Good morning, good afternoon, and good evening. Welcome to day two of the RBC Capital Markets Financial Institutions Conference. We hope you've been able to catch some of the terrific sessions we hosted yesterday, including our interview with Kelly King, the CEO of Truist, and our interview with the Executive Chairman of Mastercard. My name is Lindsay Patrick, I am the host of our session today, Building a More Sustainable Future: The Role of Financial Institutions. I lead the strategy and ESG teams for RBC Capital Markets. This is the second year where we are featuring an ESG keynote at our financial institutions conference, We look forward to having this be a mainstay event as we go forward. We think of ESG as more than a market theme. It's actually disrupting business, in a very positive way. It's disrupting how we are looking at our future plans, our capital investments, and indeed how we are allocating capital, either through financial investments or through corporate investments. Increasingly, financial institutions are embracing the role that they have to play in building a more sustainable future. At RBC, we are a purpose-driven organization, That frames our approach to sustainable finance. We take an integrated view to ESG, Believing that in working with partnership with our clients, we can all achieve our own sustainability goals. Two weeks ago, RBC announced progress on our own climate strategy, including raising our sustainable finance target to $500 billion by 2025, Announcing a commitment to achieve net zero emissions in our lending portfolio by 2050. We acknowledge that this is a journey we are on together. Together, across all the different organizations within RBC, our management teams, and our board of directors, we are committed to working with you to advance a sustainable future. Today, I couldn't be more delighted to be joined by three industry leaders who will not only share their perspectives across the three or perhaps four, in Fred's case, areas, geographic regions that we cover, but also the unique perspectives that they bring across the financial services ecosystems, either as a universal bank, a wealth manager, an insurance company. Fred, Doug, Katerina, thank you very much for joining us this morning. Thank you. Thank you. I'm going to start with one question for all of you. We'll start with perhaps Fred, then Catharina, and then Doug. Unquestionably for your organizations, ESG has progressed from perhaps a niche offering to more of a mainstream factor in your own decision-making progress. Leveraging sustainability as a competitive advantage was a key theme for our ESG conference that we hosted two weeks ago. Can you tell the audience, please, how you are setting up your own business to embrace sustainable business factors and your own teams to succeed in this regard? Fred, over to you. Sure. Thank you, Lindsay, thank you for the invitation to the conference and this panel. One thing I would say about Aflac, just to frame it a bit for the audience, is one major component to keep in mind is we are a supplemental health insurance company, we cover health insurance needs for individuals that their major medical doesn't cover in the U.S., or in the case of Japan, the national healthcare system. Most importantly, though, is we are a dominant player in what we do, both in Japan and in the U.S. We have 25 million policies in Japan and 13 million policies in the U.S. From an ESG perspective, we focus on both geographies very carefully. We've had a longstanding approach to ESG that actually is attributed to one of our board members who established a sustainability committee back in 2008, a committee of the board of directors. Her name was Betty Hudson. She was a senior executive of National Geographic, had a natural inclination to want to take the power of the company and drive it on ESG, had the vision to set that up. We have had a longstanding approach to it. Like many companies, have done a lot of the right things on environmental and social, given we have a huge commitment both in Japan and the U.S. towards juvenile cancer, children inflicted with cancer. We've donated over $150 million to the fight against childhood cancer here in the U.S. through the Aflac Cancer Center in Atlanta, for example. It's been a longstanding part of the fabric. What ESG has done for us is really institutionalize the process in a more significant way with clear and measurable metrics to achieve, and with measurable results. It started with setting up, first of all, it reports directly to me. I have in my job description as President, ESG, so it's at the senior-most levels. We established a working group which contains people from around the organization, asset management, because of the important role that assets, investments play. Diversity and inclusion. In Japan, it's largely around women in leadership position, where we've set a target of 30% of our management positions in Japan being female, which is really on the outer edge of advancement in Japan. Also advancing our environmental footprint where we also committed to net zero emissions by 2050, and are driving towards that end. We have structured a working group, which is identifying key work streams in the company, reporting up to me, and I act as the executive liaison with the sustainability committee of the board. It's enterprise-wide. It has participation from Japan, the U.S., and our asset management folks realizing that's an important factor, and we look to drive these objectives. We went a further step in that we also have included these objectives of ours in our actual compensation. Our annual compensation as executives are modified up and down as to whether or not we achieve all of the objectives we set out. One of which was the issuance of a sustainability bond that we announced just this past Monday. That sustainability bond, while it was an objective, also really served to, again, formalize with the controls and auditing all of the measures and investments we're making on ESG. I feel like the sustainability bond was more than just a bond. It actually made official, if you will, all of the major initiatives that we have and put an exclamation point on it with key controls and audit capability. That's terrific. A lot of lessons learned there, Fred, and we'll dive into those a little bit deeper. Katarina, over to you. Thank you. Thanks again, Lindsay, for having me on the panel. I think that's an excellent