Black and white document - low environmental impact and minimalistic.

True Impact Investing Happens with Thematic Solutions, not ESG

December 14, 2016

Agenda

• A Problem with a Solution

• Trends toward more disclosure

• UNPRI and SASB

• Most managers will become ESG managers

• Thematic versus ESG managers

• Thematic managers make an impact

• Introducing GEOS – a Thematic manager

2

The Problem

3

There are solutions

Increasing trend towards CSR disclosures

4

12

18

2428

41

53

64

71

0

10

20

30

40

50

60

70

80

90

100

1993 1996 1999 2002 2005 2008 2011 2013

Percentage of companies globally with corporate social responsibility (CSR) reports%

Source: KPMG Survey of Corporate Responsibility Reporting 2013. Includes N100 companies – top 100 companies from each country globally.

7673 71

54

0

10

20

30

40

50

60

70

80

90

100

Americas Europe Asia Pacific Middle East & Africa

Percentage of companies with CSR reports (2013)

5

%

CSR disclosure levels are also high globally

Source: KPMG Survey of Corporate Responsibility Reporting 2013. Includes N100 companies – top 100 companies from each country within the regions.

Disclosures have evolved over time

6

1934SEC

1973FASB

2011SASB

2010SEC Climate Change Disclosure

Investor Disclosure

Accounting Disclosure

Climate Disclosure

Sustainability Accounting Standards

1887AICPA

American Institute of CPAs

(accountants)

1947CFA Institute

Financial Analysts

Source: Hamersley Partners Research

UNPRI Signatories

7Source: UN PRI, December 2016. *Average rate based on UNPRI schedule of fees for 2016-2017.

Signatories Europe U.S. Other Total Fees*

Asset Owners 187 29 111 327 $6,100

Investment Managers 581 226 264 1,071 $8,800

Service Providers 104 40 72 216 $4,600

Total 872 295 447 1,614

Six Principles

• Include ESG issues• Be active owners• Seek ESG disclosure• Promote the principles• Work together• Report on progress

UNPRI has grown gradually since 2006

8Source: UN PRI, November 2016, https://www.unpri.org/download_report/3847

0

200

400

600

800

1000

1200

1400

1600

0

10

20

30

40

50

60

70

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

UNPRI Growth: 2006 - 2016

Assets under management (US$ trillion) Number of Signatories

($ trillions) #

Non Financial Inputs

Hazardous air pollutants

Water withdrawn and discharged

Energy consumed from grid

Energy from renewable sources

Percent of toxic chemical substances

Number of safety incidents

Violations of nonconformance of laws

Material from recycled sources

Amount of waste produced

Confirmed foodborne illnesses

CDC investigations

Employee turnover

Labor law violations

9

Revenue

Expenses

Cost of Capital

Assets and Liabilities

Sustainability Analysis

SASB Metrics Financial Impact

Source: Hamersley Partners Research

New RFP Questions for Managers

• Are you a UNPRI signatory?

• Do you produce sustainability reports?

• Do you have an ESG investment policy?

• How are ESG factors integrated into your process?

10Source: Hamersley Partners Research

Mercer ESG Ratings

11Source: Mercer, http://www.mercer.com/our-thinking/mercer-esg-ratings.html

ESG 1

ESG 2

ESG 3

ESG 4

High Integration

Medium Integration

Low Integration

No Integration

ESG investing has steadily increased

$650$1,100

$2,100 $2,200 $2,100 $2,150

$2,750$3,050

$3,700

$6,500

$8,900

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

$9,000

$10,000

1995 1997 1999 2001 2003 2005 2007 2010 2012 2014 2016

Professionally managed US assets utilizing sustainable investment criteria

Total investments

12

($ billions)

Source: US SIF Foundation, Report on US Sustainable, Responsible and Impact Investing Trends

