May 30, 2019

Money Management Institute Sustainable Investing Community

A suite of educational resources for engaging clients on sustainable investing

Tools of Change: 2019 Calvert Engagement Report

Beyond the choices investors make in allocating their capital, active ownership is a key lever, and can be expressed through proxy voting, direct dialogue and shareholder resolutions A vigorous corporate engagement program is a key tool that investors can use to improve corporate behaviors, which, in turn, can contribute to a more sustainable and equitable world and potentially to the business prospects of an investment.

CALVERT RESEARCH AND MANAGEMENT: A GLOBAL LEADER IN RESPONSIBLE INVESTING

Tools of change:

2019 Calvert Engagement Report

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Table of contents

Calvert’s engagement approach

Proxy voting

Direct dialogue

Shareholder resolutions

Key results of 2018 engagement

Proxy results

Shareholder resolutions

Direct dialogue

Collaborative efforts

Cover image: The mighty microchip, a powerful tool used to analyze large amounts of data to

better understand material ESG issues and strengthen companies through proxy voting and

direct engagement.

Calvert Research and Management

(Calvert) recognizes the contribution that free-market capitalism and

competition have made in lifting living standards globally. We are also acutely aware of the specific risks

to the long-term health of the environment and the stability of the social and economic system that have

come along with this progress. As a responsible investor, we seek to understand the challenges facing the

world today, ascertain how companies are positioned to respond to those challenges and allocate capital in

a manner that drives positive change. As a complement to our research, structured engagement to attempt

to improve environmental and social outcomes—as well as long-term shareholder value—is a core part of

our investment approach.

Our engagement program over the past year continued our decades-long history of working with

companies to address critical issues. In 2017–2018 these included dialogues on setting greenhouse gas

emissions targets, improving board/employee diversity and adopting water stewardship policies, among

many other important issues. In addition, our engagement efforts encouraged company action on gun

violence and opioid addiction, both of which continue to be major U.S. societal issues.

We also continued to push for advancements in disclosure. While the number of companies providing

sustainability reports and similar documents has grown, the strength of this reporting does not always

meet investor needs and the data provided is not consistent. Progress was made in this area in 2018. As a

founding member of both the Sustainability Accounting Standards Board (SASB) Alliance and the SASB

Investor Advisory Group, Calvert provided input to the SASB standards, which were officially codified at

the end of 2018. The standards outline the financially material sustainability issues relevant to a particular

industry and the companies within that industry. The SASB standards will give companies a guide to focus

their disclosure efforts appropriately, thereby providing investors with the ESG information most relevant to

longer-term financial performance.

Investors, companies and society must grapple with a number of pressing concerns today. Responsible

investors work within and help to strengthen a set of global norms, held individually and promulgated

worldwide. These global norms, expressed in agreements such as the United Nations Sustainable

Development Goals and the Paris Climate Accord, provide a framework for investors and business to create

a more just and sustainable world. As a critical component of those efforts, a robust program for engaging

corporations on material ESG issues is more essential now than ever before.

Calvert’s engagement approach

By engaging with corporations, which have great financial power relative to other stakeholders, Calvert

can help address critical sustainability issues that matter to business, our shareholders and society. As the

connection between a company’s environmental, social and governance (ESG) practices and its financial

success becomes clearer, engagement aimed at improving corporate ESG performance increasingly aligns

with the creation of shareholder value.

As a responsible investor, Calvert considers what

opportunities exist to improve our position as a shareholder

in the companies in our portfolios, and which tools

are best suited toward driving the positive change we

seek. Our research system helps discover areas where

individual companies can benefit from improving their

performance on ESG areas that are financially material

to their businesses. Understanding an ESG profile and

involvement in controversies can provide a signal to us

of an occasion for a company to derisk its operations or

to capitalize on an opportunity. We believe that active

ownership is essential for improving one’s position as a

shareowner and therefore, we have made it a key part of

Calvert’s approach to Responsible Investing.

