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APPROACH FOR A RESPONSIBLE MANAGEMENT OF ESG ISSUES AND SUSTAINABLE

DEVELOPMENT GOALS

Updated January 2020

MERIDIAM ESG/SDG Policy 1


Table of contents

Table of contents .................................................................................................. 2


INTRODUCTION ................................................................................................... 3
INFORMATION ABOUT MERIDIAM ......................................................................... 3
General ESG/SDG approach ............................................................................... 3
Investor information .......................................................................................... 6
INFORMATION ABOUT THE MERIDIAM FUNDS ...................................................... 7
List of funds ...................................................................................................... 7
ESG/SDG charter, code or label .......................................................................... 7
ISO 9001 certification, version 2015 ................................................................... 8
External ESG Audits ........................................................................................... 8
PRI Signatory .................................................................................................... 8
Certifications within the project companies ......................................................... 8
MERIDIAM'S ESG AND SDG ANALYSIS PROCEDURES .............................................. 9
Main ESG criteria ............................................................................................... 9
SDG Positive Screening .....................................................................................11
Internal ESG and SDG analysis and monitoring ...................................................11
Analysis methodology .......................................................................................12
Integration in the investment process ................................................................13

MERIDIAM ESG/SDG Policy 2


INTRODUCTION

Responsible investment is an essential part of the strategic positioning and management of


Meridiam funds. Since its creation in 2005 and the launch of its first fund, Meridiam has
ensured that its investments achieve the highest environmental, social and governance
(ESG) objectives. More recently, Meridiam positioned itself as one of the first French
company to change its by-Laws to become a French Benefit Corporation within the meaning
of the French law, and by doing so, reaffirmed its commitment to balancing profit with
achieving positive impact. In this context, Meridiam updated its ESG risk classification
procedures to evaluate projects’ impacts using the internationally agreed, referential
framework of the United Nations Sustainable Development Goals (UN-SDGs). This document
outlines how ESG criteria and relevant performance measures are considered in Meridiam's
investment and asset management process.

More specifically, this document demonstrates how the Meridiam funds also comply with the
regulatory requirements for the application of ESG criteria in France1.

INFORMATION ABOUT MERIDIAM


General ESG/SDG approach

Meridiam’s General Policy


Meridiam places consideration of environmental, social and governance quality issues at the
heart of its activities, due to the very nature of its investments, and their sustainability. As
rigorous risk identification is a fundamental step in the project evaluation process, Meridiam
commits itself only when these are in line with its commitments and the general interest of the
communities for which they are intended.
Since its creation, Meridiam has therefore placed the consideration of ESG issues at the
heart of its priorities by adopting a Charter on Sustainable Development focused on these
issues. In particular, the Charter on Sustainable Development commits Meridiam to:

- Protect the environment


- Respect fundamental rights and develop human capital
- Meet the expectations of the community
- Value the human capital of Meridiam
- Apply the rules of good governance

The Sustainable Development Charter is available on Meridiam’s website.


Taking these commitments a step further, Meridiam decided to implement a regular
assessment of its contribution to the Sustainable Development Goals (SDGs), a referential
framework developed by the United Nations, to determine the impact performance and areas
of improvement related to its activities. Meridiam identified the most relevant goals and
targets of the SDG referential that best reflect its role as a long-term infrastructure asset
developer, investor and manager.

1
Decree No. 2015-1850 of December 29, 2015 applying Article 173 (paragraph VI) of the LTECV of August 17, 2015.

MERIDIAM ESG/SDG Policy 3


Ensure access to affordable, reliable, sustainable and modern energy for all

Build resilient infrastructure, promote inclusive and sustainable industrialization and


foster innovation

Take urgent action to combat climate change and its impacts

This global responsibility is also central to Meridiam's commitment to policy makers and
public institutions to promote and encourage long-term investment and foster communities’
sustainable development.