ESG and non-ESG strategies - large cap, household names

13

Fund 1 Fund 2 Fund 3

$14.4B $1.9B $900M

Wells Fargo Apple Verizon

Gilead Sciences American Tower Corp Merck

Apple Microsoft Microsoft

Danaher Corp Johnson & Johnson Intel Corp

Charles Schwab Chubb Ltd PepsiCo

Intel Corp Qualcomm Amazon

Walt Disney Zoetis Inc. Prudential

UPS Inc. Occidental Petroleum Cummins

Praxair Inc. Alphabet Gilead Sciences

CVS Health Corp PepsiCo Edwards Lifesciences

Source: Morningstar, Q3 2016. Accessed on December 1, 2016. http://ibd.morningstar.com/article/article.asp?id=632201&CN=brf295,http. Excludes cash and index fund holdings.

Fund 1 Fund 2 Fund 3

$147.0B $32.6B $14.8B

Amazon Amazon Apple

Broadcom Facebook Facebook

Home Depot Alphabet C Alphabet A

United Health Priceline Group Alphabet C

Microsoft Visa Berkshire Hathaway B

EOG Resources Microsoft JP Morgan Chase

Amgen MasterCard Visa

Alphabet Alphabet A MasterCard

Netflix Danaher Corp Home Depot

Facebook Alibaba Group Chevron Corp

Top 10 holdings: ESG Managers Top 10 holdings: non-ESG Managers

MSCI vs. MSCI ESG Performance

14

2013 2014 2015 3 year 5 year

MSCI World 27.36% 5.50% -0.32% 6.44% 12.27%

MSCI World ESG 28.22% 5.42% -0.55% 6.34% 12.12%

Source: eVestment Database, December 2, 2016. Hamersley Partners Research

Universe of Managers

15

ESG Strategies*5,150

Source: *Mercer Global Investment Manager Database (GIMD), Q3 2016. **Hamersley Partners Research

All Strategies*27,300

Thematic Managers**(50)

ESG Strategies

All Strategies

Thematic Managers

Today Tomorrow

ESG vs. Thematic Managers

16

ESG (5,150) Thematic (50)

Emphasis ESG integration Targeted themes

Portfolio holdings Using impact solutions Creating impact solutions

Number of holdings Diversified Concentrated

Benchmarks Standard, broad benchmarks Lacking benchmarks

Screening Negative screens Positive screens

Volatility Lower volatility Higher volatility

Supply of managers Plenty of supply Limited supply

Sector exposure All or most One or few

Asset allocation Core (Beta) Satellite (Alpha)

Cap bias Large Small and Mid

Source: ESG: Mercer Global Investment Manager Database (GIMD), Q3 2016. Thematic: Hamersley Partners Research

Targeted Thematic Managers

17

Clean Water

Agriculture

Renewable Energy

Affordable Housing

Transportation Access

Low Carbon

Focused on solving societal problems

Source: Hamersley Partners Research

Where do thematic managers fit in Asset Allocation?

18

Listed-equity impact investing

Complements private equity clean tech

Thematic equity strategy Fossil fuel divest-invest

Mission-based investment

Infrastructure exposure

Alpha Complement to ESG StrategiesCommodity substitute

Source: Hamersley Partners Research

Common Benchmark Performance Comparisons

2011 2012 2013 2014 2015 2016*

MSCI World Index -5.0% 16.5% 27.4% 5.5% -0.3% 6.1%

Wilderhill Clean Energy Index -50.7% -18.6% 57.9% -17.2% -10.7% -18.5%

S&P Goldman Sachs Commodity -1.2% 0.1% -1.2% -33.1% -32.9% 5.3%

FTSE Environmental All Share -13.6% 16.4% 31.7% -0.1% -2.0% 11.5%

FTSE Global Core Infrastructure 50/50 7.1% 14.0% 14.3% 16.2% -8.1% 15.8%

MSCI World Industrials Index -7.6% 16.3% 32.3% 1.4% -1.5% 14.7%

19*YTD Q3 2016, September 30, 2016. Source: Hamersley Partners Research

GEOS Global Environmental Opportunities Strategy

Listed equity thematic investment solutions

Black and white document - low environmental impact and minimalistic.