question, how do we organize this to really get this moving? Handelsbanken is a full service bank and a decentralized one for that as well. I think for us, the decentralization is both a challenge when it comes to sustainability work. Obviously, we need to really put this everywhere close to the business and close to our customer relationships. It also is something that we can see as a large advantage, obviously, because the success factor here in getting sustainability work to really find its way into every business decision, it needs to break free of the silos. The silo of having a sustainability department that sort of owns and governs everything that has to do with sustainability. For the reason that we are decentralized, and each branch manager and whole market is empowered to make its own decision-making and owns the customer relationships, I think we've been inclined to work in an integrated and decentralized fashion with sustainability from the get-go. I think that does help. At the moment, we do have dedicated sustainability people working at group level. I had the group level sustainability department. We also have within all whole markets, we have dedicated sustainability people working, and also within asset management obviously has a sustainability team, and we have within sustainable finance and within our life and pensions company and within equity research and so on and so forth. I think that's the way we're going to have to go along with this. The idea of the full integration, we've come very close and very far when it comes to asset management within Handelsbanken, where each fund manager actually brings to the table his own sustainability analysis with some support, obviously, from the expertise of the sustainability team. It is something that every asset manager is expected to and does integrate into their decision-making process and dialogue with the portfolio companies and everything. I think that in a few years' time, we will be in a place where we can say that we're sort of fully integrated. I think that we're going to need dedicated sustainability resources for a few years to come still because this area is evolving very rapidly, and the sustainability focus is shifting constantly. First there's the climate issue that I think is now a household thing, comes biodiversity and all of the social aspects, we're learning a lot by the day, I'd say. For the next coming years, we're still going to need that, but nothing would make me happier, obviously, than being out of a job in five years or so because this is fully integrated. I think a lot of us in that seat feel very much the same way, Katarina, that full integration means just how widespread and how deep ESG is adopted within an organization. Yeah. Doug, over to you. It's a nice segue from the asset management to wealth management perspective. Sure. Thank you, Lindsay, and thank you to all the attendees to the conference and all the participants and speakers. It's very helpful to all of us. I oversee our wealth management businesses, which includes asset management, our insurance business, and our custody business. Lindsay, right off the top, you mentioned that for us it ties to our corporate purpose, which for us, our purpose is stated as helping clients thrive and communities prosper. Those are two important constituencies. Clearly, the shareholders are an important constituent. I think over the last year, we've come to raise in prominence each other, our colleagues and our employees as constituents. If you start there with what's the purpose, how you align against a corporate priority, which is at the top of the organization, as it is for others on the call here. I sit on the executive committee. There's a couple of us that run about three-quarters of the businesses of the bank that are overseeing the effort around climate specifically. Lindsay, you know all this because you're a key part of what we're doing on sustainable finance and ESG across the bank. I think the key to success is finding the balance. Well, it's a few things. It's finding the balance between deep expertise in your client-facing groups. Because what matters to our corporate clients, helping them transition, helping them with disclosures, helping them with their portfolio management, is very different than what it means to the retail investor, to the institutional investor, to our asset management groups. Decentralized enough that each of those groups, each of those client-facing businesses, can build the skills they need, embed, and similar themes to others who have spoken just now, embedding in our portfolio management decision-making process, ESG right at the decision-making point, not as an overlay. In the capital markets arena, advising our companies as a core part of our advice proposition to them on almost any transaction, ESG matters. To centralize enough to have weight in those client-facing interfaces, but centralized enough that as an organization, a $100+ billion bank, the very large bank who has the power to convene, who has an ability to influence, who has a role to advise government and help government come to terms with their role in all of this. Enough at the top also that you can achieve those goals and signal. We'll get to it, I'm sure, but as you mentioned, we've refreshed our commitments and priorities a couple weeks ago, we believe that has signaling power to our peers, to our clients. Finding that balance, decentralized versus centralized. I think also importantly on the centralized piece is having everyone of our top executive be fluent on the topic and be able to represent it as an important matter for the bank. I agree with Katarina. I think we're going to be at this for many years. I think we'll continue to evolve. For us, it's finding the balance between in the groups and at the top, but both being important. Yeah. I think you highlighted, Doug, and certainly the theme of this panel today is what is the role of a financial institution? We all know we don't have very big scope one emissions. We're not a real assets or a real economy player, but there are various different roles we can play, both in terms of what we finance, what we influence, and how we support our own customer base. We'll unpack that a little bit more. Katarina, Handelsbanken has recently announced, I would say, some very bold targets for the global financial sector, including net zero emissions as soon as possible, but no later than 2040, a