A vigorous corporate engagement program, such as

the one Calvert pursues, is a key tool that investors can

use to improve corporate behaviors, which, in turn, can

contribute to a more sustainable and equitable world and

potentially to the business prospects of an investment.

What are the “tools of change”?

Investors have many levers to pull in creating change. Beyond the choices investors make in allocating

their capital, active ownership is a key lever, and can be expressed through proxy voting, direct dialogue

and shareholder resolutions. This graphic provides brief descriptions of each of these key parts of

active ownership.

Proxy voting

Direct dialogue

Shareholder resolutions

Every shareholder of a public

corporation generally gets the

right to vote on key issues at

the company’s annual meeting

concerning its policies, practices

and governance.

Direct shareholders receive ballots,

while mutual fund investors

have their proxies voted by the

fund managers that select the

fund’s investments.

In person or phone conversations

with corporate leadership for the

purpose of exchanging perspectives,

gathering investment-useful ESG

information from companies and

contributing to improvement in

corporate practices.

In the United States, any shareholder

with at least $2,000 in stock of a

public company, held for at least

one year can file a resolution

calling for the company to take

a specific action. Although most

are nonbinding, a vote of above

20% is an important signal to

corporate leadership.

Proxy voting

Calvert’s proxy voting guidelines, available on our

website, outline our approach to voting on critical

issues facing corporations, including many governance

considerations. Proper governance is foundational to

corporate success; some governance structures by their

very nature weaken accountability, while others are

better suited to create accountability of management to

the board and the board to shareholders. Calvert’s proxy

voting guidelines support governance structures and

policies that keep the focus of company management

on long-term corporate health and sustainable financial,

social and environmental performance. We also believe

in the importance of disclosure and transparency and,

as such, post all votes to our website within 72 hours

of being cast and, in almost all cases, in advance of the

meeting so our clients and the general public can easily

see how we voted.

We also appreciate that issues brought to shareholders

may change over time, as both investors’ concerns and

rules governing inclusion of specific items in corporate

proxies change. Corporate governance laws and best

practice codes are continuously evolving, worldwide.

We have constructed our guidelines to be both general

enough and sufficiently flexible to adapt to such changes,

and we periodically update them to reflect evolving norms.

Direct dialogue

Respectful and constructive direct dialogue with senior

management, built on a foundation of trust and an

understanding of shared goals, is a core part of active

ownership. Calvert engages directly with companies both

on its own, and as part of investor or broader stakeholder

coalitions.

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.

As dialogue takes place, Calvert evaluates success

based upon the concrete actions a company takes.

In some cases, this involves the release of requested

information or disclosure. As engagement develops,

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. Other positive

outcomes include developing constructive relationships

with companies we hold, raising awareness among

investors broadly and contributing to industry best

practices. When an engagement is completed, we

typically maintain dialogue to track progress.

Shareholder resolutions

Shareholder resolutions are a way for investors to get

issues that are important to them onto the proxy ballot.

These often call for the company to take specific action,

and even though the results of the vote are generally

nonbinding, they can serve as an important signal to

companies about investor interest in specific issues

that may not otherwise be a priority for them. Calvert

uses shareholder resolutions as a tool to encourage and

influence change particularly when direct dialogue and

other efforts at engagement do not prove fruitful.

Often, the filing of a resolution and ensuing dialogue is

sufficient to influence corporate behavior, which allows

us to withdraw the resolution. Failing any meaningful

commitment to address the subject of our proposal,

Calvert will present the proposal at the company’s

annual shareholder meeting, speaking to the company’s

board of directors, senior executives and assembled

shareholders about the importance of taking action on

the matter at hand.

Key results of 2018 engagement

The past year marked another successful engagement season for Calvert. Working both on our own and

with coalitions, we identified opportunities to use the tools at our disposal to drive positive change:

■

We continue to make our shareholders’ voices heard

via proxy voting, adhering to our proxy guidelines

to support issues that we believe improve a

company’s long-term health as well as the society and

environment in which it operates.

■

We filed or cofiled 16 shareholder resolutions, 13 of

which were withdrawn after successful dialogue.