How impactful is your portfolio?™

GEOS

Portfolio Managers

Bill Page Rob Uek, CFA

21

About GEOS

• Global, small-mid cap; 7 year track record• Impact leader• Inefficient portion of capital markets• Domain expertise• Concentrated• Low turnover

GEOS 22See appendix for additional background on these organizations.

GEOS

• Higher agriculture yields• Enhanced resource efficiency

• LED street lighting• Energy efficiency initiatives

• Water infrastructure• Management and treatment

• Production, distribution, storage• Solar, wind, waves, geothermal

• Electric vehicle technologies• Enhanced engine efficiencies

Five Areas of Focus

Power Technology and Renewables Clean Water

Smart City Agricultural Productivity

23

Efficient Transportation

GEOS 24

Water quality and filtration

LED technologies

Energy management and assessment

Residential Efficiencies

Electric, gas and water data

GEOS 25

Industrial robotics systems

High performance insulation panels

Industrial Efficiencies

Energy management software

Industrial automation solutions

GEOS

GEOS Investment Process

26

Thematic Universe

Domain Expertise

Attractive Fundamentals

Portfolio

GEOS

GEOS Portfolio

27

Areas of Focus # of stocks

Smart City 14

Agricultural Productivity 3

Power Technology and Renewables 9

Efficient Transportation 4

Clean Water 6

Total 36

Geographic Breakdown # of stocks

US 21

Canada 3

Israel 2

United Kingdom 2

Japan 2

Netherlands 2

Other (Austria, Germany, Ireland, Switzerland) 4

Total 36

Holdings as of September 30, 2016

• Available in separate account, commingled fund, ADR-only, and mutual fund (soon)• Customized solutions are available

GEOS

Essex Investment Management

• Boston based investment manager

• $628 mil AUM (as of 9/30/2016)

• Focused on dynamic growth opportunities

• 100% employee owned

28

GEOS

Growth in AUM over time

0

10

20

30

40

50

60

2010 2011 2012 2013 2014 2015 2016

Assets Under Management

29

($ millions)

Current clients: Endowments, Foundations and Family Offices

2016 AUM as of September 30, 2016

Investor Feedback

• “We use GEOS as a complement to our ESG portfolio”

• “Our clients want to leave a legacy and make a sustainable impact through GEOS”

• “The portfolio managers at GEOS are truly domain experts”

• “GEOS is a substitute for our commodity allocation and reduces the overall portfolio volatility”

30

Thank you!

Hamersley PartnersBoston-based global capital raiser

Webinar recording: www.hamersleypartners.com/webinar

For more information, please contact:

Peter Pavlina, ppavlina@hamersleypartners.com

Michael Wren, mwren@hamersleypartners.com

Kanwar Singh, ksingh@hamersleypartners.com

1-781-235-3235

31

GEOS Global Environmental Opportunities Strategy

Listed equity thematic investment solutions

Black and white document - low environmental impact and minimalistic.

How impactful is your portfolio?™

Appendix

33

Evolution of Reporting Standards

• 1991 AICPA - “Special Committee on Financial Reporting”

• 1993 AIMR – “Financial Reporting in the 1990s and beyond”

• 2001 FASB – “Improving Business Reporting”

• 2011 SASB – Sustainability Accounting Standards

• 10 sectors, 79 industries

34Source: SASB, http://www.sasb.org/. AICPA: American Institute of CPAs. AIMR: Association for Investment Management Research

(now called CFA Institute). FASB: Financial Accounting Standards Board.

