How green innovation is changing the world for the better, and some investment options

Trend Hunter Series

How green innovation is changing the world for the better Green innovation has the potential to transform and solve some of the biggest environmental and social challenges facing the world today. In this session, Ralton, Franklin Templeton and Pendal, explore the companies and sectors, from vegetarian diets to battery storage technology, that are set to benefit from the green wave.

3 rd September 2021 This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.

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Meet today’s Trend Hunters

Francyne Mu

Vice President, Portfolio Manager & Research Analyst

Franklin Templeton

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George Bishay

Will Riggall

Pendal Group

Ralton Asset Management

Portfolio Manager Fixed Interest

Portfolio Manager

Franklin Templeton Francyne Mu

Vice President, Portfolio Manager & Research Analyst

Franklin Templeton

HOW GREEN INNOVATION IS CHANGING THE WORLD FOR THE BETTER AND SOME INVESTMENT OPTIONS Francyne Mu, CFA Portfolio Manager/Research Analyst, Franklin Global Growth NETWEALTH MEGATRENDS WEBINAR SERIES September 2021

Franklin Global Growth Fund: Investment Strategy

9

Finding growth through sustainable innovation

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Growing Awareness of Nutrition

Source: OECD projections.

OECD projections assuming that BMI will continue to rise as a linear function of time. Obesity was defined as BMI > 30Kg/m 2 in adults aged 15-74 years.

Age and gender-adjusted rates using the 2005 OECD standard population. Height and weight were measured in England, Hungry, Korea, Mexico, and the USA but self-reported in other countries.

From 2017 OECD analysis of national health survey data)

Source: 2018 Global Wellness Economy Monitor. Global Wellness Institute.

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Case Study: Koninklijke DSM NV

12

Nutrition’s Unique Business Model

Broad, global portfolio in nutritional ingredients & local solutions (incl. premix)

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Product Spotlight: Bovaer An impactful climate change solution The problem •

Cows make methane, a byproduct of digesting the tough food they eat, and it’s released into the air burp by burp

•

Methane is a greenhouse gas that traps heat in a much more potent way than CO2

The Solution • Bovaer is a food additive that helps prevent the conversion of cow feed into methane • Use of ¼ teaspoon daily in a cow’s feed reduces methane production by 30%

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DSM has a purpose & performance led growth strategy

Delivering positive impact, while also delivering on its ambitious financial targets Science-based company

Creating growth…

With targets that underpin the mission

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Electrification of Vehicles

Democratisation of technology leading to lower CO2 emissions

Source:.BCG EV Market Evolution June 2021 Note: xEV inclusive of: BEV = Battery Electric; PHEV = Plug-in Hybrid Electric; HEV = Full Hybrid Electric; MHEV = Mild Hybrid Electric Source: IHS Markit Alternative Propulsion Plus Data; IHS Markit LV sales (June 2021)

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Where we are today…

Included in Europe: UK, Germany, France, Italy and Spain Source: BCG analysis, Marklines, Publicly available information from SMMT (Society of Motor Manufacturers and Traders), UNRAE (Unione Nazionale Rappresentanti Autoveicoli Esteri), CAAM (China Association of Automobile Manufacturers), Wards, etc.

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What tomorrow may bring…

Source: BCG analysis, forecast includes all light vehicles, except heavy vans

Source: BCG analysis, HIS, CGIS Research, public announcements

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Case Study: Aptiv PLC Safe, Green and Connected

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Business Spotlight

Leveraging its capabilities to build future mobility APTV Revenue (US$bn) $25 $22.0 $20

US$bn

$16.3 $15

$14.4

$13.1

$10

$5

$0

2019

2020

2021F

2025T

Growing revenues Expanding margins Increasing cash flows

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Franklin Global Growth Fund Aims to achieve long-term capital appreciation by investing primarily in equity and/or equity-related securities of companies throughout the world – in both developed and emerging markets – of any market capitalisation.

