VAUGHAN NELSON’S ESG INITIATIVE

Vaughan Nelson maintains that Environmental, Social, and Governance (ESG) considerations are inherently relevant in the value investing realm and are factored into our investment process. As fundamental investors, our investment teams utilize a host of tools and spend time engaged with management to gain insight into their operations and effectiveness in corporate governance. Vaughan Nelson maintains that appreciable management engagement on ESG related factors can contribute to better corporate performance and ultimately increased shareholder value.

ESG INTEGRATION AT VAUGHAN NELSON

The investment process at Vaughan Nelson incorporates both financial and non-financial factors, including ESG considerations. Thorough analysis uncovers any material ESG risks prior to making an investment decision. Issuers are continually re-evaluated across our analytical and ESG spectrum.

Our investment team continually monitors developments in regulatory, market, political, technological, and social considerations that may have a material impact on an issuer’s ability to generate positive shareholder value. A solid management team with robust corporate governance is paramount to an issuer’s ability to react to a changing business environment, retain key talent and adhere to relevant industry product safety and operational standards. The investment analysis considers environmental factors, inclusive of climate change issues, that may materially impact the issuer’s potential return.

Vaughan Nelson does not look to exclude companies or sectors from our investable universe, but rather to analyze and monitor issues, including ESG factors, that may have an impact on long-term financial performance. Vaughan Nelson is positioned with portfolio management capabilities to address client parameters and tailor specific portfolios to incorporate unique restrictions.

ESG ENGAGEMENT AT VAUGHAN NELSON

Engagement with management is core to our investment process. A constant dialogue between the investment team and management teams allows for the ongoing assessment of a company’s adherence to, and willingness to maintain, appropriate corporate governance standards.

Vaughan Nelson is not a silent observer and engages in relevant strategic ESG dialogue. We exercise proxy voting authority to address corporate governance issues and believe that voting is an important component of our ESG engagement. We strive to identify investments where both our goals and those of management are aligned and our investment team will vote in a manner best suited to promote and maintain positive shareholder value.

SIGNATORY - UN PRINCIPLES FOR RESPONSIBLE INVESTING (PRI)

Vaughan Nelson is a signatory to the PRI and has entered the two-year setup and evaluation phase. The PRI provides a standardized and robust framework for ESG guidance that is globally accepted and recognized. Ultimately Vaughan Nelson’s responsibility is to meet our clients’ investment objectives, and the PRI provides the structure to not only evaluate ESG investments but also a methodology to report ESG related results. Vaughan Nelson will complete the PRI reporting process in the Spring of 2023. We seek to constantly evolve our investment process to better incorporate PRI principles and demonstrate our commitment to responsible investing.

ESG AT VAUGHAN NELSON

Vaughan Nelson has a reputation for operating with a high degree of integrity, and we feel strongly about maintaining the highest standards of oversight, compliance, and corporate governance. The Vaughan Nelson Board of Directors provides oversight and directional perspective, and our Risk Management Committee meets quarterly to evaluate all aspects of operational risks. Vaughan Nelson maintains a robust compliance infrastructure and actively reinforces adherence to our Code of Ethics. Senior management sets the tone by articulating the organization’s values and by maintaining a culture of accountability, transparency, and compliance.

Vaughan Nelson prides itself on the familial nature of our staff. Our Mission Statement is “to provide for the financial wellbeing of our clients and employees through superior performance consistent with our values”. We feel strongly about inclusivity and as a firm and strive to enhance our capabilities by recognizing the importance of identifying talent with varying age, educational, socioeconomic, race, ethnic and gender backgrounds. We recognize that incorporating a diversity of perspectives into our investment process and operations will better position us to deliver performance for the benefit of both our clients and employees.