Calvert Research and ManagementA global leader in Responsible Investing

Tools of change2020 Calvert Engagement Report

Table of contents 4 Calvert’s engagement approach

How research and engagement work together

Proxy voting

Direct dialogue

Shareholder resolutions

Public advocacy

6 Key results of 2019 engagement

Proxy results

Direct dialogue and collaborative efforts

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Calvert Research and Management (Calvert) recognizes the contribution that free markets and

competition have made in lifting living standards globally. We are also acutely aware of the risks to the

long-term health of the environment and the stability of the social and economic system that have come

along with this progress. As a responsible investor, we seek to understand the challenges facing the world

today, ascertain how companies are positioned to respond to those challenges and allocate capital in a

manner that drives positive change. As a complement to our research, structured engagement in pursuit

of improving environmental and social outcomes – as well as long-term shareholder value – is a core

component of our investment approach. In accordance with that, Calvert maintains a dedicated team of

engagement professionals who use our research to uncover financially material opportunities where a

change in a company’s environmental, social and governance (ESG) approach could help mitigate risk or

take advantage of opportunities more effectively.

Our engagement program over the past year continued our decades-long history of working with

companies to address critical issues. In 2018-2019 these issues included dialogues on setting greenhouse

gas (GHG) emissions targets, data security, the ability to manage through a global energy transition,

improving board/employee diversity and adopting water stewardship policies, among many other

important issues. In addition, our engagement efforts encouraged company action on gun violence and

opioid addiction, both of which continue to be major US societal issues. We also advocated for shareholder

rights and preparing for the impacts of climate change in testimony before the US Senate.

Investors, companies and society must grapple with a number of pressing concerns today. Responsible

investors work within and help to strengthen a set of global norms, held individually and promulgated

worldwide. These global norms, expressed in agreements such as the United Nations Sustainable

Development Goals, United Nations Principles for Responsible Investment (UN PRI) and the Paris Climate

Accord, provide a framework for investors and businesses to create a more just and sustainable world.

Critical to those efforts is a robust program for engaging corporations on material ESG issues, which is

more essential now than ever before.

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Calvert’s engagement approach

Engaging with corporations, which exert substantial influence over every aspect of society, allows Calvert to help address critical sustainability issues that matter to business, our shareholders and society as a whole. As the connection between a company’s environmental, social and governance (ESG) practices and its financial success becomes clearer, engagement aimed at improving corporate ESG performance increasingly aligns with the creation of shareholder value.

As a responsible investor, Calvert considers opportunities to improve our position as a shareholder in our portfolio companies and which tools are best suited for driving the positive change we hope to see. Our research system helps discover areas where individual companies can benefit from improving their performance on ESG areas that are financially material to their businesses. Understanding an ESG profile and involvement in controversies can provide a signal to us of an occasion for a company to reduce risk in its operations or to

capitalize on an opportunity. We believe that active ownership is essential for improving one’s position as a shareowner and, therefore, have made it an integral part of Calvert’s approach to Responsible Investing.

Rigorous corporate engagement can improve corporate behaviors, and contribute to a more sustainable and equitable world, and potentially contribute to an investment’s business prospects.

How research and engagement work together

Calvert’s engagement and research teams work closely together to maximize the opportunities for successful engagement. Our research team identifies the specific ESG factors that are most likely to be financially material within a given subindustry in which they specialize, ultimately guiding our investment decisions. Our research also identifies opportunities where corporate engagement can have a material financial impact for shareholders. This combination helps us to alert companies to opportunities for improvement and explain how such a change may help it to become a more sustainable and growing company over time.

Calvert has a team with specific expertise in talking to companies about issues that are important to shareholders. We seek to expose them to a perspective that is very relevant for their business model and long-term success. This approach also offers a different perspective than the one they get from other conversations either internally or on Wall Street, where the typical concern is around earnings or other short-term issues.

