Invesco 2017 Investment Stewardship and Proxy Voting ...

1 Invesco 2017 Investment Stewardship and Proxy Voting Annual Report Our commitment to responsible investingContents 03 Introduction from Martin L. Flanagan, President and CEO, Invesco Ltd. 04 Responsible Investment overview06 Invesco s Investment capabilities08 Responsible investment09 Our philosophy10 Governance and oversight12 Stewardship and corporate responsibility14 Thought leadership 16 Our leading ESG strategies18 Invesco Real Estate19 Invesco Quantitative Strategies20 Invesco Fixed Income21 Invesco Fixed Income Bank loans22 Invesco Japan Japanese Equities23 Invesco Global Smaller Companies strategies24 Invesco Perpetual26 Invesco Unit Investment Trusts27 Our leading ESG

2 Strategies28 Proxy voting30 Active ownership 31 Proxy voting32 Our global footprint34 ESG shareholder proposals36 Engagement38 ESG case studies40 Environmental Integrating ESG into the Investment management process41 Environmental Supporting shareholder issues42 Environmental/Social Incorporating ESG into an Investment decision43 Social Service provider engagement44 Social Proxy Voting against management45 Governance Incorporating ESG into an Investment decision46 Governance Letter writing campaign47 Governance Proxy Voting against management48 Governance Proxy Voting against management49 Governance Proxy Voting against management50 Our ESG journeyInvesco s commitment to sound Investment stewardshipMartin L.

3 FlanaganPresident and CEO, Invesco L. FlanaganPresident and CEO, Invesco Investor, Invesco is committed to delivering an Investment experience that helps people get more out of life. A key part of this effort is providing strong, long-term Investment performance to our clients around the globe while meeting our fiduciary obligations and ensuring a sustainable environment for future generations. Every day we hear from clients expressing their desire to work with a firm that is committed to responsible investing . We believe that investing responsibly by incorporating sound environmental, social and governance (ESG) practices into activities across our firm can positively impact the value we provide to clients as well as the value we deliver to the same time, we believe strongly that integrating ESG into our Investment decisions shouldn t compromise the results we deliver to clients.

4 We view our commitment to integrating ESG as an additional layer of due diligence that reinforces our long-term approach to investing , which we believe is in the best interest of clients and the markets. Our clients in Europe have a long-standing expectation of asset managers to utilise ESG, and we are seeing growing interest across the Americas and Asia Pacific. Invesco is committed to meeting the specialised and diverse needs of these clients. As an example, we ve been actively integrating ESG into our Investment strategies in Europe for more than 15 years.

5 In Asia, we ve provided ESG training to our institutional clients on responsible Investment practices and requirements for asset owners working in partnership with asset managers. Over the past year, we ve worked to promote and advocate responsible investing in industry forums, including appointments to the UNPRI advisory committee on ESG Engagements, the United Nations Sustainable Development Goals working group and, most recently, the advisory board for deep data delivery standards, which promotes effective vendor due diligence for ESG efforts.

6 We adhere to the UK Stewardship Code at Tier 1 level and are a signatory to the Japan Stewardship Code. Our focus on responsible investing helped drive a 12% growth in our ESG assets under management, which increased US$6bn to more than US$57bn (as of 30 September 2017). We ve also been a proud signatory of the United Nations Principles of Responsible Investment (PRI) for 4 years, and have earned high ratings on the organisation s six principles for ESG practices. This report highlights our commitment to responsible investing and details our ESG practices.

7 We invite you to learn more about Invesco s dedication to meeting client needs and our responsible investing philosophy, practices and approach in the pages of this report. Regards,03 04 Responsible Investment overview We believe that the ESG practices of company management impact the long-term performance of a company s stock. As active, long-term investors, we seek to encourage the companies in which we invest to adopt best-in-class ESG practices. Invesco has demonstrated leadership and commitment to responsible investing with a variety of capabilities made available across the Investment teams.

8 Our US$ in sustainable investments covers a range of ESG strategies including the following approaches: Exclusionary/negative screening Sector/values based exclusion Norms-based screening Positive/best-in-class Thematic investing Active ownership, Proxy Voting and engagement Full ESG integration Distribution of ESG AUM by ESG strategy (%)1 Full ESG integration Sector/values based exclusion Positive/best-in-class Thematic investing Exclusionary/negative screening 1 US$ as of 30 September 2017, represents of Invesco 's total assets under management.

9 2 US$ as of 30 September 2016, represents of Invesco 's total assets under 2017 Assessment Report for Invesco Ltd., Morningstar Sustainability ratings 258 of 594 as of 30 September Ranked 3rd among 20 brokers and asset managers in North America with top 4 considered ESG leaderAmong brokers and asset managers543% Invesco s listed funds rated "High" or "Above Average" for sustainability4A+PRI rating for Strategy & Governance343%Increase in PRI assessment score from 2015312% Increase in ESG AUM year-over-year2US$ AUM in sustainable investments119 Strategies110 Investment centres1 Invesco ESG capabilities Distribution of

10 ESG AUM by asset class (%)1 Alternatives Equity Fixed Income Balanced Invesco s Investment capabilitiesInvesco is an independent Investment management firm dedicated to delivering an Investment experience that helps people get more out of life. We offer specialised Investment teams managing more than US$917bn1 in assets across a comprehensive range of asset classes, Investment styles and geographies. With an on-the-ground presence in more than 20 countries and nearly 7,000 employees, our single focus is to help clients across the globe achieve their Investment Asia-Pacific Asia ex-Japan Greater China Japan Australia India Locations Beijing, Hong Kong, Melbourne, Shenzhen, Singapore, Sydney, Taipei, Tokyo, MumbaiInvesco Canada Trimark Investments Canadian, regional, sector and global equity Canadian and global fixed income Balanced portfolios Location Toronto.