SASB Materiality Map

35Source: SASB, http://www.sasb.org/materiality/sasb-materiality-map/Issue materialIssue somewhat materialIssue not material

ESG Investor Resource Guide

36

Standards and Metrics ESG Database Index Provider Industry Organizations Advocacy Groups

CDP eVestment FTSE Russell USSIF SOCAP

SASB Mercer MSCI World iPARCrotan Institute

(Clean 15)

UN PRI Morningstar S&P Dow Jones Collaboration Capital Divest-Invest

IRIS (GIIN) BloombergJantzi Social

(Sustainalytics)Ceres (INCR)

Global Impact Investing Network

Source: Hamersley Partners Research

Funds using ESG factors

$12$96 $154 $136 $151 $179 $202

$569

$1,013

$2,457$2,597

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1995 1997 1999 2001 2003 2005 2007 2010 2012 2014 2016

US domiciled assets using ESG factors

Total investments

37

($ billions)

Source: US SIF Foundation, Report on US Sustainable, Responsible and Impact Investing Trends. ESG funds include mutual funds, variable annuity funds, closed-end funds, exchange-traded funds, alternative investment funds and other pooled products. Separate accounts have been excluded since 2014.

Top 10 holdings – ESG managers

38

Fund 1 Fund 2 Fund 3 Fund 4 Fund 5 Fund 6 Fund 7

$14.4B $2.2B $2.2B $1.9B $900M $409M $179M

Wells Fargo Visa Texas Instruments Apple Verizon Alphabet Unilever

Gilead Sciences Alphabet Newell Brands American Tower Corp Merck Apple Roche Holding

Apple CVS Health Progressive Corp Microsoft Microsoft Taiwan Semiconductor Henkel AG

Danaher Microsoft Becton Dickinson Johnson & Johnson Intel Corp Samsung Electronics Novartis

Charles Schwab Lowe’s Home Improve. Schlumberger Ltd Chubb Ltd PepsiCo KDDI Corp Hoya Corp

Intel Corp Abbott Laboratories Unilever Qualcomm Amazon Cisco Systems Daikin

Walt Disney Level 3 Comm. W.W. Grainger Zoetis Inc. Prudential TJX Companies AIA Group

UPS Inc. Intuit Inc. Danaher Occidental Petroleum Cummins Merck Wolseley

Praxair Inc. Intercontinental Exch. Noble Energy Alphabet Gilead Sciences Jeronmio Martins Royal Philips

CVS Health Medtronic PLC eBay PepsiCo Edwards Lifesciences SVB Financial Singapore Telco

Source: Morningstar, Q3 2016. Accessed on December 1, 2016. http://ibd.morningstar.com/article/article.asp?id=632201&CN=brf295,http. Excludes cash and index fund holdings.

Mentioned three times

Mentioned two times

GEOS

Portfolio Managers

Bill Page Rob Uek, CFA

• PM at Essex since 2009• Prior firms: State Street Global, Wellington Management• Journal of Environmental Investment; Better Future Project • MBA, Babson College; B.S., Boston University• History of demonstrated leadership in the impact space• Frequent speaker on impact investing

• PM at Essex since 2009• Prior firms: State Street Global, John Hancock, Ernst & Young• Investment Committee Member, Anatolia College, Greece• M.S., Northeastern University; B.S., Economics, Boston College• Focused on quantifying environmental impact of companies• Managing impact portfolio for 10 years

39

GEOS

GEOS as an Industry Leader• Ceres - Investor Network on Climate Risk : Network of financial market participants that integrate sustainability into

investment decision-making, corporate practices and public policy, thereby improving environmental, social and economic outcomes. GEOS has engaged and educated INCR members regarding climate solutions in listed equities.

• Collaboration Capital: GEOS provides investment solutions to Perigon Wealth Management’s social impact investment arm, Collaboration Capital.

• CDP: Essex Investment Management has been a signatory of the CDP for seven years. GEOS leverages CDP’s global disclosure system for information on environmental technologies when making investment decisions. CDP enables companies, cities, states and regions to measure and manage their environmental impacts.

• Croatan Institute: GEOS PMs have provided leadership to Croatan Institute’s efforts to advance social and environmental research and engagement. Essex is a founding sponsor of the Croatan Institute.

• Divest Invest Clean Fifteen: GEOS is a founding consortium member of the Clean 15 which incorporates 15 sustainable investment strategies across five major asset classes.

