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United Bankers

S U S T A I N A B I L I T Y R E P O R T 2 0 2 3

United Bankers

United Bankers Plc	Aleksanterinkatu 21 A
Sustainability Report 2023	00100 Helsinki, Finland
unitedbankers.fi	tel. [phone]

CONTENT
Sustainability at United Bankers	5
Responsibility at the centre of operations	9
Risks and opportunities related to climate change -
Climate risk assessment according to the tcfd framework	17
Pursuing climate-resilient growth	26
Towards the green transition with investments	33
Compliance with the UN principles for responsible
Investment in international comparison	38
Responsible investment practices	39
Employees are our most important asset	49
A good workplace is now even better	55
Transparency and reliability as cornerstones of
administration and communication	61
Building a reputation requires listening to stakeholders	63
Corporate social responsibility projects	77
Carbon footprint calculation - methodology, assumptions and sources	80
GRI-index	81

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Sustainability at United Bankers

At United Bankers, sustainability is broadly defined as economic,	the environment and society. This is reflected in our strategy, our val-
social, and environmental responsibility. As a company, we want	ues and our operations. Sustainability is also a key part of the com-
to take responsibility and support the sustainable development of	pany's value creation as well as United Bankers' growth strategy.

UNITED BANKERS' SUSTAINABILITY HIGHLIGHTS 2023

Responsibility at the centre of operations

• United Bankers published its sustainability focus areas and described the related targets and indicators
• United Bankers' reputation clearly improved in the Reputation&Trust survey. The company succeeded in improving its reputation while the reputations of other listed companies were declining, on average
• Customer satisfaction improved to a very high level. The results improved among both retail and institutional clients

The sustainability targets are visible in United Bankers' operations to an increasing extent, and the opportunities created by the green transition are now a significant factor in the development of the business operations. The company seeks to implement its growth strategy by operating in line with international climate targets. In 2023, as part of its own climate targets, United Bankers drew up a climate roadmap for the Group to define both its long- and short- term climate objectives to achieve the targets of the Paris Agree- ment. Progress in sustainability work is also measured in terms of responsible products and services, the company's reputation, customer satisfaction, achievement of equality, and the well-being and competence of employees, among other things.

The continuous development of responsible business operations in cooperation with stakeholders is a priority for United Bankers. The company's target is to promote client satisfaction, in particu- lar, and the well-being and job satisfaction of its employees. United Bankers believes that responsibility is also a way to improve the profitability and competitiveness of its business and that by doing

FIGURE 1: SUSTAINABILITY FOCUS AREAS

the right thing and acting sustainably, the company can increase its positive impact on the environment and society. United Bankers wants to be worthy of the trust of all its stakeholders.

Sustainability focus areas

In 2023, together with the Group's long-term financial objectives, United Bankers announced its sustainability focus areas, including the key targets and indicators related to them. The sustainability focus areas are based on the company's materiality analysis that was conducted in 2022 and they have been grouped as follows:

• Sustainable products and good stakeholder and client re- lations: United Bankers drives the transition to a sustainable economy and increases its clients' wealth sustainably
• Meaningful and inspiring work: United Bankers offers meaning- ful work and inspiring opportunities
• Reliable and transparent governance: United Bankers is trans- parent and accountable for its actions

Pursuing climate-resilient growth

• The company published its climate roadmap and committed to setting climate targets under the SBTi
• The carbon footprint of United Bankers' investment products decreased by 7 per cent and the company's total net emissions halved year-on-year

Towards a sustainable society

• UB Forest Industry Green Growth Fund I LP, which invests in sustainable and resource-efficient forest and bio-based industries, was launched
• United Bankers launched UB Renewable Energy Fund, a new fund focusing on investment in wind and solar power plants
• United Bankers expanded its selection of forest funds and launched Nordic Forest Fund IV, a new fund investing in forests in the Baltic Sea rim countries
• According to the results of the UN PRI's assessment, very good progress was made in sustainability work
• Responsibility of investments promoted through active

ownership (ISS Proxy Voting)	5

Meaningful work and inspiring opportunities

• United Bankers receives Finland's Most Inspiring Workplaces 2023 award. The PeoplePower index, which measures personnel commitment, continued to develop in a positive direction
• Skills development targets were updated
• The incapacity for work percentage continued to fall and was at a very low level at 0.39 per cent (0.48% in 2022)
• Employer image was also at a good level, and according to the Reputation&Trust survey, it had improved on the previous year

Transparency and reliability as cornerstones of administration and communication

• New ESG reports for funds and the UB 360 asset management model were introduced
• United Bankers' UNGP-compliant whistleblowing channel was opened
• United Bankers continued to report in line with the GRI Standards
• United Bankers strengthened responsible value chain management by implementing a Supplier Code of Conduct