Another proposal was withdrawn when the company

was acquired and two proposals went to a vote.

■

We were the lead filer on 14 resolutions and a co-filer

on two resolutions.

■

The two resolutions that went to a vote at the annual

meeting both received a majority of shareholder votes.

■

We engaged in direct dialogue with selected

companies on issues that included gun violence,

climate change, clean energy and clean water.

■

We collaborated with coalitions and partners to

further amplify our shareholders’ voices and work for

positive change.

Proxy results

During the 2018 proxy season, which ran from July 1,

2017 to June 30, 2018, Calvert voted at 4,425 meetings

on issues ranging from climate change and energy to

board diversity and sustainability reporting. Calvert

voted 100% of proxy ballots in alignment with our

comprehensive proxy voting guidelines, not just in line

with management or proxy voting providers.

Per our proxy guidelines, Calvert again supported

proposals in favor of corporate board independence,

diversity and accountability. Among the many key

issues noted in our guidelines, we voted to support

shareholder rights, corporate transparency and

increased disclosure, and again scrutinized executive

compensation. We supported increased sustainability

reporting, positive environmental practices, climate

change adaption and mitigation, clean water proposals

and environmental justice.

Overview of all votes submitted

7/1/2017–6/30/2018

20%

40%

60%

80%

100%

Peer Group

Calvert

Percentage of Votes

With Management

Against Management

Shareholder resolutions

During the most recent proxy season, Calvert filed or

cofiled 16 shareholder resolutions, 13 of which were

withdrawn after successful dialogue at U.S. companies.

In addition, two proposals went to a vote and one was

withdrawn because the company was being acquired.

The two shareholder resolutions that went to a vote both

resulted in votes favorable to Calvert’s position:

Depomed:

Calvert presented a resolution at the Depomed

annual meeting of shareholders calling for the company to

report on the governance measures it has taken to more

effectively monitor and manage financial and reputational

risks related to the opioid crisis in the United States. In a

historic result, shareholders approved the proposal, with

62.3% of the shares voting in favor. The company, now

called Assertio, has issued the requested report.

GHG emissions

Climate change

Advisory say on pay

20%

40%

60%

80%

100%

Peer Group

Calvert

Percentage of Votes

With Management

Against Management

20%

40%

60%

80%

100%

Peer Group

Calvert

Percentage of Votes

With Management

Against Management

20%

40%

60%

80%

100%

Peer Group

Calvert

Percentage of Votes

With Management

Against Management

Resolutions filed

or co-filed

Resolutions

successfully withdrawn

Resolutions

that went to a vote

Resolution withdrawn because

company was being acquired

The peer group is composed of seven investment managers who have business models similar to Calvert’s, though none shares Calvert’s core focus on responsible investing.

Genesee & Wyoming Inc.:

Calvert attended the

company’s annual meeting on May 23, 2018, to request

that the company adopt goals for reducing GHG

emissions. Greenhouse gas emissions and energy/fuel

management are financially material issues for the

railroad sector as indicated in the recommendations of

the Taskforce on Climate-Related Financial Disclosure.

The board, recognizing the importance of the issue to

the business, took a neutral stance on the proposal — the

first instance of a board remaining neutral (instead of

opposing) on a Calvert proposal. Investors agreed and

approved the proposal.

The company published an initial sustainability report

using SASB as a guide and establishing baseline

performance on a set of important environmental

matters. Genesee & Wyoming points to the Paris Climate

Agreement in its report and states an intention to set

a quantitative goal for emissions reductions in 2019.

Calvert will continue to follow up with the company to

measure progress.

Thirteen of the remaining 14 resolutions were withdrawn

with agreements. The opportunities seen in proposing

and supporting these efforts centered around a variety

of topics. We share below our requests for the 12

resolutions on which we were the lead filer.

Diversity

Calvert filed one resolution on board diversity, requesting

that a company in the data processing & outsourced

services subindustry report on steps being taken to

foster greater diversity on its board.

