Manulife Financial : Y2020 Annual Green Bond Report

2020 GREEN BOND REPORT

COMBINED REPORT FOR THE TWO GREEN BOND ISSUANCES:

• 3.0% SG$ 500 million subordinated debt due 21 November 2029, callable 21 November 2024
• 3.317% C$ 600 million subordinated debt due 9 May 2028, callable 9 May 2023

In 2017, Manulife became the 1st global life insurer to issue a green bond1. This regular debt instrument with proceeds allocated to the emission-efficient assets aligns our investment and financing activities. Manulife's Green Bond Framework2 is governed by Manulife's executives on the Green Bond Council, and is consistent with the global best practice - Capital Markets Associations' Green Bond Principles, as confirmed by the 2nd party opinion3.

Together with our second issuance in 2018, our total green bond issuance to date is over $1 billion with the estimated annual environmental benefit of 192,459 tons of avoided carbon dioxide emissions.

Green Bonds	Issuance Type	Allocation of Proceeds	Estimated Annual Environmental Benefit
1st Green Bond issued 21	MFC 3.0% SG$ 500 million subordinated	Wind and solar energy projects in Canada and the United States	53,176 tons of avoided carbon dioxide emissions
November 2017	debt due 21 November 2029	annually, or 107 tons per SG$ 1 million allocated
2nd Green Bond issued 9 MFC 3.317% C$ 600 million subordinated	Wind and solar energy projects in Canada, the US and Uruguay,	139,283 tons of avoided carbon dioxide emissions
energy efficiency of public buildings, and sustainably managed
May 2018	debt due 9 May 2028	forestry	annually, or 233 tons per C$ 1 million allocated.

About sustainable finance at Manulife

Manulife is a long-term investor that supports the transition to the net zero economy. As of 2020, C$39.8 billion or 9.7% of the total C$411 billion general fund4 was invested in long-duration, carbon emission-efficient assets. These investments are a good economic fit to the Manulife's business model, as they form part of an asset mix that optimizes risk-adjustedreturns and matches the characteristics of the long-dated insurance liabilities, some of which continue for over 20 years.

	Holdings at
Manulife Green Investments	31/12/2020	Description
[Canadian
	dollar billion]
Green Buildings	$16.9		Direct equity investments and commercial mortgages backed by green building certifications Leadership in Energy and Environmental Design
	(LEED), Buildings Owners and Managers Association (BOMA Best), and Energy Star
Renewable Energy	$9.8		Private debt and equity financing of solar/wind/geothermal/waste biomass/hydro energy
Sustainably-managed Timberland	$4.0		Assets operated by Manulife subsidiary Hancock Timber Resource Group and private placements certified to Forest Stewardship Council (FSC) and
	Programme for the Endorsement of Forest Certification (PEFC) standards
Energy Efficiency	$3.9		Private debt financing of energy efficiency upgrades at US government sites
Clean Transportation	$2.7		Private debt financing of electrified transport and mass public transit
Sustainably-managed Agriculture	$1.3		Investments operated by Manulife subsidiary Hancock Agricultural Investment Group and certified to the Leading Harvest Standard
Sustainable Management of Water Resources	$0.6		Private debt financing of water recycling and purification businesses
Green Bond Investments	$0.7		Public and private green bond investments in renewable energy, energy efficiency, clean transport, and sustainably-managed forests
TOTAL	$39.8		General Account investments only, no third-party funds
	Private debt and equity investments, no public securities, except for several green bond investments
Percent of Total General Account	9.7%		Total General Account assets: $411 billion

1. Manulife's green bond is a fixed income instrument with an amount equal to the net proceeds intended to be used to finance or re-finance new and/or existing Eligible Assets consistent with Manulife's Green Bond Framework that directs proceeds towards renewable energy, energy efficiency, sustainably managed forests and other investments that advance ecosystem improvements
2. Manulife's Green Bond Framework is aligned with the International Capital Market Association's Green Bond Principles 2017, and directs the use of proceeds towards renewable energy, green buildings, sustainably managed forests, energy efficiency, clean transport, sustainable water management and/or pollution prevention and control:http://manulife.force.com/servlet/servlet.FileDownload?file=00P5000000u15GVEAY
3. The Second-PartyOpinion on the Framework, and the Annual Review of this Green Bond report (the limited assurance procedure) are available on the Manulife Investor Relations webpage https://www.manulife.com/en/investors/results-and-reports.html.It confirms a) the assets meet the Use of Proceeds the Eligibility Criteria outlined in the Framework, and b) Manulife reported on at least one Key Performance Indicator for each Use of Proceeds criteria in the Framework.
4. All amounts in Canadian dollars, unless otherwise stated, and for the year ending 31 December 2020

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About Manulife's climate commitments and governance

Manulife is committed to steering our investment portfolio to be net zero by 2050. To ensure best practice in emission reduction target setting, measurement, and progress reporting, Manulife is committed to the Science Based Targets initiative.