Proxy voting

Calvert’s proxy voting guidelines, available on our website, outline our approach to voting on critical ESG issues facing corporations. Proper governance is foundational to corporate success; some governance structures, by virtue of their design, weaken accountability. while others are better suited to create accountability of management to the board and of the board to shareholders. Calvert’s proxy voting guidelines support governance structures and policies that keep the focus of company management on long-term corporate health and sustainable financial, social and environmental performance. We also believe in the importance of disclosure and transparency and, as such, post all votes to our website within 72 hours of being cast and, in almost all cases, in advance of the meeting so our clients and the general public can easily see how we voted.

Furthermore, we appreciate that issues brought to shareholders may change over time, as both investors’ concerns and rules governing inclusion of specific items in corporate proxies change. Corporate governance laws and best practice codes are continuously evolving, worldwide. We have constructed our guidelines to be both general enough and sufficiently flexible to adapt to such changes, and we periodically update them to reflect evolving norms.

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Direct dialogue

Respectful and constructive direct dialogue with senior management, built on a foundation of solid research, respect and an understanding of shared goals, is a core component of active ownership. Calvert engages directly with companies both on its own and as part of investor or broader stakeholder coalitions.

When Calvert’s research team uncovers an opportunity to potentially enhance shareholder value and improve company performance by taking advantage of an opportunity or mitigating a risk, we engage directly with management through periodic phone calls, letters and meetings to raise concerns and identify opportunities, operating on our commitment to encourage concrete progress across sectors of the economy.

As dialogue takes place, Calvert evaluates success based upon the concrete actions a company takes. In some cases, this involves the release of requested information or disclosure. As engagement develops, positive outcomes may include a company establishing or strengthening a policy, adding members to the board, developing risk management approaches or committing to specific performance improvements. Other positive outcomes include developing constructive relationships with companies we hold in our portfolios, raising awareness among investors broadly and contributing to industry best practices. When an engagement is completed, we typically maintain dialogue to track progress.

Shareholder resolutions

Shareholder resolutions are a way for investors to get issues that are important to them onto the proxy ballot. These often call for the company to take specific action, and even though the results of the vote are generally nonbinding, they can serve as an important signal to companies about investor interest in specific issues that may not otherwise be a priority for them. Calvert only files proposals in cases where management does not respond in a constructive manner to our engagement.

Public advocacy

Calvert takes advantage of opportunities to address lawmakers to educate them on issues related to Responsible Investing. This may take the form of testifying before legislative groups – as CEO John Streur and Director of Corporate Engagement John Wilson did before Senate subcommittees in 2019 – and working with regulators and policymakers to make sure they understand our position on critical issues.

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Key results of 2019 engagement

The past year marked another successful engagement season for Calvert. Working both on our own and with coalitions, we identified opportunities to use the tools at our disposal to drive positive change:

■ We continue to make our shareholders’ voices heard via proxy voting, adhering to our proxy guidelines to support issues that we believe improve a company’s long-term health as well as the society and environment in which it operates.

■ We testified before two Senate subcommittees on mitigating the potential effects of climate change on investment returns, on the application of ESG principles

in investing and on the role of asset managers, proxy advisors and other intermediaries.

■ We engaged in direct dialogue with selected companies on issues that included gun violence, climate change, clean energy and clean water.

■ We collaborated with coalitions and partners to further amplify our shareholders’ voices and work for positive change.

Proxy results

During the 2018–2019 proxy season (“reporting period”), Calvert voted 907 shareholder proposals on behalf of the Calvert Funds. Calvert voted against management on shareholder proposals 51% of the time.

The top three categories of shareholder proposals on which Calvert voted during the reporting period were: director-related (44%), business matters (16%) and miscellaneous (11%). Although most of the director-related proposals pertained to board composition (27%), shareholder voting rights and auditor concerns were also popular issues. With respect to business-matter shareholder proposals, 41% of the votes related to requiring an independent board chair with charter amendment proposals following closely behind. Lastly, 64% of the miscellaneous shareholder proposals related to political contributions or lobbying disclosure, and 21% related to reporting on employment diversity and the gender pay gap. Additionally, 10% of the shareholder proposals that Calvert voted during the reporting period related to health and environmental issues, including climate change, greenhouse gas (GHG) emissions and phasing out nuclear facilities.

