September 14, 2012

To our stakeholders:

I am pleased to confirm that Wealth Management Partners NV reaffirms its support of the Ten Principles of the United Nations Global Compact in the areas of Human Rights, Labour, Environment and Anti-Corruption.

In this annual Communication on Progress, we describe our actions to continually improve the integration of the Global Compact and its principles into our business strategy, culture and daily operations. We also commit to share this information with our stakeholders using our primary channels of communication.

Sincerely yours,

Patrick Mol
Managing Partner

In making investment choices on behalf of its clients, the main priority of Wealth Management Partners (WMP) is earning long-term returns. However, those returns need to be earned in an responsible way. By signing up to the UN Principles for Responsible Investments (PRI), WMP has underlined its efforts in this field. WMP considers information on the performance of companies in terms of the environment, human rights, corporate governance, working conditions and anti-corruption measures (so called ESG criteria) as part of the investment process. That is why WMP has signed up to the United Nations Global Compact and adheres to these international standards on responsible investment. Furthermore, WMP also takes a variety of international conventions into account in conducting its activities.

WMP is directly dependent on external fund managers for the implementation of its policy. That is why external fund managers are actively informed about WMP’s vision on responsible investment. If the composition of a fund does not comply with WMP’s minimum requirements, a meeting will be held with the fund manager to explain the problem, in line with WMP’s vision on responsible investment, before asking the fund manager to take action accordingly. The objective of this approach is to increase the understanding of and support for responsible investment choices and to encourage fund managers to actively take steps in this area. Although a number of fund managers pursue their own responsible investment policy, this cannot be said of all external fund managers selected by WMP. WMP does not want to make this a condition for accepting external fund managers. However, WMP does encourage those fund managers not yet pursuing a responsible investment strategy to begin doing so, for instance by signing up to the UN PRI principles or formulating their own responsible investment policy.

By means of engagement in the form of active dialogue, WMP exerts influence, through fund managers, on the companies in which investments are made. The objective is to encourage change processes at those companies. WMP believes that good corporate governance and corporate social responsibility increase shareholder value over the longer term. That is why WMP endeavours to promote the PRI principles and encourage other parties in this respect. WMP will enter into dialogue with external fund managers on this matter. In implementing its responsible investment policy, WMP relies on research from an independent research provider in this field.

WMP’s responsible investment policy is based on two pillars.
1. Engagement and exclusion criteria: WMP has defined engagement and exclusion criteria to be applied to all investments in equity funds. The basic principle is that WMP’s investment choices may not lead to involvement with serious breaches of internationally acknowledged standards. The engagement and exclusion criteria form the basis for the engagement and exclusion strategy.
2. Dialogue with fund managers: WMP conducts a dialogue with its external managers in order to highlight responsible and sustainable investment choices and to further promote the PRI principles.

WMP will not make investments for any of its clients in companies involved in the manufacture of controversial weapons. This means manufacturers of cluster munition, anti-personnel mines and biological, chemical and nuclear weapons. These weapons are regarded as controversial because of their disproportionate and arbitrary impact on civilian populations, often continuing for many years after a conflict ends. Investment funds that include manufacturers of controversial weapons are therefore not selected.

Besides a policy of excluding manufacturers of controversial weapons, WMP adopts additional criteria in order to protect their investments against any involvement with serious infringements in the areas of human rights, employment rights (including child labour), the environment or business ethics (i.e. corruption). These additional criteria are based on the principles of the United Nations Global Compact. WMP pursues a combined engagement and exclusion policy with respect to companies that breach one or more of these principles on an ongoing basis.

WMP’s Responsible Investment Committee is comprised of at least one external member who is an expert on responsible investment, a member of WMP’s management and a member of the WMP Investment Committee. The committee is charged with monitoring WMP’s responsible investment policy and with making and approving decisions on engagement, the steps reported by the manager and the progress made in this connection, as well as decisions on exclusion. The ultimate authority to take decisions on these matters lies with the Responsible Investment Committee. Furthermore, the Responsible Investment Committee reviews whether it would be desirable to make changes or improvements to the responsible investment strategy and advises the Investment Committee accordingly.

Transparency is one of the key features of WMP’s approach. In its reports to clients, WMP will therefore report on investment decisions that arise directly from the pursuit of the responsible investment strategy, as well as exclusions. Clients can consult these reports in the secure environment of the WMP website. A copy will also be sent upon request.
The reports will address the following matters:

• the names of companies identified as having specific problems
• the subjects discussed with fund managers
• the steps taken by the fund managers in response to the problems
• decisions of the Responsible Investment Committee.

WMP receives quarterly research reports from Sustainalytics, an international researcher and service provider in the field of responsible investment. Those reports give an overview of companies involved in the manufacture of controversial weapons and companies which, according to the research methods employed, act contrary to the Global Compact principles.
WMP asks external fund managers to supply details of their portfolios, then verifies whether the composition of the funds complies with the criteria formulated by WMP.

Within a month after receipt of the report from Sustainalitics, a member of the Investment Committee will contact the fund managers in question by e-mail to inform them about the identified cases and in particular about any changes compared with the previous quarter. The fund manager will be informed (or reminded) about the WMP policy, specifically naming the companies at issue and the reason why WMP regards them as problematic.

If the funds are found to include companies that do not comply with the criteria, a variety of further steps are possible. If companies that manufacture controversial weapons are found, the fund manager will be asked to adjust the composition of the fund within a period of three months and to commit to the WMP policy on exclusion in relation to controversial weapons. In the event of failure to comply with this request, investment in the fund will cease.
WMP pursues a combined engagement and exclusion policy with respect to companies that breach one or more of the Global Compact principles on an ongoing basis. In first instance, WMP will encourage an active dialogue with the company through the fund manager, with the aim of encouraging the company to make improvements and avoid future problems. If such dialogue is not possible or produces unsatisfactory results, a decision to exclude the company may follow. In that case the fund manager will be asked to adjust the composition of the fund. The decision on whether to continue investing in a fund will depend on a number of factors, such as:

• whether the fund manager has a policy on responsible investment and the quality of that policy;
• the fund manager’s engagement activities with the companies involved;
• the willingness of the fund manager to adjust the composition of the fund.

Specific aspects of engagement, the steps reported by the manager and the progress made in this connection, as well as with respect to exclusion, will be reported to WMP’s Responsible Investment Committee on a quarterly basis; that committee will take the final decisions.

Besides the quarterly audits carried out by WMP itself, at the end of each year an external audit will be carried out by Sustainalytics, which involves screening the constituents of all the funds in which WMP invests.

We refer to to policy as formulated under 'human rights'

We refer to to implementation as formulated under 'human rights'

We refer to to measurement of outcomes as formulated under 'human rights'

We refer to to policy as formulated under 'human rights'

We refer to to implementation as formulated under 'human rights'

We refer to to measurement of outcomes as formulated under 'human rights'

We refer to to policy as formulated under 'human rights'

We refer to to implementation as formulated under 'human rights'

We refer to to measurement of outcomes as formulated under 'human rights'