Announcements April 28, 2020

Methodology Change | Solactive ISS ESG Screened UCITS Index Series | Effective Date 05/05/2020

Today, on the 28/04/2020, Solactive announces the following changes to the methodology of the following indices (the ‘Affected Indices’):

NAME	RIC	ISIN
Solactive ISS ESG Screened GM Asia ex Japan UCITS Index PR	.SESGAJUP	DE000SLA7Y32
Solactive ISS ESG Screened GM Asia ex Japan UCITS Index NTR	.SESGAJUN	DE000SLA7Y40
Solactive ISS ESG Screened GM Asia ex Japan UCITS Index TR	.SESGAJUT	DE000SLA7Y57
Solactive ISS ESG Screened Brazil Small & Mid Cap UCITS Index PR	.SESGBRUP	DE000SLA7Y99
Solactive ISS ESG Screened Brazil Small & Mid Cap UCITS Index NTR	.SESGBRUN	DE000SLA7ZA5
Solactive ISS ESG Screened Brazil Small & Mid Cap UCITS Index TR	.SESGBRUT	DE000SLA7ZB3
Solactive ISS ESG Screened EM EMEA UCITS Index PR	.SESGEAUP	DE000SLA7ZF4
Solactive ISS ESG Screened EM EMEA UCITS Index NTR	.SESGEAUN	DE000SLA7ZG2
Solactive ISS ESG Screened EM EMEA UCITS Index TR	.SESGEAUT	DE000SLA7ZH0
Solactive ISS ESG Screened Golden Dragon UCITS Index PR	.SESGGDUP	DE000SLA7ZM0
Solactive ISS ESG Screened Golden Dragon UCITS Index NTR	.SESGGDUN	DE000SLA7ZN8
Solactive ISS ESG Screened Golden Dragon UCITS Index TR	.SESGGDUT	DE000SLA7ZP3
Solactive ISS ESG Screened DM Health Care UCITS Index PR	.SESGHCUP	DE000SLA7ZT5
Solactive ISS ESG Screened DM Health Care UCITS Index NTR	.SESGHCUN	DE000SLA7ZU3
Solactive ISS ESG Screened DM Health Care UCITS Index TR	.SESGHCUT	DE000SLA7ZV1
Solactive ISS ESG Screened Latin America Large, Mid & Small Cap UCITS Index PR	.SESGLAUP	DE000SLA7ZZ2
Solactive ISS ESG Screened Latin America Large, Mid & Small Cap UCITS Index NTR	.SESGLAUN	DE000SLA7Z07
Solactive ISS ESG Screened Latin America Large, Mid & Small Cap UCITS Index TR	.SESGLAUT	DE000SLA7Z15
Solactive ISS ESG Screened EM EMEA ex Saudi Arabia UCITS Index NTR	.SESGEAXU	DE000SLA70D1

Rationale for methodology change

The Solactive ISS ESG Screened UCITS Index Series aims to track various size and regional segments of the global stock market including only companies operating in accordance with market standards on ESG controversy screens. Solactive has determined that the methodology of the indices mentioned above shall be amended to further refine the application of the objective of the index series with regards to Norm-Based Research. This change was already incorporated in the main index family, the Solactive ISS ESG Screened Index Series after conducting the Market Consultation (see https://www.solactive.com/methodology-change-solactive-iss-esg-screened-index-series-effective-date-23-04-2020/). As the Solactive ISS ESG Screened UCITS Index Series applies the exact same selection steps, resulting in the exact same composition for the respective equivalent in the Solactive ISS ESG Screened Index Series, and just differs in the weighting mechanism, this amendment will also be implemented in the Solactive ISS ESG Screened UCITS Index Series.

Changes to the Index Guideline

The following Methodology changes are applied in the following point of the Index Guideline:

Section 2.1 Selection of the Index components

The following additional section is included in the theme “Norms-Based Research” to further refine the norms violations that shall be excluded from the Index:

Theme		Exclusion criterion
Norms-Based Research	Companies incorporated in countries identified with high social risk	More than 50% ownership by the state
		Alleged failure to respect established norms
Explanation: High social risk countries will be updated annually based on new information. This is aimed at incorporating risks associated with a repressive state violating fundamental civil rights via its controlled entities

Therefore, section 2.1 will read as follows:

The initial composition of each Index of the Solactive ISS ESG Screened UCITS Index Series as well as any ongoing adjustment are based on the following non-discretionary rules. On the Selection Days, Solactive AG defines the respective Index Universe as outlined in Section 4. The selection of the Index Components proceeds as follows:

Solactive evaluates all companies in the respective Index Universe based on the criteria outlined in the table below. The evaluation is based on data provided by ISS ESG:

Theme		Exclusion criterion
Norm-Based Research	Environment	Verified ongoing failure to respect established norms
	Human Rights
	Corruption
	Labour Rights
	Companies incorporated in countries identified with high social risk	More than 50% ownership by the state
		Alleged failure to respect established norms
Controversial Weapons Research	Chemical weapons	Verified ongoing involvement
	Biological weapons
	Nuclear weapons
	Depleted Uranium
	Nuclear weapons outside the NPT
	Cluster munitions
	Anti-personnel mines
Sector-Based Screening	Fossil Fuel	50% Services <OR> 5% Production <OR> 5% Distribution <OR> 5% Exploration
	Oil sands	0% Production <OR> 0% Exploration
	Military	50% Services <OR> 5% Production <OR> 5% Distribution
	Pornography	5% overall <OR> 0% Production
	Tobacco	50% Services <OR> 0% Production <OR> 5% Distribution
	Gambling	50% Services <OR> 5% Production <OR> 5% Distribution
	Alcohol	50% Services <OR> 5% Production <OR> 5% Distribution
	Cannabis	50% Services <OR> 5% Production <OR> 5% Distribution
Explanation: % figures refer to revenue threshold (for degree of involvement) above which criterion is breached; High social risk countries will be updated annually based on new information. This is aimed at incorporating risks associated with a repressive state violating fundamental civil rights via its controlled entities

All companies violating any of the exclusion criteria above are excluded. All companies for which an evaluation of these exclusion criteria is not possible due to insufficient and/or missing information or data are excluded.

The remaining companies constitute the respective Index.

Defined terms used in this announcement, but not defined herein, have the meaning assigned to them in the respective index guideline of the Affected Indices. The amended version of the index guideline will be available on the effective date.