Meridiam’s Strategy

These ESG and SDG priorities are translated into operational terms by an internally
developed ESG/SDG approach to analyze and monitor all investment opportunities. This
strategy applies to all funds and throughout the lifecycle of projects. It is based on a selective
filtering ahead of investments, via exclusion and restriction lists, followed by a positive
selection of resilient infrastructure projects that answer the needs of local communities. This
approach is based on international standards, such as the UN Principles for Responsible
Investment (UNPRI), and the Equator Principles, and takes into account the ESG criteria of
major financial development institutions such as the International Finance Corporation (IFC),
the World Bank, the European Investment Bank (EIB) and the European Bank for
Reconstruction and Development (EBRD). By integrating the UN-SDGs to its procedures,
Meridiam has reinforced the rigorous impact evaluation assessment and monitoring of
projects, ensured consistency with its development objectives and captured the positive
contribution of projects on issues such as health, education, water, sanitation, energy,
urbanization, environment and social justice.

Meridiam’s approach to managing ESG and SDG issues is operationalized using tailor-made
procedures and tools. This approach is part of Meridiam’s ISO 9001 system.

ESG Analysis Methodology

Meridiam's ESG approach to selecting, analyzing and monitoring investments enables public
authorities to better carry out and manage their infrastructure projects. This approach
includes the following major steps:

- Identification of infrastructure projects according to immediate and long-term needs;


- Global analysis of risks, whether financial, operational, social or environmental,
including the exclusion of investments that do not meet the requirements and
performance criteria established in the investment procedures (working standards,
ESG laws and regulations, ESG capacity, environmental issues, social issues and
energy carbon and climate are the main risk criteria evaluated). The level of risk is
detailed for each criteria allowing every project to be rated according to its overall risk
level;
- Development and implementation of ESG risk management plans;
- Creation and management of companies created specifically to manage projects
called project companies;

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- Coordination of the development and construction phases of projects;
- Long-term management of infrastructures with and on behalf of the public authorities.
In addition, Meridiam applies strict compliance and the principle of professional integrity to the
conduct of all projects, in accordance with regulatory requirements. To this end, each
employee of Meridiam subscribes to the Code of Ethics which includes strict
reservations/clauses on the issue of conflicts of interest.

In addition, Meridiam ensures that all partners apply zero tolerance to corruption issues, in
line with its anti-corruption policy.

SDG Analysis Methodology

Meridiam has updated its investments assessment and monitoring procedures to


systematically incorporate the SDG referential framework and to ensure a rigorous alignment
to global priorities. This approach includes the following major steps:

- Preliminary assessment of the core and direct goals material to Meridiam’s activities;
- Systematic identification of the relevant pre-selected indicators during project
assessment and validation of related performance measures and objectives;
- Use of a tailor-made SDG proprietary tool to evaluate and enhance projects’ positive
impacts during their lifecycle. Meridiam’s tool was designed to focus on the pre-
assessed core and direct impacts of its sectors of activities while being adaptable to
the different stages of a project’s development thanks to contextualized benchmarks
that calibrate a carefully designed scoring system. It uses data and KPIs available at
the project company level to rigorously monitor and identify each investments’ relevant
contribution to the UN-SDGs;
- Continuous improvement of performance indicators and identification of transversal
best practices throughout assets’ management to improve and enhance impacts’
contributions.

This process drives each investment team members to proactively incorporate rigorous
performance objectives to their decision-making and ensure Meridiam’s commitment to
achieving positive impacts.

Climate Analysis Methodology

Meridiam invests in mobility, energy transition and social infrastructure projects that answer
the development needs of communities. Consequently, the investment strategy is more
representative of Meridiam’s mission than of the accomplishment of predetermined
objectives. For example, all investments in energy production are in renewable energy
projects, thus the establishment of fossil fuel reduction objectives in our portfolio is irrelevant.

Nonetheless, Meridiam contributes with other investors and with Carbone 4 to the elaboration
of a methodology to firstly measure the alignment of infrastructure portfolios with a 2°C
trajectory and secondly, evaluate the associated climate risks, notably physical and transition
risks. The methodology has been designed to initially cover the European and Mediterranean
rim geographies before future coverage of the African, American and Asian continents. The
methodological approach and results are validated by a scientific committee, based on
reliable and contextualized data.

Meridiam has also collaborated with Carbone 4 in order to develop a risk analysis
methodology related to energy, carbon and climate change. Based on the French

MERIDIAM ESG/SDG Policy 5


Development Agency’s approach, this methodology applies to Meridiam’s various project
categories. Therefore, as part of our investment process, we integrate this
Energy/Carbon/Climate risk evaluation to the project or Project Company. Based on the
results of this evaluation, the development team will be able to follow up and prepare the
impact in-depth analysis.

