment industry; an industry that supplies the clothes

that end up on our high street and the brands whose shares end up in our pensions and ISAs.

Companies cannot absolve themselves of responsibility for their supply chain. We want our

investments in European and US retail brands to deliver the highest investment returns possible

and believe this is best achieved through safe and decent supply chains. In response, we worked

closely with other investors to champion the Bangladesh Accord on fire and building safety,

enlisting support from shareholders representing more than $1tn of assets. It is an independent

9 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

agreement which has been signed by over 150 apparel corporations from 20 countries and is

designed to make all garment factories in Bangladesh safe working places.

Please also see answers as before on the questions regarding Corporate Social Responsibility and

Engagement

1c. Describe/List your SRI products and the specific resources allocated to your SRI activities. • Briefly describe the SRI fund range (number, assets under management, strategies,..) Sustainable Future Fund Range

Strategy Name Global

Inception

Date ISIN Type AUM

€m

Sustainable Future Global Growth Fund Feb 2001 GB0030030067 OEIC 154.7

Sustainable Future Absolute Growth Fund Feb 2001 GB0030029515 OEIC 138.3

Sustainable Future Managed Fund Feb 2001 GB0030030406 OEIC 644.0

Sustainable Future Cautious Managed Fund July 2014 GB00BMN90528 OEIC 16.3

Sustainable Future Defensive Managed Fund July 2014 GB00BMN90858 OEIC 16.4

Europe

Luxcellence Alliance Trust Sustainable Future Pan–European Equity Fund*

Mar 2001 LU0942865907 SICAV 168.6

Sustainable Future European Growth Fund Feb 2001 GB0030029283 OEIC 179.7

UK

Sustainable Future UK Growth Fund Feb 2001 GB0030028764 OEIC 288.0

UK Ethical Fund Feb 2001 GB00B85B1526 OEIC 408.3

Fixed Income

Sustainable Future Corporate Bond Fund Feb 2001 GB00B9FBJG91 OEIC 446.3

*All funds are domiciled in the UK with the exception of Luxcellence Alliance Trust Sustainable Future Pan–European Equity Fund which is a Luxembourg domiciled. Fund factsheets and KIID documents are available at http://www.alliancetrustinvestments.com/institutional/literature/ • Describe/Detail the resources allocated by the fund management company (organisation, ESG

research internal/external, dedicated portfolio management team,…) and indicate where this

information is available.

Our Organisation

Alliance Trust PLC, and its subsidiaries, is fully committed to Sustainable Investment, both in

dedicated sustainable strategies and in our corporate strategy of ‘Investing for Generations’.

Details are on our website at: http://www.alliancetrust.co.uk/

Sustainability is fully integrated into every investment decision across the Sustainable Future

strategies. Our investment philosophy, unchanged since the inception of the Sustainable Future

strategies in 2001, contends that more sustainable companies tend to have better quality

management and better growth prospects, and that this is under-appreciated by the broader

investment community. Over time these positive characteristics become evident in the financial

performance of these companies, leading to improved performance. In short, sustainability can be

a competitive advantage.

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The investment approach avoids making investments in companies involved in certain sectors

which have a detrimental impact on society or the environment, such as tobacco, gambling and

arms. Please see details on our Sustainability & Ethical Criteria appended with this document and

available on our website at:

http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-

sustainability.pdf

Internal resources

Investment Team & Corporate Governance Team

The investment team was established by Morley Fund Management (which became Aviva

Investors) in December 2000 with Peter Michaelis as one of the founding members. The first

strategies were launched in 2001. In 2005, Peter Michaelis took over as head of team, and in 2012

the team of six, along with the assets of £1.2bn, moved from Aviva Investors to Alliance Trust

Investments, as a fully-functioning unit.

The eleven equity team members are focused on the management of the sustainable investments

and all are involved in the research of suitable companies for inclusion within the portfolios. This

integrated team structure is unusual compared to the typical segregation between investment

management and sustainability and impact investing research teams. The team benefits from this

enhanced knowledge and information flow, allowing it to make better investment decisions. A

single investment philosophy and process is used throughout.

