The Schroder Sustainable Growth Fund is a sustainable-focused investment strategy which adopts a traditional multi-asset investment approach that invests in a broad range of asset classes with more detail provided in the 'Asset classes and investment ranges' section below. The Fund has a growth-biased strategic asset allocation (SAA) formulated with Schroders’ proprietary medium term asset class return projections and risk expectations which includes a climate change adjustment, based on estimated costs or benefits of rising temperatures and potential regulatory and behavioural changes. The climate change adjustment incorporates four factors: physical costs (effect of rising temperatures on an economy’s growth rate), transition costs (impact of steps taken to mitigate temperature increase such as carbon taxes, and investment in clean energy), stranded assets (losses incurred where carbon-based forms of energy are written off) and the net impact on inflation.Schroder Sustainable Growth Fund.

A multi-faceted risk management framework is incorporated in the decision making process to manage volatility and mitigate inherent downside risks within the Fund.

The Fund is managed with a forward looking Sustainable Investment Framework, which guides asset allocation and security selection decisions, with the following two sustainability objectives; 1) achieve a portfolio sustainability score (Sustainability Score) of at least 2% better than the Fund’s SAA benchmark (Sustainability Objective) and 2) achieve a portfolio carbon intensity score (Carbon Intensity Score) of less than 60% of the Fund’s SAA benchmark (Carbon Intensity Objective).

The Sustainability Score of the Fund is measured by SustainEx™, Schroders’ proprietary tool that provides an estimate of the net "impact" that an issuer may create in terms of social and environmental "costs" or "benefits". It does this by using certain indicators with respect to that issuer, and quantifying them positively and negatively to produce an aggregate notional measure of the effect that the relevant underlying issuer may have on society and the environment. The result is expressed as an aggregate score of the sustainability indicators for each issuer, specifically a notional percentage (positive or negative) of sales or GDP of the relevant underlying issuer. As part of the Fund’s investment processes, the SustainEx™ score, and the drivers of that score, are reviewed at the overall Fund level on a weighted basis. By achieving a higher Sustainability Score than the SAA benchmark at the Fund level, the Fund will likely have less revenue at risk, as estimated by SustainEx™, to potential regulatory or behavioural changes.

The Carbon Intensity Score is a measure of a company’s carbon emissions, and covers both scope 1 (direct emissions resulting from energy production) and scope 2 (indirect emissions, resulting from energy use), normalised by $million of sales in USD. Additional detail on the Sustainability Score and Carbon Intensiy Score are provided under the heading ‘Further information on ESG matters for the Schroder Sustainable Growth Fund’ in the ‘Labour standards and environmental, social and ethical considerations’ section of the ‘Additional Information to the PDS’ booklet.

The Fund seeks to achieve its Sustainability Objective and Carbon Intensity Objective by:

1) applying revenue exclusion screens (referred to as Negative Screens).

2) using our proprietary quantitative and qualitative tools which measure sustainability and governance practices to favour companies with positive or improving Sustainability Scores and Carbon Intensity Scores and good or improving governance.

3) seeking to drive more sustainable practices through engagement.

These are explained further under the the heading ‘Further information on ESG matters for the Schroder Sustainable Growth Fund’ in the ‘Labour standards and environmental, social and ethical considerations’ section of the ‘Additional Information to the PDS’ booklet.

Given the backward looking nature of revenue based exclusions, the Fund, may, on an exceptions basis, hold securities in companies or issuers that do not meet the Negative Screens if Schroders considers that the companies or issuers nonetheless are, or have committed to, contributing to either of the Fund’s two sustainability objectives (Sustainability Objective and Carbon Intensity Objective), or broader ESG initiatives.

Additional examples of these exceptions are outlined under the the heading ‘Further information on ESG matters for the Schroder Sustainable Growth Fund’ in the ‘Labour standards and environmental, social and ethical considerations’ section of the ‘Additional Information to the PDS’ booklet.The Fund’s Sustainability Score and Carbon Intensity Score are measured daily and reported to investors monthly (via the monthly fund reports available at www.schroders.com.au), on both an absolute basis and relative to the SAA benchmark. In addition, any investment or loan to companies that do not meet the Negative Screens is also reported monthly with the investment rationale provided.

Whilst allof Schroders' Multi-Asset strategies have fully integrated ESG within ourinvestment process, the Schroder Sustainable Growth Fund has a greater emphasison sustainability. The Fund is managed within a sustainable investmentframework, which guides asset allocation decisions and security selectiondecisions.  The framework guides decision making to avoid investing in andlending to companies that are having a negative impact on people and planet inpreference to companies reducing negative impacts and making positiveenvironmental and societal contributions.