Finally, Meridiam carries out the carbon footprint evaluation of projects at financial close by
using a tool developed by Carbone 4.

Resources

Meridiam has a team of full time ESG/SDG specialists but holds each member of personnel
responsible for the integration of ESG and SDG themes within investment process,
relationship with investors or asset management. Ongoing trainings and support enable a skill
improvement of employees. If necessary, Meridiam partners with technical experts for ESG
evaluations as part of due diligences, to evaluate the carbon footprint of projects but also to
measure the positive impact of projects within the SDG framework.

Perspectives

Thanks to the implementation of its SDG-based proprietary tool, Meridiam has reinforced its
evaluation of the positive impact of projects in the investment and monitoring phases. Another
improvement in the short-term has been the development of a tool to measure the alignment
of our infrastructure portfolios with a 2°C trajectory and the associated climate risks. As
mentioned previously, this work has been initiated in 2018, and matured in 2019. In addition
to these innovations to its internal procedures, Meridiam also works constantly to improve its
evaluation and monitoring instruments through better trainings and a progressive increase of
its quality requirements.

Investor information
Investors are aware of Meridiam's ESG/SDG procedures for the conduct of all its activities, as
well as key ESG issues related to the investments themselves. In addition, Meridiam's ESG
and SDG commitments are public and accessible on the website www.meridiam.com.
Meridiam considers investor concerns in determining ESG criteria for its investment and asset
management process as well as their increasing commitments to contribute materially to
international development goals. Meridiam ensures compliance with their requirements to
produce follow-up reports, whether it be through documented ESG indicators or the frequency
with which information is disseminated.
In general, Meridiam issues a number of reports at predefined frequencies, by which
investors are informed of the ESG and SDG indicators that are monitored:
- A quarterly report is sent to investors, which includes a specific note on ESG issues
for each asset.
- An annual ESG/SDG report is produced called the "Impact Report", which includes a
presentation of Meridiam's approach and policy on these aspects and an analysis of
selected qualitative and quantitative ESG/SDG indicators with a monitoring of
performance over time.
Other ESG/SDG monitoring reports are prepared according to the requirements of certain
investors and for specific funds, as is the case for the Meridiam Infrastructure Africa Fund.
The ESG performance of each project is presented, as well as the ESG performance of the
fund as a whole.

MERIDIAM ESG/SDG Policy 6


INFORMATION ABOUT THE MERIDIAM FUNDS

List of funds
Meridiam currently manages 7 funds, the details of which are presented below.

AMF SEC

Meridiam Meridiam
Meridiam Meridiam Meridiam Meridiam
Meridiam Infrastructure Infrastructure
Infrastructure Infrastructure Infrastructure Infrastructure
Transition4 North North
SICAR Europe II Africa Fund2 Europe III3
America II America III

Asset class Infra Infra Infra Infra Infra Infra Infra

Year of
creation 2008 2012 2015 2016 2016 2012 2017

Duration of
the funds
25 25 15 25 20 25 25

OECD Europe, Africa Europe, Europe OECD OECD


countries in including including countries in countries in
Geographical Europe and Central and Central and North America North America
area North America Eastern Eastern and South and South
Europe Europe America America

- Transport - Transport - Public utility - Transport - Public utility - Transport - Transport


infrastructures infrastructures services and infrastructures services and infrastructures infrastructures
networks networks
- Social - Social - Social - Social - Social
infrastructures infrastructures - Energy infrastructures - Energy infrastructures infrastructures
Types of infrastructures infrastructures
projects - Energy - Public - Public - Public
infrastructures - Transport buildings buildings buildings
infrastructures
- Energy
- Social infrastructures
infrastructures
Amount of
Meridiam’s
assets
following its - 100 - 100 - 100 - 100 - 100 - 100 - 100
ESG policy
(as a share of
funds, in %)

The funds are managed by either Meridiam SAS (MSAS) or Meridiam Infrastructure North
America (MINA). MSAS is regulated by the French Autorité des Marchés Financiers (AMF)
while MINA is regulated by the Security and Exchange Commission (SEC).