Key benefits

Performance (%) 31 July 2021 (W Class)

• Concentrated yet diversified portfolio of high-quality growth stocks

• Benchmark indifferent – invests outside of the well-known mega-cap universe

• Forward-looking risk management approach • Strong performance track record Awards*

1 yr p.a

3 yr p.a

5 yr p.a

10 yr p.a

Fund (net)

33.66

21.58

20.53

18.22

Fund (gross)

34.84

22.84

21.82

19.51

Benchmark^

31.85

15.06

15.18

15.78

Ratings* Zenith

Recommended

Lonsec

Recommended

Morningstar

Silver

Winner of Fund Manager of the Year – Global Equities Morningstar Australia Awards 2020 Past performance is not a guide to future returns. ^ Benchmark is MSCI World ex-Australia Index NR. * See Fund Ratings and Awards disclaimer at back.

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Franklin Concentrated Global ex-Aust Model (SMA) Awards*

Performance (%) 31 July 2021 1 yr p.a

3 yr p.a

5 yr p.a

SMA (gross)

27.30

27.88

24.65

Benchmark^

31.85

15.06

15.18

Ratings* Zenith

Recommended

International Equities Award Winner IMAP Managed Account Awards 2020 & 2021

Past performance is not a guide to future returns. ^ Benchmark is MSCI World ex-Australia Index NR. * See Fund Ratings and Awards disclaimer at back.

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Disclaimer Franklin Templeton Investments Australia Limited (ABN 87 006 972 247) (Australian Financial Services Licence Holder No. 225328) issues this publication for the benefit of the category of person described below for information purposes only and not investment or financial product advice. It is not addressed to any other person and may not be used by them for any purpose whatsoever. It expresses no views as to the suitability of the services or other matters described herein to the individual circumstances, objectives, financial situation, or needs of any recipient. Franklin Templeton Investments Australia Limited is the Responsible Entity for the Franklin Global Growth Fund (ARSN 132 597 972). A Product Disclosure Statement (PDS) for any Franklin Templeton funds referred to in this document is available from Franklin Templeton at Level 19, 101 Collins Street, Melbourne, Victoria, 3000 or www.franklintempleton.com.au or by calling Toll Free 1800 673 776. The PDS should be considered before making an investment decision.

Any research and analysis contained in this presentation has been procured by Franklin Templeton for its own purposes and may be acted upon in that connection and, as such, is provided to you incidentally. Any views expressed are the views of the fund manager and do not constitute investment advice. The underlying assumptions and these views are subject to change. Franklin Templeton accepts no liability whatsoever for any direct or indirect consequential loss arising from the use of this commentary or any information, opinion or estimate herein. The value of investments and the income from them can go down as well as up and you may not get back the full amount that you invested. Past performance is not an indicator nor a guarantee of future performance. Any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets is not necessarily indicative of the future or likely performance.

The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the security transactions discussed here were, or will prove to be, profitable.

This publication is the property of Franklin Templeton Investments Australia and is intended for the sole use of its clients, consultants, and other intended recipients. It should not be forwarded to any other person. Contents herein should be treated as confidential and proprietary information. This material may not be reproduced or used in any form or medium without express written permission.

The Lonsec rating issued (Franklin Global Growth Fund – February 2020) is published by Lonsec Research Pty Ltd ABN 11 151 658 561 AFSL 421 445 (Lonsec). Ratings are general advice only, and have been prepared without taking account of your objectives, financial situation or needs. Consider your personal circumstances, read the product disclosure statement and seek independent financial advice before investing. The rating is not a recommendation to purchase, sell or hold any product. Past performance information is not indicative of future performance. Ratings are subject to change without notice and Lonsec assumes no obligation to update. Lonsec uses objective criteria and receives a fee from the Fund Manager. Visit lonsec.com.au for ratings information and to access the full report. © 2020 Lonsec. All rights reserved.

