Prudential PLC

**Board and management oversight** **ESG governance overview** The Board considers ESG to be integrated and aligned with our core business strategy of protecting people's wealth, helping them grow their assets, and empowering them to save for their goals. It recognises the major role that Prudential can continue to play across Asia and Africa, as well as in the long-term success, resilience and health of the communities in which we operate. As such, ESG matters, including climate change, are overseen by the Board, which is responsible for determining overall strategy and prioritisation of key focus areas, and monitoring risk. More information on the composition and competencies of our Board can be found in the [Governance section of our 2022 Annual Report.](https://www.prudentialplc.com/~/media/Files/P/Prudential-V13/reports/2022/prudential-plc-ar-2022) The Board Responsibility and Sustainability Working Group (RSWG), established in January 2021, continued during 2022. In July 2022, the responsibilities of the RSWG were re-positioned to focus on customer, culture and digital, in addition to people and community matters. Oversight responsibilities for environmental and climaterelated issues, and the ongoing implementation of the Group's external commitments to the decarbonisation of its operations and investment portfolio and other climate-focused external responsible investment commitments were transferred to the Group Risk Committee (GRC). Their terms of reference were amended to ensure a holistic approach to these climate-related topics. The GRC's additional responsibilities extend to external reporting, via the ESG Report, where it relates to those areas within its remit, including monitoring the progress of the Group's reporting against the recommendations of the Taskforce on Climate-Related Financial Disclosures (TCFD). Following this transition, an exercise was completed to map the material climate and climate-commitment-related activities which support the GRC's new responsibilities, and the supporting governance arrangements. The supporting management information and frequency has also been reviewed. In addition to regular course discussion, to further enhance strategic Board-level discussions on climate, a dedicated climate deep-dive session was also held with the Board in September 2022. Following discussions at the Board on our approach to climate change, the progress towards the Group's externally communicated climaterelated commitments, climate-related opportunities and the evolving expectations of stakeholders, the Board agreed on the need for clear communication around Prudential's role in emerging markets. The latter point has been supported by the publication of Prudential's Supporting a Just and Inclusive Transition white paper, which sets out the Group's approach to ensuring the transition to a low-carbon economy considers all countries, economies and worker populations by raising awareness on the country-specific challenges for emerging markets in the energy transition. **Management oversight** ESG activity, including the impacts from climate change, is overseen at a management level by the Group ESG Committee, which was chaired by the Group Chief Executive in his role as ESG sponsor. Other members of the Committee are the Group Chief Financial Officer, the Group Chief Risk and Compliance Officer, the Group HR Director, both the Chief Executive and CIO of Eastspring, and the Chief Executive of PACS (Prudential's Singapore business). During 2022, the Group ESG Committee was strengthened by the inclusion of the recentlyappointed Group Chief Information Officer and Group Corporate Affairs Director. From 26 February 2023, the Group ESG Committee is chaired by the Group Chief Financial Officer. One of the Group ESG Committee's responsibilities is to oversee the Group's progress towards fulfilling our commitment to report against the recommendations of the TCFD. In 2022, the Group ESG Committee reported to the Board through the RSWG, as highlighted in figure 7.

**Governance** The Group Investment Committee (GIC) is designated to oversee Prudential's Responsible Investment activities, including the approval of the Group RI Policy. The Group RI Policy is integrated in the Group Investment Policy to ensure ESG considerations are embedded in our investment approach. To assist the Group Chief Financial Officer in providing oversight for the Group and its subsidiaries relating to RI activities and requirements, the GIC provides a forum for the Group and its business units to discuss RI topics and proposals. The Group Sustainable Finance Council (GSFC) is a sub-committee under the GIC to ensure transparency in Sustainable Finance definitions and qualify investments based on these definitions. It also operates as technical review for Prudential to keep pace with industry standards. Meanwhile, the Group Executive Sustainability Committee (GESC) provides a holistic assessment of sustainability matters in line with the implementation of the Sustainability strategy, including RI activities. [...] **Pillar #5: Market influence:** Prudential recognises our critical role on further assisting our markets' sustainability initiatives through bilateral channels or industry partners. Especially for ESG topics, both direct and industry wide engagement with governments or other regulatory agencies will be pursued in a constructive manner where appropriate.

