Manulife Financial : Limited Assurance Statement, May 202

Manulife

Type of Engagement: Annual Review

Date: May 7, 2021

Engagement Leader:

Zach Margolis, [e-mail], ([phone]

Introduction

In 2017 and 2018, Manulife issued green bonds (the "2017 and 2018 Green Bonds") aimed at financing activities that help advance a low-carbon,climate-resilient future. In May 2021, Manulife engaged Sustainalytics to review the projects funded through the issued green bonds and provide an assessment as to whether the projects met the Use of Proceeds criteria and the Reporting commitments outlined in the Manulife Green Bond Framework. This review follows previous reviews of the 2017 issuance, conducted in October 2018 and November 2019, a previous review of the 2018 issuance, conducted in May 2019, and a previous review of the combined issuances conducted in May 2020.

Evaluation Criteria

Sustainalytics evaluated the projects and assets funded with proceeds from the 2017 and 2018 Green Bonds based on whether the projects and programmes:

1. Met the Use of Proceeds and Eligibility Criteria outlined in the Manulife Green Bond Framework; and
2. Reported on qualitative and/or quantitative environmental performance indicators as outlined in the Green Bond Framework.1

Table 1 lists the Use of Proceeds and Eligibility Criteria that are applicable to the 2017 and 2018 Green Bond issuances.2

Table 1: Use of Proceeds, Eligibility Criteria, and associated KPIs

	Use of	Eligibility Criteria
	Proceeds
	Renewable	Development, construction, operation, maintenance and upgrades of:
	i. facilities and equipment wholly dedicated to the generation of renewable energy, as
	Energy
	defined by the International Renewable Energy Agency (IRENA) Statute3, including:
			•	wind energy
			•	solar energy
			• small-scale hydro (under 25 Mega Watts)
			• bio-energy from waste biomass
			•	tidal energy
			•	geothermal energy
			ii. transmission infrastructure and other supporting infrastructure wholly dedicated to
			renewable energy generation facilities including inverters, transformers, energy storage
			systems and control systems
			iii. production or manufacturing facilities wholly dedicated to equipment, feedstock or
			components for renewable energy generation facilities

1. The Manulife Green Bond Framework commits to reporting on qualitative and quantitative environmental performance indicators where feasible. See
   Appendix 1 for environmental performance indicators reported on per use of proceeds category in Manulife's 2020 Green Bond Annual Report, dated May 2021.
2. The Green Bond Framework also allows for investment in green buildings, clean transportation, sustainable water management, and pollution prevention and control.
3. IRENA Statute, 2009.https://www.state.gov/documents/organization/179955.pdf

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Annual Review

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Sustainably	Purchase and operation of sustainably-managed forest holdings certified by credible
third-party forest certification systems, such as:
Managed
Forestry	i. Forest Stewardship Council (FSC)
	ii. Programme for the Endorsement of Forest Certification (PEFC)

Energy	Development, construction, acquisition, installation, operation, and upgrades of projects
that reduce energy consumption or improve the efficiency of resources, including:
Efficiency
	i.	projects involving the installation, maintenance or replacement of efficient heating,
		ventilation, air conditioning, refrigeration, lighting and electrical equipment
	ii. projects that allow the monitoring and modeling of energy performance such as the
		design and installation of digital controls, sensors or building information systems
	iii. projects that optimize the amount and time of energy consumption by minimizing
		peak loads, such as design and installation of metering systems, smart grids, load
		control systems

Issuing Entity's Responsibility

Manulife is responsible for providing accurate information and documentation relating to the details of the projects that have been funded, including description of projects, amounts allocated, and project impact.

Independence and Quality Control

Sustainalytics, a leading provider of ESG and corporate governance research and ratings to investors, conducted the verification of Manulife's Green Bond Use of Proceeds. The work undertaken as part of this engagement included collection of documentation from Manulife employees and review of documentation to confirm the conformance with the Manulife Green Bond Framework.