The Zenith Investment Partners (“Zenith”) Australian Financial Services License No. 226872 rating (Franklin Global Growth Fund – November 2019) referred to in this document is limited to “General Advice” (s766B Corporations Act 2001) for Wholesale clients only. This advice has been prepared without taking into account the objectives, financial situation or needs of any individual and is subject to change at any time without prior notice. It is not a specific recommendation to purchase, sell or hold the relevant product(s). Investors should seek independent financial advice before making an investment decision and should consider the appropriateness of this advice in light of their own objectives, financial situation and needs. Investors should obtain a copy of, and consider the PDS or offer document before making any decision and refer to the full Zenith Product Assessment available on the Zenith website. Past performance is not an indication of future performance. Zenith usually charges the product issuer, fund manager or related party to conduct Product Assessments. Full details regarding Zenith’s methodology, ratings definitions and regulatory compliance are available on our Product Assessments and at http://www.zenithpartners.com.au/RegulatoryGuidelines. © 2020 Morningstar, Inc. All rights reserved. Neither Morningstar, its affiliates, nor the content providers guarantee the data or content contained herein to be accurate, complete or timely nor will they have any liability for its use or distribution.

Any general advice or ‘class service’ have been prepared by Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892) and/or Morningstar Research Ltd, subsidiaries of Morningstar, Inc, without reference to your objectives, financial situation or needs. Refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/s/fsg.pdf. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Our publications, ratings and products should be viewed as an additional investment resource, not as your sole source of information. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. The Morningstar Rating is an assessment of a fund’s past performance – based on both return and risk – which shows how similar investments compare with their competitors. A high rating alone is insufficient basis for an investment decision.

The Morningstar Analyst Rating™ for Franklin Global Growth Fund is ‘Silver’ as at 20 March 2020Morningstar Awards 2020 ©. Morningstar, Inc. All Rights Reserved. Awarded to Franklin Global Growth Fund for Fund Manager of the Year Global Equities category in Australia.

CFA© and Chartered Financial Analyst® are trademarks owned by CFA Institute.

MSCI makes no warranties and shall have no liability with respect to any MSCI data reproduced herein. No further redistribution or use is permitted. This presentation is not prepared by or endorsed by MSCI.

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Pendal Group George Bishay

Portfolio Manager Fixed Interest

Pendal Group

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Responsible Investing Does this style of investing produce stronger returns in Fixed Interest markets?

George Bishay Portfolio Manager Pendal Group

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Our Responsible Investing journey Commitment to RI has a long and proud heritage 1984

2000

2007

2014

2017

Pendal Sustainable Balanced Fund (originally BT Australia Charities Trust) launched1

Became a member of Responsible Investment Association Australasia (RIAA)2

Pendal Australia became PRI Signatory2

Awarded our first ‘low-carbon’ mandate

Pendal Sustainable Funds received RIAA certification

1989 Pendal Sustainable Conservative Fund1

2001

Co-founded Regnan – Governance Research & Engagement2

Pendal Ethical Share Fund and Pendal Australian Sustainable Share Fund launched1

2015 Group CEO appointed to the Banking & Finance Oath

2009 Started managing our first Sustainable Australian fixed income strategy

2005

Founding member of the Investor Group on Climate Change (IGCC)2

Thermal coal exclusion implemented across Pendal Sustainable Funds

2018

2016

Launched Pendal Sustainable Future Australian Share Portfolio SMA (ex fossil fuels)

Launched Pendal sustainable funds: - Australian Fixed Interest - International Fixed Interest - International Shares Appointed Head of Responsible Investments

2015

2010 2007 2001 Westpac (and later BT) Governance Advisory Service (BT GAS) launched2

1996 Monash Centre for Environmental Management (MCEM) formed

2000 MCEM became Monash Sustainability Enterprises (MSE)

BT GAS evolved into Regnan - Governance Research & Engagement Pendal established as a founding part-owner and client2

MSE merged with Regnan, now operating in Sydney and Melbourne

Pendal increased ownership of Regnan to 50%

2019 Regnan wholly owned by Pendal

2020 Regnan and Pendal collaborated to launch first impact fund, the Regnan Credit Impact Trust Regnan Global Equity Impact Solutions Fund was launched

1 The fund was launched when Pendal was part of the BT Financial Group. Pendal Fund Services Limited (previously known as BT Investment Management (Fund Services) Limited) became the responsible entity of this fund in 2007.

2 When Pendal was part of the BT Financial Group.

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What is Responsible Investing?

