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Welcome to the RBC Global Asset Management site for Institutional Investors

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Please read the following terms and conditions carefully. By accessing and any pages thereof (the "site"), you agree to be bound by these terms and conditions as well as any future revisions RBC Global Asset Management Inc. ("RBC GAM Inc.") may make in its discretion. If you do not agree to the terms and conditions below, do not access this website, or any pages thereof. Phillips, Hager & North Investment Management is a division of RBC GAM Inc. PH&N Institutional is the institutional business division of RBC GAM Inc.

No Offer

Products and services of RBC GAM Inc. are only offered in jurisdictions where they may be lawfully offered for sale. The contents of this site do not constitute an offer to sell or a solicitation to buy products or services to any person in a jurisdiction where such offer or solicitation is considered unlawful.

No information included on this site is to be construed as investment advice or as a recommendation or a representation about the suitability or appropriateness of any product or service. The amount of risk associated with any particular investment depends largely on the investor's own circumstances.

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The material on this site has been provided by RBC GAM Inc. for information purposes only and may not be reproduced, distributed or published without the written consent of RBC GAM Inc. It is for general information only and is not, nor does it purport to be, a complete description of the investment solutions and strategies offered by RBC GAM Inc., including RBC Funds, RBC Private Pools, PH&N Funds, RBC Corporate Class Funds and RBC ETFs (the "Funds"). If there is an inconsistency between this document and the respective offering documents, the provisions of the respective offering documents shall prevail.

RBC GAM Inc. takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when published. Information obtained from third parties is believed to be reliable, but no representation or warranty, express or implied, is made by RBC GAM Inc., its affiliates or any other person as to its accuracy, completeness, reliability or correctness. RBC GAM Inc. assumes no responsibility for any errors or omissions in such information. The views and opinions expressed herein are those of RBC GAM Inc. and are subject to change without notice.

About Our Funds

The Funds are offered by RBC GAM Inc. and distributed through authorized dealers. Commissions, trailing commissions, management fees and expenses all may be associated with the Funds. Please read the offering materials for a particular fund before investing. The performance data provided are historical returns, they are not intended to reflect future values of any of the funds or returns on investment in these funds. Further, the performance data provided assumes reinvestment of distributions only and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. The unit values of non-money market funds change frequently. For money market funds, there can be no assurances that the fund will be able to maintain its net asset value per unit at a constant amount or that the full amount of your investment in the fund will be returned to you. Mutual fund securities are not guaranteed by the Canada Deposit Insurance Corporation or by any other government deposit insurer. Past performance may not be repeated. ETF units are bought and sold at market price on a stock exchange and brokerage commissions will reduce returns. RBC ETFs do not seek to return any predetermined amount at maturity. Index returns do not represent RBC ETF returns.

About RBC Global Asset Management

RBC Global Asset Management is the asset management division of Royal Bank of Canada ("RBC") which includes the following affiliates around the world, all indirect subsidiaries of RBC: RBC GAM Inc. (including Phillips, Hager & North Investment Management and PH&N Institutional), RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, BlueBay Asset Management LLP, and BlueBay Asset Management USA LLC.

Forward-Looking Statements

This website may contain forward-looking statements about general economic factors which are not guarantees of future performance. Forward-looking statements involve inherent risk and uncertainties, so it is possible that predictions, forecasts, projections and other forward-looking statements will not be achieved. We caution you not to place undue reliance on these statements as a number of important factors could cause actual events or results to differ materially from those expressed or implied in any forward-looking statement. All opinions in forward-looking statements are subject to change without notice and are provided in good faith but without legal responsibility.

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Performance matters: Achieving responsible returns

In the past five years, ESG scoring systems and data reporting standards have proliferated. Dozens of ESG ratings groups have emerged, each measuring the performance of companies or investment products in different ways.

These varying systems measure companies’ approaches to climate change, environmental issues, diversity and inclusion, human rights, and other social and governance factors, putting different weights on each area when calculating a final score. However, it is not always clear how these scores are decided.

These inconsistencies in methodologies often result in the same company receiving vastly different ratings across different ESG rating systems and platforms. It also means that often ESG scores cannot be linked directly to financial performance.

Instead, investors may use these scores as one input among many in their consideration of ESG risks and opportunities. Many investors are opting to move away from third-party ESG scores, and either using direct data on specific ESG factors or creating their own internal ESG scoring systems according to each investor’s specific investment process.

There has been some convergence in reporting standards for listed companies in the past two years.

In March 2021, the IFRS Foundation announced plans to collaborate with the International Accounting Standards Board and other bodies to “accelerate convergence” on reporting standards.27

Three months later, the International Integrated Reporting Council and the Sustainability Accounting Standards Board announced a planned merger to create the Value Reporting Foundation and pledged to work closely with the IFRS Foundation.28 The IFRS Foundation then formed the International Sustainability Standards Board at the COP26 climate conference in Glasgow, Scotland.29

In the first half of 2022, the Climate Disclosure Standards Board consolidated into the IFRS Foundation29 , the Global Reporting Initiative announced a collaboration with the IFRS Foundation to align the work of their respective Sustainability Standards Boards31 , and the Value Reporting Foundation became part of the IFRS Foundation.32

Regulators and investors have publicly supported these developments as they move towards a more standardized global approach to sustainability data standards. Harmonizing these standards aims to improve data quality and availability, bolstering investors’ ability to assess ESG risks and opportunities across their portfolios.

ESG: Alpha generator or risk mitigator (or neither)?

There is a growing body of evidence from industry-led and academic studies linking positive ESG traits to performance that is in line with or ahead of traditional indexes.

More than 200 studies published since 2015 have pointed to ESG funds and strategies enhancing investment returns, helping stimulate investor inflows.33 For example, research by the NYU Stern Center for Sustainable Business has demonstrated that companies can achieve positive financial benefits from making ESG-related investments. These include realizing operational efficiencies, investing in innovation, mitigating risks, improving sales, and better employee engagement and retention.34

RBC GAM’s Responsible Investment Surveys have shown that most investors expect ESG integrated portfolios to perform as well as or better than non-ESG strategies. Over half of respondents in 2021 said they believed integrating ESG factors could help generate long-term sustainable alpha.

However, as the chart below indicates, a small but fairly consistent minority of respondents has held fast to the belief that ESG portfolios actually perform worse than traditional investments.

How do you believe ESG integrated portfolios are likely to perform relative to non-ESG portfolios?

A meta-analysis from 2021 found that, while there was no “outsized financial return for ESG strategies”, many analyses were challenged by inconsistent ESG data and the various definitions of ESG, sustainability, and responsible investing, making it harder to compare findings directly. Regardless, the research did propose that ESG investing could give investors an advantage in certain scenarios, especially when it comes to potential risk mitigation.35

The concept of risk mitigation as a driver of ESG investment is popular among investors. RBC GAM’s Responsible Investment Survey has consistently shown that many investors see ESG as a risk management tool as much as an alpha generating strategy.

Do you believe that integrating ESG factors can help generate long term sustainable alpha and/or mitigate risk?

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