Conflicts of Interest Procedures

Effective date: September 2024

1. Scope

This document states the rules applicable to management and mitigation of actual and potential conflicts of interest in the provision of ESG Ratings and ESG Products.

2. Responsible Parties

Responsible Parties include Non-ESG Analytical Personnel, ESG Ratings Analytical Personnel and Compliance.

3. Managing Actual and Potential Conflict of Interests

3.1 Procedure regarding initiation or participation in negotiations of fees or payments

ESG Ratings Analytical Personnel and ESG Data Products Analytical Personnel may not initiate or participate in negotiations of fees or payments concerning ESG Ratings and/or ESG Data Products but may communicate with Non-ESG Analytical Personnel regarding resources necessary to provide ESG Evaluations.

Non-ESG Analytical Personnel shall not communicate any fees or payment information, at any stage, to ESG Ratings Analytical Personnel and/or ESG Data Products Analytical Personnel. ESG Ratings Analytical Personnel and/or ESG Data Products Analytical Personnel receiving any information regarding fees or payments of a rated entity, either orally or in writing, must immediately cease any rating activity related to this rated entity and contact Compliance.

The responsible functional manager1, in consultation with Compliance, will determine whether ESG Ratings Analytical Personnel and/or ESG Data Products Analytical Personnel may resume their Analytical Tasks or whether the rated entity must be reallocated to another member of ESG Ratings Analytical and/or ESG Data Products Analytical Personnel.

In case reallocation is necessary, the manager of the conflicted ESG Ratings Analytical and/or ESG Data Products Analytical employee(s) will take action accordingly.

3.2 Procedure regarding the ownership of financial Instruments

ESG Ratings Analytical Personnel shall not participate in or otherwise influence the determination of an ESG rating of any rated entity if they:

1. (a) own financial instruments of a rated entity, other than holdings in diversified collective investment schemes, including managed funds, and investments made under discretionary portfolio management; or
2. (b) own financial instruments of any entity related to a rated entity, which may cause or may be generally perceived as causing a conflict of interest, other than holdings in diversified collective investment fund, including managed funds, and investments made under discretionary portfolio management.

The restrictions above apply to the ownership of financial instruments of a rated entity by ESG Ratings Analytical Personnel’s family members and domestic partners when the ESG Analytical Personnel could reasonably be expected to be able to exercise influence or control (whether or not the ESG Ratings Analytical Personnel actually has such influence or control) over those instruments.

In case a rated entity is allocated to ESG Ratings Analytical Personnel and any of the situations above applies or becomes applicable, the ESG Ratings Analytical Personnel must immediately inform their manager, recuse themselves and shall not undertake any Analytical Tasks related to the rated entity. The manager shall reallocate the Analytical Tasks for the rated entity to another member of the ESG Ratings Analytical Personnel who is not conflicted.

3.3 Procedure regarding other relationships that may cause or may be generally perceived as causing a conflict of interest

ESG Ratings Analytical Personnel shall not participate in or otherwise influence the determination of an ESG Rating of any rated entity if they:

1. have had in the last year, employment, business or other relationship with the rated entity or any entity within the group of the rated entity which may cause or may be generally perceived as causing a conflict of interest;
2. have a family member who has a significant association with the rated entity, in circumstances where this employment relationship may cause or may be generally perceived as causing a conflict of interest;

In case any of the conditions above apply or ESG Ratings Analytical Personnel initiates any relationship that may cause or may be generally perceived as causing a conflict of interest after allocation to the rating activity, they must immediately cease any activity in relation to the rated entity and contact their manager.

The responsible functional manager, in consultation with Compliance, will determine whether ESG Ratings Analytical Personnel may resume their Analytical Tasks or whether the rated entity must be reallocated.

4. Defined Terms

Terms capitalized in this document are either MSCI ESG Research defined terms or Compliance defined terms. For the definitions, please refer to the ESG Research Glossary of Defined Terms and Glossary of Compliance Defined Terms.

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