After the resolution was filed, the company announced

that its corporate governance and nominating committee

was examining ways it could foster the diversity of its

board “to ensure that it operates at a high-functioning

level and to reflect the board’s commitment to

inclusiveness.” In connection with this, the committee

revised its Corporate Governance Guidelines to expressly

include diversity of age, gender, nationality, race,

ethnicity and sexual orientation as a part of the criteria

the committee may consider when selecting nominees

for election to the board. Specifically, the company

stated that its corporate governance and nominating

committee is focused on considering highly qualified

women and individuals from minority groups who may

be recommended by its directors, management or

shareholders as candidates for nomination as directors.

The company also included a director skills matrix, with

reference to diversity in its proxy.

TCFD, Implementing the Recommendations of the Task Force on Climate-related Financial Disclosures, June 2017.

Five resolutions focused on employee diversity, in which

Calvert asked companies to report on diversity of race

and gender of workforce, and to provide a description

of policies and programs to promote racial and gender

diversity, particularly in management and senior

management ranks.

Three of these resolutions were filed with regional

banks and in each case, the company took important

steps forward.

■

One bank appointed a chief diversity officer in early

2019. It also agreed to put together a multidimensional

team related to diversity and to report on its diversity

initiatives, and added a woman to its board of directors.

■

Another agreed to include proxy language related its

diversity programs. It also committed to share its EEO-1

data with Calvert on a confidential basis and to discuss

with Calvert the diversity data and performance, and

how to report this information.

■

A third bank likewise agreed to work with Calvert

to share data and develop a format for publishing

workforce diversity metrics.

Calvert also engaged with a company in the systems

software subindustry, which hired a head of diversity

and committed to being transparent and reporting on

its workforce diversity metrics, though the company

relayed to Calvert during the dialogue that diversity

was already a focus of the company prior to our

engagement. Finally, Calvert engaged with a company in

the applications software subindustry, which agreed to

review its published diversity information to improve the

presentation of its diversity objectives and programs.

Clean energy

Calvert filed a resolution with a company in the rail

transportation subindustry regarding the adoption of

greenhouse gas emission (GHG) reduction targets. We

withdrew the resolution after the company agreed to

increase reporting on the business’s operational context

and to discuss ways to reduce its GHG emissions.

Clean water

Calvert filed resolutions with two companies in the

packaged foods and meats subindustry to urge them

to adopt a water stewardship policy designed to reduce

risks related to water availability and water pollution.

One company developed and published a Water

Stewardship Policy that applies to the firm’s operations

and agricultural and manufacturing suppliers. It intends

to establish and disclose water stewardship goals in

early 2019 and to report in future years regarding its

performance on these stated goals.

Calvert withdrew its resolution at the other company

because the company subsequently announced that it

was being acquired.

Disclosure

Calvert filed three shareholder resolutions asking

companies to publish a sustainability report.

■

One company in the apparel, accessories and footwear

subindustry committed to making information available

regarding how the company addresses material

ESG issues. It agreed to cover a specified selection

of materials over the next two years and to update

Calvert on its progress.

■

A company in the steel subindustry agreed to issue

a sustainability report in 2018 and affirmed that this

would include performance data and goals for certain

priority issues.

■

A company in the hotels, resorts & cruise lines

subindustry was acquired after the resolution was

filed, and its reporting is subsumed under its new

parent company.

Direct dialogue

Gun violence

One area in which Calvert engaged in productive

dialogue with companies was gun violence. While

Calvert does not own any U.S. gun manufacturers

because of their high risk to society and high risk for

investors, we did own Kroger, a retailer where gun sales

were an insignificant portion of the business.

We urged Kroger to take swift action to establish

policies that would eliminate the sale of all assault rifles

and high-capacity magazines, and raise the age of

purchase to 21. We were told at the time that Calvert

was the first investor to make that specific request, but

that the company was already taking a hard look at its

policies and procedures for firearms sales and moving

in a positive direction. It subsequently announced that it

would indeed take action to stop selling guns to buyers

under 21.

