2018 Guide to Effective Proxies

2.12 Environmental & social disclosure | 185 6 TH EDITION | GUIDE TO EFFECTIVE PROXIES AFFILIATED MANAGERS GROUP, INC. AK STEEL HOLDING CORPORATION Sustainability andCorporateResponsibility Highlights AK Steel is committed to operating in a sustainable manner and being a responsible corporate citizen for the benefit of our customers, investors, employees, environment and the communities in which we live and work. We view sustainability as a key part of our business strategy, as we believe that operating AK Steel responsibly and providing products that help our customers achieve their sustainability goals provides us opportunities to grow our business; increase customer collaboration and loyalty; use less energy and natural resources; attract, retain and motivate employees; and differentiate us from our steel and non-steel competitors. The following are some highlights of our sustainabilityprogram: ❖ Direct Oversight by the Corporate SustainabilityCommittee of the Board. ❖ Outperformed the domestic steel industry averageinOSHArecordableinjury frequency for ten consecutiveyears. ❖ Tremendousvolumeof recycled material—steelis the most recycled material on the planetannually,more than aluminum, plastic, paper andglass combined. ❖ Unwaveringcommitment to responsible environmentalperformance, witha record year in2017for both air andwater permit compliance. ❖ AllsteelmakingplantshaveISO 14001 environmentalmanagement certification. ❖ Nosignificantspillsacross the company andno releasesthat requirednotificationto the NationalResponseCenter in2017. ❖ Committed to enhancedgreenhousegas emissionsdisclosureandtargeted emissionsreductions. ❖ Participatinginresearch anddevelopment to advancetechnology,processes and approachesto reduce greenhousegas emissions(“GHG”) duringthe steelmaking process. ❖ Educatingstakeholdersthat the production phaseof steelmakingis lesscarbon- intensivethan the processes for producing certain other competingmaterials, such as aluminum. ❖ Producinginnovativeproducts ineachof our carbon, stainless,electricalandtubular steel families, as wellas our advanced automotive stamping solutions,to further the sustainabilitygoalsof many of our automotive andother customers, including reducedGHG emissionsandenergy consumption. ❖ Contributingto our communities andbeing a responsiblecorporate citizenthrough the AKSteelFoundation,employeevolunteer actionsthrough AKCares andother philanthropicprograms. 71% 29% Water Recycling and Reuse Steelmaking Plants WaterRecycled&Reused FreshWaterWithdrawn 55% 45% Waste Recycling Steelmaking Plants WasteRecycled WasteDisposed vi 2018Proxy Statement WaterRecyclingandReuseSteelmakingPlantsWaterRecycled&ReusedFreshWaterWithdrawnWasteRecyclingSteelmakingPlantsWasteRecycledWasteDisposed Total of 07 pages in section Corporate Environmental and Social Responsibility: We believe that sound corporate citizenship and attention to governance and environmental principles are essential to our success and that of our Affiliates. We are committed to operatingwithintegrity,contributingtothelocalcommunitiessurroundingourglobaloffices,promotingdiversityand inclusion, developing our employees and being thoughtful stewards of natural resources. We are also focused on the security of our data and safeguarding our clients’ privacy. Our Board of Directors provides oversight of these ESG topics, and is committed to supporting the Company’s efforts to operate as a sound corporate citizen. We have a cross-functional Sustainability Committee with oversight responsibility of our policies and operational controls of environmental, health and safety, and social risks. The Sustainability Committee includes members of our executive management team and reports to the Board of Directors at least annually. We believe that an integrated approach to business strategy, corporate governance and corporate citizenship creates long-term value. The following summary highlights certain of our policies and initiatives in these areas. To learn more, please see the “Responsibility” section ofourwebsiteat www.amg.com/responsibility.html. Environmental, Social and Governance (ESG) Highlights WorkEnvironment • Equalemploymentopportunityhiringpractices,policiesandmanagementofemployees • Anti-harassmentpolicythatprohibitshostilityoraversiontowardsindividualsinprotected categories,andprohibitssexualharassmentinanyform,anddetailshowtoreportand respondtoharassmentissuesandstrictlyprohibitsretaliationagainstanyemployeefor reportingharassment DiversityandInclusion • Committedtofosteringandpromotinganinclusiveandgloballydiverseworkenvironment • Formalpoliciesthatforbiddiscriminationbasedonprotectedclassifications • Twodirectorsarefemale,representing25%ofthenon-executivemembersoftheBoard; approximately25%ofourseniormanagementteammembersarefemale PrivacyandDataSecurity • Maintainingprivacypolicies,managementoversight,accountabilitystructuresand technologydesignprocessestoprotectprivacyandpersonaldata • Datasecurityprogramisgovernedbyaseniormanagementcommitteethatmeetsregularly andreportstotheBoardofDirectorsatleastannually CommunityInvestment • TheAMGCharitableFoundation,formedin2011,donatestoavarietyofnon-profit organizationsandcommunityprogramsglobally • Company-widecampaignssupportmanycharitiesinlocalcommunitiessurroundingAMG officelocationsaroundtheworld,andweencourageemployeestovolunteerforandserve onboardsofnon-profitorganizationsandsupportemployeegift-matchingtoeligible non-profitinstitutions BusinessConductand EthicsCodes • Astrongcorporateculturethatpromotesthehigheststandardsofethicsandcompliancefor ourbusiness;themajorityofourdirectorshaveanextensivebackgroundandexperiencein riskmanagement • CodeofBusinessConductandEthicssetsforthprinciplestoguideemployeeanddirector conduct Anti-Briberyand CorruptionPolicies • Policiesonpoliticalcontributionsandotherrestrictedpaymentsrequirefullcompliancewith allapplicablepoliticalcontributionandanticorruptionlaws • Whistleblowerhotlineforconfidentialreportingofanysuspectedviolations Environment • ThirteenAffiliatesaresignatoriestotheUnitedNationsPrinciplesforResponsible Investment(UNPRI)andfivearesignatoriestotheUKStewardshipCode • Environmentalsustainabilityfactorsareincorporatedintoourassessmentprocessfor prospectiveAffiliates • Recyclingprograms,energy-savingtechnologyandtheuseofenergy-efficientequipment andmaterialsinouroffices • Programstopromotetheprocurementofproductsandmaterialswhichhavehigh concentrationsofrecycledmaterials • Businesscontinuitypoliciestoensurethesafetyofourpersonnel,facilitiesandcritical businessfunctionsincaseofnaturaldisasters 22 2.12 Environmental & social disclosure Investors and other stakeholders increasingly are interested in a company’s environmental impact as part of a broader focus on corporate social responsibility (CSR) and corporate sustainability and related risk mitigation. Many companies furnish stand-alone environmental impact and sustainability studies and CSR reports, typically hosting these reports on their websites. Many also include links or QR codes within the proxy – the back or inside cover of the proxy being popular places to feature such links. Companies in receipt of shareholder proposals on CSR issues typically discuss these issues in their response or rebuttal statement to the proposal. In addition, some companies, even in the absence of shareholder proposals, are including discussions of their environmental impact and overall E&S and CSR efforts directly within the proxy to demonstrate their commitment to these issues. In a fairly recent but significant development, many CSR shareholder proposals are being recast to focus on the sustainability of the company in an era of climate change. Recasting the proposals in these terms draws a clearer link between CSR issues and shareholder value, and as a result significant investors increasingly are supporting these proposals, and expect companies to discuss this issue even in the absence of a shareholder proposal.