Climate change

Responsible

Meaningful

Reliable and

products and

and inspiring

transparent

services

work

governance

Human rights

We drive the transition

We provide

We are transparent

to a sustainable

meaningful work and

and accountable

economy and increase

inspiring opportunities

for our actions

our clients' wealth

sustainably

Biodiversity

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United Bankers wants to take responsibility for society and the environment and contribute to the achievement of the Sustainable Development Goals. In practice, sustainability is reflected in client and stakeholder relations, responsible investment and the product range, employee well-being, and sound corporate governance. In addition, climate change, human rights, and biodiversity are relevant cross-cutting sustainability themes.

Reporting principles

The Sustainability Report covers all United Bankers Group com- panies. The Sustainability Report is published once a year with the Annual Report. This report was published in February 2024 and it covers the period 1 January - 31 December 2023. The sustainability information has not been verified. The report uses the Global Reporting Initiative (GRI) Sustainability Reporting Standards as a reporting framework (with reference to -level). There is no need for adjustments to be made to the 2022 Sustainability Report, which covers the period 1 January - 31 December 2022.

UNITED BANKERS' VALUES

customer	agilit y	team spirit
orientation

EXCELLENCE

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Responsibility at the centre of operations

Targets and achievements 2023:

• United Bankers published its sustainability focus areas and described the related targets and indicators
• United Bankers' reputation clearly improved in the Reputation&Trust survey. The company succeeded in improving its reputation in an environment where the reputations of listed companies were, on average, in decline
• Customer satisfaction improved to a very high level. The results improved among both retail and institutional clients

As a listed company, United Bankers complies with the Finnish Corporate Governance Code for listed companies, the rules of Nasdaq Helsinki and the applicable securities market legislation and the official regulations issued under it, which serve as a basis for open and transparent governance and communication.

International commitments

Since 2012, United Bankers has been committed to the UN Principles for Responsible Investment (UN PRI). United Bankers continuously develops its activities in line with these principles and reports annually to the PRI organisation. United Bankers achieved excellent scores in the 2023 PRI assessment for its own operations and selected asset classes. United Bankers' official PRI Transparencyand Assessment reportwas published in January 2024.

sible investment processes can be found in the chapter Responsible investing.

As of 2021, United Bankers has been committed to assessing the climate risks of its operations according to the international Task Force onClimate-RelatedFinancial Disclosures (TCFD)guidelines. The climate risk assessment is part of the company's responsible investment processes, such as investment due diligence and monitoring, as well as its risk management guidelines and processes. More information on responsible investment processes can be found in the chapter Responsible investing and on risk management in the chapter Managing sustainability risks.

Integrating sustainability principles into practice

Sustainability principles and policies

Our clients and their goals and needs are at the core of our work at United Bankers. United Bankers operates in a economically, en- vironmentally, and socially responsible manner, and promotes the implementation of corporate responsibility in its operations and investments. The company is guided by not only its values, but also by international commitments, best practices, and financial regulation. The key principles and commitments that guide United Bankers' sustainability are set out in the Code of Conductand Principles for Responsible Investment. We also require that the operations of our business partners, such as service providers and suppliers, comply with United Bankers' sustainability standards. The principles and requirements are set out in the Supplier Code of Conductthat was introduced in 2023.

The commitments contained in these principles are integrated into the company's governance system, policies and strategies and their implementation is regularly monitored. The way in which monitoring is carried out varies depending on the subject matter and the context in question. The key players in the monitoring process include the Sustainability Steering Group, the risk management and compliance functions, the company's executive management and ultimately, the company's Board of Directors (see Managing

and leading sustainability). As the Principles for Responsible Investment are central to United Bankers' investments and prod- ucts, their implementation is described in more detail in the chapter Responsible investing.

United Bankers' Code of Conduct

United Bankers' Code of Conduct guides all employees to act in accordance with shared values, guidelines and principles of op- eration. The aim of these is to strengthen mutual trust and open communication within the organisation. The Code of Conduct also supports the promotion of equality and non-discrimination, helps build the company's reputation and creates a secure and confidential framework for managing client and other stakeholder relationships.

At the same time, it aims to advance the external stakeholders' positive image of the company. The Code of Conduct sets out the company's values, business principles, guidelines and practices that help ensure responsible conduct and open interaction with stakeholders. It also guides sustainability management in the United Bankers value chain. More information on the value chain and related Code of Conduct can be found in the chapter Managing the responsibility of supply chains.