Climate change and clean energy

Calvert continued our dialogue with a large steel and

steel products company addressing the company’s

work on energy management and performance on

greenhouse gas emissions. Two members of our team

visited a steel mill to meet with plant management and

staff, and were joined by environmental and investor

relations representatives from corporate headquarters.

The meeting allowed Calvert to see the day-to-day

operations, deepen our understanding of the company,

and continue our discussions about energy management,

reporting and goal-setting.

Calvert and other investors worked with Ceres, a

sustainability nonprofit organization working with

investors and companies, to build leadership and drive

solutions to tackle challenges like climate change, water

scarcity, pollution and human rights abuses. We helped

convene a meeting with four large steel manufacturers

to discuss the feasibility of setting science-based

greenhouse gas emissions reduction targets, with

expert input from the Science Based Targets initiative

and emphasizing opportunities in energy efficiency and

renewable energy.

Calvert initiated climate-related engagement with two

electric utilities and a major transportation company,

and played a leading role in the dialogues with three

other companies. The engagement is part of Climate

Action 100+, a new five-year, investor-led initiative to

engage with the world’s largest corporate greenhouse

gas emitters to curb emissions across the value chain,

strengthen climate-related financial disclosures and

improve governance of climate-related risks that

may affect companies. As of December 2018,

310

investors with more than $32 trillion in assets under

management

have signed on to the initiative.

Clean water

Calvert continued its dialogue with a large meat

production and distribution company on water risks and

impacts in its own operations and supply chain, with

particular focus on standards for the farmers that it

subcontracts with to rear the company’s animals.

In addition, Calvert participated in a Principles for

Responsible Investment (PRI) initiative to engage food

and agriculture companies on water risk in company

supply chains, leading the engagement with one of the

companies. Calvert also participated in a collaborative

effort coordinated by CDP (formerly the Carbon

Disclosure Project), taking the lead in reaching out to

a dozen companies from sectors for which water is a

material issue, but which did not respond to CDP’s 2017

water questionnaire.

Calvert also spoke to companies, investors and

nonprofits at the Innovation Forum for Sustainable

Agriculture’s event in April 2018, addressing the investor

perspective on water-related risks in the supply chain for

food and agribusiness companies.

Collaborative efforts

Calvert uses coalitions and partners to further amplify

our voice and work for positive change in key issue areas.

Some common issues and partners we worked with in

2017–2018 include:

Opioids — Investors for Opioid Accountability

Calvert joined the Investors for Opioid Accountability

(IOA) in November 2017, a month after its launch. The

coalition formed as the result of concerns around the

profound negative impacts to society of the opioid crisis

and the financial impact to companies that are involved

either as distributors or manufacturers of opioids. As of

November 2018, it was a coalition of 53 asset owners,

asset managers and consultants with more than $3.4

trillion in assets under management.

As part of IOA, Calvert engages with manufacturers and

distributors of opioids. Specifically, the IOA is asking the

independent directors of the boards of these companies

to investigate how they are responding to increasing

risks related to opioids. The coalition is asking boards

of such companies to adopt good governance practices

and policies to increase transparency and accountability,

and deter misconduct.

Among the specific practices the IOA is looking for are

the separation of CEO/chair positions, an independent

investigation and report into business risks related to

opioids, adoption of executive claw-back provisions that

emphasize compliance, refraining from excluding legal/

compliance costs in compensation metrics, drug pricing

transparency for companies that manufacture opioid

addiction treatment medication and transparency on

lobbying activities and political spending.

Disclosure — SASB

In late 2018, the Sustainability Accounting Standards

Board (SASB) officially published a set of standards

that establish a framework to determine the financially

material sustainability issues relevant to each industry

and the companies within that industry. This gives

companies a guide to focus their disclosure efforts

appropriately, providing investors with the ESG

information most relevant to long-term financial

performance. As founding members of both the SASB

Investor Advisory Group and the SASB Alliance, Calvert

has been able to voice our views as the SASB standards

evolved over the past several years.

Our collaboration extends across our organization.

Our analysts — some of whom participated in SASB’s

standard-setting industry consultations and working

groups and hold SASB’s Fundamentals of Sustainability

Accounting (FSA) credential — incorporate SASB’s

concepts of materiality into the research we do on

sectors and companies.