Some specific areas of interest included:

Climate change: During the Reporting Period, on shareholder proposals related to climate change, Calvert voted:

■ For all six shareholder proposals to require companies to create a report on climate change.

■ For all 10 shareholder proposals regarding GHG emissions.

■ For both shareholder proposals to establish an environmental or social issue board committee.

Diversity and Equal Employment Opportunity (EEO): Because women and minorities are still significantly underrepresented in the ranks of senior corporate management and other high-income positions, and overrepresented in the more poorly paid categories, it is critical to measure company progress and encourage laggards to push forward. Calvert voted:

■ In favor of all 14 shareholder proposals relating to the gender pay gap (100% of the votes were against management).

■ In favor of all four shareholder resolutions to report on pay disparity (100% of the votes were against management).

Sustainability reporting: As companies strive to translate the concept of sustainability into practice and measure their performance, the result has been a growing demand for broadly accepted sustainability performance indicators and reporting guidelines. Calvert ordinarily supports proposals asking companies to prepare sustainability reports, and will ordinarily support proposals requesting that companies conduct social and/or environmental audits of their performance. Calvert voted for all three shareholder proposals to request companies to provide a report on sustainability (all three against management).

Independent board of directors: Many proxy votes relate to the composition of a company’s board of directors. One key topic is independence. In our view, a majority of the board should be composed of independent directors. In addition, key committees — including the audit, compensation, and nominating and/or governance committees — should be composed exclusively of independent directors. These directors should not have a material financial or personal relationship with the company or any of its managers

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that could compromise the objectivity and fiduciary responsibility to shareholders. Calvert voted in favor of 98.3% of the shareholder proposals requiring an independent board chair.

Human rights: Global corporations often do business in countries lacking adequate legal or regulatory structures protecting workers, consumers, communities and the environment, or where lax enforcement renders existing laws ineffective. Such activity is not always exploitative, but it can be. The adverse publicity associated with allegations of sweatshop practices or other human rights abuses can also pose substantial brand or reputational risks for companies. Calvert voted:

■ For all 12 shareholder proposals to require companies to conduct a human rights assessment (100% against management).

■ For all five shareholder resolutions requesting a company to improve its human rights standards or policies.

Political action committees and political partisanship: Calvert believes that shareholders have the right to know how corporate assets are being spent in furtherance of political campaigns, social causes or government lobbying activities. Companies are required to make such disclosures pursuant to federal and state law, but this information is often not readily available to investors and shareholders. Moreover, corporate lobbying activities and political spending may at times be inconsistent with or actually undermine shareholder and other stakeholder interests that companies are otherwise responsible to protect. Calvert voted for all 38 shareholder resolutions requesting that companies disclose political contributions (100% against management).

Direct dialogue and collaborative efforts

Climate and energyClimate change is an engagement priority that Calvert addresses in direct dialogue with companies and through collaboration with other investors. Our engagement addresses governance of climate risk, and calls on companies to reduce greenhouse gas (GHG) emissions, and invest in energy efficiency and renewable energy when suitable. Calvert does this through dialogue, filing shareholder resolutions and engaging with policymakers.

Part of our engagement was under the auspices of Climate Action 100+, a global investor initiative seeking to enhance corporate governance of climate change, curb emissions and strengthen climate-related financial disclosures at companies with great opportunities to tackle climate change.

Calvert has volunteered to engage three companies as a lead and is in a co-lead or supporting role with six other companies. Our focus is on high-emitting sectors including electric utilities, construction machinery and heavy trucks, transportation, industrial machinery and consumer products.

We are leading the engagement with two electric utilities that are working to transition their electricity generation fleets away from coal and toward natural gas and renewable energy. Both of these companies have made commitments to reduce GHG emissions in line with climate science. Calvert’s engagement seeks to understand how their investments and business strategies align with a low-carbon economy. In that regard, we are asking these companies to conduct climate risk scenario analyses – and we are calling on

them to align their public policy and lobbying practices with their stated sustainability priorities.