In 2023, United Bankers committed to setting climate targets for its operations in line with the international Science Based Targetsinitiative (SBTi). With these targets, United Bankers aims to achieve climate-resilient growth and net zero emissions in accordance with the Paris Climate Change Agreementby the end of 2050 at the lat- est. Climate targets based on SBTi will be set over the period from 2023 to 2025 and the actions needed to achieve them will be integrated into the company's operations and responsible investment processes. More information on climate targets can be found in the chapter Pursuing climate-resilient growth.

In 2022, United Bankers committed to respecting human rights in its operations in accordance with the UN Guiding Principles on Business and Human Rights (UNGP). United Bankers exercises due diligence and avoids violating human rights in its operations and business relationships. This commitment covers the principles of fundamental rights as defined in the UN Declaration of Human Rightsand the International Labour Organisation (ILO) declaration. The integration of human rights considerations into responsible investing and the Group's activities as a whole were continued during 2023.

United Bankers' human rights commitments are integrated into the company's responsible investment processes, including due diligence and monitoring processes. More information on respon-

ThePrinciples for Responsible Investmentbring together the key principles, commitments and practices that guide investment activities. Central to this is a commitment to due diligence in the selection and monitoring of investments and the selection of part- ners. The principles also include an assessment of sustainability risks and principal adverse impacts, as well as commitments on human rights and climate change, which are supplemented by United Bankers' climate roadmap that was published in 2023.

United Bankers is seeking to make the company's values, Code of Conduct and Principles for Responsible Investment a part of every employee's daily life by expanding on individual themes in the personnel magazine and by discussing their practical aspects at biannual personnel events. The Code of Conduct is part of the orientation of all new employees and regular training sessions are organised for all employees on its content and any potential up- dates. In late 2023, United Bankers introduced mandatory training on the Code of Conduct for all personnel that will be repeated every year. By the end of the year, 67 per cent of employees had completed it. In addition, a brief description of the Code of Conduct was provided to all personnel in the annual training related to sustainability at United Bankers. In 2023, 81 per cent of personnel completed this training. The Code of Conduct is communicated to other stakeholders as described in Table 2. In addition, the Code of Conduct is publicly available on the United Bankers website.

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Promoting sustainability together with interest groups

In addition to its own activities, United Bankers' policy is to promote the sustainability of the financial sector as well as responsible investment through a range of advocacy organisations and initiatives. United Bankers has been a member of the Finnish Association for Responsible Investment (Finsif ry) since 2018. Fin- sif's mission is to promote sustainable investing in Finland. The company is a member of Finance Finland and is on its Sustainability Committee, which, among other things, comments on national and international EU regulation in the preparatory phase and promotes key sustainability issues in the financial sector. United Bankers is also a member of the Finnish Venture Capital Association and, among other things, is active in the association's legal working group.

UN Sustainable Development Goals

These goals have been identified as key priorities based on United Bankers' activities and the focus areas of its core funds. Goals 7 and 9 were added to the list of key goals due to the launch of new funds investing in renewable energy and green innovations in the forest industry value chain in 2023. United Bankers seeks to especially contribute to the achievement of these goals both through its own activities and through the investment products it offers. The role of businesses and investors in achieving the SDGs is therefore crucial, and financial sector companies in particular have an outsized impact on bringing about change, as they manage significant amounts of capital and control the allocation of finance. United Bankers therefore seeks to take the SDGs into account also through the design of its product range and new products.

The Sustainable Development Goals (SDGs) aim to put global development on a path that safeguards human well-being and human rights, economic prosperity and social stability in an environmentally sustainable way. The SDGs are universal, although actions to promote them may vary from country to country and

The aim is to ensure that sustainability work and targets meet stakeholder expectations and focus on topics that are material to the company. Each focus area has different targets and indicators, the progress of which is monitored in the company's sustainability reporting. The attainment of sustainability goals is also increasingly linked to the company's remuneration policy and practices. The materiality analysis is based on workshops held with United Bankers' management team and the Board, financial industry benchmarking, and comments and perspectives received from key stakeholders. United Bankers' ESG team and Sustainability Steering Group reviewed the results thematically to assess the relevance of environmental and social impacts in areas identified as important by stakeholders.

Issues relevant to United Bankers' sustainability have been grouped into clear themes. The materiality analysis and prioritisa- tion of the topics took into account the importance of the issues

for stakeholders and for United Bankers' business, as well as the company's ability to develop the areas and thus the sustainability of its business. United Bankers' stable earnings performance, the sustainability of its investing activities and products and services, together with long-standing client and partner relationships and a thriving team, are issues that United Bankers has identified as particularly important in ensuring its competitiveness and creating long-term value for its stakeholders. The foundations of sustainability include customer privacy and data security, prevention of corruption and money laundering, sustainability risk management and transparent and sound corporate governance, all of which financial regulation has defined a clear framework for.

