KAsset, as a leading domestic asset manager, our investment approach is to invest in companies which generate both financial and sustainable economic value for investors. We strive to integrate Environmental, Social and Governance (“ESG") issues as well as ethical issues into our investment analysis, decision-making process and portfolio construction across all asset classes under our management. Being engaged in an asset management industry, KAsset duly recognizes the public's trust and faith in the Company as keys to success for our business. We truly believe that good corporate governance will help sustain and enhance the Company's operations, which are means to achieve our ultimate goal to maximize our customers' satisfaction. With our top priority is given to investors' benefits, we also seek to ensure effective measures to prevent conflict of interest and assure transparency.​

2) Oversight

The Sustainable Development Committee (“SDC") is delegated by the Board of Directors to be responsible for oversight of KAsset's ESG and Climate Change approaches, policies and practices as well as approval of disclosure reports related to sustainability to public and external parties. The Committee is also to monitor the impact of ESG and climate at a firm level and portfolios under management together with to promote and ensure effective ESG practices across functions within KAsset. The SDC will report the overall sustainability development compare with goals and targets to the Board of Directors at least 2 times a year.

3) Scope of ESG Considerations, Priorities and Sustainability Outcome

Environmental:

KAsset aims to support a sustainable and low carbon economy transition. We measure and assess our investee companies on their abilities to reduce and control direct and indirect environmental impact as well as seek new opportunities that may arise from a transition to a low carbon economy. Our main area of focus are such as:-

• Greenhouse gas emissions
• Climate risk
• Energy efficiency
• Pollution
  
• Waste management
• Biodiversity
  

Social:

We focus on how companies managing their human capital, establishing their social goals and measuring social impact, consideration area are such as:-

• Human rights: We expect investee companies to show responsibilities on human rights which are aligned with international frameworks in addition to local laws and practices where businesses are operating such as UN Guiding Principles on Business and Human Rights (UNGP) and/or The International Labor Organisation Declaration of Fundamental Principles and Rights at Work (ILO). The focused topics are such as child labor, forced labor, discrimination in respect of employment and occupation, diversity, equity and inclusion, employee health and safety, product quality and safety
• Community responsibility
• Responsible production and consumption

Governance:

Our approach to corporate governance and proxy voting are based on corporate governance principles listed below:-

• Integrity
• Transparency
• Independence
• Responsibility
• Accountability
• Fairness

We have established an internal proxy voting policy as a guidance to our exercise of voting rights and appropriate actions to be taken, if necessary, as well as to support and encourage sound corporate governance practice.

Corporate governance issues are systematically integrated through proxy voting and engagement process through active communication with the investee companies. For example, for any shareholder meeting which “against" vote is potentially casted, KAsset will make best effort to contact companies before exercising votes to discuss on the matter and explain the reasons for vote cast in opposition to management's recommendations. This provides us opportunities to communicate and raise our concerns to the Companies. Post-shareholders' meetings, the follow-up process will be carried out to ensure our investment decision/appropriate action towards the Companies, if necessary. We also focus on issues such as conflict of interest, anti-bribery and anti-corruption.

Sustainability Outcome

KAsset believes that by incorporating ESG factors into investment process and decisions will result in increasing positive outcomes and reducing negative outcomes to our society and planet which leading us to achieve the Sustainable Development Goals. In addition, focusing on outcomes will enable us to understand potential risks and opportunities during the transition to achieve goal of sustainability. KAsset supports investee companies that have business operations aiming to achieveacross 17 SDGs.

4) Summary of KAsset Firm-Wide ESG Implementation by Asset Class and Product Segment

​​ESG Integration Process

KAsset incorporates ESG into our investment process from securities analysis and selection to portfolio construction. Our ESG data and information are conducted through various sources such as management discussions, questionnaires, company visits, site (factory) visits, company's relevant report filings e.g. one report, 56-1, sustainability report, annual and interim financial reports, shareholders' meetings agendas, database/research provided by third party service providers such as LSEG workspace, S&P Global market intelligence, Bloomberg, Institutional Shareholder Services (ISS) and other available public information.

Given the dynamic of investees' ESG data availability and ESG trends, we have been improving our ESG assessment framework to better reflect ESG data into our ESG scoring methodology for all investees. We have ESG assessment score for all investees in our investment universe by using our internal template and reliable external data providers. The evaluation topics cover all ESG areas e.g. climate change, carbon emission, human right, socio-impact, governance etc. To reflect the materiality of ESG factors, we assign weighting of each factor varying by industry that individual company is in. Our ESG assessment of investee companies are done at least once a year and review upon any significant changes or material events.

The derived ESG scores and ratings will then be integrated and/or consider in our investment process. Fund managers/analysts will reflect ESG data into their respective financial forecasts, company valuations and portfolio construction where appropriate. In case there is an ESGissue that has an impact onthe company's operation or value,we will engage with the investee company to obtain additional information in order to assess the potential impact and formulate the investment decision making.

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A. Active Equity Strategy

​5) Climate Change Approach

KAsset fully recognizes the impact of climate change and the urgent need to accelerate the sustainable transition towards global net-zero emissions as environmental impact could have adverse impact on investment performance. We strive to evaluate climate risks and opportunities and try to manage risks that consider material to our investments and business. Climate change is one of our engagement priority topics with investee companies.