Calvert also continued prior engagement with a group of companies on climate and energy issues.

DiversityDiversity has long been a flagship issue for Calvert both in engagement and research. Corporate diversity is increasingly understood as having investment materiality – and is a focus of both our research and engagement teams’ efforts. Our research and engagement also support the work of the Thirty Percent Coalition, the foremost US investor initiative working on board diversity.

During this reporting period, Calvert began a diversity engagement focusing on companies with less than 20% women on the board and no women among the top five executive officers. We wrote to 37 companies and had dialogue with seven. We are pursuing further engagement with another six companies by filing shareholder proposals seeking to increase representation of women and people of color on boards and in senior management.

Calvert has continued its engagement from prior years with several small regional banks on diversity. These companies are in the process of building out their engagement strategies, and have created leadership initiatives, strengthened diversity policies and formalized diversity programs, which address hiring, training and promotional opportunities. Ultimately, success will be measured by positive change in the numbers of women and people of color in senior roles.

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WaterCalvert encourages positive change by engaging companies where improved policy around material water usage could positively impact business operations and the environment. When applicable, we ask companies to consider their water usage and water risk for both their own operations and those among their supply chains.

Over the last year, Calvert continued to engage agricultural companies about water risk. We have led engagement with a large packaged food company on water risk in its agricultural supply chain. This is part of a broader investor engagement under the auspices of the UN PRI, including 36 investors with US$ 5.9 trillion in assets under management engaging 15 apparel, food and beverage, and agricultural products companies. The company published a list of its priority agricultural commodities, which will be the basis for further work to understand and address water risks in its supply chain through supplier standards and certified sustainably sourced commodities.

Gun violenceCalvert engaged Walmart on its position on firearms sales following an August shooting at one of its stores in El Paso. The company subsequently announced changes to its policies on gun and ammunition sales, as well its position on gun policy. The company agreed to use its influence to argue for stronger gun safety regulations and conditions, share best practices and technology with smaller retailers to improve everyone’s compliance with existing laws, request that customers not openly carry firearms into its stores, even in states with open carry laws, and stop sales of ammunition for handguns and assault weapons. In its statement announcing these changes, Walmart CEO Doug McMillon noted that, “We’ve also been listening to a lot of people inside and outside our company as we think about the role we can play in helping to make the country safer.”

Sustainability reportingPublishing a robust sustainability report can help to demonstrate a company’s awareness of business risks and opportunities as well as its programs to manage its exposure. As companies strive to translate the concept of sustainability into practice and measure their performance, this has created a growing demand for broadly accepted sustainability performance indicators and reporting guidelines.

In April 2019, Tesla published its first-ever “Impact Report” addressing product impact, operational impact, supply chain, and employees and culture. During 2017 and 2018, Calvert and Lily Bowles, a private investor, engaged Tesla

in dialogue and filed a shareholder proposal calling for the company to report on the company’s material ESG issues and the management of those issues. As part of these discussions, Tesla informed us that it was already in the process of developing such a report. As shareholders, we provided input on the most important issues to include in such a report and ultimately withdrew the proposal based upon the company’s willingness to move forward with ESG reporting. We are pleased to see Tesla take this important step toward transparency.

Calvert had dialogue with several other companies about ESG disclosure broadly. As an active member of the Investor Advisory Group of the Sustainability Accounting Standards Board (SASB), Calvert engaged three companies to encourage disclosure to SASB standards.

Public advocacyIn April 2019, CEO John Streur testified before the Senate Committee on Banking, Housing, and Urban Affairs on the subject of “The Application of Environmental, Social, and Governance Principles in Investing and the Role of Asset Managers, Proxy Advisors, and Other Intermediaries.” The forum offered an opportunity to address how ESG investment strategies have evolved in recent years and to discuss public policy and regulatory matters relevant to our industry. In his testimony, he discussed those topics and outlined the business case for incorporating ESG considerations into the investment process. He also noted how corporate disclosure standards have evolved over time, and how when it comes to the issue of standardizing disclosures related to ESG risk factors, the United States could go further to ensure our capital markets continue to remain competitive relative to other developed economies around the globe. Finally, he provided insight into how Calvert conducts its structured engagement and how we use proxy advisory firms.

