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CCLA, One Angel Lane

London EC4R 3AB

clientservices@ccla.co.uk

IMPORTANT INFORMATION

All data as at 31 December 2025, unless specified otherwise. This document is issued for information purposes only. It does not constitute the provision of financial, investment or other professional advice. We strongly recommend you seek independent professional advice prior to investing. The value of investments and the income derived from them may fall as well as rise. Investors may not get back the amount originally invested and may lose money. Any forward-looking statements are based on CCLA’s current opinions, expectations and projections. CCLA undertakes no obligations to update or revise these. Actual results could differ materially from those anticipated. All names, logos and brands shown in this document are the property of their respective owners and do not imply endorsement. These have been used for the purposes of this document only. CCLA Investment Management Limited (registered in England & Wales, No. 2183088, at One Angel Lane, London EC4R 3AB) is part of the Jupiter Group, and is authorised and regulated by the Financial Conduct Authority.

2026 Better World

Stewardship outcomes for the year 2025

result

Stewardship and engagement

Our stewardship programmes are designed both to reflect our clients’ priorities and to preserve the long‑term value of our clients’ investments. Where possible, we also aim to be a catalyst for change in areas that have not received the attention from investors that they deserve.

Near to Nature, St Andrew’s Healthcare Northampton (secure mental health unit) | Courtesy of Koestler Arts

For CCLA, stewardship sits at the intersection of client priorities and long-term value at risk. We believe that companies with strong sustainability and governance practices are best positioned to serve the interests of all stakeholders. Such companies demonstrate greater resilience to regulatory change, shifting consumer behaviour and long-term challenges such as climate change.

Through active engagement and voting, we seek to improve the business practices of the companies that we invest in on our clients’ behalf. By acting to encourage responsible corporate behaviour now, we aim to enhance long-term value while also contributing to a better future.

Engagement philosophy

We understand that some of the biggest environmental and social challenges, such as climate change, inequality and global health, can have long-term impacts on our clients’ investments. These are complex, widespread issues that cannot simply be avoided by spreading investments across different sectors or regions. We also recognise that the investment industry has not always done enough to tackle these risks.

At CCLA, we seek to be a catalyst for positive systemic change and have a proven track record of developing engagement initiatives that focus investor action on underserved areas.

We view regulation and legislation as key instruments for addressing systemic environmental and social risks. As responsible investors, we believe it is our duty to collaborate with policymakers to advocate for progressive frameworks that drive meaningful and lasting change.

Juan Astasio/The New Yorker Collection/The Cartoon Bank

Stewardship and engagement in numbers

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£16 trillion in assets supporting CCLA engagements

We are hugely grateful to every investor that collaborates with us.

engagement themes^vi

billion in assets under engagement^vii

total number of companies engaged with^viii

AGMs attended

companies showing improvement

companies met engagement targets

Engagement framework

In 2025 we launched the CCLA Better World Engagement Framework. This framework defines our engagement themes and uses established best-practice data points to inform our dialogue with companies. Through this framework, we classify portfolio holdings across five performance levels, enabling us to drive meaningful engagement outcomes while evaluating and reporting with clarity and transparency.

The framework categorises engagement themes into three pillars: better work, better environment and better health. For each theme, the framework defines clear, measurable objectives, allowing us to monitor the success of our engagement over time.

Our engagements cover our listed equity holdings and the financial institutions used in our cash funds. They typically span a three-year period, during which we maintain regular dialogue with company representatives. We systematically monitor progress against the objectives we establish at the outset.

Companies engaged by country of listing

Number of companies engaged

United Kingdom 163 USA 113 France 13 China 11 Switzerland 8 Canada 7 Japan 7 Australia 6 Germany 6 Netherlands 6 Sweden 4 India 3 Italy 3

Spain 3 Denmark 2 Ireland 2 Singapore 2 Belgium 1 Finland 1 Hong Kong 1 Israel 1 Norway 1 Saudi Arabia 1 South Korea 1 Taiwan 1

Summary of engagement outcomes in 2025

Engagement consists of a dialogue between a company and its investors to discuss how the company can improve its management of a given theme. We engage with companies worldwide, with a focus on listed equities.

engagement cases

companies engaged^ix

companies displayed improvement

companies met engagement target in 2025

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Engagement prioritisation

Our engagement prioritisation process is overseen by our Investment Committee. The process typically involves a review of existing investor action alongside an analysis of the financial materiality and human and/or environmental impact of a given issue.