target that 20% of your lending be green by 2025. Interestingly, I saw an advisory program to reduce the wealth gap between men and women. Can you tell us a little bit about how you came to these goals, why they were priorities for you, and what the reaction has been so far? Yes. Happy to. Obviously, this is not something I can take credit for on my own, or it's not even something that my team alone arrived at. Again, being a decentralized bank, this is actually the result of a fairly thorough exercise with workshops throughout the entire bank and all our home markets just to see what are the focus areas that we need to be targeting, and how should we go about that. A couple of years back, we did the typical materiality analysis and stakeholder dialogue on what our focus sustainability areas are. Out of those areas, it was now time to sort of pick a few which we needed a bit more additional focus on. Handelsbanken, we're known for our sustainable business model as such, and our core values being long-term relationships with our customers and local decision-making and low cost and a low risk tolerance. It's a good platform to build from. Now it came time to sort of step up a gear and put some additional focus on that. That's when measurable targets came into play. It made sense at this point in time to advance this further and to make sure that we have an ambitious pathway. As you mentioned, it's a net zero emissions target by 2040, because climate action obviously is at the forefront of what we're focusing on as a sector, I would say. We have a regulatory backdrop also that is very much targeting climate action. That's the reason for that, I would say. We wanted very much to tie this into our business reality and the everyday business of Handelsbanken. It was important to find something that pinpoints financing as such, investments, i.e., asset management and asset ownership as such, and also advisory. We were very much along the lines of finding something for each of those three pillars. For financing, it made sense. We have a good sustainable finance offering, and we wanted to advance that further, and that's also one of the means by which we're going to reach net zero climate altering emissions in our lending portfolio, after all. Maybe I should just clarify, it's not only 20% green, we're also looking to do 20% sustainable finance of sorts. That might well be sustainability-linked lending and similar transitional lending and more product development to come in the years to come. I think that we need to be focusing also on the SME segment that needs more of a sustainable finance offering than we have out there today. Yeah. I think it's early days to say anything about how this has been perceived. I think from our own organization and colleagues throughout the bank, everyone appears to be very happy about these targets. From other stakeholders that have reached out to us during these few days since we launched our targets have been enthusiastic and curious and intrigued why did we choose these targets and so on. Yeah, very happy about them. Yeah. Congratulations. I think that's a tremendous progress. Thank you. Fred, you have a leading market presence in the U.S., but your largest market is Japan, and I'd love to unpack that a little bit. Tell us a little bit how you integrate ESG factors across two very different regions, with perhaps different ESG priorities. How are you doing that across the two regions, and how do the stakeholder interests and the material issues, if you will, differ across the two regions, or do they? Yeah, it's a good question. I would say a few things for perspective. One is the Suga administration, who just recently took over for the Abe administration, has put a very strong focus, the Prime Minister, a very strong focus on ESG issues in Japan. They run across the typical categories, but I would tell you that they are fundamentally attempting to be a leader among the industrialized nations on ESG. As a result, if you are a large corporate citizen of Japan, you really need to remain aligned and understanding of what the broader Japanese administration is trying to drive, while at the same time focusing on your own initiatives. A few things I would note about Japan that you might find interesting. First of all, I would say 70% of ESG initiatives are really common across Japan and the U.S. We have assets in the U.S., we have assets in Japan, they follow a common framework. There's quite a large proportion of Japanese insurance companies and banks are PRI signatories if you will, from an investing perspective, they've embraced that ESG screening element and structural element in their investing. All of the environmental dynamics are largely similar as well in terms of driving towards zero emissions in Japan and the U.S. Some differences, obviously, fall into some of the social category, the biggest one being diversity in Japan is a very different definition than, as you can imagine, than the U.S. In Japan, the major diversity initiative is driving what I mentioned earlier, women in leadership positions in Japan, which is really not in good shape. What you'll find is many talented women come into the work site, start making their way up their career goals, only to fall out as part of either building a family or even taking care of three generations in the household, taking care of elderly individuals as an aging population. That tends to fall on the women in the household, that really can truncate their professional advancement. What you often find is you have great diversity, gender diversity, up until a point, it halts. That's why we announced really a formal plan to get more of our senior management, women in senior management roles or management roles. As I mentioned, our target is 30% by 2025. We're currently at about 21%. Again, I can rest assure that is a leadership position in Japan- these very male-dominated executive roles. The other dynamic that's unique to Japan is it's still a very much a paper-based society. They are way heavy into paper. You might think of that as a digitized business environment in Japan. It is not. It is paper-based. The government is trying to actually initiate plans to move to more digitized platforms. We announced a JPY 10 billion, or so roughly $90 million, two-year program to go paperless in Japan. That will remove roughly 80 million pieces of paper in circulation in our operation in a given year. Part of that is