As well as academic qualifications pertinent to fund management, members of the team also have

further academic qualifications relevant to Sustainable & Responsible Investment. For example,

Peter Michaelis has a PhD in Environmental Economics.

In addition to the eleven members of the equity team, Alliance Trust Investments has a 5 member

Corporate Governance Team which reports to our Head of Investment Operations, Andrew Killean.

The Identification of Sustainable Companies – the Sustainability Matrix

At the core of the sustainable investment process is the investment team’s proprietary

Sustainability Matrix (please see further details at 2d) which is used to identify those companies

that both benefit from, and participate in, the shift to a sustainable global economy. This tool is

used primarily as a positive screen and ensures we avoid companies which fail to manage their own

direct social or environmental impacts.

The team aims to invest in companies which, because of the products or services which they

provide and their management of the material environmental, social and governance factors which

affect their businesses, are more sustainable than the market. We look for well-managed

companies that provide products or services that are set to benefit as the global economy shifts

towards more sustainable development. In order to identify these more sustainable companies,

we use primarily positive screening tools including our Sustainability Matrix to determine the

eligibility of a company for inclusion in the Sustainable Future strategies. We use this tool to

11 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

measure how sustainable the product or services the company provides as well as how well the

company manages its environmental and social impacts, and how it is governed.

External Resources

ESG data is provided by MSCI, GMI (now MSCI), ISS and Ethical Screening. (Website addresses are

provided on page 20.)

We get input from our Advisory Committee on grey areas which helps form our view.

The Advisory Committee

The Advisory Committee comprises industry experts in sustainability. It currently has five members.

There is no formal period of tenure, but positions are rotated periodically. The team always aims to

have a committee with a broad mix of long-term experience and new skills and expertise, covering

investment, human rights, the environment and economics. Formal meetings are held three times

a year.

The committee’s role is to continually assess and challenge the team and to offer guidance on

evolving issues within sustainability. It reviews all holdings at regular meetings and gives guidance

as appropriate. This can include making the sustainable team aware of up-and-coming themes that

warrant further analysis, to investigate what impact this might have on the strategies.

Ethical Screening

Ethical Screening reviews and cross references all holdings against the publicly-stated screening

criteria on a quarterly basis. In the event of a potential breach of these criteria, the Sustainable

Future investment team is informed and responds accordingly.

Report Commissioning

Industry consultants or sell-side analysts are periodically commissioned to carry out industry

specific research to further enhance the Sustainable Future investment team’s ESG analysis.

The SRI Funds

1e. Provide the name of the fund(s) to which this Code applies and its (their) main characteristics Describe the main characteristics of the fund(s): geographical focus, asset class, SRI strategy used (use the classification provided by Eurosif/EFAMA).

Sustainable Future Global Growth Fund

GB0030030067 Equity KIID score 5

Sustainable Future Absolute Growth Fund

GB0030029622 Equity KIID score 5

Sustainable Future Managed Fund GB0030030398 Equity/Fixed Income KIID score 5

Sustainable Future Cautious Managed Fund

GB00BMN90304. Equity/Fixed Income KIID score 4

Sustainable Future Defensive Managed Fund

GB00BMN90635. Equity/Fixed Income KIID score 4

12 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

Luxcellence Alliance Trust Sustainable Future Pan–European Equity Fund

LU0942865907 Equity KIID score 6

Sustainable Future European Growth Fund

GB0030029390 Equity KIID score 6

Sustainable Future UK Growth Fund

GB0030028764 Equity KIID score 5

UK Ethical Fund GB00B8HCSD36 Equity KIID score 5

Sustainable Future Corporate Bond Fund

GB0030029069. Fixed Income KIID score 3

The assets are managed using exclusion based criteria, detailed on our website as follows:

http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-

sustainability.pdf

The following Eurosif Criteria also apply: Sustainability Themed Investment Exclusion of Holdings from Investment Universe Integration of ESG Factors in Financial Analysis Engagement and Voting on Sustainability Matters 1f. What is (are) this (these) fund(s) trying to achieve through taking into account ESG criteria? • For instance, financing a specific sector, reducing risks, support better CSR practices, develop new value creation opportunities, other objectives.