Strengthening governance for the future We continue to build upon our sustainability governance foundations to embed sustainability across Prudential. At the board level, we replaced the Responsibility and Sustainability Working Group with a dedicated Sustainability Committee. I oversee management accountability for the Group Executive Sustainability Committee, which brings together leaders from across Prudential's markets and functions on strategy execution. We strongly believe leadership reward should closely align the economic interests of shareholders with those of executives, and support the longer-term strategic ambitions of the Group. Therefore, 10 per cent* of our Executive Director's Long Term Incentive Plans are already linked to sustainability metrics. We have made significant progress in 2024, but there remains much to be done as we further embed sustainability across Prudential. Our commitments, frameworks, investments, and incentives are a strong foundation for continued progress in building inclusive futures across Asia and Africa. - 5 per cent diversity and 5 per cent carbon reduction in Weighted Average Carbon Intensity (WACI) [...] Sustainability governance Board oversight With the goal to build inclusive and resilient futures across Asia and Africa, our business practices are rooted in a steadfast commitment to sustainability. This drives us to innovate, collaborate, and lead with purpose, with the intention that our efforts create lasting positive impacts for generations to come. The Board recognises the importance of integrating sustainability into Prudential's core business strategy in driving value for our shareholders. They play a pivotal role in overseeing sustainability matters that are material to Prudential's business, including climate change and environmental impacts, responsible investment, social sustainability and workforce engagement. We recognise the importance of sustainability in our business strategy and to assist the Board in providing leadership, direction and oversight of Prudential Group's sustainability strategy. Prudential established the Sustainability Committee in September 2024, replacing the Responsibility and Sustainability Working Group (RSWG), which had been created in early 2021 in order to allow more Board time and attention to certain sustainability-related topics. This Committee takes over from the Risk Committee oversight of environmental and climaterelated issues, and the two continue to collaborate on identifying and managing relevant risks. The Sustainability Committee is chaired by Non-executive Director George Sartorel. As set out in its terms of reference, the Committee is responsible for overseeing: the development of the Group's sustainability strategy, goals, targets and key metrics; the implementation of the sustainability strategy; sustainabilityrelated reporting; sustainability-related policies and practices; employee culture, workforce safety, wellbeing and engagement; and the Group's corporate social responsibility programmes. It collaborates with other Principal Committees of the Board as needed. **George Sartorel** Independent Non-executive Director Chair of Sustainability Committee [...] Management oversight At the management level, the Group Executive Sustainability Committee (GESC) oversees sustainability and climate-related activities. The Chief Financial Officer chairs the Committee, which met five times in 2024. Membership of the Committee includes the Chief Risk and Compliance Officer, Chief Investment Officer, Chief Corporate Affairs Officer, Chief Human Resources Officer, Strategic Business Group CEO, and management executives from Eastspring Investments. One key responsibility of the GESC is to oversee the Group's progress towards all sustainability reporting. This includes on climate and the environment, and disclosing against the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We remain committed to meeting regulatory requirements, including upcoming mandatory requirements to report the Group's climate-related financial disclosures under the International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards, especially with the incorporation of the TCFD recommendations into the International Sustainability Standards Board (ISSB) standards. The policies and procedures to support how the Group operates in relation to certain sustainability topics are included in the Group Governance Manual. Prudential manages key sustainability issues across functions through a multi-disciplinary approach.