ESG/SDG charter, code or label


Meridiam does not manage specific labelled funds. However, all investments have a
dimension that contributes to achieving ESG and SDG objectives. Therefore, all Meridiam’s
funds take simultaneously into account the environmental, social and governance quality
criteria of Meridiam. This represents 100% of our assets under management in 7 funds that
integrate ESG criteria and SDG assessment. The Meridiam Transition fund was created for
the sole purpose of financing energy transition projects. Additionally, Meridiam systematically
applies the French Article 173 (paragraph VI) of the LTECV of August 17, 2015, regardless of
whether the fund is subjected to foreign legislation. However, Meridiam’s funds valuated
above 500 M € are not under French regulation and thus are not subjected to “investors

2
Fund subject to Decree No. 2015-1850 of December 29, 2015 applying Article 173 (paragraph VI) of the LTECV of August 17, 2015.
3 Ibid.
4 Ibid.

MERIDIAM ESG/SDG Policy 7


reporting” publications.
Meridiam's approach to the environmental and social responsibility and corporate governance
consists in involving all members of the development and asset management teams in the
process of evaluating, developing and managing the projects in which the organization
invests. Each employee receives training on ESG and SDG topics on an ongoing basis, so
that he or she takes ownership of the procedure put in place for the responsible consideration
of ESG and SDG issues in all projects.
Some of the project companies in which Meridiam invests also have a dedicated ESG team.
In addition, there is a procedure in place for sharing knowledge and good practices with
project companies on various topics including ESG and SDG-related impacts.

ISO 9001 certification, version 2015


The importance of ESG and SDG issues is also reflected in the continuous improvement of
Meridiam's operational methodology, as illustrated by the ISO 9001 certification obtained in
January 2012, the first of its kind to be awarded to an investment company. This certification
is renewed regularly; the last renewal was in January 2020.
As a reminder, the ISO 9001 certification is an international standard for quality management
and provides guarantees in terms of organizational quality within the company.

External ESG Audits


Meridiam conducts audits on Corporate Social Responsibility (CSR) and calls on specialized
external consultants such as Vigeo Eiris, an independent international research and ESG
agency offering services to private, public and associative organizations and investors.
Vigeo Eiris has carried out several audits, the last of which was conducted end of 2017, on
the basis of the ISO 26000 standard. The "Advanced" rating awarded to Meridiam in 2017
reflects the maturity of its organization. A Sustainability Performance Review is currently
being carried out, which results will be made available to Meridiam in the course of 2020. This
evaluation will provide a rated analysis of our visions, commitments and management of our
sustainability risks, impacts and performances.

PRI Signatory
Meridiam has been a signatory of the United Nations Principles for Responsible Investment
(PRI) since January 5, 2011. In 2019, Meridiam's ESG approach received ratings of:
- A+ (29/30) for the overall ESG approach
- A+ (30/30) on topics specific to infrastructures

Certifications within the project companies


Meridiam ensures that ESG issues are taken into account by all companies created to
manage the infrastructures in which the organization invests. The achievement of
performance objectives often results in obtaining labels or certifications of national or
international scope as is the case for the following examples:
- The project company for the A66 motorway in Spain, i.e. the 49 km section between
Benavente and Zamora, received the Green Energy certification for the use of
renewable energy for all of its energy needs;
- The research Centre of the University Hospital of Montreal (CRCHUM) in Canada
obtained the LEED Gold certification;

MERIDIAM ESG/SDG Policy 8


- The Long Beach Courthouse in California has been LEED Gold certified;
- The student residence complex at the University of Hertfordshire in England, which
includes 3000 housing units, common rooms, a gymnasium and sports fields, obtained
the BREEAM Excellent certification.
Many project companies have put in place an environmental management system that meets
the ISO 14001 standard.

MERIDIAM'S ESG AND SDG ANALYSIS PROCEDURES

Meridiam's ESG and SDG analysis consists in an integrated approach to responsible


investment; it covers all activities related to investment in infrastructure projects, from
identifying investment opportunities to the long-term management of assets. The analysis is
based on an increasingly complete control of the ESG and SDG components of a given
project as the investment process progresses. In the initial phase of projects, the approach
developed by Meridiam focuses on ESG risk management and SDG assessment. It then
makes it possible to optimize the positive effects of the projects and improve their ESG and
SDG performance once the assets are in operation. The main elements of Meridiam's ESG
and SDG approach are described below. This approach is applied both in Meridiam's
investment process and in monitoring the funds it manages. Meridiam's ESG approach also
meets regulatory requirements for the application of ESG criteria in France5.

