Driving Employee Engagement, Productivity and Impact through the Use of Sustainable 401(k) Plans - R. Paul Herman, Marla Skeffington, Max Messervy, Philip Jordan & Timothy Yee

1. Driving Employee Engagement, Productivity and Impact through the Use of Sustainable 401(k) Plans R. Paul Herman CEO & Founder HIP INVESTOR RATINGS + PORTFOLIOS @HIPinvestor Marla Skeffington Vice President, Retirement Strategies MARS WRIGLEY CONFECTIONERY @NatixisIM Max Masservy Senior Associate, Responsible Investment MERCER @MaxMesservy Phillip Jordan Vice President and Principal BW RESEARCH PARTNERSHIP

2. Engaging Employees with Sustainable 401(k)s Sustainable Brands – NEW METRICS 2018 1

3. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Disclosure and Disclaimers HIP Investor Ratings LLC is a California limited liability company, providing 121,800+ ratings for investors, advisers, fund managers and retirement plans. R. Paul Herman is a registered representative of HIP Investor Inc., an investment adviser registered in the States of California, Washington, and Illinois, with clients across the USA. This is not an offer of securities. All investing has risks.   Past results are not indicative of future performance. 2

4. CONFIDENTIAL © 2006-2018 HIP Investor Inc. About HIP Investor HIP Investor: since December 6, 2006; now 12th year 126,800+ HIP ESG Ratings (7000+ corporates; 112,300 munis) 5 HIP Strategies with track records of 4 to 8 years 5 HIP Fossil-Fuel-Free Portfolios, including 401(k)s   Clients: 401(k)s, 403(b), wealth advisors, RIAs/advisors,   fund managers, hedge funds, college endowments   The HIP Investor textbook/ebook/audiobook  in 27 universities, MBA, and MPA programs Newsweek Green Rankings, 2015, 2016, 2017 HIP Investor featured in NYTimes (2017, 2014, 2011),   Fast Company magazine (2006-2018), and more 3

6. CONFIDENTIAL © 2006-2018 HIP Investor Inc. What Millennials Want:   #1 Purpose of Business Is Building a Better World 80 million Millennials in USA Inheriting $40 Trillion from Boomers Source: Deloitte global survey of Millennials 5

9. CONFIDENTIAL © 2006-2018 HIP Investor Inc. The HIP + MVP 401(k) Sustainability   Education + Impact Ratings Program 1. Survey 2. Educate 3. Feedback 4. Rate Funds 5. Discuss 6. Prioritize 7. Change Your 401(k) Building Bridges 2012 Copyright 2012 - 2018 All Rights Reserved 8

10. CONFIDENTIAL © 2006-2018 HIP Investor Inc. High level of understanding of sustainability & impact of investments on me personally 24% Adequacy of 401(k) education 34% Diversity & education of sustainable investment choices 26% Desire to do good with investing 81% Overall level of trust of the financial markets & advisors 28% Step 1: Survey - Get a baseline of your employees understanding and attitudes of their 401(k) plan and investments Building Bridges 2012 Copyright 2012 - 2018 All Rights 9

12. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Investing in “100 Best” to Work For Can Beat the Market (1998-2016) Source: Russell Investment Group, via © Great Places To Work® Institute 1998-2016, ANNUALIZED RETURNS 11

13. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Usefulness of information & presenter clear and easy to understand 93% Desire to have more information on sustainability, impact and ESG 79% Desire to know your sustainability and impact scores on your investments 77% If you could see the impact of your investments quantified would you contribute more to your 401(k) plan 55% Do you think creating a signature for your company around sustainability would increase market share and better engage employees 71% Building Bridges 2012 Copyright 2012 - 2018 All Rights Reserved 12 Half to nearly all want more sustainable 401(k) options

14. CONFIDENTIAL © 2006-2018 HIP Investor Inc. The HIP + MVP 401(k) Sustainability   Education + Impact Ratings Program 1. Survey 2. Educate 3. Feedback 4. Rate Funds 5. Discuss 6. Prioritize 7. Change Your 401(k) Building Bridges 2012 Copyright 2012 - 2018 All Rights Reserved 13

15. CONFIDENTIAL © 2006-2018 HIP Investor Inc. HIP Ratings = 100 Point Rating  Indicator of Impact, Future Risk, and Future Return Worst: 0 HIP Rating Best: 100 Net Negative IMPACT Health, Wealth, Earth, Equality, Trust Net Positive More Volatile Future RISK More Resilient Lesser Potential Future RETURNS Stronger Potential HIP RATINGZero 100

16. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Higher Impact Portfolios Can Lead to Higher ReturnsAverage Annual 5-year Total Shareholder Return of 7,000 Global Equities Segmented by HIP Investor Ratings (for period ending 12/31/2017) -5.0% 0.7% 6.5% 12.3% 18.0% 0-10% 21-30% 41-50% 61%-70% 16.3% 12.9%12.8% 11.2%11.1% 10.3% 4.0% -2.7% Source: Thomson Reuters; HIP Investor Ratings scores and analysis Total Shareholder Return (TSR) includes capital gains and reinvested dividends 15