We prioritise a small number of issues for focused attention. In 2025, we primarily sought to address market failures that contributed to climate change, poor workplace mental health and widespread modern slavery in company supply chains. These risks apply to all or most companies, regardless of geography or industry, and are therefore considered systemic.

In addition, we maintained focused engagement with a select group of companies on specific issues including the Living Wage, biodiversity and nature, and nutrition. We also prioritise dialogue with companies considered at risk of breaching minimum behavioural standards – particularly in areas such as human and labour rights, environmental responsibility and business ethics.

These engagements are core to our stewardship strategy and ensure that investee companies are held accountable for misconduct and substandard practices.

companies engaged on work themes

companies engaged on environmental themes

companies engaged on health themes

Engagement collaborations

We acknowledge that it takes more than action by a single investor to drive change at scale. Collaboration with other investors is key, enabling us to pool resources, share expertise and foster meaningful dialogue with companies on themes of shared concern.

We believe that collective action strengthens our engagement approach, as exemplified by the collaborations that we both lead and support. These are set out below.

An overview of our memberships and initiatives can be found in Appendix 6. *Not held in CCLA portfolios as at 31 December 2025.

Escalation strategies

We aim to use all the tools available to us as an investor to achieve desired outcomes. Engagement is our preferred route, as we believe that constructive dialogue with investee companies is a more effective method of changing company behaviour than outright exclusion.

Where a problem is concerning, and where an investee company fails to respond or take action, we may escalate our engagement. This typically involves moving beyond bilateral discussions with the company to, for instance, collaborating with other investors, attending the company’s AGM in person or selectively using the media via open letters or press releases. We may also withhold support for the election of company directors or co-file a shareholder proposal.

If a period of engagement on the most serious issues does not lead to the desired change, we can, in extreme cases, sell a stock from our investment portfolios. That said, we consider divestment an action of last resort.

What is a systemic engagement programme?

According to the Principles for Responsible Investment, system stewardship is an approach to stewardship that addresses system-level risks – such as climate change or inequality – that cannot be diversified away at the portfolio level. System stewardship aims to enhance long-term value for investors while also benefiting the wider ecosystem within which they operate.

CCLA’s systemic engagement programmes are designed to change the system: the accepted way in which businesses approach a certain theme. Whereas engagement aims to drive a clear and measurable improvement by companies at scale, systemic engagement programmes tend to cover a large number of companies. To be successful, they require significant investor collaboration. Systemic engagements aim to create value for both investors and society at large.

For example:

CCLA’s Find it, Fix it, Prevent it investor coalition aims to improve the corporate response to modern slavery through collaborative engagement, knowledge-sharing and convening. Founded in 2019, it comprises 58 investors with a combined £13 trillion in assets under management. Using the CCLA Modern Slavery Benchmark as its engagement framework, it targets more than 200 listed companies for engagement while also selecting certain high-risk sectors, such as construction, for enhanced engagement.

CCLA’s Global Investor Coalition on Workplace Mental Health supports engagement around the CCLA Corporate Mental Health Benchmark. The benchmark assesses and ranks 220 companies annually on their approach to mental health, whereas the investor coalition supports engagement efforts by co-signing letters and taking part in company dialogues. The coalition comprises 55 investors with a combined £8 trillion in assets under management.

Tools for Change

When we engage with companies, we aim to use a variety of ‘tools’ to deliver the desired outcomes. The tools we use in an engagement vary depending on the nature of the organisation, the problem we’re addressing and the behaviours we are trying to change. Some of the tools in our investor’s ‘toolbox for change’ are set out below.

Bilateral company engagement

Shareholder collaboration

Data measurement

Peer comparison

Voting

Sensitive use of the media

Policy engagement

AGM attendance

Shareholder proposals

Threat of divestment

Stewardship across asset classes

Our stewardship work is focused primarily on equities, where shareholder rights and voting power provide the most direct and effective means of influencing corporate behaviour. While equities represent the largest proportion of our assets under management, they are not the only asset class that we deploy on behalf of our clients.

Money markets

Money market instruments represent the second largest asset class in our overall mix of investments. They comprise our cash-focused funds – the CBF Church of England Deposit Fund, the COIF Charities Deposit Fund and the Public Sector Deposit Fund – which are also held within our core long-term multi-asset funds.

In 2025, we revised our approach to engagement with the counterparties used in our cash funds and sent letters to each of the listed institutions approved for use by our cash team. This correspondence began a new round of engagement for CCLA, being focused primarily on financial institutions’ approach to financing the expansion of fossil fuels.

Property

We recognise the importance of environmental and social impact when considering property selection and improvements. Before purchase, all properties, tenants and vendors undergo due diligence to ensure compliance with fund restrictions and standards on the prevention of financial crime. If the potential investment is approved, we conduct enhanced checks on environmental risks and building energy efficiency.