Main ESG criteria


A set of more than 45 ESG conditions and criteria are used to analyze all investments,
without distinction by sector of activity or asset class. This ESG analysis framework is used to
identify the ESG issues and risks that are associated with investments and to determine the
risk level of each criteria and the implementation modalities for projects that will allow these
issues to be effectively taken into account. Each condition/criterion must be documented
during the different analysis phases. Here are some examples of analysis criteria.

ESG THEMES Examples of criteria for the evaluation of investments

Free from exploitation of child labor


WORKING STANDARDS Free from forced or compulsory labor practices
Good working conditions, in terms of health / safety and equality
Legal context and compliance
LAWS AND REGULATIONS
Procurement procedure
Client's ESG policy and procedures
ESG CAPACITY
ESG policy and procedures of Meridiam's Partners
Impacts on the physical components of the environment
ENVIRONMENTAL Impacts on nature protection areas and biodiversity
ISSUES Impacts on fauna, flora and habitats
Environmental measures
Social impacts
Cultural heritage
SOCIAL ISSUES Interests of stakeholders
Land acquisition and resettlement
Vulnerability to climate change
ENERGY, CARBON AND
Contribution to the fight against climate change
CLIMATE Combined risk relating to the Energy and Carbon market and Climate risk

5
Decree No. 2015-1850 of December 29, 2015 applying Article 173 (paragraph VI) of the LTECV of August 17, 2015.

MERIDIAM ESG/SDG Policy 9


In the asset management phase, i.e. during the construction and operation of the
infrastructures, the ESG and SDG analysis is carried out based on detailed criteria whose
scope is adjusted according to the type of infrastructure and the issues it generates. More
than 200 criteria are used to monitor the implementation of ESG measures and to evaluate
the ESG and SDG performance of projects. The following table shows some of the ESG
criteria.

ESG ESG THEMES Examples of criteria to analyze the performance of assets

GENERAL Environmental policy


Training
ENVIRONMENTAL Environmental protection expenditure
POLICY Climate change risk management approach
Air quality / emissions
Water
CONTROL OF
Soil
POLLUTION AND WASTE Noise
ENVIRONMENTAL MANAGEMENT Waste
Discharges
Energy consumption
SUSTAINABLE USE OF
Water consumption
RESOURCES Resource consumption
Protected areas and species
BIODIVERSITY Minimization and compensation
Deforestation
Job creation
Diversity
EMPLOYMENT Representation of workers
Working conditions
Management of complaints and grievances
Training policy
TRAINING Training results
Percentage of employees trained

SOCIAL SAFETY
Safety procedures and programs
Results in terms of safety for workers and users
Impact on local employment and the economy
ECONOMIC AND SOCIAL Questions from stakeholders (employees, unions, suppliers, neighboring
IMPACT populations, etc.)
Relations with local development and support actors

ARCHAEOLOGY AND Archaeological discoveries and presence of heritage sites


CULTURAL HERITAGE Communication to the public

MANAGEMENT Stakeholder involvement


GOVERNANCE Certifications / labels
COMPLIANCE Sanctions / penalties

MERIDIAM ESG/SDG Policy 10


SDG Positive Screening
In addition to the above mentioned ESG criteria, the analysis framework also includes a
preliminary assessment of material SDG’s core and direct indicators determined for each type
of infrastructure; the general approach is summarized in the following figure. This enables for
the systematic identification of the investment’s associated positive impacts and resulting
performance indicators that are to be considered during the development of the project. Thus,
the indicators selected by the investment team during the projects’ origination will have to be
carefully monitored, and when possible, documented for later validation during the analysis
phase.