The investment team believes that the incorporation of ESG criteria into its investment process

gives it an information advantage which enables it to better identify companies which are likely to

outperform over the long term. The Sustainable Future Investment philosophy contends that

investors underestimate the value of sustainable and responsible businesses as these issues are not

considered material by the broader investment community. The team seeks to identify these

companies and exploit this market inefficiency. Environmental, social and governance issues do

affect the value of investments and analysing these aspects of companies is an important part of

making investment decisions. By identifying attractively valued companies that are more

sustainable than the market the team believes it can deliver investment returns that benefit from

sustainable trends and outperform mainstream benchmarks. It aims to achieve its investment

objectives through fundamental analysis of companies, primarily in a bottom-up manner but also

takes account of the prevailing global macro outlook. The investment team identifies undervalued

sustainable companies that are well-managed, principally through thematic analysis of a broad

range of sustainability themes such as climate change and energy efficiency, quality of life, and

resilience.

The Sustainable and Responsible Investment philosophy and process is consistent across Alliance

Trust Investments’ Sustainable Future Fund range. The investment philosophy and process have

13 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

not changed and have been used by the investment team since the Sustainable Funds’ inception.

• If part of the fund(s) assets is invested in unlisted organisations with high social, community or

impact investing relevance, please specify.

Not applicable

Section 2. Approach to ESG Evaluation of Companies

2a. What fundamental principles underlie the ESG research methodology? Describe the principles, standards or norms on which the ESG analysis is based for each of the environmental, social/societal and governance dimensions. Include brief comments about how stakeholders are consulted, as appropriate. Please see our Position on Sustainability and Ethical Criteria as stated below: http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-sustainability.pdf We often discuss the work of NGOs and research organisations, some of which are our clients, in

promoting a more sustainable economy. Where clients wish us to engage on issues that we believe

are material to the success of the business, or simply to encourage better business, we will do so –

providing they are consistent with our stated position on matters most commonly of concern to

our clients.

Examples of issues that have been highlighted as a concern by clients (or IFAs who speak to our

clients), which have led us to escalate engagement with companies include: pay and remuneration,

tax, and unethical behaviour in pharmaceutical companies and banks.

There is currently no formal process to elicit clients’ views other than when we meet them or their

IFAs. That said, the considerable effort we have put into stating our thoughts and views on the

Sustainable Future Hub, www.alliancetrustinvestments.com/sri-hub/ and encouraging comment

provides an additional way in which clients can express their opinions.

2b. What internal and external resources are used to carry out this research?

Please see answer at 1c

Describe the general information used to carry out the ESG research: internal analysis, ESG rating agencies, other external sources of information. The investment team goes to considerable lengths to ensure that its information on the

environmental, social, ethical and corporate governance performance of companies is current and

correct. In addition to an internal analysis and audit, it uses a number of external data providers,

drawing on data from company meetings, broker research, market data, academia, and NGOs. This

information is all analysed internally by the relevant analyst to form a final rating, which is then

presented to, and reviewed by, the whole team. Current external data providers are MSCI IVA,

Governance Metrics International, and Ethical Screening. The team also consults an external

14 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

Advisory Committee, which is able to see the companies held in the portfolios and query any

companies it feels may be inappropriate, as well as give guidance on areas which are controversial

or where the team wishes to clarify its position.

2c. Which ESG analysis criteria are used?

Indicate what the main criteria for each of the environmental, social/societal and governance dimensions are. Specify if these criteria differ according to sectors, the geographical zones, the type of company,… If appropriate, provide an example. Please see details published in our ‘Position on Sustainability and Ethical Criteria’. http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-sustainability.pdf The Identification of Sustainable Companies

Positive Screening - the Sustainability Matrix

At the core of the sustainable investment process is the investment team’s proprietary

Sustainability Matrix (Please see Question 12) which is used to identify those companies that both

benefit from, and participate in, the shift to a sustainable global economy. This tool is used

primarily as a positive screen and ensures we avoid companies which fail to manage their own

direct social or environmental impacts.

