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ESG has always been an important component of the RBC Emerging Markets Equity team’s investment philosophy and process, and we have continuously sought to expand our knowledge and initiatives in this area.

When we look back to our first ESG report in 2016, one of our key motivations at the time was to raise awareness of the importance of ESG within the investment community. At that time ESG investing was a small but steadily-growing niche, and the dialogue was largely centred on the “why” and the “how”.

In 2021, however, the industry has witnessed a large increase in the number of ESG-related funds as a result of growing demand from investors and more regulation. The incorporation of ESG factors into an investment process is now widely accepted as the norm, and the focus has shifted from purely avoiding harm to promoting and effecting positive change.

The COVID-19 pandemic, coupled with the extreme weather events witnessed during 2021, have further heightened awareness of environmental issues. The combination of geography, higher carbon emissions and the ability to deal with unexpected natural events are key reasons why we believe climate change will have significant economic and political ramifications for emerging markets.

Thus this year we expanded our research and engagement across a broad range of environmental topics, looking at both the risks and opportunities. We delved deeper into our Green Infrastructure theme and invested in a number of companies that are part of the decarbonisation solution. We have also analysed the impending risk of water shortages and how this may affect various industries.

We have consistently found that companies that invest in their employees and create a progressive and transparent culture tend to be rewarded with strong and sustainable long-term returns. This year we broadened our research in this area by developing a scorecard which is used to analyse our portfolio companies, and as a starting point for further engagement on specific topics. Our key findings are highlighted in this report.

Engaging with companies on ESG-related topics continues to be a critical part of our investment process and this report features some notable case studies and engagement examples from 2021.

We hope that you enjoy these insights into our ESG activities and achievements, and we welcome any feedback on how we can improve our future efforts.

For the full RBC Emerging Markets ESG report, please contact: RBCGAM-USMarketingTeam@rbc.com.

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RBC GAM is the asset management division of Royal Bank of Canada (“RBC”) which includes RBC Global Asset Management Inc., RBC Global Asset Management (U.S.) Inc., RBC Global Asset Management (UK) Limited, RBC Global Asset Management (Asia) Limited, and BlueBay Asset Management LLP, which are separate, but affiliated subsidiaries of RBC.

Nothing contained in or on the Site should be construed as a solicitation of an offer to buy or offer, or recommendation, to acquire or dispose of any security, commodity, investment or to engage in any other transaction. This Site is not intended to provide legal, accounting, tax, investment, financial or other advice and such information should not be relied upon for providing such advice. RBC GAM takes reasonable steps to provide up-to-date, accurate and reliable information, and believes the information to be so when produced. The information, including layout, of this Site, may be wholly or partially suspended, withdrawn or changed at any time. We also reserve the right at any time to immediately suspend the provision of all or any part of this Site to you and/or block your access to this Site.

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Any investment processes described in this Site may change over time. The characteristics set forth in this Site are intended as a general illustration of some of the criteria considered in selecting securities for client portfolios. Not all investments in a client portfolio will meet such criteria.

Past performance is not indicative of future results. With all investments there is a risk of loss of all or a portion of the amount invested. Where return estimates are shown, these are provided for illustrative purposes only and should not be construed as a prediction of returns; actual returns may be higher or lower than those shown and may vary substantially, especially over shorter time periods. It is not possible to invest directly in an index. Interest rates, exchange rates and market conditions are subject to change.

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