 The Fund has a growth-biased strategic asset allocation(SAA) formulated with Schroders’ proprietary medium term asset class returnprojections and risk expectations which includes a climate change adjustment,based on estimated costs or benefits of rising temperatures and potentialregulatory and behavioural changes. The climate change adjustment incorporatesfour factors: physical costs (effect of rising temperatures on an economy’sgrowth rate), transition costs (impact of steps taken to mitigate temperature increasesuch as carbon taxes, and investment in clean energy), stranded assets (lossesincurred where carbon-based forms of energy are written off) and the net impacton inflation.

A multi-faceted risk management framework is incorporated inthe decision making process to manage volatility and mitigate inherent downsiderisks within the Fund.

The Fund is managed with a forward looking SustainableInvestment Framework, which guides asset allocation and security selectiondecisions, with the following two sustainability objectives; 1) achieve aportfolio sustainability score (Sustainability Score) of at least 2% betterthan the Fund’s SAA benchmark (Sustainability Objective) and 2) achieve aportfolio carbon intensity score (Carbon Intensity Score) of less than 60% ofthe Fund’s SAA benchmark (Carbon Intensity Objective).

The Sustainability Score of the Fund is measured bySustainEx™, Schroders’ proprietary tool that provides an estimate of the net"impact" that an issuer may create in terms of social and environmental"costs" or "benefits". It does this by using certainindicators with respect to that issuer, and quantifying them positively andnegatively to produce an aggregate notional measure of the effect that therelevant underlying issuer may have on society and the environment. The resultis expressed as an aggregate score of the sustainability indicators for eachissuer, specifically a notional percentage (positive or negative) of sales orGDP of the relevant underlying issuer. As part of the Fund’s investmentprocesses, the SustainEx™ score, and the drivers of that score, are reviewed atthe overall Fund level on a weighted basis. By achieving a higherSustainability Score than the SAA benchmark at the Fund level, the Fund willlikely have less revenue at risk, as estimated by SustainEx™, to potentialregulatory or behavioural changes.

The Carbon Intensity Score is a measure of a company’s carbonemissions, and covers both scope 1 (direct emissions resulting from energyproduction) and scope 2 (indirect emissions, resulting from energy use),normalised by $million of sales in USD.

The Fund seeks to achieve its Sustainability Objective andCarbon Intensity Objective by:

1) applying revenue exclusion screens (referred to asNegative Screens).

2) using our proprietary quantitative and qualitative toolswhich measure sustainability and governance practices to favour companies withpositive or improving Sustainability Scores and Carbon Intensity Scores andgood or improving governance.

3) seeking to drive more sustainable practices throughengagement.

Given the backward looking nature of revenue basedexclusions, the Fund, may, on an exceptions basis, hold securities in companiesor issuers that do not meet the Negative Screens if Schroders considers thatthe companies or issuers nonetheless are, or have committed to, contributing toeither of the Fund’s two sustainability objectives (Sustainability Objectiveand Carbon Intensity Objective), or broader ESG initiatives.

The Fund’sSustainability Score and Carbon Intensity Score are measured daily and reportedto investors monthly (via the monthly fund reports available atwww.schroders.com.au), on both an absolute basis and relative to the SAAbenchmark. In addition, any investment or loan to companies that do not meetthe Negative Screens is also reported monthly with the investment rationaleprovided.

*SustainEx™provides an estimate of the potential “impact” that an issuer may create interms of social and environmental “costs” or “benefits of that issuer. It doesthis by using certain metrics with respect to that issuer, and quantifying thempositively (for example by paying ‘fair wages’) and negatively (for example thecarbon an issuer emits) to produce an aggregate notional measure of the relevantunderlying issuer’s social and environmental “costs”, “externalities” or“impacts”. SustainEx™ utilises and is reliant on third party data (includingthird party estimates) as well as Schroders’ own modelling assumptions, and theoutcome may differ from other sustainability tools and measures. WhereSustainEx™ relies on data and estimates produced by third parties, Schrodersseeks to ensure that such data and estimates are accurate, but Schroders cannotand does not warrant the accuracy, completeness and adequacy of such thirdparty data and estimates. Like any model, SustainEx™ will evolve and developover time as Schroders continues to assess, refine and add to the metrics andtheir relative contributions. Generating SustainEx™ scores involves an elementof judgment and subjectivity across the different metrics chosen by Schroders,and accordingly Schroders does not accept any liability arising from anyinaccuracy or omission in, or the use of or reliance on, SustainEx™ scores. Asthe model evolves, changes made to how metrics are applied may result inchanges to the SustainEx™ score of any issuer and ultimately the overallfund/portfolio score. At the same time, of course, the issuer’s SustainEx™performance might improve or deteriorate. Schroders’ proprietary sustainabilitytools including SustainEx™ may not cover all of a fund/portfolio’s holdingsfrom time to time, in which case Schroders may use a range of alternativemethods to assess the relevant holding. In addition, certain types of assets(such as cash and certain equivalent securities) are treated as neutral and aretherefore not considered by our proprietary tools. Other types of assets suchas equity indices and index derivatives may not be considered by our proprietarytools and in such case would be excluded from a product’s sustainability score.