Tools of Change There are a variety of tools available to drive positive change. Calvert typically focuses on direct dialogue and proxy voting, using shareholder resolutions as a last resort. Direct dialogue Calvert engages directly with companies both on its own and as part of investor or broader stakeholder coalitions, as noted earlier. When Calvert’s research team uncovers an opportunity to potentially enhance shareholder value and improve company performance by taking advantage of an opportunity or mitigating a risk, we engage directly with management through periodic phone calls, letters and meetings to raise concerns and identify opportunities, operating on our commitment to encourage concrete progress across sectors of the economy. Prior to initiating engagement, Calvert establishes objectives regarding our engagement with each company. These objectives may include improved disclosure, governance policies designed to address the issue and performance metrics. Positive outcomes may include a company establishing or strengthening a policy, adding members to the board, developing risk management approaches, or committing to specific performance improvements. Over time, where appropriate, we measure the change in key performance metrics for the relevant issues. When an engagement is completed, we typically maintain contact with the company to track progress. More broadly, our engagement activities seek to develop constructive relationships with companies we hold in our portfolios, raise awareness among investors broadly, and contribute to the development and widespread adoption of industry-best practices. Proxy voting Proxy voting is one of the most direct means to influence corporate behavior. Calvert’s proxy voting guidelines outline our approach to voting on critical ESG issues facing corporations. Our voting promotes the alignment of corporate policies with the long-term interests of shareholders, including: „ LONG-TERM VALUE. Calvert seeks to support governance structures and policies that keep the focus of company management on long-term corporate health and sustainable financial, social and environmental performance. A focus on long-term value creation increases the relevance of companies’ environmental management, treatment of workers and communities, and other sustainability and social responsibility factors. „ ACCOUNTABILITY. Accountable governance structures emphasize transparency, alignment of interests and inclusiveness: independent boards that represent a wide variety of interests and perspectives; full disclosure of company performance on financial, environmental and social metrics; charters, bylaws, and policies and procedures to effectively communicate with management; and compensation structures that work to align the interests and time frames of management and shareholders. „ SUSTAINABILITY. Well-governed companies are financially, socially and environmentally sustainable. Sustainability requires fair treatment of shareholders and other stakeholders in order to position the company for continued viability and growth over time. Effective corporate governance cannot indefinitely ignore or exploit certain groups or interests to the benefit of others without incurring material risks for the corporation. 6