• iPAR: GEOS is iPAR certified and utilizes the proprietary metrics to report environmental impact of the companies in its portfolio. iPAR is a CapRock initiative.

40

GEOS

Portfolio Exposure by Areas of Focus

2231

4249

39 42 46

41 23

15

2029 26 16

17

24 20

11 11 1521

11

7 67 9

1310

816 18 13 12

3 8

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2010 2011 2012 2013 2014 2015 2016

GEOS Breakdown by Areas of Focus

Smart City Power Technology and Renewables Clean Water Efficient Transportation Agricultural Productivity

41Holdings as of September 30, 2016

GEOS

Common Benchmark Performance Comparisons

2011 2012 2013 2014 2015 2016*

GEOS (Net) -8.0% 5.3% 44.3% -8.9% -2.6% 4.5%

MSCI World Index -5.0% 16.5% 27.4% 5.5% -0.3% 6.1%

Wilderhill Clean Energy Index -50.7% -18.6% 57.9% -17.2% -10.7% -18.5%

S&P Goldman Sachs Commodity -1.2% 0.1% -1.2% -33.1% -32.9% 5.3%

FTSE Environmental All Share -13.6% 16.4% 31.7% -0.1% -2.0% 11.5%

FTSE Global Core Infrastructure 50/50 7.1% 14.0% 14.3% 16.2% -8.1% 15.8%

MSCI World Industrials Index -7.6% 16.3% 32.3% 1.4% -1.5% 14.7%

42

*YTD Q3 2016, September 30, 2016.

The holdings of the client portfolios in our composites may differ significantly from the securities that comprise the index shown. The indices have been selected to represent what Essex believes is an appropriate benchmark to compare the composite performance to. Please see the following page for a definition of all indices listed in this brochure. The actual performance achieved by a client portfolio may be affected by a variety of factors, including the initial balance of the account, the timing and amount of any additions to or withdrawals from the portfolio, changes made to the account to reflect the specific investment needs or preferences of the client, duration and timing of participation as an Essex client, and a client portfolio’s risk tolerance, investment objectives, and investment time horizon. Consultant’s use of Performance Data: Any use of Essex’s performance data, in other than one-on-one client presentations, should be accompanied by additional disclosures relating to gross versus net performance

GEOS

Important DisclosuresThis presentation is for informational purposes only. It does not constitute investment advice and is not intended as an endorsement of any specific investment. The opinions and analyses expressed in this presentation commentary are based on Essex Investment Management LLC’s (“Essex”) research and professional experience, and are expressed as of the date of its release. Certain information expressed represents an assessment at a specific point in time and is not intended to be a forecast or guarantee of future results, nor is intended to speak to any future periods. Accordingly, such statements are inherently speculative as they are based on assumptions that may involve known and unknown risks and uncertainties.

This does not constitute an offer to sell or the solicitation of an offer to purchase any security or investment product, nor does it constitute a recommendation to invest in any particular security. An investment in securities is speculative and involves a high degree of risk and could result in the loss of all or a substantial portion of the amount invested. There can be no assurance that the strategy described herein will meet its objectives generally, or avoid losses. Essex makes no warranty or representation, expressed or implied; nor does Essex accept any liability, with respect to the information and data set forth herein, and Essex specifically disclaims any duty to update any of the information and data contained in the commentary. This information and data does not constitute legal, tax, account, investment or other professional advice. Essex being registered by the SEC does not imply a certain level of skill or training.

Hamersley Partners, LLC serves as an independent sales and marketing representative for Essex Investment Management. Hamersley is compensated for its services by Essex in the form of a quarterly retainer fee of $30,000, and a percentage of the investment management fees on assets placed under management with Essex as a direct result of their efforts. No additional amount is added to Essex’s investment advisory fees as a result of any Hamersley role in the solicitation of new business. This information is provided in accordance with the requirements of Rule 206(4)-3 under the Investment Advisers Act of 1940.

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