Since we deem transparency and disclosure on climate related risk is important in order for quantify the potential impact of climate change to financial performance of companies. KAsset has signed up as official supporter of Task Force on Climate-related Financial Disclosures (TCFD) and will try to align our practices in accordance with the guidelines.

The analysis of potential impact of climate change in investment process which is also considered part of ESG assessment. SDC is responsible for reporting and update the activities and outcome to the Board of Directors.

6) Exclusionary Guideline (For Direct Investment only)

A. Companies that have controversial behavior according to international standards onresponsible conduct and the management does not react to address the issuesproactively or implement necessary reforms, will be placed on watched list and may be excluded from KAsset investment universe.

B. Companies that involve/manufacture/distribute or sell products in the following productcategories will be excluded from our investment universe:-

• Controversial weapons such as chemical, biological, nuclear weapons
• Anti-personnel landmines
• Cluster bombs or munitions
  
• Firearms
• Military contracting
• Adult Entertainment

C. Companies that involve in businesses that consider high carbon emission such as coal mining, coal-based electricity, fossil fuel will be closely monitored the development of the company' strategies to achieve a transition toward a low or net-zero carbone mission target.​

7) Active Ownership Activities

A.Engagement Approaches

We believe engagement with investee companies is an important part for fundamental approach investors as ongoing active dialogues with the investee companies could gain more understanding on their business strategies and directions as well as creatingconstructive feedbacks. These could help improving the companies' performance and also reducing potential risks and uncertainties.

In case the concerned issues are considered serious and might incur the negative consequences, we might escalate the issues to the Board of Directors level of the investee companies.

Although in general and most cases of our approach, we prefer to communicate with investee companies privately on our stewardship activities since we believe in positive relation and trust and also avoid public misleading that could cause an unintended outcome. To conduct any action towards an investee company that is involved with KAsset's concerns and is unable to solve the problem even after the degree of monitoring has been raised, KAsset may collaborate with other investors (both domestic and foreign investors) or other stakeholders in a collective engagement as deemednecessary to bring about an improved situation.

KAsset also acts collectively with other domestic institutional investors through industry organization such as Association of investment Management Companies (“AIMC"), Thai Listed Companies Association (“TLCA"), Thai Institute of Directors (“IOD") and regulators such as the Stock Exchange of Thailand (“SET"), the Securities and Exchange Commission (“SEC") the and Bank of Thailand (“BoT"). We actively participate in public hearings, focused groups and give feedbacks for any new or reviews of the existing regulations or notifications by related regulators. We are also a member in ESG Collective Action Committee arranged by the AIMC and signed the guidance to apply negative list with investee companies together with other institutional investors on behalf of the AIMC.

Escalation:

After the considerable effort of engagement is done and the concerned topics have notbeen satisfactory resolved, we may escalate in the following order as appropriate

• Sending letters to the board of directors
• Collective engagement with other investors
• Withholding support from directors
• Opposing a management proposal
• Supporting a shareholder proposal at annual meetings
• Making our concerns public
• Nominating new directors to the board
• Choosing to not or no longer invest in the company.
  

Prioritization of engagement topics:

Engagement topics may vary upon circumstances/incidents and materiality of businessthat each company operates in. However, we have identified priority on ESG engagement topics that considered as common and have high impact on most ofinvestee companies' performance:-

1. Climate Change and natural sustainability
2. Human capital
3. Company strategy, purpose and resilience
4. Board quality
   

Overall political engagement approach:

We believe that in order to achieve sustainability development goals, cooperation from all stakeholders both public and private sectors are necessary. Participations on focusedtopics or feedbacks from investee companies and investors with public sector can lead to effective changes. KAsset supports political engagement that are conducted in linewith business principles that ensure integrity and sustainability goals. The engagement activities should lead to effective public policy decisions that contribute to a stable economic system and promote positive real-world sustainability outcomes.

Engagement approach with other key stakeholders:

KAsset gives importance to engagement with all stakeholders not only investee companies or regulators. Our engagement would also covers communication anddiscussion with other key stakeholders such as external managers, service providers, academics, medias or non profit organizations which can exchange discussions on sustainability related topics. However, it should be conducted with integrity, transparency and long term sustainability purpose.

B. Proxy Voting

We believe that proxy voting is an integral aspect of investment management. KAssethas established internal proxy voting policy which also incorporate criteria that focused on potential impact on a company from environmental, social and corporate governance issues. The proxy voting policy is reviewed at least on an annual basis toensure that KAsset votes proxies prudently and in the best interest of its clients.

We have also subscribed third party proxy research service provider for comparison and reference of global practice. However, we retain full discretion when determining howto vote on behalf of our clients.

C. Securities Lending Program

Certain funds of KAsset may participate in a securities lending program which we have the guidelines as follows:-

- KAsset maintains the list of securities restricted from lending and the lis t is being monitored on a daily updates for upcoming proxy events.

- Where a security on loan is subject to a proxy event, it is our policy to instruct the lending agent to recall the security so that we may vote such shares. However, this will be done on a best effort basis considering the circumstance.

8. Conflicts of Interest related to Responsible Investment

KAsset is aware of conflict of interest which may arise from stewardship activities such as proxy voting on directors appointment whom could be our clients or the management of clients' accounts or engagement with public sectors or regulators. KAsset has internal practice that can prevent conflict of interest effectively such as proxy voting policy and guideline, voting reports disclosure, conflict of interest policy as well as political engagement guideline and approach.