to reduce our carbon footprint, move to a more flexible structure, because the other dynamic in Japan is they are prone to earthquakes and natural disasters. You have to also set your structure up paperless so that you can move information around should one of your locations be shut down. There's a huge climate-related dynamic as it pertains to natural disasters that factors into the psychology of ESG in Japan as well. Those would be some differences. Our working groups and my responsibility, I have responsibility for both Japan and the U.S., is to sew it together and make sure we're on the same page. Those would be some of the clear differences in emphasis between Japan and the U.S. Yeah. Interesting. I like that the 70% is consistent, 30% really is quite unique. It really, I think, speaks a lot to the fact that different countries are going to have different pathways to a sustainable future depending on their own demographic makeup, their own natural resource makeup. Although we need to be aligned on these very common global goals, we also need to be really understanding that the pathways to get there across a variety of ESG factors could be considerably different. I think sometimes in the globalized world that we live in, that can be hard to get to. I'm going to turn to Canada on that question, Doug, and over to you. We talked about how RBC is advancing its own climate strategy. Tell us a little bit about the work that's going on, the role that RBC has to play in terms of helping Canada advance their own sustainability objectives as a country, being the largest bank and one of the largest companies, and how is RBC defining success here? Sure. Of course, the bank spans much more than Canada. I think on the government public policy side is the place where we would have the highest relative weight in terms of influence with government. If I just start for a sec with what we've done on the topic. We've been at this for a while. Our first climate-related policies were put in place in 1991. We had 10 years that ended maybe four or five years ago with a real focus on water security, water access, clean water to communities that maybe didn't have it. We were early in North America in terms of publishing TCFD-aligned disclosure, the first in Canada, on the steps we take to manage climate risk. The commitments we announced 10 days or so ago that you mentioned off the top, Lindsay, $500 billion by 2025, up from $100 billion net zero in our lending portfolios by 2050 to align with the Paris Agreement. We're committed to an interim goal that we'll get to shortly and just still trying to figure out what level and at what time. We've committed to reporting by key segments or sectors financed emissions. We've joined PCAF, which is the Partnership for Carbon Accounting Financials, and working with 90 other peers in the financial institutions industry to really advance how that is all measured, join Rocky Mountain Institute, and have some more specific goals as well around achieving carbon neutral in our own operations, which we have been since 2017, easier for a bank than for many other industries, reducing greenhouse gases by 70% by 2025. There's others. That's sort of what the bank's done inside our own walls. The role of the bank in making things happen, the role of asset managers in making things happen, there's lots we can do, but we really need government to be at the table as well. There isn't enough bank capital in the world to solve the challenge that we're facing. There isn't the right economics around risk right now to allow even progressive asset managers or their investors to force change because so much of the solution is today uneconomic. I think a big role we've got as an industry, and I think we can do better at it than we have, is to help government understand where they need to play. If carbon sequestration is uneconomic, which it is. If solar is uneconomic, which it certainly was a decade ago. What role does government have to play in terms of taking tail risk, taking offtake, providing junior capital such that you can crowd in other capital that behaves on a purer rational economic basis? How do you crowd in institutional pension capital? How do you crowd in traditional asset management capital? How do you encourage or provide a reasonable risk return for family offices or family foundations who are aligned with the goals and who might be willing to take a slightly lower return on their capital? That's how I think about where banks play and encouraging government to continue to push themselves to lay out a framework and be accepting of the need for them to take junior capital and tail risk. I think we do have a societal obligation to play as important a role as we can in our own commitments, which I just went through, our ability to influence others, and our ability to help government put in context what they probably need to do more of. Absolutely. I think what you have all spoken to is just the reach that as financial institutions we have, and therefore the potential for impact that exists amongst the industry. We spent a little bit of time talking about ESG integrations and asset management. Fred, Aflac has $100 billion in AUM, largely in fixed income securities. As you mentioned, you issued your first sustainable bond last week. Congratulations. Which I loved how you framed it as more than just a bond. Right. Part of your targets include What I found really interesting about your sustainable bonds was that you had some social categories that included investments including financial inclusion, economic opportunity to underserved populations. Can you tell us a little bit about how you're integrating ESG considerations into your investment strategy for your asset manager, and then how you're using that data to inform investment decisions that then enabled you to issue that sustainability bond? No, thank you for the question. Just to level set, you're right. We have approximately 120 billion of assets under management, but a very large portion of those assets are JGBs because we operate in Japan, and we need to hold a certain amount of yen-based fixed income securities. Our actual bond portfolio, which is where you really can put forward your ESG screening and initiatives, is about 60 billion in size. What we do as a company is we assign a proprietary ESG rating to each bond, and it is factored into our credit analysis. I say that because we firmly believe that ESG is