There are a number of approaches within RI

ESG Integration

Sustainability investing

Considering Environmental, Social and corporate Governance (ESG) factors – both risks and opportunities – in the investment process.

Investments that target companies with sustainable business practices & products.

An essential element of RI

Example: Best of Sector, positive screening

Ethical or socially responsible investing

Impact investing

Investments which incorporate ethical and/or other values-based considerations.

Investments that seek to achieve targeted environmental and social outcomes in addition to financial returns.

Example: Exclusions/negative screening

Example: Green bonds

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The ‘Outperformer’ in Fixed Interest markets = Impact Bonds

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What is a Green Bond

When the bond matures, investors get their capital back

Borrowers use this money to build solar plants, wind farms and other facilities that help fight climate change

The bank then lends the investor money to borrowers who want to finance “green” infrastructure projects

A lender like a bank announces a green bond

Investors buy these bonds

Like other securities, investors earn interest on their bonds

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Examples of AUD Impact Bonds

Asian Dev Bank Green Bond

LendLease Green Bond

Asian Dev Bank Gender Bond

Macq. University Sustainable Bond

African Development Bank Social Bond

Mitsubishi UFJ Fin Green

ANZ Sustainable Development Goal bond

NAB Climate Bond

Asian Infrastructure Investment Bank SDB

NAB Social Bond

Australian Catholic University Sustainable Bond

National Green RMBS

Canadian Pension Plan Green Bond

National Housing Social Bond

CBA Climate Bond

National Housing Sustainability Bond

EIB Climate Awareness Bond

New South Wales Treasury Corp Green Bond

IADB EYE Social Bond

New South Wales Treasury Sustainability Bond

IBRD Green Bond

Treasury Corp. of Victoria Green Bond

IBRD Sustainable Development Bond

Wesfarmers Sustainability-Linked Bond

IFC Social Bond

Westpac Climate Bond

KFW Green Bond

Woolworths Green Bond

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Strong growth of impact securities in Australia

Issuance 12000

10000

AUD Impact bond issuance

A$M

8000

6000

4000

2000

0

Source: Climate Bond Initiative, Pendal

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

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Mapping investments to the Sustainable Development Goals (SDGs)

ADB Green Bond ADB Gender Bond African Development Bank Social ANZ Sustainable Dev. Goal Asian Infrastructure Investment Bank Australian Catholic University Sustainable Bond Canadian Pension Plan Green Bond CBA Climate Bond EIB Climate Awareness Bond IADB EYE Social Bond IBRD Green Bond IBRD Sustainable Bond IFC Social Bond KFW Green Bond LendLease Green Bond Macq. Uni Sustainable Bond Mitsubishi UFJ Green NAB Climate Bond NAB Social Bond - Gender Equality National Green RMBS National Housing Social Bond National Housing Sustainability Bond NSW TCorp Green Bond NSW TCorp Sustainability Bond Treasury Corp. of Vic. Green Bond Wesfarmers Sustainability Linked Westpac Climate Bond Woolworths Green Bond

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Impact report Portfolio’s contribution to the environment

Low carbon

Renewable energy

22,283 tCO e 2

20,040 MWh/year

9,789

120 hectares

OF FOREST RESTORED

68

Equivalent to Melbourne Cricket Ground-sized stadiums Gunning wind farm | Australia Westpac Banking Corp Climate Bond

SOCIAL / AFFORDABLE HOUSING*

740

RENEWABLE ENERGY GENERATED

YOUTH

Equivalent to annual electricity

placed in at-risk training programs*

GHG EMISSIONS AVOIDED PA Equivalent to cars taken off the road p.a.

83

use of

4,360 Australian households

8 megawatts

RENEWABLE ENERGY GENERATION INSTALLED CAPACITY

0.4%

Equivalent to of renewable energy capacity installed in Australia in 2018

7,743

UNDERPRIVILEGED STUDENTS number of students educated*

Two Leading Solutions

Portfolio Manager

Pendal Sustainable Australian Fixed Income

Regnan Credit Impact Trust

George Bishay

George Bishay

Description

Actively managed portfolio of Australian fixed interest securities including Commonwealth, Semi Government and Sustainably screened Credit and Impact securities.