The net zero transition is managed by the General Account's Climate Change Working Group chaired by the Head of Environmental, Social and Governance Integration and consisting of senior investment officers and members of the credit and portfolio management teams.

Manulife's Climate Action Plan is driven by the Executive Sustainability Council - the Chief Sustainability Officer and nine members of the Executive Leadership Team, including the Chief Executive Officer, and is overseen by the Board's Corporate Governance and Nominating Committee.

Manulife is also a member of global collaborations that advance integration of sustainability into financial decision-making:

• Accounting for Sustainabilityis a network of financial leaders that inspire action to shift towards resilient business models and a sustainable economy. In 2017, our Chief Financial Officer became the founding Chair of the A4S's Canadian Chapter
• United Nations Environmental Programme - Finance Initiativeis a partnership between United Nations Environment and the global financial sector that promotes sustainable finance. Manulife has been a signatory since 2005
• Equator Principlesare a set of voluntary guidelines that help financial institutions identify and manage environmental and social risks in project finance. Manulife committed to the principles in 2005.

For more information on Manulife's sustainability performance, please see our Annual Sustainability Report.

About this report

Consistent with our Green Bond Framework, we committed to publishing an annual use of proceeds report. This report follows on our four historical reports published in November 2018 and 2019, May 2019 and May 2020 available on the Manulife's Investors Relationswebpage. This report combines the two annual issuances' reports into one, and shows relevant metrics by issuance, including allocation of proceeds, environmental performance indicators, and project examples. Sustainalytics - a provider of environmental, social, governance research to institutional investors - who issued the 2nd party opinion on the Framework, has reviewed this report and confirmed its alignment with the Framework4.

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GREEN BOND 1: 3.0% SG$ 500 MILLION SUBORDINATED DEBT DUE 21 NOVEMBER 2029

Key elements

• Use of Proceeds: Renewable energy (wind and solar)
• Geography: Canada and United States
• Management of Proceeds: All proceeds allocated at issuance; no change in allocations since issuance
• Estimated Environmental Benefit: 53,176 tons of avoided carbon dioxide emissions or 107 tons CO2 per SG$ 1 million

Use of proceeds by category on portfolio basis and environmental performance

Category as			Green Bond		Manulife's share of	Manulife's share of
		amount allocated		annual energy	estimated annual avoided
per Green	Criteria in the Manulife Green Bond
Location	to renewable	% Allocation	generation, allocated	carbon dioxide emissions,
Bond	Framework
	energy projects		to Green Bond	allocated to Green Bond
Principles
		(SG$ million)		(MegaWatt hour)a	(tons)a,b,c
Renewable	Development, construction, operation,
maintenance and upgrades of wind energy	Canada	219	44%	274,212	38,097
Energy: Wind
facilities and equipment
Renewable	Development, construction, operation,	Canada and
maintenance and upgrades of solar energy	278	56%	59,846	15,079
Energy: Solar	facilities and equipment	US
Total	107 CO2 tons/SG$ 1 MM allocated		497d		334,058	53,176

Notes:

a. Manulife's share of installed capacity, annual energy generation and estimated avoided carbon dioxide emissions was based on our debt and equity investments deployed in the projects as a proportion of the projects' total enterprise value at the time of investment. The reported figures were scaled to the SG$ 497 million allocation of the net proceeds from the green bond issuance.

b. Avoided carbon dioxide emissions were estimated based on the energy mix in local country grids and the life-cycle emission factors for wind and solar technologies (see Methodology)

c. The environmental benefit estimated by Manulife in the form of avoided carbon dioxide emissions does not constitute a transfer of right to any person of the tradable carbon credit or other offset that may be associated with all or part of the environmental benefit.

d. SG$497 millionis is the net proceeds from the green bond issuance, namely SGD 500 million gross issuance amount net of SGD 3 million transaction costs.

Examples of projects

Project	Location	Description
							•	total installed capacity: 350 Megawatt
					Rivière-du-Moulins	Province of Quebec, Canada	•	estimated to power 59,500 homes
					• 20-year agreement with Hydro Quebec since construction 2014
							• largest wind energy facility in Canada under single PPA
							•	total installed capacity: 100 Megawatt
					Grand Renewable	Haldimand County, Province of	•	800-acre farm with 450,000 solar panels, powering 17,000 homes
					Ontario, Canada	•	20-yearfeed-in-tariff contract with HydroOne since 2015
							•	one of the largest solar farms in Canada

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GREEN BOND 2: 3.317% C$ 600 MILLION SUBORDINATED DEBT DUE 9 MAY 2028

Key elements

• Use of Proceeds: Renewable energy (wind & solar), energy efficiency of public buildings, sustainably managed forestry
• Geography: Canada, US, Uruguay
• Management of Proceeds: All proceeds allocated at issuance; no change in allocations since issuance
• Estimated Environmental Benefit: 139,283 tons of avoided carbon dioxide emissions, or 233 tons CO2 per C$1 million