The team aims to invest in companies which, because of the products or services which they

provide and their management of the material environmental, social and governance factors which

affect their businesses, are more sustainable than the market. We look for well-managed

companies that provide products or services that are set to benefit as the global economy shifts

towards more sustainable development. In order to identify these more sustainable companies,

we use primarily positive screening tools including our Sustainability Matrix to determine the

eligibility of a company for inclusion in the Sustainable Future strategies. We use this tool to

measure how sustainable the product or services the company provides as well as how well the

company manages its environmental and social impacts, and how it is governed.

Negative Screening

We aim to exclude companies with significant exposure to fifteen sustainability and ethical issues, where we generally apply a threshold of 10% of revenue exposure. http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-sustainability.pdf

We have very stringent criteria on climate change, which means that we are only able to invest in

three oil & gas companies globally. Currently, we hold only one oil and gas company across all

strategies. For utilities, we consider the generation mix and would not invest in companies which

generate a high proportion of electricity from coal.

15 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

We operate a company-wide negative screen for companies with confirmed involvement in the

manufacture of anti-personnel mines or cluster munitions, or their critical components, as defined

by the Ottawa Mine Ban Convention and the Oslo Convention on Cluster Munitions.

ESG issues differ markedly by industry and sector. The investment team has therefore developed

its own set of factors with which it views each industry. For example, with regards to media

companies, governance and staff management are key issues, but when analysing resource

industries, the type of assets, political risk, health and safety, and effective management of bribery

and corruption are critical.

2d. What is your ESG analysis and evaluation methodology (how the investment universe is built, rating system,…)? Describe the ESG evaluation/rating system and how it is built by explaining how the various ESG criteria are articulated. If appropriate, provide an example.

As a primary source of ideas for stocks suitable for inclusion in the portfolio we focus on the

following four key themes which we have identified as value drivers; Climate Change, Quality of

Life, Sustainable Consumption and Resilience.

Gaining exposure to positive themes is important as we would rather be exposed to companies

that are set to benefit from sustainability trends than to companies with obvious negative

externalities which will suffer from existing or future regulation. This is from an ethical, as well as

an investment and economic perspective.

These themes are used in conjunction with our proprietary sustainability matrix to identify

sustainable companies which conform to our sustainable and ethical criteria.

The Sustainability Matrix

Every company held in the portfolios is given a Sustainability Rating, which analyses the following

aspects:

i. Product Sustainability – rated from A - E. This assesses the extent to which a company‘s

core business helps or harms society and/ or the environment.

Product rating description

A Core products are a sustainability solution in helping overcome some of the key hurdles to sustainable development.

B Products have low impacts and some benefits which may contribute to a more sustainable future.

16 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

C Products are broadly neutral to sustainability.

D Products create sustainability problems (perhaps partially offset by some benefits).

E Products are in conflict with sustainable development.

ii. Management Quality – rated from 1 - 5. This assesses whether a company has appropriate

structures, policies and practices in place for managing its environmental, social and governance

(ESG) risks and impacts.

Management rating description

1 Excellent. Management has a clear vision of its impacts and is actively working and delivering good performance in these ESG areas. These management teams are proactive, going beyond compliance and understand doing so can give them a competitive advantage over their peers.

2 Good. Company is progressive within its sector and good policies and performance in most areas.

3 Average. Management address some ESG aspects of their business but it is lacking in some areas.

4 Fair. There is some management of ESG issues but has significant areas where this is lacking.

5 Poor. Reactive company which has a lack of awareness of the main ESG issues they face. Few policies and big gaps in many key areas in data and performance.

We include a stock example attached below for Roche, showing the ESG analysis (theme,

sustainability matrix rating) and how it affects what the company is worth (company note and

valuation).

Roche company template CB Dec 14 v 5.0 with Income.pdf

Roche Holding AG matrix rating template MA B2 23-Jul-2014.pdf

2e. How frequently is the ESG evaluation reviewed?