Diversity — 30% Coalition

Calvert works with the 30% Coalition, a collaboration

between corporations, investors and advocacy groups.

As of June 2018, the investor members represented $3.5

trillion in assets under management. The group issued

a call to action to companies asking them to proactively

strengthen governance policies by:

■

Embedding a commitment to diversity, inclusive of

gender and race/ethnicity.

■

Including women and minorities in candidate pools for

selecting board nominees and senior corporate leaders.

To view our latest engagement, advocacy, and

public policy initiatives, go to

www.calvert.com/impact.php

The specific securities mentioned are not representative of all the securities purchased, sold or recommended for advisory clients. It should not be assumed

that any of the securities/ sectors were or will be profitable, or that any recommendations in the future will be profitable or will equal the performance of

the securities in this list.

General disclosure: This material is provided solely for informational purposes only and are intended only to illustrate certain relevant environmental, social

and governance factors. This information does not constitute an offer to sell or the solicitation to buy securities. The information presented has been

developed internally and/or obtained from sources believed to be reliable; however, Calvert does not guarantee the accuracy, adequacy or completeness of

such information. Opinions and other information reflected in this material are subject to change continually without notice of any kind and may no longer

be true after the date indicated or hereof. Past performance is no guarantee of future results.

For included companies: As of 12/31/18, Calvert portfolios hold the following companies within the Pharmaceuticals sub-industry. For included companies:

As of 12/31/18, Calvert portfolios hold the following companies within the Railroads sub-industry. For included companies: As of 12/31/18, Calvert portfolios

hold the following companies within the Food Retail sub-industry.

Important Additional Information and Disclosures

Source of all data: Calvert, as at 12/31/2018, unless otherwise specified.

This material is presented for informational and illustrative purposes only. This material should not be construed as investment advice, a recommendation

to purchase or sell specific securities, or to adopt any particular investment strategy; it has been prepared on the basis of publicly available information,

internally developed data and other third-party sources believed to be reliable. However, no assurances are provided regarding the reliability of such

information and Eaton Vance has not sought to independently verify information taken from public and third-party sources. Investment views, opinions,

and/or analysis expressed constitute judgments as of the date of this material and are subject to change at any time without notice. Different views may

be expressed based on different investment styles, objectives, opinions or philosophies. This material may contain statements that are not historical facts,

referred to as forward-looking statements. Future results may differ significantly from those stated in forward-looking statements, depending on factors

such as changes in securities or financial markets or general economic conditions.

This material is for the benefit of persons whom Eaton Vance reasonably believes it is permitted to communicate to and should not be forwarded to any other

person without the consent of Eaton Vance. It is not addressed to any other person and may not be used by them for any purpose whatsoever. It expresses

no views as to the suitability of the investments described herein to the individual circumstances of any recipient or otherwise. It is the responsibility of every

person reading this document to satisfy himself as to the full observance of the laws of any relevant country, including obtaining any governmental or other

consent which may be required or observing any other formality which needs to be observed in that country. Unless otherwise stated, returns and market

values contained herein are presented in US Dollars.

In the United Kingdom, this material is issued by Eaton Vance Management (International) Limited (“EVMI”), 125 Old Broad Street, London, EC2N 1AR, UK,

and is authorised and regulated by the Financial Conduct Authority. EVMI markets the services of the following strategic affiliates: Parametric Portfolio

Associates® LLC (“PPA”), an investment advisor registered with the SEC. Hexavest Inc. (“Hexavest”) is an investment advisor based in Montreal, Canada

Company names/GICS subindustries

Holdings information for the GICS subindustries of companies named in the above report. Data as of 12/31/18.

Pharmaceuticals

Allergan plc

Amneal Pharmaceuticals, Inc. Class A

Astellas Pharma Inc.

AstraZeneca PLC

Bristol-Myers Squibb Company

Catalent Inc

Chemical Works of Gedeon Richter Plc

China Resources Pharmaceutical