Actively managed portfolio of Credit Securities, including Sustainably Screened Corporates and Impact Bonds. The Fund focuses on investments anchored to impact goals adapted from Sustainable Development Goals (SDG)

Return objective

The Fund aims to provide a return (before fees, costs and taxes) that exceeds the Bloomberg AusBond Composite 0+ Yr Index by 0.75% p.a. over rolling 3 year periods

The Fund aims to generate positive and measurable social or environmental impact, or both; and a return (before fees, costs and taxes) that exceeds the RBA Cash Rate +1% to 3% over rolling 3 year periods

Bench mark

Bloomberg AusBond Composite 0+ Yr Index

RBA Cash

Research Rating

Recommended (Zenith and Lonsec)

Recommended (Zenith)

Drivers of Return

Modified Duration (interest rate risk) Credit Spread Duration Security and Sector Selection Active Risk Management

Minimal Modified Duration ( focus on Floating Rate Return) Credit Spread Duration Security and Sector Selection.

Active Risk Management

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Disclaimer This presentation has been prepared by Pendal Funds Services Limited (Pendal) ABN 13 161 249 332, AFSL No 431426 and the information contained within is current as at August 2021. It is not to be published, or otherwise made available to any person other than the party to whom it is provided. This presentation is for general information purposes only, should not be considered as a comprehensive statement on any matter and should not be relied upon as such. It has been prepared without taking into account any recipient’s personal objectives, financial situation or needs. Because of this, recipients should, before acting on this information, consider its appropriateness having regard to their individual objectives, financial situation and needs. This information is not to be regarded as a securities recommendation. The information in this email may contain material provided by third parties, is given in good faith and has been derived from sources believed to be accurate as at its issue date. While such material is published with necessary permission, and while all reasonable care has been taken to ensure that the information in this video is complete and correct, to the maximum extent permitted by law neither Pendal nor any company in the Pendal Group accepts any responsibility or liability for the accuracy or completeness of this information.

Pendal is the responsible entity and issuer of units in Pendal Sustainable Australian Fixed Interest Fund ARSN: 612 664 730 (the Fund). A Product disclosure statement is available for the Fund (PDS) and can be obtained by calling 1800 813 886 or visiting www.pendalgroup.com. You should obtain and consider the PDS before deciding whether to acquire, continue to hold or dispose of units in the Fund. An investment in the Fund is subject to investment risk, including possible delays in repayment of withdrawal proceeds and loss of income and principal invested. Performance figures are calculated in accordance with the Financial Services Council (FSC) standards. Performance data (post-fee) assumes reinvestment of distributions and is calculated using exit prices, net of management costs. Performance data (pre-fee) is calculated by adding back management costs to the post-fee performance. Past performance is not a reliable indicator of future performance

For more information, call us 1800 813 886 or visit www.pendalgroup.com

Ralton AM Will Riggall

Portfolio Manager

Ralton Asset Management

This document is for general use. Modification of content is prohibited unless you have Netwealth’s express prior written consent.

Ralton Asset Management Investment opportunities from a greening economy Will Riggall – Chief Investment Officer

Disclaimer and General Advice Warning The information contained in this presentation has been prepared by Ralton AM Pty Ltd (Ralton), a Corporate Authorised Representative of AdviceNet Pty Ltd, ABN 35 122 720 512, AFSL 308200.

This presentation is for Financial Advisers and Professional Investors only (as defined in the Corporations Act 2001). The information contained herein is not intended to be personal advice and does not take into account any person's individual circumstances, financial situation and objectives.

The information in this presentation is accurate as at 1 September 2021.

Investing involves the risk of capital loss and past results are not a reliable indicator of future performance and returns.

P.38

The shift to a greener economy is gaining momentum

By 2030, bp aims for emissions from its operations to be lower by 30-35%.*

* BP Investor Day 2020

P.39

Longevity | Performance | Insight | Transparency

Leaders

Investment Insight

Concentrated Portfolios

Optimised SMA Structure

Transparency Communication

Concentrated

Dividend Builder

X50

P.40

How we integrate ESG into fundamental investing

Prefer Pact Group Worley

•

Investing is about understanding the sustainability of growth and the risks to that growth.