Use of proceeds by category on portfolio basis and environmental performance

					Manulife's share of
					annual energy	Manulife's share of
					production,energy	estimated annual
Category per			Green Bond		savings, and certified	avoided carbon dioxide
Green Bond	Eligibility Criteria in the Manulife		Allocations (C$	%	acreage, allocated to	emissions, allocated to
Principles	Green Bond Framework	Location	million)	Allocation	Green Bonda	Green Bond a,b,c,d,e
Renewable	Development, construction, operation,				33,254
maintenance and upgrades of wind energy	Uruguay	19.8	3%	[energy generated in	998
Energy: Wind
facilities and equipment				MegaWatt hour]
Renewable	Development, construction, operation,	Canada			76,286
maintenance and upgrades of solar energy	333.9	56%	[energy generated in	20,146
Energy: Solar	and US
facilities and equipment			MegaWatt hour]
					32,635
	Development, construction, acquisition,				[energy savings in MegaWatt
Energy Efficiency	installation, operation, upgrades to reduce	US	171.6	29%	hour]	44,535
	energy consumption/improve resource				15%
	efficiency				[average efficiency
					vs.baseline]
Sustainably-	Purchase and operation of forest holdings				28,440
Managed	certified by credible third-parties such as	US	72.6	12%	[acres 100% certified to the	73,604
Forestry	FSC and PEFC				PEFC standard]f
Total	233 CO2 tons/C$ 1 MM allocated		597.9g			139,283

Notes:

a. Manulife's share of actual energy generation, energy savings, sustainably-managed forest acreage, and estimated avoided carbon dioxide emissions are based on our debt and equity investments in the projects as a proportion of the projects' total enterprise value at the time of investment. The reported figures were scaled to the C$ 597.9 million allocation of the net proceeds from the green bond issuance.

b. We estimated avoided carbon dioxide emissions for renewable energy projects based on the energy mix in local country grids and the life-cycle emission factors for wind and solar technologies [see Methodology].

c. Avoided carbon emissions from our energy efficiency projects were estimated by the project originator Hannon Armstrong. Their CarbonCount® methodology used the estimated kilowatt hours ("kWh"), gallons of fuel oil, million British thermal units ("MMBtus") of natural gas and gallons of water saved as appropriate, for each project. The energy savings were converted into an estimate of metric tons of CO2 equivalent emissions based upon the project's location and the corresponding emissions factor data from the U.S. Government and International Energy Agency.

d. Avoided carbon emissions from our forestry projects were estimated using carbon accounting protocol by our 100%-owned timber subsidiary Hancock Natural Resource Group [see Methodology]. The net greenhouse gas emission profile can fluctuate largely as a result of ongoing forest management activities, such as fertilization, herbaceous weed control, and harvesting schedules. The year-on-year change in the profile may be positive or negative.

e. The environmental benefit estimated by Manulife in the form of avoided carbon dioxide emissions does not constitute a transfer of right to any person of the tradable carbon credit or other offset that may be associated with all or part of the environmental benefit.

f. PEFC: the Programme for the Endorsement of Forest Certification, an international non-profit,non-governmnetal alliance of national forest certification systems dedicated to promoting sustainable forest management through independent third-party certification.

g. C$ 597.9 million is net proceeds from the green bond issuance, namely C$ 600 million gross issuance amount net of C$ 2.1 million transaction costs.

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Examples of projects

Project	Location	Description
							•	installed capacity: 70 Megawatt
					Campo Palomas	Department of Salto, Uruguay	•	estimated to power 13,573 households
					•	annual power generation: 200,000 MegawattHour
							• in August 2017, Manulife participated in the USD 136.8 million financing
					Axium Infinity Solar	Province of Ontario, Canada	•	installed capacity: 76 Megawatt
					•	portfolio of eight solar facilities across the province
							•	in December 2017, Manulife provided debt financing for C$540 million portfolio acquisition

Smithsonian Institution's National Zoological Park

• energy efficiency upgrades to the park hosting pandas Tian Tian, Mei Xiang, and her new cub Xiao Qi Ji: high-efficiencyair-cooledWashington D.C., United States chillers, solar shades on skylights, 625kiloWatt solar plant, LED lighting

• US Government building of 1,088,000 square feet and 163 acres of parkland
• annual energy savings 5,852 MegaWh; carbon dioxide emissions avoidance 4,340 tons

Vinegar Bend

Alabama and Mississippi, United States

• 18,940-acretimberland property of pine and bottomland hardwood plantations
• 100% of property certified to PEFC (Programme for the Endorsement of Forest Certification)
• pine plantation is managed on a 27-30 year rotation age, and hardwood is typically age 50 years+
• merchantable timber totals approximately 690,000 tons of which 70% is pine

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