Internal ESG and SDG analysis and monitoring


A rigorous and demanding approach to ESG standards and responsible investment is
embedded in Meridiam's investment process. This is reflected in the resources that Meridiam
allocates to the implementation of its responsible investment policy as defined by the
Sustainable Development Charter and illustrated by the development of its SDG-based
proprietary tool.
A team of ESG/SDG specialists is involved full-time in the implementation of Meridiam's
ESG/SDG policy and procedures. In addition, all staff are engaged and proactive in
integrating ESG and SDG elements into projects and investment opportunities that are
controlled under Meridiam's ISO 9001 system. In order to ensure ownership of ESG
procedures and SDG assessment by the teams and their commitment, training sessions are
organized on ESG and SDG topics and on the mechanisms for integrating these issues into
the conduct of their activities. The participation of all team members in official training
sessions with the Meridiam ESG/SDG Compliance Team is mandatory.
The ESG/SDG requirements, including all procedures, tools and details on the distribution of
responsibilities, are included in Meridiam's ISO 9001 procedures.
In addition, all project development teams carry out "due diligence" during the opportunity
assessment phase and the planning and finalization phase of projects then during the asset
management phase. The ESG/SDG Compliance Officer is involved in development strategies
and monitoring before decisions are finally made for projects where the ESG risk is
considered medium or high. The teams are empowered and are involved in the preparation of
the quarterly and annual reports.
Meridiam is an involved investor and asset monitoring is done on three complementary levels:

MERIDIAM ESG/SDG Policy 11


- Representation on the Board of Directors: Meridiam is represented on the Board of
Directors of each of the project companies;
- Staff of the project company: Meridiam appoints full-time members to the management
team of each asset or provides seconded staff;
- Active/involved management of assets according to a local approach.
The proximity with its assets ensures that Meridiam's investments are managed transparently
in all areas, including for ESG and SDG aspects. Each project company contributes to
Meridiam's ESG/SDG reports via a tool using standard surveys to be completed once a year.
These surveys were developed by Meridiam with the assistance of experts in the field,
compiling industry best practices and additional components more specific to its business. It
also integrates the United Nations Sustainable Development Goals (UN-SDGs) framework
and exploits data and KPIs available at the project company level to rigorously monitor and
identify each investments’ relevant positive impacts through a calibrated scoring system
Meridiam is also supported by external specialists on certain ESG/SDG themes in order to
benefit from their expertise and to equip themselves with powerful and evolving tools.
External audits of the certification processes take place annually or every two years, led by
external certification or rating bodies, whereby Meridiam's ESG/SDG approach is evaluated.
Thus, the organization seeks to maintain a certain standard in the quality of its management
and more generally in its procedures.
Internal audits on compliance and ESG topics are also organized on a recurring basis, for
example on an entire portfolio of Meridiam funds or a part of it.

Analysis methodology
The ESG/SDG approach is generalized and systematically integrated into Meridiam's ISO
9001-certified investment and asset management processes.
The ESG/SDG assessment and the establishment of avenues for ESG and SDG
improvement take place as soon as investment opportunities are identified using the criteria
mentioned above.
In practice, each project is thoroughly assessed through an initial due diligence analysis prior
to investment. When ESG concerns are highlighted during this process, risk mitigation
procedures are included in the project documentation and specific risk indicators are
identified for the implementation of continuous monitoring. Similarly, relevant SDG targets are
identified in order to determine areas of value creation throughout the development processes
and establish performance indicators to enhance projects’ positive impacts.
In general, the methodology used in the ESG and SDG analysis process for investment
opportunities is built around the following steps:
1. Verification of the eligibility of the project against the exclusion list established by
Meridiam for its various funds
2. ESG framing of the project in regulatory terms and SDG preliminary assessment for
performance indicators
3. Detailed analysis of ESG issues and SDG contribution
4. Determination of ESG risks and SDG opportunities
5. Identification of the ESG mitigation and monitoring strategy as well as SDG
enhancement strategy.

Four levels of risk can be identified for each ESG element that will be assessed; the level of
risk will vary from "low" to "constraint". The risk assessment itself takes into account criteria
such as the intrinsic value of the component affected by the proposed project, the possibility
of implementing measures to control and limit the impacts of the project on this component,

MERIDIAM ESG/SDG Policy 12


the social acceptability of the project, etc. The application of this methodology not only makes
it possible to evaluate all the ESG risks of a project but also to understand the context in
which it is to take place. In addition, by providing details of the issues related to the project,
the methodology allows for an efficient transition to the implementation phase of the project,
namely the construction and operation of the infrastructure.

Meridiam also conducts regular audits of the project companies and, where appropriate, will
require audits on the ESG aspects to be carried out.