Please briefly explain the methodology update process and who is involved. If appropriate, explain if the methodology has changed in the past 12 months and the nature of the key changes. All members of the Sustainable Future team participate in the decision making process, in

accordance with our stated investment process, using the same methodology as described above.

The proprietary sustainability matrix has been used since the inception of the Sustainable Future

Fund range in 2001. The investment team and the Advisory Committee keep these criteria and the

interpretation of them under continuous review. The team meets at least quarterly with the

Advisory Committee.

Section 3. Fund Management Process 3a. How do you take into account ESG criteria when defining the universe of eligible investments? If appropriate, describe the eligibility threshold and the resulting level of selectivity. Please see details published in our ‘Position on Sustainability and Ethical Criteria’.

17 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

http://www.alliancetrustinvestments.com/global/documents/6076/2013/36468/SRI-position-on-sustainability.pdf and page 5 of the following document.

http://www.alliancetrustinvestments.com/global/documents/3301/A-Guide-to-SRI

3b. How do you take ESG criteria into account into the portfolio construction?

Describe how you link ESG selection with the financial analysis or with portfolio management. More precisely, describe how the results of the analysis of each of the dimensions (E, S and G) are integrated into the investment / divestment process. If applicable, state where you provide information on divestments occurred in the past year on the basis of ESG criteria? If appropriate, explain how potential ESG weightings are defined and describe your treatment of companies that are not subjected to an ESG analysis. ESG impacts affect our investment decisions in the Sustainable Future funds in three main ways:

1) Sustainability matrix. See details contained earlier in this document. All companies are

rated in terms of sustainability on the basis of the product or service they provide (and whether

this is positive or negative in terms of sustainability) as well as how they manage the ESG aspects of

their business. Approximately 45% -50% of the relevant benchmark to a particular fund is excluded

on the basis of the sustainability of the company, leaving us to analyse the more interesting

opportunity set.

2) We carry out analysis based on whether companies are set to benefit or lose out from long-

term structural changes related to Environmental, Governance or Social trends. Our main

sustainability themes are listed on p5 of this document:

http://www.alliancetrustinvestments.com/global/documents/3301/A-Guide-to-SRI

After completing this analysis we look at the value of the companies set to benefit from themes

and when their fundamentals (including valuation) look compelling, they become potential

investments for the funds.

3) Approximately two thirds of the funds (by weight) are beneficiaries of sustainability

investment themes; climate change & energy efficiency, quality of life, sustainable consumption

and resilience – please see our fund factsheets which can be found here:

http://www.alliancetrustinvestments.com/institutional/literature/literature-

library/?type=Factsheet

Once a stock has been given a sustainability rating, (detailed earlier in this document) to

determine whether it is suitable for inclusion in the portfolios, it is then further assessed on the

valuation metrics relevant to its sector. Using a standard template, each member of the team takes

consensus forecasts, and flexes this according their own research and assumptions, using

independent research, company meetings, site visits and sell-side analysis. From this data they

derive a price target to indicate the value achievable over a one and three year time period,

creating a thesis document for each stock. Combined with the sustainability rating, this integrated

analysis provides consistency and transparency and ensures that the team will only invest in

companies which have suitable ESG criteria and ethical characteristics, but are also undervalued by

18 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

the market. The final recommendations are presented to the team for debate and challenge at

formal meetings and the investment recommendations are recorded. The ultimate decision

whether to include the stock in a portfolio lies with the fund manager.

If the portfolios are invested in a company that either breaches the screening criteria (due to an

acquisition, for example) or is falling short of expectations in how the company is managed, the

team will downgrade the company and it will be divested. The fund manager has six months in

which to sell and replace any companies that are no longer eligible for inclusion in the fund.

Typically, the stock will be sold well in advance of this period.

No companies have been divested in the past year on sustainability grounds.

3c. Does (do) the fund(s) have a specific ESG engagement policy?