In the future, the sustainability focus areas and their specifications will be updated and developed in accordance with the new Corporate Sustainability Reporting Directive (CSRD), for example.

United Bankers aims to contribute to the achievement of the UN Sustainable Development Goals. Among the SDGs, the most im-

sector to sector. All the SDGs are closely interlinked: no one goal can be pursued at the expense of another.

TABLE 1:

GROUPING BASED ON MATERIALITY ANALYSIS (PRIORITIES, KEY ISSUES, FOUNDATION)

portant for United Bankers are:

• Goal 5: Gender equality
• Goal 7: Affordable and clean energy
• Goal 8: Decent work and economic growth
• Goal 9: Sustainable industry, innovation and infrastructure
• Goal 12: Responsible consumption and production
• Goal 13: Climate action
• Goal 15: Life on land

Defining focus areas

At United Bankers, sustainability is broadly defined as econom- ic, social, and environmental responsibility. This includes both the company's own operations and its investment activities through its products and services. United Bankers published its sustainability focus areas in early 2023, together with the company's financial targets. The focus areas were specified through a materiality analysis in 2022.

FOCUS

AREAS

IMPORTANT TOPICS

•	Stable earnings performance	The main areas of sustainability work that UB has identified
• Responsible investing and sustainable products	as important to ensure its future competitiveness and to create
•	Long-term and trusting relationships with	value for its stakeholders in the long term.
	clients and partners

• Open communication with stakeholders
• A thriving team

•	Top-level expertise	Issues relevant to UB and its stakeholders that enable more sustaina-
•	Direct environmental impact	ble business. These are partly determined by law.
• Fairness, equality, equity and diversity
• Employer image and brand	However, UB itself determines the extent to which it develops these
		areas of sustainability in order to be a sustainable business and to
		meet the expectations of its stakeholders now and in the future.

Why are companies important? When the UN Sustainable Development Goals and Agenda 2030 were being prepared, it became abundantly clear that the objectives could not be achieved through official development cooperation alone. According to some estimates, the cost of achieving the SDGs is USD 4,000 billion. A major percentage of this money should come from the private sector - i.e., from companies and business operations. Yet it is obvious that companies are unable to solve all the problems related to sustainable development. Attaining the Sustainable Development Goals calls for cooperation between numerous sectors, and responsible businesses have an important role to play in this.

FOUNDATION

• Customer privacy and data security	The areas that lay the foundations for wealth management and
•	Taxes and tax footprint	are directly linked to stakeholders' trust in UB and its business.
•	Prevention of corruption, bribery and	These are always managed in accordance with applicable
	money laundering	legislation and regulatory requirements.

• Sustainability risk management- Reliable and transparent governance (corporate governance code)

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TABLE 2:

SUSTAINABILITY PROGRAMME THEMES, OBJECTIVES, MEASURES AND RELATED PRINCIPLES OF OPERATION

	Impacts	Main policies and guidelines to	Goals 2023	Measures and
		manage impacts		achievements 2023

We provide meaningful work and inspiring opportunities

	Impacts	Main policies and guidelines to	Goals 2023	Measures and achievements
		manage impacts		2023
We drive the transition to a sustainable economy and increase our clients' wealth sustainably
Sustainable products and	Climate, social, human	Principles for responsible invest-	UB's climate roadmap and	UB's climate roadmap and its
services	rights and biodiversity	ment	setting climate targets	SBTi commitment will further
	impacts of UB products			refine the management of the
		Guidelines on sustainability risk		climate impacts of UB's invest-
		management		ments and its own operations
		UB climate roadmap 2023	Promoting investment	UB performed excellently in the
		activities in line with the UN	areas of responsible invest-
			Principles for Responsible	ment management, strategy
			Investment (UN PRI)	and verification (4/5 stars) and

Enthusiastic staff and a close-knit working community

Top-level expertise

A diverse work community

Impact on workers' well-being, rights, skills and equality

Human resources policy and policies and guidelines on staff practic- es, including the equality plan and the workplace development plan