•

Over 20 years ESG focus has shifted from risk to growth

•

Significant opportunities to find sustainable growth from the global thematic of decarbonisation.

Healius

Supporting Sustainability Forces OZ Minerals

Avoid

ESG Performance

Low Risk

P.41

What does it take to achieve net zero?

Material shift needed to meet 1.5C pathway

Climate math: What a 1.5-degree pathway would take, McKinsey Quarterly, April 2020

Investment opportunity is large

Report from IGCC and Energetics. Author Dr Peter Holt. Date August 2020 P.42

The de-carbonised economic ecosystem Shift in consumption • Willingness to pay a premium Shift in behaviour • Transport • Recycling Energy consumption • Advocacy

Australian ESG funds under management increased 60% over the last year to 33.4billion. *Morningstar 2021.

Leadership in Net zero Industry signatories (APCO) – Packaging industry targets

Individuals

Business

Investors

Government Investment & incentives needed to bridge economic/social divide State governments policy platforms.

• NSW renewable energy zone (REZ) P.43

Ralton Process & Philosophy – converting insight into conviction

Thematic

Quality

Value

Economic

Qualitative

Cyclical misvaluation

Industry

Quantitative

Overlooked value

Fundamental

Fallen angel/Turnaround

Behavioural

Thematic

Conviction Value

Quality

P.44

We are investing across three streams of opportunity

Low carbon economy Creating a circular economy

Supplying the new economy

Building the new economy

Pact Group

OZL

WOR

IGO

DOW

P.45

De-carbonisation is expanding the opportunity set

• Worley estimates the investment to reach net zero would be US$1 trillion per year • 2% US GDP • IEA (International Energy Agency) estimate is US$5 trillion per year

Worley Investor Day, 2021

• Worley uniquely positioned to win work across a decarbonising economy Worley Investor Day 2021

P.46

Sustainable project wins to drive forward earnings Share price impacted by short term COVID headwinds

Source: Factset, Ralton Worley FY21 presentation P.47

Strategic shift turns risk to opportunity Industry committed to change through APCO

Pact Group Presentation August 21

• •

December 2019 announced strategic shift Key markers of turnaround in place • Acknowledgement of changing industry/competitive position • New CEO • Communication of strategy

• •

apco.org.au

What did Pact see?

• customers/community/capital market change • Turned risk into opportunity Outcome?

• Benefit from industry tailwinds • Strengthen competitive position • Improving sustainable return on capital

P.48

Leadership in the circular economy In late 2019 Pact, Asahi and Cleanaway created a company with its first project ( cost $48m) to increase recycled PET from 30kT to 50kT. Corporate – Asahi, Cleanaway & Pact • Cleanaway will provide available.

• Pact will provide technical and packaging expertise • Asahi and Pact will buy the majority of the recycled pellets Individual • Consumer preferences • Willingness to pay premium Customer • Necessity to meet APCO targets Government • CEFC through the Australian Recycling Investment Fund, committing up to $16.5 million in debt finance • The project received financial assistance of A$5m as part of the NSW Government’s Waste Less, Recycle More initiative.

P.49

Increased growth at higher returns Strong share price returns

Source: Factset, Ralton

Strong financial returns

Pact Group Presentation August 21

P.50

Conclusion

 Economies are moving towards a greener future  The path to net zero necessitates material change  Government, business, individuals and investors are key participants  Investment opportunities are significant  Green thematic offer higher growth at strong returns  ASX listed companies are set to benefit

P.51

Ralton Asset Management Investment opportunities from a greening economy Will Riggall – Chief Investment Officer

Questions and answers

Thank you Trend Hunters Series – Coming up • Thu 9th Sep at 1pm - Making an impact: The breakdown of impact investing and why you don't need to sacrifice returns

Portfolio Construction Podcast In this podcast series, our investment research team pick the brains of key wealth management professionals to uncover unique insights on the investment areas they are most passionate about.