not a siloed type analysis when making an investment. We think there's a high correlation between companies that are doing the right things and progressing on ESG matters, and the quality of the company and credit worthiness of the company over the long term. We are a believer in that. When we offer that ESG screen, it's not just to check a box related to our ESG efforts on asset management. We think it will, over the long run, yield better results for us by investing in better companies. That has been part of our process for a while now. We've also further advanced it to where we have about $13 billion, $15 billion or so of assets that are actually managed by external managers. What we do there is we obviously need to work with those external managers to see what ESG applications they're providing. We actually put that manager through an annual review process. Is that manager we're hiring, does that manager have ESG type framework in their practice in how they manage the money? We can move our money anywhere. We can move our money to any manager, we expect our managers to live up to the types of ESG standards that we as a company are adopting on the asset side. You mentioned a Sustainability Bond, this is a good example of where in order to issue a Sustainability Bond, those in the audience who have done it know, you have to build and document a very rigorous framework. That framework is then typically audited by a third party. In our case, Sustainalytics came in and audited our practices to see if it was aligned to the Social Bond, Green Bond, and Sustainability Bond principles that have been put forward by the capital markets associations that dictate those principles. They audit that, they make sure it's aligned with Sustainable Development Goals coming out of the UN in 2015, and you have to set structure up such as a Sustainability Bond Council that actually oversees and dictates the use of those proceeds, in our case, $400 million, and the use of those proceeds in a consistent way with those standards. If that's not enough, at the end of the day, within one year, you report out on your investments and the impact they've had, and those results are audited by KPMG, in our case, our auditor. All of that rigor, okay, takes the entire investing and ESG investment standards up to a new level. What you want to do is it's not about the $400 million, it's about the several billion dollars that you plan to commit over time and having it all fit under that type of rigorous framework just brought on to you by the Sustainability Bond. That's what I mean by it being a big effort. A good example, we have about $1.7 billion of that $60 billion invested in ESG qualified investments today. More importantly, we've committed to new money. A great example of that is we announced actually just a couple of weeks ago that we formed a venture with SoundPoint Capital, this is in transitional real estate, where we together with SoundPoint, have founded a company. We are a minority owner in that company. We have sent them a mandate of $1.5 billion to invest in transitional real estate. Remember, transitional real estate is really when somebody's taking a property that is currently used one way and borrowing to then convert the property to another use. Most commonly, for example, apartments to condominiums, et cetera. If you know that asset class, you'll know that's a uniquely great asset class to attack disadvantaged communities, opportunity zones, because it's often the case that somebody is borrowing to convert a property into a use that's helping to rebuild the community. What we did is we said, "Okay, here's the $1.5 billion mandate, but we are going to require $500 million of those dollars to go towards distressed communities and opportunity zones as part of new lending and new money." The reason I say that is you have ESG factoring into your strategy. We have long had a strategy of making minority investments in specialized boutique asset managers. That's part of our strategy to extend our footprint. The difference now is we ran that whole strategy through ESG, and now we announce a minority interest. Only this time, it's a minority interest directly attached to a social need in the communities. We're very proud of that, and that's the type of thing that will build our presence in investing in ESG. It really speaks to the many different pathways and alternatives there are to integrate ESG into a financial services institution, and how value can be created along a wide variety of platforms. Doug, I want to talk a little bit, speaking on that, around the passive lens around ESG. We all know that ESG investments have performed very well throughout the COVID pandemic. This has likely spurred increased inflows into ESG-related fund strategies, and in particular around ESG ETFs, where AUM has nearly doubled in 2020 over 2019. Can you tell us a little bit about the RBC iShares Sustainable Core ETF, how you have extended that product line recently, and then how you are balancing the interest between your active portfolio and your passive portfolio? We are predominantly an active asset manager. We, I guess a little over a year ago, thought that while we didn't have an interest in building a passive factory, that there was clearly a desire for some of our clients to invest in a passive vehicle, and an ETF is just another vehicle. We partnered with BlackRock to create the RBC iShares group of investment opportunities. The way to think about that is it's not a formal joint venture, but it's an alliance where anything active we manage, anything passive they manage, and then we'll split the profitability on a specific ETF investment by one of our clients on the basis of who brings how much value to the table. We're predominantly an active manager. That said, we have been broadening ESG-related ETFs. We started with what we call ESG aware ETFs, which incorporate some elements of ESG by way of screening, without deviating too far from the market benchmark. Screen out firearms, screen out controversial weapons, tobacco, companies with ESG controversies. Still relatively close to benchmark when you do that, but allows a client an opportunity to align their interests with that vehicle. That developed into a more intensive screening out of ESG matters in a subsequent family of funds, which we call ESG Advanced. For those who would like to see even more things that they're not aligned with removed from their