UB Code of Conduct

100% of performance	Performance reviews recorded
reviews held	for 62% of staff in 2023
Employee survey:	The overall result of the em-
PeoplePower index at least	ployee survey improved on the
at the 2022 level.	previous year and UB again
With a score of "Good"	received the Finland's Most
(AA), UB is one of the most	Inspiring Workplaces award
inspiring places to work in
Finland
Setting training objectives	Aiming for an annual average
for personnel	of 15 hours of training in expert
	positions
Achieving equality objec-	UB achieved the equality ob-
tives	jectives set for the Group

				various asset classes (5/5
				stars) in the first comparison
				under the new UN PRI frame-
				work
			Setting sustainability targets	Sustainability targets for portfo-
			for forest funds and real	lio management of forest funds
			estate funds	and real estate funds
Sustainable financial devel-	The impact of UB's ac-	Policies and guidelines for product	1) SFDR 8 and 9 products	The vast majority of United
opment of the company	tivities on the realisation	development and sales	account for at least 50% of	Bankers' product sales were
	of the green transition		UB's assets under manage-	for SFDR 8 and 9 products
	and the economic impact		ment
	on investors, clients,
	employees and other		2) Sales of SFDR 8 and
	stakeholders		9 products at least 50%
			of UB's sales (excluding
			external funds and bonds)
Client and stakeholder	Impacts for example on	Client relationship management	We improve client satisfac-	Based on client satisfaction
relations	the financial situation of	policies and guidelines	tion among both retail and	surveys (SFR and UB client
	clients and investors,		institutional clients	satisfaction survey 2023),
	client experience and sat-	Policies and guidelines for manag-		both client groups' satisfac-
	isfaction with the quality	ing stakeholder relations		tion improved on the previous
	of service, data protec-			surveys
	tion and security	Policies and guidelines on client
		data protection and security
		Policies and guidelines on client
		feedback and the whistleblowing
		channel

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We are transparent and accountable for our actions

Direct environmental and	Climate, social, human	Policies and guidelines on procure-	Setting UB climate targets	UB's climate roadmap and its
social impacts of UB's	rights and biodiversity	ment and supply chains	for UB's own activities as	SBTi commitment will further
activities	impacts of UB's activities		part of the climate roadmap	refine the management of the
		Supplier Code of Conduct in 2023		climate impact of UB's invest-
				ments and operations
Managing sustainability	Climate, social and	United Nations Principles for Re-	Implementation of internal	UNGP and TCFD policies bet-
risks	human rights impacts	sponsible Investment (PRI)	guidelines for human rights	ter integrated into the Group's
	of UB's products and		risk management in line with	risk management framework
	activities	Policies and guidelines on risk	the UNGP principles, and
		management and portfolio manage-	for climate risk management
		ment, and in particular on sustaina-	in line with the TCFD
		bility risk management
Reliable and transparent	Setting UB climate	Policies and guidelines for the man-	Creation of UB's Supplier	Supplier Code of Conduct
governance	targets for UB's own	agement of investments and client	Code of Conduct and its	implemented as part of the
	activities as part of the	assets	implementation in the com-	company's supply chain man-
	climate roadmap	Policies and guidelines on the	pany's supply chains	agement
		prevention of money laundering,	Cases of corruption, bribery	UB's reputation improved on
		corruption and conflicts of interest
		or money laundering: no	the previous year to a good
		Policies and guidelines on reporting,	offences	level in the Reputation&Trust
		accounting, taxation and financial		survey
		Improving the company's
		management
		reputation among investors
		Policies and guidelines on corporate
		governance
		Policies and guidelines on data
		security and data protection

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Sustainability programme and impact monitoring

The management of United Bankers' responsibility areas and the related target setting is encapsulated in the company's sustainability programme, which is based on the results of the materiality analysis. The sustainability programme defines measures and short- and long-term objectives for developing the company's responsibility impact management. The management of material impacts is integrated into the company's corporate responsibility policies and guidelines. The methods and indicators for monitoring impacts are also defined in these internal process guidelines. The company's risk management and compliance functions contribute to ensuring that impact management processes are working properly.

The measures and targets contained in the sustainability programme aim to further develop the management of potential neg-

FIGURE 2:

MANAGING AND LEADING SUSTAINABILITY

ative impacts and to promote positive impacts. The Sustainability Steering Group and the executive management ensure that the responsibility programme is updated annually. The company's Board of Directors approves the responsibility programme and monitors its implementation and progress in accordance with the Board's annual calendar.

Managing and leading sustainability

Sustainability is a central part of United Bankers' operations and is integrated into many of the Group's activities. In addition to the United Bankers Board of Directors, subsidiaries' Boards and executive management, the United Bankers Group has a Sustainability Steering Group and an ESG team to organise and implement sustainability and responsible investment.

The Board of Directors of the parent company is responsible for the management and proper organisation of the United Bankers

Group. The Board of Directors decides on the organisation and methods of sustainability work within the Group and monitors sustainability activities, their results and the associated risks. The Board of Directors of United Bankers establishes the Group's sustainability principles and Principles for Responsible Investment, which ensure that activities comply with laws, regulations, guidelines and good international practices. Principles for Responsible Investment and the related internal guidelines also include due diligence processes for investment activities. As part of the organisation of sustainability, the Board of Directors also approves the sustainability objectives contained in the company's sustainability programme and monitors their implementation.