Sustainalytics has relied on the information and the facts presented by Manulife with respect to the Nominated Projects. Sustainalytics is not responsible nor shall it be held liable if any of the opinions, findings, or conclusions it has set forth herein are not correct due to incorrect or incomplete data provided by Manulife.

Sustainalytics made all efforts to ensure the highest quality and rigor during its assessment process and enlisted its Sustainability Bonds Review Committee to provide oversight over the assessment of the review.

Conclusion

Based on the limited assurance procedures conducted,4 nothing has come to Sustainalytics' attention that causes us to believe that, in all material respects, the reviewed projects, allocated through proceeds of Manulife's Green Bond, are not in conformance with the Use of Proceeds and Reporting Criteria outlined in the Green Bond Framework. Furthermore, the methodology used to calculate estimated avoided CO2 emissions was assessed and found to be credible and based on accepted third party GHG emission calculation tools. Manulife has disclosed to Sustainalytics that the proceeds of both the 2017 and 2018 Green Bonds were fully allocated at the respective times of issuance.

4 Sustainalytics' limited assurance process includes reviewing the documentation relating to the details of the projects that have been financed, including description of projects, allocated amounts, and project impact, which were provided by the Issuer. The Issuer is responsible for providing accurate information. Sustainalytics has not conducted on-site visits to projects.

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Detailed Findings

Table 2: Detailed Findings

Eligibility	Procedure Performed	Factual Findings	Error or
Criteria			Exceptions
			Identified
Use of	Verification of the projects funded by the	All projects reviewed	None
Proceeds	green bonds in 2017 and 2018 to	complied with the Use
Criteria	determine if projects aligned with the Use	of Proceeds criteria.
	of Proceeds Criteria outlined in the Green
	Bond Framework and above in Table 1.
Reporting	Verification of the projects funded by the	All projects reviewed	None
Criteria	green bond in 2017 and 2018 to determine	reported on at least one
	if the impact of projects was reported in	KPI per Use of Proceeds
	line with the Green Bond Framework. For a	criteria.
	list of KPIs reported please refer to
	Appendix 1.

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Appendices

Appendix 1: Impact Reporting by Eligibility Criteria

Manulife has provided in their 2020 Green Bond Report the following reporting information. These figures have been revised for the reporting period to reflect actual energy generation and forest management practices for 2020.

Green Bond	Issuance	Location(s)	Amount	Avoided	Other reported quantitative
Category			Allocated5	CO2	indicators
			(million)	(tonnes)
Renewable	Green	Canada	SGD 219	38,097	274,212 MWh generated
Energy: Wind	Bond 1
Energy
Renewable	Green	Canada &	SGD 278	15,079	59,846 MWh generated
Energy: Solar	Bond 1	US
Energy
Renewable	Green	Uruguay	CAD 19.8	998	33,254 MWh generated
Energy: Wind	Bond 2
Energy
Renewable	Green	Canada &	CAD 333.9	20,146	76,286 MWh generated
Energy: Solar	Bond 2	US
Energy
Energy	Green	US	CAD 171.6	44,535	32,635 MWh saved
Efficiency	Bond 2
Sustainably	Green	US	CAD 72.6	73,604	28,440 PEFC-certified acres6
Managed	Bond 2
Forestry
		TOTAL:	SGD 497	192,459
			million
			CAD 597.9
			million

NOTE:

The capacity, energy, and avoided emissions are calculated on a basis proportional to Manulife's share

of debt and equity investments in the project, scaled to the amount financed by the green bond proceeds

1. Allocated amounts from Green Bond 1 are provided in million SGD, amounts from Green Bond 2 are provided in million CAD, reflecting the currency in which the bond was issued.
2. Manulife has confirmed that the forestry projects to which green bond proceeds have been allocated are certified by the Sustainable Forest Initiative (SFI) endorsed by the Programme for the Endorsement of Forest Certification (PEFC), and has provided information on the certifications for Sustainalytics' review.

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Disclaimer

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