Calvert Funds Review

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    Funds Group: Calvert Funds

    Management Company: Calvert Research and Management (subsidiary of Eaton Vance)

    Funds Affected: (1) Calvert Absolute Return Bond, Calvert Aggressive Allocation, Calvert Balanced, Calvert Bond, Calvert Conservative Allocation, Calvert Emerging Markets Equity, Calvert Equity, Calvert Floating-Rate Advantage, Calvert High Yield Bond, Calvert Income, Calvert International Equity, Calvert International Opportunities, Calvert Long-Term Income, Calvert Mid-Cap, Calvert Moderate Allocation, Calvert Responsible Municipal Income, Calvert Short Duration Income, Calvert Small-Cap, Calvert Ultra-Short Duration Income, (2) Calvert Global Energy Solutions.

    Principal Sustainable Investment Management Strategy: ESG Integration, Exclusions, Thematic Investing, Impact Investing, Shareholder Engagement, Proxy Voting

    Calver Principles for Sustainable Investing:

    (1) Calvert Research and Management seeks to invest in issuers that provide positive leadership in the areas of their operations and overall activities that are material to improving societal outcomes, including those that will affect future generations.

    Calvert seeks to invest in issuers that balance the needs of financial and nonfinancial stakeholders and demonstrate a commitment to the global commons, as well as to the rights of individuals and communities.

    The Calvert Principles for Responsible Investment (Calvert Principles) provide a framework for Calvert’s evaluation of investments and guide Calvert’s stewardship on behalf of clients through active engagement with issuers. The Calvert Principles seek to identify companies and other issuers that operate in a manner that is consistent with or promote:

    Environmental Sustainability and Resource Efficiency

    • Reduce the negative impact of operations and practices on the environment
    • Manage water scarcity and ensure efficient and equitable access to clean sources
    • Mitigate impact on all types of natural capital
    • Diminish climate-related risks and reduce carbon emissions
    • Drive sustainability innovation and resource efficiency through business operations or other activities, products and services

    Equitable Societies and Respect for Human Rights

    (1) Respect consumers by marketing products and services in a fair and ethical manner, maintaining integrity in customer relations and ensuring the security of sensitive consumer data

    (2) Respect human rights, respect culture and tradition in local communities and economies and respect Indigenous Peoples’ Rights

    (3) Promote diversity and gender equity across workplaces, marketplaces and communities

    (4) Demonstrate a commitment to employees by promoting development, communication, appropriate economic opportunity and decent workplace standards

    (5) Respect the health and well-being of consumers and other users of products and services by promoting product safety

    Accountable Governance and Transparency

    (1) Provide responsible stewardship of capital in the best interests of shareholders and debtholders

    (2) Exhibit accountable governance and develop effective boards or other governing bodies that reflect expertise and diversity of perspective and provide oversight of sustainability risk and opportunity

    (3) Include environmental and social risks, impacts and performance in material financial disclosures to inform shareholders and debtholders, benefit stakeholders and contribute to strategy

    (4) Lift ethical standards in all operations, including in dealings with customers, regulators and business partners

    (5) Demonstrate transparency and accountability in addressing adverse events and controversies while minimizing risks and building trust

    Calvert’s commitment to these Principles signifies continuing focus on investing in issuers with superior responsibility and sustainability characteristics. The application of the Calvert Principles generally precludes investments in issuers that:

    • Demonstrate poor environmental performance or compliance records, contribute significantly to local or global environmental problems, or include risks related to the operation of nuclear power facilities.
    • Are the subject of serious labor-related actions or penalties by regulatory agencies or demonstrate a pattern of employing forced, compulsory or child labor.
    • Exhibit a pattern and practice of human rights violations or are directly complicit in human rights violations committed by governments or security forces, including those that are under the U.S. or international sanction for grave human rights abuses, such as genocide and forced labor.
    • Exhibit a pattern and practice of violating the rights and protections of Indigenous Peoples.
    • Demonstrate poor governance or engage in harmful or unethical practices.
    • Manufacture of tobacco products.
    • Have significant and direct involvement in the manufacture of alcoholic beverages or gambling operations.
    • Manufacture or significant and direct involvement in the sale of firearms and/or ammunition.
    • Manufacture, design or sell weapons or the critical components of weapons that violate international humanitarian law; or manufacture, design or sell inherently offensive weapons, as defined by the Treaty on Conventional Armed Forces in Europe and the U.N. Register on Conventional Arms, or the munitions designed for use in such inherently offensive weapons.
    • Abuse animals, cause unnecessary suffering and death of animals, or whose operations involve the exploitation or mistreatment of animals.
    • Develop genetically-modified organisms for environmental release without countervailing social benefits such as demonstrating leadership in promoting safety, protection of Indigenous Peoples’ rights, the interests of organic farmers and the interests of developing countries generally.

    (2) The fund employs a passive management strategy designed to track, as closely as possible, the performance of the Calvert about the same proportion as represented in the Index itself. The Index universe consists of companies that satisfy minimum market capitalization and liquidity thresholds and are significantly involved in business activities in the sustainable energy solutions sector that are consistent with the Calvert Principles for Responsible Investment. A company is significantly involved in business activities in the sustain­able energy solutions sector if (i) at least 30% of its total annual revenue or earnings is derived from business activities involving the production and/or distribution of renewable energy including solar, wind, biomass, waste‑to‑energy, geothermal, biofuels, hydropower, and landfill gas recovery, the manufacture of technologies and/or products that enable the transition away from fossil fuels or that reduce energy consumption, includ­ing power storage, smart‑grid applications, and carbon capture technologies, or the provision of products and services that improve energy efficiency for residential or commercial use, (ii) it is a leader in energy efficiency and/or the use of renewable energy in the most energy intensive industries, such as the cement and steel industries, or (iii) it provides solutions that address global energy challenges, as outlined in the United Nations Sustainability Development Goals.