The Board of Directors of United Bankers also monitors and supervises the effectiveness, efficiency and procedures of internal control and audit and risk management and approves the policies on internal control and audit and risk management. This also includes overseeing due diligence processes related to other aspects of United Bankers' operations. Monitoring is carried out in accordance with the Board's annual calendar. The role and responsibilities of the Board of Directors are described in more detail in the chapter Corporate Governance Statement.

for preparing an update of the Principles for approval by the Board of Directors.

The ESG team acts as an expert team on sustainability issues, supporting portfolio management, business operations, and risk management on sustainability issues as well as develops the sustainability of operations. The ESG team reports to the Head of ESG.

Managing sustainability risks

The sustainability risks of United Bankers' activities include both the sustainability risks related to investments and the sustainability risks of the Group's other activities. A significant part of United Bankers' sustainability risks relates to investments and their impacts and performance. During 2022, United Bankers updated the sustainability risk management principles for its investment products, updated the risk management policies for its investment products and clarified the sustainability risk management principles. In addition, the identification of human rights risks related to business relationships was integrated into the company's operations.

The Sustainability Steering Group monitors the sustainability risks of United Bankers' operations, identifies ways to manage them,

UNITED BANKERS GROUP BOARD

UB ASSET MANAGEMENT BOARD	UB FUND MANAGEMENT BOARD
MANAGEMENT TEAM
	Reporting
	SUSTAINABILITY
	STEERING GROUP

PORTFOLIO MANAGEMENT:	ESG team	Role: Body responsible	RISK MANAGEMENT
				for monitoring and
Portfolio	Investment	Allocation	ESG (Management)	developing corporate	UB Group Risk	UB Fund Management
managers	committees	team		responsibility	Management	Company Risk
					• Reporting and monitoring	Management
					of operational risks, incl.	• Sustainability risks
					sustainability risks	• Fund risk reporting
					COMPLIANCE	Guidance
						Monitoring
						Training

The executive management of the parent company (management team) and the CEOs of each Group company manage the day- to-day administration of the Group companies in accordance with the principles and guidelines set by the Board of Directors of the parent company. A person responsible for sustainability has been appointed to the management team, and the Head of ESG reports to this individual. In practice, the executive management ensures that the principles and regulations governing sustainability are integrated into the company's policies and processes. The executive management reports to the Board of Directors on sustainability issues in accordance with the Board's annual calendar.

To steer sustainability and responsible investment, United Bankers Group has a Sustainability Steering Group, chaired by the Head of ESG. The Steering Group reports to executive management. The Steering Group is responsible for developing and monitoring the sustainability of the business. Among other things, the Steering Group plans the company's sustainability programme and the setting of its targets. It is also responsible for providing guidance on the application of the Principles for Responsible Investment and

provides guidance on managing sustainability risks in investments and improves the sustainability performance of its operations. The risk management function integrates sustainability risks into the Group's risk management.

In particular, United Bankers focuses its investments on identifying and managing the following liability risks:

• Environmental, social and governance risks (so-called traditional ESG risks)
• Human rights risks
• Climate risks

Especially human rights risks and climate risks are considered not only from an investment perspective but also from the perspective of the United Bankers Group, and are therefore separated into their own entities. This is because United Bankers is committed to operating in accordance with the principles of the UN Global Compact (UNGC) and reporting its climate risks in accordance with the TCFD.

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RISKS AND OPPORTUNITIES RELATED TO CLIMATE CHANGE

CLIMATE RISK ASSESSMENT ACCORDING TO THE TCFD FRAMEWORK

In recent years, theTask Force onClimate-RelatedFinancial Disclosures (TCFD)has established itself as the world's leading standard for climate-relatedfinancial reporting. According to the TCFD, the direct and indirect business impacts of climate change are considered through four main elements: governance, strategy, risk management and metrics. Consistent and transparent climate reporting leads to better risk management, more informed investment decisions and more integration of climate issues into strategic management. In 2021, United Bankers committed to reporting on climate change risks and opportunities in line with the TCFD recommendations. United Bankers' first TCFD report will be published as part of the 2023 sustainability reporting.

GOVERNANCE

The risks and opportunities presented by climate change have a significant impact on United Bankers' investment activities and sustainability work. The Board of Directors and the management team of United Bankers have included the work to accelerate the mitigation of climate change and the green transition in the entire Group's focus areas for both strategic and humane reasons. At the Board level, climate issues are regularly addressed as part of the Group's broader sustainability work. The Board of Directors also approves the United Bankers Principles for Responsible In- vestment, which guide investment activities by defining responsible investment policies and practices. The Head of ESG of United Bankers is part of the extended management team that meets several times a year.