**Governance** The Group Investment Committee (GIC) is designated to oversee Prudential's Responsible Investment activities, including the approval of the Group RI Policy. The Group RI Policy is integrated in the Group Investment Policy to ensure ESG considerations are embedded in our investment approach. To assist the Group Chief Financial Officer in providing oversight for the Group and its subsidiaries relating to RI activities and requirements, the GIC provides a forum for the Group and its business units to discuss RI topics and proposals. The Group Sustainable Finance Council (GSFC) is a sub-committee under the GIC to ensure transparency in Sustainable Finance definitions and qualify investments based on these definitions. It also operates as technical review for Prudential to keep pace with industry standards. Meanwhile, the Group Executive Sustainability Committee (GESC) provides a holistic assessment of sustainability matters in line with the implementation of the Sustainability strategy, including RI activities. [...] **Pillar #3: Stewardship:** [Prudential's approach to stewardship is set out in more detail here, and covers corporate, asset manager and](https://www.prudentialplc.com/%7E/media/Files/P/Prudential-V13/news-and-insights/financing-the-transition/unleashing-stewardship-as-an-asset-owner-for-a-just-and-inclusive-transition-whitepaper.pdf) policy engagement, with a specific focus on emerging markets. _Engagement_ Where appropriate and possible, Prudential expects asset managers to represent the asset owners in maintaining a dialogue with the companies in which the business units invest in order to ensure that they manage ESG risks and opportunities effectively, and where appropriate improve their performance and conduct in relation to relevant ESG matters. Engagement can be triggered by managers' ongoing monitoring of an investee's general ESG practices, or be thematically focused on specific topics, such as climate change, palm oil, timber, and UNGC. Prudential may appoint external engagement specialists to strengthen the overall engagement effectiveness across our diverse regions and topics. [...] **Pillar #5: Market influence:** Prudential recognises our critical role on further assisting our markets' sustainability initiatives through bilateral channels or industry partners. Especially for ESG topics, both direct and industry wide engagement with governments or other regulatory agencies will be pursued in a constructive manner where appropriate.

The Board established the Responsibility and Sustainability Working Group (RSWG). The RSWG is chaired by Alice Schroeder and comprised four Non-executive Directors during 2021 (Alice Schroeder, Jeremy Anderson, Fields Wicker-Miurin and Jeanette Wong, who replaced Kai Nargolwala). [...] ESG activity, including the impacts from climate change, is overseen at a management level by the Group ESG Committee chaired by the Group Chief Financial Officer and Chief Operating Officer, in his role as ESG sponsor. He will continue to chair this Committee in his role as Interim Group CEO. Membership of the Committee includes the Group Chief Risk and Compliance Officer, the Group HR Director and senior representatives from the Group's asset owner and asset management businesses, including the Chief Executives of Eastspring and PACS (Prudential's Singapore business). One of the Group ESG Committee's responsibilities is to oversee the Group's progress towards fulfilling our commitment to report against the recommendations of the Financial Stability Board's Task Force on Climate-related Financial Disclosures (TCFD). In 2021, the Group ESG Committee reported to the Board through the RSWG. Further information on the governance and oversight of our responsible investment activity is provided on page 45. [...] Responsible investment activity is overseen by the Group ESG Committee. Operational responsibility for responsible investment activity is delegated to the Group Responsible Investment Advisory Committee (GRIAC), which provides a forum for the Group and local businesses to consider responsible investment approaches. The GRIAC is co-chaired by the Chief Investment Officer (CIO) of Prudential and Co-Chief Investment Officer of Eastspring, who are both senior executives within our main asset owner and asset management businesses. Other permanent members include the CIOs of the major life businesses, as well as representatives from the Group Finance and Group Risk functions. The GRIAC meets at least monthly to monitor the implementation of current responsible investment activities, and considers and prioritises new initiatives. The GRIAC considers potential trade-offs between responsible investment initiatives and the risk/return profile of the investment portfolio. The new Group Responsible Investment Policy and the targets announced in May 2021 were both discussed by the GRIAC, prior to approval by the Group ESG Committee and the Responsibility and Sustainability Working Group (RSWG).

