Abundance Canada Investment Policy Statement

1. Purpose

The objective of the Abundance Canada Investment Policy is to establish a framework which will ensure prudent investment management of the assets entrusted to Abundance Canada by its donors and supporters. The Investment Policy addresses the manner in which the assets should be invested, the investment objectives, guidelines and parameters, limitations and criteria which shall be communicated with the investment managers, sub-advisors and internal staff who have decision-making authority over investment decisions. These individuals/corporations shall use their best efforts to adhere to the content and intent of this Investment Policy Statement.

2. Investment Philosophy and Objectives

To realize a competitive financial return on investments with an aim to produce adequate earnings to cover distributions to charities, provide operating revenue, and preserve the value of the gifted capital while ensuring that these investments are aligned with the Responsible Investment Criteria of Abundance Canada.

3. Core Guiding Principles

The overriding objective of Abundance Canada’s investments activities is to maximize risk adjusted returns. Risk is to be measured, managed and controlled and includes, but is not limited to, credit, reinvestment, market, liquidity, capital, environmental, social, governance, and reputational risks.

To this end, the following Core Guiding Principles have been established:

1. Conduct careful research – Abundance Canada management will ensure that prospective investments are researched as thoroughly as possible and on a continuous basis by its investment managers/sub-advisors as well as being periodically reviewed internally by Abundance Canada. This is part of its continuing effort to avoid participating in any businesses that are out of alignment with this Investment Policy.
2. Refine criteria regularly – Abundance Canada subjects its Investment Policy Guiding Principles to regular review and appraisal and may refine its Guiding Principles as a result of new information and understanding.
3. Responsible investing – Abundance Canada believes that it is imperative to integrate environmental, social and governance (ESG) criteria into the investment decision-making process.
4. Dispose of unacceptable holdings – If Abundance Canada receives information, which reveals that an investment it holds is not compliant with this Investment Policy, it will sell the holding within a period of twelve months. The Board of Abundance Canada can extend this twelve-month period if deemed prudent.

4. Responsible Investment Criteria

Abundance Canada uses, but is not limited to, the following criteria to evaluate companies in which it may consider investing:

• Respect the dignity and value of all people – Abundance Canada will seek to invest in companies that respect and support the basic human rights of all people and who do not attempt to benefit from the misfortunes that may befall disadvantaged individuals or communities. This includes providing fair and sustainable compensation for employees and sub-contractors and extending opportunities to disabled, disadvantaged, and marginalized people.
• Support world peace – Abundance Canada will seek to invest in companies whose activities and practices contribute to peaceful and healthy relationships between individuals, communities, nations, and within society in general.
• Promote social betterment – Abundance Canada will seek to invest in companies that work towards building healthy families and communities by providing some fulfillment in areas such as housing, environmental control, food, education and health care.
• Observe management best practices – Abundance Canada will seek to invest in companies that operate in an honest, compassionate, and responsible manner, value and empower employees, respect workers’ rights, engage in responsible resource management, employ sound practices of corporate governance, avoid unnecessary litigation and pursue alternative dispute resolution options, and are competitive but respectful of their competitors.

Abundance Canada will avoid investing in companies whose focus is:

• the development, production, and sale of weapons and other instruments of war
• the manufacture or sale of firearms
• the manufacture of abortion related equipment
• the production and sale of liquor
• the production and sale of tobacco and recreational cannabis products
• the production and sale of adult entertainment related products
• the operation and sale of gambling products
• the production or distribution of nuclear power

Abundance Canada will also avoid investing in high ESG risk companies due to lacking policies, management practices, complicity with human rights abuses in high risk countries, controversial business practices or other issues and shortcomings that leave the company at risk of significant market and/or stakeholder backlash and, the ownership of which, would leave Abundance Canada at risk for significant financial and reputational damage.

More information on the application of these exclusions/screens may be found in Appendix One (end of page).