17. CONFIDENTIAL © 2006-2018 HIP Investor Inc. • Five year performance for financials (risk and return), as of 7/31/2015 HIP Ratings cover sustainable performance for the years 2013-2014. • FEES represent the average expense ratio of the underlying investments; Additional fees for the plan are typically charged, and vary by provider. 16 Step 5:   Discuss 

21. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Step 7: Take Action in Your 401(k) 20 • Discovered top customers and suppliers are in firm’s 401(k) mutual funds – employees are now investing more • Launched conflict-minerals-free supply-chain program, which gained attention from customers • Added more sustainable mutual fund choices Both branded “sustainable”/SRI/ESG (e.g. Trillium)… …and well-managed non-SRI-branded funds  • Demanding its 401(k) provider be more alert to sustainability – which links to future risk and return • Won a state award and grant funds for sustainability

24. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Rate Your 401(k) Choices with HIP Ratings 23 • Five year performance for financials (risk and return), as of 12/31/2017 HIP Ratings cover sustainable performance for the years 2015-2016-2017. • FEES represent the average expense ratio of the underlying investments; Additional fees for the plan are typically charged, and vary by provider.

25. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Invest in Target-Risk Fossil Fuel Free Portfolios 24 • Five year performance for financials (risk and return), as of 12/31/2017 HIP Ratings cover sustainable performance for the years 2015-2016-2017. • FEES represent the average expense ratio of the underlying investments; Additional fees for the plan are typically charged, and vary by provider.

26. BrightScope. (2015, February 19). The one chart that explains 401(k) fees. Do You Know Your 401(k) Fees? 25

28. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Sustainable Portfolios Can Outperform on Future Risk & Return Potential “Sustainable equity mutual funds had   equal or higher median returns   and equal or lower volatility (risk)   than traditional funds for   64% of the periods examined” http://www.morganstanley.com/ideas/business-case-for-sustainable-investing 27

29. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Contribution Levels Can Increase Higher Employee Engagement And Increased Innovation Participation Rates Can Increase Stronger, Resilient Plan Performance Ability to Attract Millennials Benefits of Adopting A Sustainable 401(k) Program Quality of 401(k) Education & Understanding Can Increase Future Portfolio Risk Can Decrease Rollover Rates Can Increase Fiduciary Risk Managed Employee Trust in Plan & Financial Markets Can Increases Benefits of ESG Education and Impact Ratings 401(k) Program for Employees and Plan Sponsors Building Bridges 2012 Copyright 2012 - 2018 All Rights Reserved 28

30. 29 ERISA Guidance on ESG in 401(k)s

31. Benefits to Plan Sponsors Offer a 401(k) program that aligns with company values Gives your employees options for sustainable investing Attract and retain top talent Tax advantageous opportunities Reduce risk by offering a conflict-free sustainable 401(k) solution Bring ESG screening and sustainable investments to your 401(k) plans with our open-architecture recordkeeping platform Deliver a seamless experience for retirement plan participants with investments that align with their values Sustainable 401(k) Investm ent Freedo m Conflict- Free Philosop hy Low Investm ent Costs Full Fee Transpar ency Payroll Integrati on & Automati on Financia l Wellnes s & Educatio n Sustaina bility Ratings Increase d Participa tion Best-In- Class Client Services 30

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35. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Health Wealth Earth Equality Trust HIP’s Factors Connect Directly to Cash Flow, Profit and Shareholder Value Products & Services Operating Metrics Mgmt Practices IM PA CT “How HIP Is This Investment?” HIP = Human Impact + Profit  Strategic Innovation & Risk Mitigation Higher Revenue potential Lower Cost potential 34

36. CONFIDENTIAL © 2006-2018 HIP Investor Inc. HIP Ratings: Corporate Faceoffs PEPSI COCA-COLA Overall HIP Rating 57.8% 55.9% Earth Pillar Rating 56.2% 46.6% Energy Used Per $1,000 Revenue 1.16 gigajoules 1.39 gigajoules CO2 Emissions Per $1 million Revenue 89 metric tons 123 metric tons Waste Recycled Per Total Waste 93.83% unavailable Water Usage Per $1 million Revenue 1,470 cubic meters 6,861 cubic meters 35

42. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Parnassus Endeavour (Workplace, Fossil Free) Fund  (Ticker: PARWX) Investing in “Best” Companies to Work For Can Beat S&P500 (4/21/2006 to 3/19/2018) +149% +133% Source: Yahoo Finance 41

43. CONFIDENTIAL © 2006-2018 HIP Investor Inc. Overpaid CEOs Deliver Negative TSR, Lose Value Source: ISS; Thomson Reuters; As You Sow; HIP InvestorSource: HIP Investor; Thomson Reuters; As You Sow; ANNUALIZED 42 Total Shareholder Return (TSR), annualized over 3-year period   Before and After 2015 Most Overpaid CEOs report