investment vehicles, we screen out in various ways, things like fossil fuels, alcohol, for-profit prisons, gambling, nuclear power, palm oil, predatory lending, tobacco. Two different passive vehicles in the ESG side and then a full family of active. We're proud of the alpha we've delivered across our investments. We've back tested, and we're confident that those who've invested with us on our active side have more than made up the delta in fees. We understand some investors are more fee sensitive. We're seeing strong uptake for both, frankly. To some of the comments that Fred makes, it really is, from a portfolio management perspective, built right into the fabric of the decisions these teams are making. We've got a core belief that, and Katarina has made similar comments, but that attention to ESG mitigates risk. It increases the probability of good shareholder outcomes. It forces a company to look farther down the road with respect to their strategic positioning, which has to be a good thing. It'll continue to evolve, but we'd expect to evolve those families of offerings on both the active and the passive side. It's really interesting because we get asked a lot by our corporate clients, "How can I make sure I'm ESG aligned?" There really is such a breadth to investment strategies that integrate ESG, that it's very hard to pinpoint. On one end of the spectrum, Katarina, you have your Sustainable Energy Funds, which won, and I can't pronounce the award, but the Sustainable Fund Category of the Year for 2020 in Sweden, and was classified by Morningstar as the largest now in the new energy category. Can you tell us a little bit about the momentum behind what I would say is a thematic approach to ESG investing, the demand for the fund and what you have learned so far? Yes. Thanks. I would love to. Apart from the awards that you mentioned, it's not only that, it's also that we were sort of ranked top 20 out of thousands of funds in the CDP Europe Awards. A number of testaments really, I'd say, to that there being no conflict between attractive returns and sort of shaping a better future for all of us. We're obviously very happy about how this fund has developed. I'd say that two segments in particular have driven the performance of this fund, and it's been a lot of solar during 2020 and also electric vehicles and storage. This is obviously what we would, just coming back to what Doug was telling us, of all of the pieces of the jigsaw puzzle within the asset management world, this is what we would say is almost an impact investing piece, but targeting energy specifically. I think it has a lot to do. We have a global outlook for this fund, obviously, and we strive to have a deep knowledge of what is around the corner in terms of how the market is evolving and if there is a shortage of demand or shortage in renewable energy around the corner so that we can be well-positioned and make good investment decisions. I think part of the success story here is both the great performance of the fund itself, obviously, but we need to keep in mind that this fund has also grown 10 times today as the size of assets we had at the beginning of 2020. This is both the performance paired with an increased interest for this kind of investment. We see that this increased interest in ESG investing in this kind of way, thematic, as you mentioned, is not a trend. We think it's a permanent shift, we have to sort of keep at it. This is a part of our asset management strategy, obviously, one being, as Doug mentioned, excluding and then extensive sort of excluding criteria, and also an integrated focus on ESG in the decision-making process and in the investment process, and also in the portfolio management, in the dialogue with the portfolio companies. This is the sort of the third piece of the jigsaw puzzle where we actively are allocating funds to what we believe is going to be the solutions of tomorrow's problems or today's problems, for that matter. We're actively allocating funds to the Sustainable Development Goals. For that part, on this sort of spectrum of our asset management business, we have an AI tool also that we've now turned around to our customers so that they can themselves map the funds that they've chosen towards the Sustainable Development Goals that are close to their hearts, so that they can see what a particular fund contributes to each of the Sustainable Development Goals. I think that this is, as you mentioned, it's a wide spectrum of different ways of working with the ESG within asset management, we're certainly very happy about this particular fund and keep working on the entire offering of funds here to make sure that we have something for everyone. I think it certainly highlights a very clear opportunity, and I think both across sort of the fund perspective and the sustainable debt perspective that we're seeing, there is right now still very much a bit of a supply-demand imbalance, where there is just so much demand for these strategies, for these applications, and to understand the impact, the sustainable impact that a financial product can have. It's really going to be interesting to see the data, the products, the supply and the demand keep up with the innovation that the financial services industry is bringing. Something certainly we're very excited about. Definitely. I think it also gives rise to all of these concerns also. Is this a green bubble? Are these assets overvalued due to this imbalance between supply and demand? I think it's going to require a lot of us to stay on our toes and stay focused to make sure that the sectors and the assets that we invest in are still on long-term value driving. Obviously, we're going to have to continue to invest in the energy sector for the next 20 to 30 years. In that aspect, this is not a risky sort of investment strategy. On the other hand, there are individual assets, individual sectors that are valued very favorably at the moment. We need to be cautious of that at the same time. Yes. To not lose sight of the financial discipline that I think we've all been trained in, right? Exactly. I want to- I think one other thing that's worth mentioning is the nature of our business models, banks, and insurance companies. One of the things that's interesting about an insurance company is our liabilities are very long duration and very sticky. Which means from an asset side, we can invest very long, and we are not as concerned about illiquidity in