5. Governance Roles and Responsibilities

The Board of Abundance Canada has the ultimate responsibility for Abundance Canada’s
Investment Policy. Accordingly, the Board shall:

• Review and approve the Investment Policy annually
• Approve the appointment/termination of all investment managers/sub-advisors
• Evaluate the performance of all investment managers at least annually

The Board may delegate some of these activities to the Investment Advisory Committee (IAC) and rely on their expertise to fulfill its obligations. The Board sees the IAC playing a key role in the ongoing monitoring of the investment manager’s adherence to the Core Guiding Principles, the Responsible Investment Criteria and the progress of the investment portfolio towards the fulfillment of the Investment Philosophy and Objectives.

6. Conflicts of Interest and Related Party Transactions

All investments of Abundance Canada will be made in a manner that avoids real or perceived conflicts of interest. Investment transactions with related parties are strictly prohibited. For the purpose of clarity, related parties shall be defined as:

1. Any director, officer, employee or member of any Board or Committee of Abundance Canada;
2. Any immediate family member of a person identified in a) above;
3. Any corporate or other entity in which a person identified in a) or b) above has a controlling or significant (more than 10%) interest.

Should there be need for a decision as to whether to proceed with a transaction that falls
outside of the bounds of the definitions above but where there is a real or perceived conflict of interest, the Chief Financial Officer of Abundance Canada shall make the final decision, while being guided by the principle that conflicts are to be avoided.

7. Permitted Investments

(All investments are subject to the Core Guiding Principles and the Responsible Investment
Criteria)

Permitted investments include:

Bonds - Sovereign, Provincial, Municipal, Corporate, Mutual or Pooled Funds, ETFs, Private Debt Funds, Debt guaranteed by one of the aforementioned issuers, Impact related debt instruments

Mortgages –Commercial, Mutual and Pooled Funds

Equities – Common stock, Preferred shares, Mutual and Pooled Funds (public equities), ETFs, Private equity pooled funds, Impact related private equity. Short selling of securities is strictly prohibited.

Real Estate – Mutual and Pooled Funds, REITs

Cash and Short-Term Investments

Derivatives – may be used for hedging purposes only

An investment which is not listed within the Permitted Investments section is not necessarily restricted. Rather, the Board (or a designate) shall be given the authority to issue a judgement on such investment at the most appropriate time and that judgement shall be noted and added to the IPS at its annual review.

8. Currencies

Abundance Canada does not have a rule on the currency of its investments. Generally,
Abundance Canada prefers to match the currency of its assets, gifts and expenses, all of which are primarily in Canadian Dollars. With that said, an Investment Manager who chooses to hedge or not hedge the foreign currency exposure within its investment mandate will be evaluated based on the outcome of that investment decision coupled with all other investment decisions it as made in the prudent investment of Abundance Canada’s assets. As noted within Permitted investments, currency derivates are not to be used other than for hedging purposes recognizing that exact hedging may not be achievable within a portfolio.

9. Investment Grade Restrictions

Fixed income purchases of BBB- (or equivalent) or below are prohibited. Holding of BBB- is acceptable arising from an issuer downgrade and will be subject to disposition in accordance with Core Guiding Principle #4. Similarly, the purchase of Preferred shares rated at P3 (or equivalent) or below are prohibited. Downgrades will also be dealt with in accordance with the Core Guiding Principle #4.

10. Proxy Voting

Abundance Canada expects its Investment Managers to fully execute their right and obligation to vote its shares at annual and special meetings of any of the companies held within its investment portfolio. Where possible, Abundance Canada expects its shares to be voted in alignment with its overall Investment Philosophy and Objectives and Responsible Investment Criteria.

11. Shareholder Engagement

Abundance Canada is committed to engaging with their portfolio companies with respect to areas where a company falls short of best practices on any of the areas covered by our Responsible Investment Criteria. This engagement may be done directly by Abundance Canada or indirectly through its Investment Managers or another party at the request and direction of Abundance Canada. Due to time and financial constraints, not all companies will be subject to engagement on any particular issue or at any particular time.