In October 2019, Director of Corporate Engagement John Wilson testified before the Senate Committee on Environment and Public Works Subcommittee on Clean Air and Nuclear Safety on the subject of “Reducing Emissions While Driving Economic Growth: Industry-led Initiatives.” He discussed the importance of mitigating the potential effects of climate change on investment returns and outlined how Calvert manages exposure to these risks. In addition, he discussed how a carbon tax or similar policy signal could allow investors to better quantify the economic implications of climate change on investments and more efficiently allocate capital to investments suitable for the low-carbon economy. He urged the Committee to support legislation that will allow key economic actors to rapidly scale existing efforts to address the significant risks posed by climate change.

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Company names/GICS subindustriesCalvert portfolios hold the following companies within the GICS subindustry noted, as of 12/31/19:

Automobile ManufacturersBayerische Motoren Werke AGBYD Company Limited Class HDaimler AGFerrari NVFord Motor CompanyGeely Automobile Holdings LimitedHonda Motor Co., Ltd.Hyundai Motor CompanyIsuzu Motors LimitedMazda Motor Corp.Nissan Motor Co., Ltd.Peugeot SARenault SATesla IncThor Industries, Inc.Toyota Motor Corp.

Hypermarkets & Super CentersBJ’s Wholesale Club Holdings, Inc.Carrefour SAColes Group Ltd.Costco Wholesale CorporationMETRO AGSun Art Retail Group LimitedWal-Mart de Mexico SAB de CVWalmart Inc.

Mutual Funds are distributed by Eaton Vance Distributors, Inc. (“EVD”). Two International Place, Boston, MA 02110, (800) 225-6265. Member FINRA/ SIPC.

References to individual companies are provided solely for informational purposes only and are intended only to illustrate certain relevant environmental, social and governance factors. This information does not constitute an offer to sell or the solicitation to buy securities. The information presented has been developed internally and/or obtained from sources believed to be reliable; however, Calvert does not guarantee the accuracy, adequacy or completeness of such information. Opinions and other information reflected in this material are subject to change continually without notice of any kind and may no longer be true after the date indicated or hereof. Past performance is no guarantee of future results.

Important Additional Information and Disclosures

About Risk

Investing involves risk including the risk of loss. Investing primarily in responsible investments carries the risk that, under certain market conditions, a Fund may under perform funds that do not utilize a responsible investment strategy. No fund is a complete investment program and you may lose money investing in a fund. Most Calvert Funds offer multiple classes of shares. Share classes are subject to different fees and expenses, which will affect their performance. Not all share classes are available to all investors.

Before investing, investors should consider carefully the investment objectives, risks, charges and expenses of a mutual fund. This and other important information is contained in the prospectus and summary prospectus, which can be obtained from a financial advisor. Prospective investors should read the prospectus carefully before investing.

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About Calvert

Calvert Research and Management (Calvert) is a global leader in responsible investing. Calvert sponsors one of the largest and most diversified families of responsibly invested mutual funds, encompassing active and passively managed equity, income, alternative and multi-asset strategies. With roots in responsible investing back to 1982, the firm seeks to generate favorable investment returns for clients by allocating capital consistent with environmental, social and governance best practices and through structured engagement with portfolio companies. Headquartered in Washington, D.C., Calvert manages assets on behalf of funds, individual and institutional separate account clients, and their advisors. For more information, visit calvert.com.

About Eaton Vance

Eaton Vance provides advanced investment strategies and wealth management solutions to forward-thinking investors around the world. Through principal investment affiliates Eaton Vance Management, Parametric, Atlanta Capital, Hexavest and Calvert, the Company offers a diversity of investment approaches, encompassing bottom-up and top-down fundamental active management, responsible investing, systematic investing and customized implementation of client-specified portfolio exposures. Exemplary service, timely innovation and attractive returns across market cycles have been hallmarks of Eaton Vance since 1924. For more information, visit eatonvance.com.

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