The fund is a stock-driven global equity strategy with a focus on growth companies and long-term, low turnover approach. The fund combines expert regional stock picking with a global perspective in portfolio construction to produce a portfolio consisting of growth companies that will look very different to the benchmark index. Baillie Gifford’s approach to stewardship is at the heart of the strategy, both as a feature of the companies held by the fund and in Baillie Gifford’s responsible long-term shareholder approach. The fund does not hedge currency risk.

The Sustainable Growth investment philosophy is based on exploiting three main behavioural inefficiencies ever present in equity markets: short-termism, herding and the mispricing of growth. In addition, the investment team believes that good governance and stewardship are vital to the long-term success and growth of a company, as well as in the interests of the world at large. The team incorporate these issues into their stock research through a series of stewardship-focused questions, and then encourage best practice on governance and sustainability matters in investee companies through engagement with company management. Baillie Gifford looks for stocks that satisfy five key criteria. The GEARS of Sustainable Growth: • Growth – How quickly can the company grow and for how long? • Edge – What is the company’s source of sustainable advantage? • Alignment – Do management act like owners? • Returns – What will long-run profitability look like? • Success – How do we double our money? The decision-making process is designed to allow controversial, idiosyncratic ideas into the portfolio, so group consensus is not required. The Baillie Gifford process bypasses some of the behavioural issues involved with committee-style decision making and results in a different, exciting portfolio. Negative Screening:In addition to the rigorous vetting process described above, the Sustainable Growth portfolio is also subject to two types of ethical screen. Sector-based screen – prevents investments in any companies that derive more than 10% of their annual revenues from: • the production or sale of tobacco, armaments or alcohol • gambling or adult entertainment related activities • fossil fuel extraction. Performance-based screen – assesses companies against the principles of the United Nations Global Compact for business. These principles cover the following areas: • human rights • labour rights • environmental safeguards • combating bribery and corruption. The principles are a ‘minimum bar’ standard for responsible business. Baillie Gifford use third-party data providers to assist with the determination of revenue by product category and minimum standards for responsible business. Baillie Gifford’s Head of Governance & Sustainability, a Sustainable Growth team member makes the final decision with respect to which companies it excludes. Positive screening:The Fund also apply three ‘positive inclusion factors’ that aim to ascertain if these companies add value to society in the long run, balance the needs of all stakeholders and exhibit a culture of responsible business *RIAA has received undertaking from product issuer to update ESG-crtieria, assessed as part of certification, either at: 

• Next roll of product collateral, Internal policy update and/or 
• Next reporting/disclosure cycle