One important action we can take is to use our influence as an asset owner to raise the challenges on the energy transition with governments and regulators and advocate for options to accelerate the energy transition. We engage constructively with trade associations, policymakers, academics and NGOs to shape the evolution of regulation and standards relating to climate risk and transition. [...] With operations in Asia and Africa, we are well placed to bring an emerging markets perspective to stakeholder discussions to help ensure the need for a just and inclusive transition in developing markets is considered in policy and regulation. We regularly engage with policymakers and regulators and monitor evolving climate risk-related initiatives that could develop into new regulation in the markets in which we operate. Policy engagement is essential to accelerate the energy transition. As the NZAOA points out: 'policymakers need to address the technological and regulatory hurdles preventing decarbonisation at sufficient speed. Society should not rely solely on corporate engagement to deliver outcomes that meet 1.5°C investor ambitions, while companies are incentivised otherwise'. [...] Those groups we have engaged with include the International Association of Insurance Supervisors (IAIS) and the International Organisation of Securities Commissions (IOSCO), and through Monetary Authority of Singapore's International Advisory Panel (IAP), Singapore's Green Finance Industry Task Force, Institute of International Finance's Sustainable Finance Policy Experts and Disclosure Working Groups, Confederation of British Industry Sustainable Finance Working Group and the Sustainable Development Investment Partnership (SDIP) of the World Economic Forum. A fuller description can be found within our 2021 ESG report. We have also supported the Global Investor Statement to Governments on the Climate Crisis which urges governments around the world to rapidly implement priority policy actions that will enable them to invest the trillions of dollars needed to respond to the climate crisis.

**Corporate political engagement and political donations**

Prudential is committed to ethical behaviour, integrity and responsibility in its political engagement. Our
Group Governance Manual incorporates the Group Code of Business Conduct and sets out the general
principles by which we conduct our business, setting the ethical standards which the plc Board requires
of all working on behalf of the Group, in their dealings with employees, customers, shareholders,
suppliers, other stakeholders, competitors, the wider community and the environment.

In each market where we operate, Prudential works in partnership with a range of stakeholders, including
governments, regulators, central banks, global regulatory and policy bodies, charities, trade associations,
regulators and academics to inform and shape public policy discussions in a range of areas including
access to and affordability of financial services, financial education, customer protection, demographics,
financial market development, job creation, skills, transparency, governance, tax, responsible business,
regulatory development, trade, long-term investment and sustainable finance, climate-related risk,
privacy and data security, and cyber security. Engaging in public policy discussions can involve
responding to information requests and consultation papers, taking part in in-person or online discussion
or debate on policy issues, sponsoring or hosting research or policy events by think tanks or academic or
other research institutions, and supporting capacity building initiatives organised by partners.

Prudential has a policy covering communication with government officials, which ensures that political
engagement is coordinated by local CEOs, local and Group-level government relations teams.

It is Prudential plc policy not to make political donations. This is defined as covering any political party or
candidate or any other organisation which attempts to affect support for any political party. It is defined
as covering any payment or gift or contribution, direct or indirect, as defined by the UK's Political Parties,
Elections and Referendums Act 2000:
https://www.legislation.gov.uk/ukpga/2000/41/part/IV/chapter/I

The policy covers expenditure on engagement activity on public policy discussions, as outlined above.

The policy applies across the Group. There is a regular process for ensuring that all headquarters and
business units comply with the policy and confirm that no political donations or contributions have been
made.

All of Prudential's employees undertake regular mandatory training on a range of areas such as PEPS,
AML, Bribery and corruption to ensure their knowledge of the latest policies and procedures is up to
date. Prudential is subject to a range of legal and regulatory obligations which require identification and
management of actual, potential or perceived conflicts of interest, and we have internal processes in
place to ensure this.

The responsible person and point of contact is Matt Cavanagh, Group Director of Government Relations.

Describe the process(es) your organization has in place to ensure that your engagement activities are consistent with your overall climate change strategy[…]Prudential's engagement designed in line with the Net Zero Asset Owner Alliance's framework, is informed by our ESG strategy and overall governance to ensure consistency.

Prudential has introduced a group responsible Investment Policy and a responsible supplier guideline to ensure their ESG & climate change strategy is consistent with the wat the company is governed.

This is further supported by the climate targets in place, such as the engagement with investees responsible for 65% of our portfolio emissions. We are on track to meet our portfolio's 25% emissions intensity reduction target and have set a net zero target for 2050.

Does your organization have a public commitment or position statement to conduct your engagement activities in line with the goals of the Paris Agreement?[…]Yes