Handelsbanken USA Index Criteria (B1 EUR)

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In order to qualify as sustainable investments, companies whose economic activities contribute to the achievement of an environmental or social objective must also not counteract sustainable development through other parts of their value chain (the “do no significant harm” principle). For this fund, which has a reduction in emissions of carbon dioxide and other greenhouse gases as its objective at the fund level, the fund company ensures this by following a Paris Aligned Benchmark where the sustainability requirements in the index guarantee that the companies in the fund and the index are selected and weighted in such a way that the index portfolio’s emissions of carbon dioxide and other greenhouse gases are adapted to the long-term global warming targets of the Paris Agreement (i.e. the goal of limiting global warming to 1.5 degrees Celsius). In addition, the index methodology involves the application of the following exclusion criteria when selecting companies to include in the fund and its index:

The fund is an equity index fund that aims to follow the performance of the Solactive ISS ESG Screened Paris Aligned USA Index as closely as possible. The index constitutes a registered EU benchmark for alignment with the Paris Agreement (a so-called Paris Aligned Benchmark) pursuant to Regulation (EU) 2016/1011 (the Benchmark Regulation), and aims to reflect developed equity markets in the US, taking into account specific sustainability requirements. The sustainability requirements of the index aim to reduce emissions of carbon dioxide and other greenhouse gases. The companies in the fund and the index are selected and weighted in such a way that the index portfolio's greenhouse gas emissions are adapted to the long-term global warming targets aligned with the Paris Agreement. The fund company reports the fund in accordance with Article 9(3) of Regulation (EU) 2019/2088 of the European Parliament and of the Council on sustainability-related disclosures in the financial services sector (SFDR). More information about the index that the fund tracks can be found at https://www.solactive.com/indices/. Note that it is the fund as a whole that, according to Article 9(3) SFDR, has a reduction in emissions of carbon dioxide and other greenhouse gases as its objective.

The fund is an equity index fund managed with the aim of generating returns over time that correspond as closely as possible to the returns of the index. The fund applies the following investment strategy to meet the sustainable investment objective:

The stated asset allocation is based on the fund's investment strategy and its objective to reduce emissions of carbon dioxide and other greenhouse gases by following the Solactive ISS ESG Screened Paris Aligned USA Index as closely as possible. The information on the minimum proportion of sustainable investments only refers to investments with environmental objectives and relates to the objective of reducing emissions of carbon dioxide and greenhouse gas at the fund level (the fund as a whole). The minimum proportion is set with consideration for the rules that apply to the fund's management, and the result of the actual allocation in the fund is reported in the fund's annual report. It is important to note that the information about the minimum proportion of sustainable investments refers to the fund level and does not provide an indication of whether an individual company in the fund constitutes a sustainable investment.

On a daily basis, the fund company's risk control monitors compliance with the target of reducing carbon dioxide and other greenhouse gases. This is done by monitoring whether the fund is following its Paris Aligned Benchmark. Furthermore, the minimum proportions set out in the Prospectus – found in the annex containing sustainability-related disclosures for the fund regarding the proportion of sustainable investments, pursuant to the requirements of Regulation (EU) 2020/852 – are complied with. The fund company's risk control also follows up on whether the fund complies with its provisions on the exclusion of companies. This verification concerns sectors we exclude and which we believe risk counteracting sustainable development. The fund company's risk control also monitors that the investee companies in the fund do not violate international norms and conventions. For further information, refer to the heading “Methodologies” below.

The fund company regularly conducts follow-up at the holdings level to ensure that companies with activities in sectors excluded by the fund and/or companies that violate international norms and conventions are not included in the fund. All of the fund's requirements for exclusion are built into in the fund's index methodology. This means that no companies with activities in sectors excluded by the fund and/or companies that violate international norms and conventions are allowed to be included in the index and thus neither in the fund. The assessment is made by the ESG provider specified in the index methodology and the result cannot be reviewed by the fund management. In the event of a change in the assessment of a company, an exit or entry into the index and the fund takes place at the next index rebalancing.

Information about the companies' exposure to excluded activities and incidents that lead to violations of international norms and conventions is obtained for funds that follow sustainability-adapted indices by the index provider from external data providers in accordance with the respective fund's index methodology. Corresponding information is also retrieved directly by the fund company. The external data providers obtain information about the companies' exposure to excluded operations from public presentations published by the companies and/or through direct contact with the companies. EU Taxonomy contributions are obtained from Sustainalytics and SDG contributions from ISS ESG. In addition, the fund company conducts its own analysis regarding contributions to environmental or social objectives, with the assessment based primarily on data from the companies' annual reports.

Information about the companies' exposure to excluded activities is limited to the information made available by the companies themselves. Consequently, it is not always possible to ensure the exact exposure to these activities. The limitations are most prominent for companies with a smaller portion of the business involved in the excluded activities, such as a grocery store that also sells alcohol. This is an acceptable limitation since the principal effect of the fund's strategy is attained by the exclusion of companies with significant exposure to the excluded activities.

The fund company has due diligence procedures in place to ensure that sustainability risks and the sustainability requirements set for each fund are accounted for in investment decisions. Depending on the management approach, these procedures differ.

As a significant investor, the fund company has a responsibility and an opportunity to engage with companies to influence them to act responsibly and conduct their business in a sustainable manner, in addition to promoting the development of sustainability efforts in the asset management industry. The fund company engages through company dialogues, asset stewardship and investor networks. Our engagement efforts are based on Handelsbanken's core values, our commitments, as well as the international norms and conventions supported by the fund company. The company dialogues include overall strategic sustainability issues, as well as specific aspects of a company's risks, opportunities and impact linked to sustainable development. Through our corporate governance efforts, we influence companies by participating in nomination committees and voting at shareholders’ meetings. Networking and collaboration with other shareholders and stakeholders contribute to collective learning, development and making an impact through engagement. The engagement is carried out on behalf of the index funds and other passively managed funds through company dialogues, as well as through corporate governance efforts and investor networks. Additional information on the principles and methodologies applied by the fund company in its engagement efforts and asset stewardship, as well as how this work is structured within the fund company, is available in the fund company's Policy for Shareholder Engagement and Responsible Investment at www.handelsbankenfonder.se.

The objective of the fund is to reduce emissions of carbon dioxide and other greenhouse gases, in accordance with Article 9(3) SFDR. The fund has the following index as its benchmark: Solactive ISS ESG Screened Paris Aligned USA Index. The fund is an index fund that follows a Paris Aligned Benchmark, pursuant to the Benchmark Regulation, and the fund's index therefore considers the same environmental and social characteristics as the fund's investment objectives (however with some extended sustainability requirements compared to the requirements of the Benchmark Regulation, see the fund's Prospectus under the heading "Sustainability requirements in index").