the near term. That's important if you think about ESG, whether it be long-term renewable energy, public-private partnerships to invest for the long ball, if you will, or the revitalization of a community and so-called economic mobility initiatives, which is also a long-term issue. Some industries, our industry, the banking industry, of course, clearly positioned to launch and really put a lot of thrust behind it. I think where our industry has a responsibility is playing the long ball and leveraging the fact that we have these long liabilities that are sticky and using that to our advantage to make long-term investments. Yeah. It's such a good point, I think equally supported by the pension industry that has been also leaders in this space because of their longer time horizon. Yeah. I do want to take a little bit of time to spend some time on the S issue within ESG, because for financial institutions, human capital, and socioeconomic issues are material factors. Doug, tell us a little bit, the research on diversity, equity, and inclusion is very clear on the fact that diverse companies and teams drive better performance and outcomes. How do you see it being a competitive advantage for your business? Yeah, you could take that a lot of ways. Just before we leave Fred's last thought, I think the issue of timeframe is a really interesting one, agree with the comments about insurance, but timeframe or horizon. We're trying to solve a problem that, Mark Carney's talked about the tragedy of the horizons, that small actions today could mitigate or solve massive problems later, but if we wait too long, that the small fixes won't work. I think that that whole topic, which we don't have time to explore, is a really interesting one, because if you think of a bank's average loan life duration might be two or three years. Acting purely from a financial point of view, a bank might sit there and say, "I got lots of time on this. I got a loan renewal on average in two years." If you think about the cycle of democracy or quarterly reporting for companies, how do you get a system that's wired on four or five-year election cycles to look down the road 30 years? Canada, for example, has embedded 2050 into law, that makes it more difficult for future governments to change their mind. I think that horizon point that Fred sort of opens up is a really interesting one. To your question on the S. Look, I agree with all of the intro. I think the literature's clear, the research is clear that people of diverse backgrounds, different voices, different perspectives, asking better questions lead to better results. I think there's another piece to it, though, which is not just that different backgrounds, genders, wealth bands bring different perspectives. If you can create an environment within your organization that actually unleashes everybody's potential, allows them to feel safe at the table, feel that their voice is heard, I think the power of that is likely as much as the power of the oft-cited diverse point of views. You can only do that if those who look or are different or have different backgrounds feel equally comfortable in the environment. It's really important at our place. Every leader has diversity and inclusion goals built into their annual review cycle. We're focused on metrics. We have 46% of our executives are women. 51% of our new hires last year were women, 52% of our promotions were women. We've got a 50% staffing goal for women in executive positions and 30% for BIPOC. We talk about BIPOC, which may not be familiar to all, but to include the Black community, but also Indigenous and people of color. We set our commitments at that level and in some of our commitments, sub-buckets for the Black community, for other communities. On the back of, I think, an awakening for a lot of enterprises and people in 2020 in the summer, we certainly broadened what we're doing. We committed $100 million to Black entrepreneurship over the next five years. We're exploring and investing in venture capital initiatives for Black and BIPOC folks. We've had an initiative that's been going on for a number of years, what we call RBC Future Launch, which is a commitment to helping youth break the cycle of if you don't have the right education so you can't get a job, so you can't get experience, so you can't get a job. That's been a major initiative. This summer, we took a piece of that and said, "Okay, of our $500 million commitment over five years to youth, let's take 50 in the next few years and direct it specifically at 25,000 Black, Indigenous, and people of color youth, Indigenous student scholarships." We were very honored a couple of weeks ago to be awarded the Catalyst Award, which is quite an achievement. There's only a couple awarded, two, three, four awarded in a year. There were two awarded last year. A recognition globally of a commitment to getting women into leadership positions, share of leadership positions, and equal opportunity and voice. It's a major initiative. I think there are links between the COVID response, the Black Lives Matter response, and what we're all hoping to do in climate. I'm optimistic and hopeful that what we saw as collective response to Black Lives Matter, with people of all backgrounds really rallying to say this needs to be improved or fixed, or the COVID response, where by definition, we've had to have community collective action. I hope and expect that'll continue to echo into other social, societal issues, and climate would be a big one. Yeah. The power of collective action. Katarina, Handelsbanken has decided to focus on six Sustainable Development Goals, with one being gender equality. Tell us how you came up to this being one of the focus areas and what you are doing to foster a more inclusive economy. Yeah. I think the why of this particular area is maybe the easy thing to respond to. I think as both Doug and Fred have mentioned before, it simply makes good business sense to have an equal between the genders and also an inclusive culture and environment. That was the no-brainer part of this particular aspiration that we have, but we have a target in place to have 40/60 proportions of men and women in leadership roles throughout our home markets. We have been transparent on our gender pay gap, which I think is also an important piece of this, to reveal where it is exactly in the organization that we need to be targeting our focus more clearly in. As to the