The ESG and SDG analysis and evaluation methodology is based on the approach presented
in the following diagram.

ESG/SDG ANALYSIS AND RISK EVALUATION

Integration in the investment process


All of Meridiam's investment opportunities are reviewed based on Meridiam's ESG and SDG
policy including on the lack of controversial elements and the opportunity to engage positively
with local stakeholders and authorities to develop a sustainable project.
Indeed, when analyzing the market and/or the origination of projects, the prerequisite for the
decision to develop a project is based on a typology of activity criterion. Meridiam has a list
common to all funds presenting the typology of activities in which the organization will not
invest, whether for reasons of environmental or social impacts, or moral reasons. In addition,
for certain geographic regions and depending on the type of investment funds, additional lists
of excluded activities are established. These exclusion lists contain all the activities in which
Meridiam undertakes not to invest and are part of the ESG/SDG procedures, which are
themselves integrated into the ISO: 9001 system that governs the conduct of business
activities.
Meridiam's eligible investment universe is defined after this first filter.
Regarding ESG risks, all funds managed by Meridiam integrate all ESG criteria due to the

MERIDIAM ESG/SDG Policy 13


nature of the investment process. Nevertheless, no specific weighting is defined for one
category of ESG issues compared to another. The relative weight of the categories of ESG
criteria, some examples of which are given above, is therefore the same for each of them.
The decision to pursue the development of a potential investment is based on the overall
assessment of ESG issues and risks; Meridiam must be confident that it can effectively
manage ESG issues to move forward with a project.
In addition, at the end of COP 21, the Meridiam Transition Fund was created; it is dedicated
to the development and implementation of projects in the field of energy transition in Europe.
The portfolio of this fund is therefore based exclusively on ESG criteria.
Furthermore, the SDG common evaluation framework has been exploited and systematically
integrated within the procedures of Meridiam’s ESG investments in order to strengthen
Meridiam’s current ESG approach and offer a capital allocating guide to attract new
sustainable investment opportunities. By doing so, Meridiam creates a holistic approach to its
investment strategy through the elaboration of a resilience and impact policy that incorporates
considerations such as socio-economic development, biodiversity protection, fight against
climate change and energy transition.
Once a project is eligible, each stage of the investment process includes an analysis of ESG
issues and SDG assessment as well as the analysis of other criteria, including financial
criteria. In practice, since the initial phase of eligibility of the investment, the investment
process integrates the ESG/SDG analysis as follows:
- An initial classification of the risk for each type of criteria (working standards, ESG
laws and regulations, ESG capacity, environmental issues, social issues and energy
carbon and climate are the main risk criteria evaluated). The evaluation of the level of
risk regarding Energy/Carbon/Climate themes is done by using a specific document
attached to the initial risk classification document. This classification will determine the
ESG risk management process to be put in place;
- At the same time, an initial pre-SDG assessment is done taking into account the
project’s specificities in order to identify areas of interest for future value creation and
performance indicators;
- The risk classification will be reassessed throughout the process, as shown in the
section describing the analysis methodology, the process is also carried out for the
SDG targets previously selected as material to the project. These reassessments will
follow a series of actions that development teams must undertake to understand the
detailed characteristics of the project, the components of the environment in which it is
located and the environmental and social impacts it generates.
- The definition of a strategy for managing ESG issues and risks and enhancing positive
impacts to achieve the SDGs set for the project.
Specifically, as needed, the project development team could conduct an additional due
diligence study to establish an environmental and social action plan, or even initiate an
environmental and social impact assessment (or a study of the deviations between an
existing impact study and international performance standards) or any other required study.
Depending on the scope of the studies to be carried out, Meridiam will call on external
consultants specializing in environmental and social studies. In the context of a climate risk
evaluation, every project financed will also be evaluated in terms of its carbon footprint
following a methodology integrating Scopes 1, 2 and 3 and comparing the reference situation
of this project with the situation once in operation. This carbon footprint evaluation allows for
technical modifications of this project but also to optimize its management in the long run by
favoring less emissive ways of functioning.
It is also necessary to obtain confirmation that a project complies with Meridiam ESG criteria
for validation. If the ESG issues are too significant and/or unmanageable, or if the
compensatory measures prove to be insufficient, the investment process is not continued.

MERIDIAM ESG/SDG Policy 14