In addition to the Board of Directors and the management team, climate topics are discussed monthly in the Sustainability Steering Group, coordinated by the Head of ESG. The Steering Group includes people from the Management Team as well as from the legal, risk management, communication, and portfolio management functions. The Steering Group oversees the implementation of United Bankers' Principles for Responsible Investment in the Group's investment activities and determines how climate risks and opportunities are considered in investment decisions. Practical climate work is developed within the United Bankers ESG team to meet the needs of the Group as a whole. Climate-related development projects are drafted by the ESG team and taken through the Steering Group to the management team and the Board of Directors for discussion, thus deepening the dialogue between management, shareholders, and climate experts. Efforts are also being made to integrate climate targets into United Bankers' business through, among other things, United Bankers' products, climate targets and remuneration.

STRATEGY

Working to mitigate climate change is one of the focus areas of United Bankers' business. At United Bankers, the most significant climate risks and opportunities relate to investment activities, as the direct environmental impact of the Group's own operations is limited. In 2022, the majority (99.6%) of the Group's total carbon footprint was made up of the carbon footprint of the investments in the products offered by the group (Scope 3, Category 15). This highlights the importance of climate work in asset management.

United Bankers' process to identify climate-related risks and opportunities in the short, medium, and long term was launched in late 2022, with the aim of identifying the most significant climate factors in each asset class to ensure regular monitoring.

Climate risks and opportunities affect United Bankers' business, strategy, and budgeting in many ways. A climate roadmapto guide United Bankers' overall climate work was published in 2023. The climate roadmap aims to ensure that United Bankers' activities are in line with the Paris Agreement. In its climate roadmap, United Bankers commits to setting medium and long-termscience-based climate targets for its operations, in line with the international Science Based Targets initiative (SBTi) and the objectives of the Par- is Agreement. In addition, United Bankers commits to reducing greenhouse gas emissions from its investment portfolios and increasing their carbon sequestration so that it exceeds emissions by 2030 at the latest. The climate roadmap will be refined during 2024-2025 to define detailed climate targets for different asset types and business areas and the measures to achieve them, in line with the SBTi initiative.

Climate work at United Bankers focuses on the continuous development of investment products and their strategies to consider climate -related risks and opportunities. Climate metrics are reviewed throughout the investment period, from the investment decision to the sale of the investment. These metrics include the carbon intensity of the investment and the carbon risk of the investment as defined by the TCFD, which describes the investment's transition risk. In addition, United Bankers' Principles for Responsible Investment define climate-based exclusion criteria for activities such as thermal coal production, its use in energy generation, and oil

sands extraction. The climate-based exclusion was supplemented in 2023 with a policy for the oil and gas sector. Active engagement and voting on climate-related issues at shareholder meetings are also an important part of daily portfolio management. Climate opportunities are an important part of United Bankers' product development and investment strategy formulation.

A climate scenario analysis for United Bankers' investment products will be carried out in the timeframe and scope defined in the Group's climate roadmap. Climate scenario analysis and calculation methods are constantly evolving, and monitoring these developments is an integral part of the work of the United Bankers Sustainability Steering Group and the ESG team.

RISK MANAGEMENT

According to the TCFD, climate risks are divided into two main categories according to their nature. Physical risks describe natural disasters and extreme weather events resulting from the progression of climate change, and are typically classified into acute (e.g. forest fires and floods) and chronic (e.g. sea level rise due to melting glaciers) risks based on time horizons. Transition risks describe the new market-based risks created by actions people and societies take towards a low-carbon lifestyle in terms of legislation, technology, markets, and reputational damage. Climate risks are often regional, i.e. different regions are exposed to different risks. Climate risk management is an integral part of United Bankers' sustainability risk management. In addition to United Bankers portfolio managers, the Sustainability Steering Group provides guidance and decides on certain sustainability risk management measures, including the interpretation of the United Bankers exclusion list,

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as appropriate. Information and analysis concerning risks as well as the recommendations and decisions of the Steering Group are also shared with the Group Risk Management function. In addi- tion, United Bankers seeks to contribute to the advancement of sustainable investing and the minimisation of sustainability risks through initiatives such as co-ownership initiatives, participation in general meetings, and direct corporate influence. The range of tools varies depending on the investment and the role of United Bankers.

Climate risks are identified and assessed as part of United Bank- ers' daily portfolio and risk management. Responsibilities are divided so that the risk analysis of individual investments is primarily the responsibility of portfolio management, while the management of the aggregate climate risk of United Bankers' products is the responsibility of the ESG team and the Sustainability Steering Group. The Risk management function integrates climate risks into the risk management of the Group as a whole. The Board of Directors is responsible for the direction of the company's climate strategy. The risk analysis utilises company-level data from several independent ESG data sources, including Morningstar, Sustainal- yticsand Bloomberg. In addition, United Bankers actively monitors the setting and achievement of climate targets through CDP and other similar databases.