We did not purchase any new properties in 2025. However, we continued to undertake several significant upgrades to improve the properties owned in our funds.

Case study: Lochside Avenue, Edinburgh

In 2025 we refurbished an office building in Edinburgh. This property operated with a building-wide gas-powered heating and cooling system and had an energy performance certificate (EPC) rating of E. Anticipated increases in minimum standards, along with increased scrutiny by potential tenants, would have rendered the space unlettable in the future without refurbishment.

Our works entailed fitting an electric heating and cooling system and installing energy-efficient LED lighting, new water-saving fittings, an improved cycle shelter, better showers and electric car-charging facilities. We are also installing external seating to improve both the physical and mental health of future occupants. Upon completion, we expect a revised EPC rating of A.

Case study: Brackmills Industrial Estate and Lutterworth Distribution Park

This year, we refurbished three large warehouse distribution units, two at Brackmills Industrial Estate, Northampton, and one at the Magna Park distribution centre in Lutterworth. We replaced gas heating with electric and installed LED lighting for the office spaces. We are targeting EPC ratings of B on all three buildings.

Environmental performance

Our ability to set targets and track progress in property investments has historically been hindered by our dependence on tenants and third-party managing agents to collect and share building performance data. In 2025, our collection of data increased considerably. For example, electricity data collection increased by eight percentage points in the Local Authority Pension Fund. This will assist in the expansion of asset-level action plans and portfolio risk management.

We are now exploring opportunities to include relevant clauses in property contracts relating to modern slavery, living wages and employee wellbeing.

Alternatives

Our engagement with the investments in our alternatives book is primarily designed to improve the financial prospects of the assets in which we invest. We set out three examples below.

Case study: Oakley Capital Investments

Throughout 2025 we engaged closely with Oakley Capital Investments’ board and investment manager, emphasising that governance improvements are vital to stronger valuation. Our efforts included meetings, private correspondence and joint shareholder initiatives.

A major focus was board composition: Oakley Capital Investments remains the only UK-listed private equity trust without a fully independent board. This issue was highlighted by a 35.31% vote against a non-independent director, in which we participated. After we challenged the accuracy of the vote count, the company secretary was required to re-run the AGM tally, revealing higher dissent than initially reported.

We also influenced capital allocation, supporting the cancellation of the dividend in favour of an expanded share buyback, and were involved in discussions about the appointment of a new chair. While board changes have strengthened Oakley Capital Investments, further progress is needed, and we will continue our engagement.

Case study: Greencoat UK Wind

Greencoat UK Wind, a renewable infrastructure trust, has seen share price weakness and a disconnection from its underlying asset value. We engaged management and the board on topics including leadership transition, capital allocation, sector headwinds, consolidation and investor communications.

In our latest meeting with the chair and the senior independent director, we raised concerns over the company’s slow response to a government initiative with the potential to materially influence earnings growth and, by extension, asset valuation. Continued underperformance, alongside sector pressures, underscores the need for ongoing engagement as the company pursues strategic measures to improve its long-term outcomes.

Case study: Neuberger Berman Private Equity

Another key engagement in 2025 was with Neuberger Berman Private Equity, focused on performance concerns and the need for a stronger strategy. We met with the board and management to assess the role of the listed vehicle within the broader Neuberger Berman platform and compare performance across vehicles. Following our engagement, the board announced a revised capital allocation policy, committing to increases in its investment activity.

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^vi Engagement themes were biodiversity and nature, climate action, human rights controversies, inequality and Living Wage, mental health, modern slavery, nutrition, and UN Global Compact.

^vii Based on CCLA’s equity holdings and the financial institutions used in our cash funds, for which we conduct engagements.Of which 119 were held in our portfolios during the year.

^viii Some companies may be covered under multiple engagement themes. Includes engagement with all portfolio holdings and companies CCLA does not hold.Includes companies owned by CCLA and under engagement by these investor coalitions during the reporting year. This includes all CCLA‑led, CCLA-member, and CCLA-supported signatory engagements.Not all of these companies are owned in CCLA portfolios.

^ix Some companies may be covered under multiple engagement themes. Includes engagement with all portfolio holdings and companies CCLA does not hold.

^x Includes companies owned by CCLA and under engagement by these investor coalitions during the reporting year. This includes all CCLA‑led, CCLA-member and CCLA-supported signatory engagements.

^xi Not all of these companies are owned in CCLA portfolios.

2025 a year in action

Better work