Please explain what you mean by engagement. Describe how you select the companies/ themes for engagement activities and the impact on the portfolio management of the fund(s). Who undertakes engagement on behalf of the fund (internal and/or service providers)? Yes. Please see our answers at Section 1 and 2a. All members of the investment team carry out engagement activities. 3d. Does (do) the fund(s) have a specific voting policy integrating ESG criteria? Yes/No Yes 3e. Does (do) the fund(s) engage in securities lending activities? No If yes, (i) is a policy to recall the securities in place in order to exercise the voting rights ? (ii) does the counterparty selection process integrate ESG criteria ? 3f. Does (do) the fund(s) use derivative instruments? If yes describe, (i) their nature (ii) the objective(s) (iii) the potential limits in terms of exposure (iv) if appropriate, their impact on the SRI quality of the fund

For the non-UK Equity funds-

The Fund Managers have no need, desire or plans to invest in anything other than equities to fulfil

their investment objectives, but the Funds are permitted to invest in derivatives, including

forwards, for both Efficient Portfolio Management (including hedging) and investment purposes.

The Funds also have the flexibility to hedge their currency exposure, but again the Fund Managers

have no intention of doing so, and would anticipate using this only in periods of extreme currency

movements.

19 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

The Equity funds are not permitted to hold more than 10% of total Net Asset Value in cash

instruments or transferable securities.

For the Alliance Trust Sustainable Future Managed Fund –

It invests in a broad range of worldwide investments based on the Fund Managers’ view of their

long-term return prospects.

This will include shares, bonds, cash and other types of investments such as other funds.

Typically between 45% and 85% will be invested in shares. It will invest only in companies that

meet our rules for environmental and social responsibility.

For the Alliance Trust Sustainable Future Corporate Bond Fund –

It should have at least 80% invested in a broad range of higher quality bonds which are seen to

have less risk and so usually offer lower returns. It may invest in global bonds issued by companies,

governments and large international organisations. Normally 80% of the bonds in the Fund will be

priced in Sterling, or hedged to Sterling. It will invest only in companies that meet our rules for

environmental and social responsibility.

3g. Is a share of the fund(s) invested in unlisted entities pursuing strong social goals? If yes, please provide a brief description of the objective(s) of this investment, in no more than one or two sentences. No Section 4. Controls and ESG Reporting 4a. What internal/external control procedures are in place to ensure the compliance of the portfolio with the ESG rules defined in section 3 of this Code? State who is carrying out the controls, their frequency and within which timeframe the fund(s) have to comply should a breach be detected.

The Sustainable Future team carry out their own controls on the stocks within the Funds to ensure

compliance with the Sustainability Criteria (detailed previously). If the portfolios are invested in a

company that either breaches the screening criteria (due to an acquisition, for example) or is falling

short of expectations in how the company is managed, the team will downgrade the company and

it will be divested. The fund manager has six months in which to sell and replace any companies

that are no longer eligible for inclusion in the fund. Typically, the stock will be sold well in advance

of this period.

The team also consults an external Advisory Committee, which is able to see the companies held in

the portfolios and query any companies it feels may be inappropriate, as well as give guidance on

areas which are controversial or where the team wishes to clarify its position.

4b. Please list all public media and documents used to inform investors about the SRI approach to the fund, and include URLs. This should include a link to the detailed, no more than 6 months

20 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

old, list of holdings of the fund(s). Prospectus http://www.alliancetrustinvestments.com/global/documents/8012/Sustainable-future-ICVC-Prospectus.pdf (semi-) Annual report http://www.alliancetrustinvestments.com/global/documents/8070/SF_ICVC_Report___Accounts_2015.pdf Addendums Not applicable KIID http://www.alliancetrustinvestments.com/search-results?search=kiid Fund Fact Sheet http://www.alliancetrustinvestments.com/institutional/literature/literature-library/?type=Factsheet Dedicated SRI Web page(s) at company / fund level (if applicable) http://www.alliancetrustinvestments.com/sri-hub/ Engagement/voting policy/votes (if applicable) http://www.alliancetrustinvestments.com/global/documents/6076/stewardship-policy-statement.pdf Part 5 for Engagement, Part 6 for Voting Votes: http://www.alliancetrustinvestments.com/global/documents/6076/2015/May/SF-voting-