For fixed income and equity funds, climate risk analysis centres around carbon intensity and carbon risk indicators, which allow portfolio managers and the ESG team to quickly understand the relative greenhouse gas emissions of a company and its exposure to transition risk. If the indicators indicate a high level of climate risk, the next step in the analysis is to examine the current status of and progress towards the company's science-based climate tar- gets. The analysis will also include, where appropriate, a comparison of the climate risk of the investee within a relevant reference

group, as climate risks depend on the company's industry and geographical location. The physical climate risks of fixed income and equity funds are assessed and monitored on an annual basis using physical risk metrics developed by Impact Cubed, an analytics company. The physical climate risks of fixed income and equity funds are described in the table 4.

Carbon risk is a measure of transition risk developed by Sustaina- lytics. The carbon risk indicator shows the level of risk to the value of an investment caused by the transition to a low-carbon econo- my. The indicator also shows how vulnerable an asset is to changes originating from the fossil fuel phase-out and the green transi- tion. Low carbon risk indicates good readiness, and high carbon risk indicates poor readiness concerning the reduction of fossil fuel use in business operations.

The climate risk analysis of real estate funds focuses on physical climate risks, unlike that of fixed income and equity funds. As United Bankers' real estate funds invest in all Nordic countries except Iceland, the average climate risks are significantly lower than in Central Europe and the Americas, for example. In terms of regional risks, some properties in coastal areas are at risk of flooding. In terms of climate risk, properties are categorised as low, medium, or high risk. United Bankers works to keep the climate risk of its property portfolios low. In the near future, the overall climate risks of the properties will be assessed by an external expert consultant. The GRESB international real estate sustainability assessment, which includes several climate risk indicators, will also be used to assess real estate investments.

In forest funds, the management of physical climate risks is strongly linked to the management of the fund's financial risks. The forest properties that forest funds invest in are directly exposed to both acute and chronic physical risks, while the timber and fibre mar-

kets can be affected by new regulatory risks such as biodiversity and renewable energy regulation. United Bankers aims to develop climate risk indicators suitable for forest funds.

METRICS AND TARGETS

United Bankers' objective is to keep the climate risks of the entire Group at a level that does not result in significant negative im- pacts. Methodologies and metrics for assessing climate risk vary by asset class and some further development is required. United Bankers aims to proactively identify the climate risks that are relevant to its operations and to identify opportunities related to the green transition.

United Bankers aims to reduce the negative impacts of its invest- ments, increase the positive impacts of its investments on socie- ty, the environment and good governance, and actively promote sustainable practices. The carbon footprint of the Group and its products was calculated for the second time in 2023. The calculation includes United Bankers' funds as well as discretionary asset management investment portfolios where United Bankers makes investment decisions on behalf of the client. More information on the company's carbon footprint can be found in the chapter Pursuing climate-resilient growth.

Comprehensive information on greenhouse gas emissions is essential for planning and targeting climate action. The carbon footprint calculation will be used annually to monitor the targets defined in United Bankers' climate roadmap and to manage the Group's comprehensive climate actions.

CLIMATE CHANGE-RELATED

OPPORTUNITIES

United Bankers wants to take responsibility for mitigating climate change and offer its clients climate-friendly solutions. United Bankers aims to make the most of the opportunities related to climate change in the development of the Group's business. The design of new products particularly takes climate considerations into account. Today, United Bankers' alternative investment funds and real asset funds in particular offer the opportunity to invest in building a sustainable society and advancing sustainable growth and innovation. Investing in United Bankers' fund makes it possible to invest in areas such as real estate, forests that mitigate climate change, or green innovations in the forest sector. The aim is that United Bankers' products will continue to offer clients even more opportunities to grow their wealth with the help of the green transition.

As an example of the evolution of its product range, United Bankers launched the new UB Renewable Energy Fund, which focuses on renewable energy and the green transition in the energy sector, in 2023. This fund offers investors the opportunity to benefit from the transition of the energy sector and the associated value cre- ation. In summer 2023 United Bankers expanded its forest fund family with the new UB Nordic Forest Fund IV, which contributes to climate change mitigation through sustainable forestry by investing extensively in forests in the Baltic Sea region. In addition, the UB Forest Industry Green Growth Fund I, which was launched in 2022 and started investing activities in 2023, strengthens United Bankers' product range by focusing on green innovation in the forest and the bio-based industries. More information on United Bankers' products can be found in the chapter Towards the green transition with investments.

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