46. The Debate Over Adding ESG to the DC Lineup New Metrics 2018

47. What plan participants demand • Natixis Investment Managers, Survey of Defined Contribution Plan Participants compiled by CoreData Research, August 2016. Survey included 951 respondents. 82% 84% 82% 79% 83% Female 79% Male I would like my investments to reflect my personal values 78% 84% 78% 74% 81% Female 75% Male I believe it is important to make the world a better place while growing my personal assets 74% 77% 79% 68% 79% Female 69% Male I would like to see more socially responsible investments in my retirement plan offering ● Overall ● Millennials ● Generation X ● Baby Boomers New Metrics 2018

48. Moving from participation to engagement • Natixis Investment Managers, Survey of Defined Contribution Plan Participants compiled by CoreData Research, August 2016. Survey included 951 respondents. 73% 74% 77% 68% 75% Female 71% Male I believe companies that provide clean water and clean energy present significant growth opportunities for my investments 64% 70% 63% 60% 68% Female 59% Male I am concerned about the environmental, social and ethical records of the companies I invest in 62% 71% 66% 53% 65% Female 61% Male I would be more likely to contribute/increase my contributions to my retirement plan if I knew my investments were doing social good ● Overall ● Millennials ● Generation X ● Baby Boomers New Metrics 2018

49. Is there a performance tradeoff? Source: MPI Stylus/Morningstar (9/30/2007-6/30/2018) The MSCI World ESG Leaders Index (Net) is a capitalization weighted index that provides exposure to companies with high Environmental, Social and Governance (ESG) performance relative to their sector peers. MSCI World ESG Leaders Index is constructed by aggregating the following regional Index MSCI Pacific ESG Leaders Index, MSCI Europe & Middle East ESG Leaders Index, MSCI Canada ESG Leaders Index and MSCI USA ESG Leaders Index. The parent index is MSCI World Index, which consists of large and mid-cap companies in multiple Developed Market Countries. The Index is designed for investors seeking a broad, diversified sustainability benchmark with relatively low tracking error to the underlying equity market. The index is a member of the MSCI ESG Leaders Index series. Constituent selection is based on data from MSCI ESG Research.  The MSCI World Index (Net) is an unmanaged index that is designed to measure the equity market performance of developed markets. It is comprised of common stocks of companies representative of the market structure of developed market countries in North America, Europe, and the Asia/Pacific Region. The index is calculated without dividends, with net or with gross dividends reinvested, in both U.S. dollars and local currencies.   Past performance is no guarantee of, and not necessarily indicative of, future results.  For Illustrative Purposes Only. Not indicative of an investible product or strategy.  Sharpe Ratio: A measure of risk-adjusted return, calculated by dividing an investment's excess return over a riskless asset (such as the 3-Month T-Bill) by its standard deviation of returns. The higher the Sharpe ratio, the better the historical risk-adjusted performance. ESG-focused equity index has kept pace with the broad market Hypothetical growth of $100 9/2007 - 6/2018 Risk-adjusted returns are also comparable across multiple timeframes Sharpe Ratio for periods ending 6/30/2018 0 45 90 135 180 9/30/07 3/31/09 9/30/10 3/31/12 9/30/13 3/31/15 9/30/16 3/31/18 MSCI World ESG Leaders NR USD MSCI World NR USD 0 0.25 0.5 0.75 1 3 Years 5 Years 10 years 0.44 0.96 0.77 0.43 0.91 0.73 MSCI World ESG Leaders NR USD MSCI World NR USD New Metrics 2018

50. H E A LT H W E A LT H C A R E E R OCTOBER 31, 2018 Max Messervy Responsible Investment Consultant Boston R E S P O N S I B L E R E T I R E M E N T P L A N S T H E 4 0 1 ( K ) O P P O R T U N I T Y

51. Copyright © 2018 Mercer (US) Inc. All rights reserved. !2 • The goal of this project is to improve outcomes for retirement plan beneficiaries by lowering barriers to the adoption of responsible retirement practices through education, dispelling myths about responsible investing and empowering engaged employees to better understand their possible options to begin saving for retirement responsibly. • Two Toolkits to be released for practitioners: W B C S D A L I G N I N G R E T I R E M E N T A S S E T S I N I T I AT I V E   A D VA N C I N G R E S P O N S I B L E R E T I R E M E N T P L A N S Toolkit #1 End of November An introduction to retirement plans and how responsibility might be considered in different plan structures and contexts Toolkit #2 Early 2019 A “tactical” approach to responsible retirement plans: helping individuals have conversations with the right people internally, typical objections raised and ways to respond

53. Copyright © 2018 Mercer (US) Inc. All rights reserved. !4 E S G C O N S I D E R AT I O N S A N D P L A N S P O N S O R S :   R E L E VA N C E O F VA R I O U S I N V E S T M E N T A C T I V I T I E S

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