Q1.pdf

Link to Web page of ESG Analysis provider(s) (if applicable) MSCI IVA http://www.msci.com/products/esg/iva/ Governance Metrics https://esgmanager.msci.com/esgmanager/ Ethical Screening http://ethicalscreening.co.uk/ URL to the research findings that are available to investors (if appropriate) http://www.alliancetrustinvestments.com/institutional/news-and-views/ Detailed fund holdings (no more than 6 months old) http://www.alliancetrustinvestments.com/institutional/search-results?search=holdings CSR Policy of the Company l (if applicable)

http://investor.alliancetrust.co.uk/ati/investorrelations/our-vision-values.htm

21 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

Other (please list): Alliance Trust Investments publishes articles, news, views and details of its SRI team’s activities on

our SRI Hub. Its purpose is to provide an opportunity for our Sustainable Future Funds’ managers to

interact with our clients and investors as well as key industry journalists and specialists.

It was launched in February 2013 and our vision for the SRI hub is to create an online portal where

we can share our views and users can tell us, and each other, what they think. It’s an open and

interactive space, where the prime objective is to encourage dialogue between us, industry figures

and investors.

http://www.alliancetrustinvestments.com/sri-hub/archive/?pages=40#

Additional If applicable, specify what the amount of donations and the percentage of management fees that the fund gave to charities in the last year. Not applicable

22 European SRI Transparency Code Version 3.0 – Alliance Trust Investments

ABOUT EUROSIF

The European Sustainable Investment Forum (Eurosif) is the leading European membership association whose

mission is to develop sustainability through European financial markets.

Eurosif works as a non-for-profit partnership of the national Europe-based national Sustainable Investment

Forums (SIFs) with the support and involvement of Member Affiliates.

Eurosif Member Affiliates include a range of organisations covering the value chain of the sustainable

investment industry, from institutional investors, asset managers to financial services providers, ESG analysis

firms, academic institutes and NGOs.

Eurosif speaks authoritatively and broadly on SRI (sustainable and responsible investment) issues. The main

activities of Eurosif are public policy, research and creating platforms for nurturing sustainable investing best

practices. For more details, please see www.eurosif.org.

National sustainable investment forums in Europe to date include:

• Belsif*,Belgium

• Dansif, Denmark

• Finsif, Finland

• Forum Nachaltige Geldanlagen* (FNG) e.V., Austria, Germany and Switzerland

• Forum per la Finanza Sostenibile*(FFS), Italy

• Forum pour l’Investissement Responsable* (FIR), France

• Norsif, Norway

• Spainsif*, Spain

• Swesif*, Sweden

• UK Sustainable Investment and Finance Association* (UKSIF), UK

• Vereniging van Beleggers voor Duurzame Ontwikkeling* (VBDO), the Netherlands

*Member of Eurosif

For further information on Eurosif or more details on the European SRI Transparency Code, please look at our website, www.eurosif.org and contact Eurosif at +32 (0)2 27414 35 or by email at contact@eurosif.org. Eurosif A.I.S.B.L. 331, rue du Progrès, 1030 Brussels, Belgium Tel. : +32 (0)2 274 14 35 www.eurosif.org

Follow us on: www.twitter.com/Eurosif

Disclaimer – Eurosif does not accept responsibility or legal liability for errors, incomplete or misleading information

provided by signatories in their responses to the European SRI Transparency Code. Eurosif does not provide any financial

advice nor endorse any specific funds, organizations or individuals.

The European SRI Transparency logo signifies that Alliance Trust Investments commits to provide accurate, adequate and

timely information to enable stakeholders, in particular consumers, to understand the Socially Responsible Investment (SRI)

policies and practices relating to the funds.

Detailed information about the European SRI Transparency Guidelines can be found on www.eurosif.org, and information

of the SRI policies and practices of the Alliance Trust Sustainable Future Fund Range can be found at:

www.alliancetrust.co.uk The Transparency Guidelines are managed by Eurosif, an independent organisation. The European

SRI Transparency Logo reflects the fund manager’s commitment as detailed above and should not be taken as an

endorsement of any particular company, organisation or individual.