sustainability goal that we put in place the other day, that also has to do with our advisory services and what we want to do in closing the gap between our female and male customers in terms of investment advice and the returns that they get on their investment. It's something that may be targeted at our customers, but it's something that I think we cannot do if we don't have a good representation internally between men and women in our workforce. We're trying to do both of those things at the same time, and the reason for focusing on the gap between men and women in their savings and what kind of savings advice that they receive, is we were very intrigued. Actually, we stumbled upon some research and also some statistics from the EU area, both in terms of what men and women obviously having different outsets here because they have different sizes of salary coming into this. Research suggests here that men and women also take different kinds of approaches to their savings and have different appetites for risk. Unfortunately, this seems to result in women receiving a lower risk-adjusted return in the long term. Also for unexpected events in life, such as death of a partner or divorce or whatever. We really want to drill down deeper into this particular issue and see what we can find, both in our digital tools, if there's any gender bias here in something that we do, or if we can be more vocal and verbal on what different investment decisions, what they result in in the long term for your pension, and what a certain type of risk-taking means in the long term for men and women respectively. While working on this, obviously we need to be working also on our internal gender issue. It's very important that we have an inclusive culture. We're working on this also, internal training and that sort of thing in terms of gender bias in the workforce as well. I think all of these things, and just looking into the statistics and the gender pay gap is not least an important thing. Yeah. It's so important to tie them all together, I think how they're layered together in terms of the representation within the organization and how that affects your interaction with your clients, the advice that's provided throughout different circumstances, right, and then how pay gaps. That all speaks to, I think, the very broad role a financial institution can play in particularly working with the S issues. Fred, we have time for one last question, I'm going to send it over to you, it's kind of a big one. We've seen a pretty dramatic shift on ESG issues with a new U.S. administration. Tell us from the lens in how you run your business, how big is the shift? Do you see the regulations changing? What sort of outcomes should businesses be prepared for as a result? We do believe under a new administration, frankly, both in Japan and in the U.S., that areas of ESG are going to be more pronounced, and expectations are going to be higher. Right now, where we think that's going to be most impactful is around disclosures. You're seeing regulators wanting and requesting more disclosures around ESG and climate risk factors. You're seeing various policies moving through the administration associated with disclosures and reporting around ESG, including diversity and inclusion statistics. We think disclosures will continue to advance. They're already advancing coming into the new administration. We think they'll go even further. Whether or not you see outright legislation or regulatory standards get put in place around ESG matters, I think that is yet to be told. I think that story is yet to play out. There is talk of that coming into play. My sense is that mostly what you're going to see is reporting requirements, disclosure requirements, and letting that light of day, if you will, self-regulate the corporate community. We'll see. I think also the relative split in the political landscape in the U.S. makes it difficult to be overly pronounced in any one way, one direction or the other. Most importantly, if you look at the Business Roundtable, for example, our CEO is on the Business Roundtable as a signatory to Business Roundtable principles. I think the leaders in corporate America, as evidenced by the Business Roundtable, they are as advanced or even more advanced in some of the initiatives as compared to legislative activities. What is probably going to be the case, which gives me comfort, I don't fear any sort of legislation. I think if there is any, it would be legislating activities that we are already committed to because it's the right thing to do. I'm not as concerned about that. I would make one note, though, a little bit of different twist, and that is it's hard to get off of any panel without talking about the pandemic. Yeah. One thing I would say is the pandemic, any kind of crisis really tests your conviction around these things. One of the things that I think is very important is the industry, the banking industry, and the insurance industry stepped up in a big way surrounding the pandemic. In our case, grace periods on premium payments because it's health insurance and it's a pandemic, for goodness sakes. Offering interest-free loans to agents, committing $10 million to first responders. These types of initiatives that many of the corporations and banks did stepped up to the plate. I think when you look now to Washington, D.C., or in Japan, look to the Suga administration, they're paying careful attention as to what role corporations played in stepping up in support of their employees, their communities, their policyholders, in our case, or depositors and clients. I think as an industry, we've stepped up and shown legislators we have the back of the communities we serve. I couldn't agree more. I think the financial services industry has done a tremendous job responding to pandemic, aligning our business models towards a net zero emissions economy by 2050. Indeed, that was the number 1 theme for my team, the sustainable finance group at RBC. Our year ahead piece was that 2021 is really the year that the corporate sector will continue to take action. I think as you mentioned, Lindsay, I think the government policy, which now does appear to be more aligned than ever around the world. Fred, Katarina, Doug, a truly engaging conversation. You are all leaders in your field, and I really want to thank you for your time and your perspectives today. Have a great rest of your day. Thank you very much. Thank you. See you.