Net Zero by 2050: Sun Life’s Climate Journey

Foreword

Doing our part to achieve net zero means driving climate action not only within our own operations, but also across our investments and the broader industries and economies in which we play a key role. To achieve our goals, we are:

1. Decarbonizing our own investments by maturing our financed emissions data and emissions reduction strategies.
2. Working with our asset management Clients to decarbonize their investment portfolios, where consistent with Client objectives.
3. Reducing our operational emissions in our offices and data centres through a combination of energy efficiency initiatives and clean energy use.
4. Enhancing our internal climate capabilities by building expertise, tools and processes.
5. Improving our climate-related measurement, monitoring and reporting.
6. Advocating for more government action on climate-related disclosures.
7. Participating in industry working groups and alliances to accelerate our climate knowledge and progress.
8. Leveraging our position to help guide climate action in companies we invest in.
9. Supporting research and thought leadership initiatives focused on the interconnectivity of climate risk and health.

About this report

This report summarizes the net-zero commitments made by Sun Life and its asset management businesses. This document will be updated as we progress towards our near and long-term decarbonization targets.

Our fight against climate change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.0 Our path to achieving net zero. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Priority 1. Achieve net zero for our investments by 2050. . . . . . . . . . . . . . . . . . . . . . . . . . 4 Priority 2. Achieve net zero in our own operations by 2050. . . . . . . . . . . . . . . . . . . . . . . . 10

Net Zero by 2050 - Sun Life's Climate Journey

Our fight against climate change

A letter from the Chief Executive Officer and Chief Sustainability Officer

Sun Life is committed to being part of the climate solution. We're taking meaningful climate action by decarbonizing our operations and investments to ensure the resiliency of our business.

'It's now or never': This is the critical decade

The climate emergency is one of the most complex and urgent priorities of our lifetime, and the world is continuing to feel the growing impacts. The time for action is now. This decade, we must take action to avoid the worst effects of climate change and to limit the disproportionate negative impacts across our communities and countries. Making significant, measurable progress on limiting climate change must be the defining breakthrough of the 2020s, and it's something that Sun Life is fully committed to realizing.

With $1.4 trillion in assets under management (AUM)1,2, 58,200 employees1,3 and 91,700 advisors1,3 globally, Sun Life has an important role in the global climate transition, and a responsibility to our stakeholders. In 2021, we set a goal to achieve net-zero greenhouse gas (GHG) emissions in our investments and operations by 2050. In 2023, we established our

first set of interim targets for the general account. Now, we must get to the hard work of delivering on these goals and transparently reporting our progress.

A multi-phased journey to net zero

There are many pathways to achieve net zero, and we are determining the most effective and credible steps for Sun Life to take. The previous few years have been a precursor to this journey. During that time, we began building our understanding of climate risks and opportunities, while taking steps in our real estate investments and across our offices to shrink our carbon footprint and make our operations more eco-efficient. We've also committed to deepening our understanding of climate change impacts on the financial security and health of our Clients globally.

Leveraging and building from this early foundational work, we're now in the process of developing a dedicated roadmap to reach net zero - one that reflects each of our lines of business. Much of our immediate focus has been on setting several interim targets to define our decarbonization pathways and provide clear direction for the transition to net zero.

We know that attaining net zero will not be easy nor straightforward. The scale of the task is immense: Sun Life has

diverse business lines, subsidiaries and offices in 28 markets around the world. There is much to consider: the cost, quality and timeliness of mitigation tactics, the availability and quality of data, how to accurately track progress and embed accountabilities across the organization, the varying pace of transition across regions and sectors, and more. We have a lot to do. But we are working diligently to put in place the necessary plans, backed by capabilities that will help us tackle the challenges at hand. Our climate expertise and bench strength also continue to grow. We are creating more climate-related roles and recruiting the right people to lead our net-zero strategy and implement actionable tactics.

The choice belongs to each of us

Our concerted efforts towards this vital global issue, along with industry collaboration, will help preserve a livable climate and the health and security of our communities. We encourage you - our Clients, investors, suppliers, employees and other industry partners - to join us in the ambitious and necessary work to achieve net zero. Every fraction of a degree matters when it comes to reducing GHG emissions. Only if we take immediate, meaningful and sustained action together, can we achieve needle-moving gains that will make this decade a watershed era for climate progress.

1. As of December 31, 2023.
2. Comprises general fund assets, segregated funds, mutual funds, managed funds and other AUM.
3. Rounded to the nearest hundred.

1.0 Our path to achieving net zero

Our climate priorities

• Achieving net zero for our investments by 2050
• Achieving net zero in our own operations by 2050
• Supporting and participating in external initiatives to help advance a net-zero economy

4 IPCC, 2022: Climate Change 2022: Mitigation of Climate Change. Contribution of Working Group III to the Sixth Assessment Report of the Intergovernmental Panel on Climate Change [P.R. Shukla, J. Skea, R. Slade, A. Al Khourdajie, R. van Diemen, D. McCollum, M. Pathak, S. Some, P. Vyas, R. Fradera, M. Belkacemi, A. Hasija, G. Lisboa, S. Luz,

J. Malley, (eds.)]. Cambridge University Press, Cambridge, UK and New York, NY, USA. doi: 10.1017/9781009157926

Advancing the measurement of our scope 3 emissions

Measuring our scope 3 emissions is a key component of our climate strategy. Scope 3 emissions are emissions incurred upstream and downstream in our value chain as a result of our business activities. These include emissions associated with business travel, the offices our employees occupy and the activities of the companies in which we invest. Scope 3 emissions data provides critical insights into our decarbonization efforts, detailing climate risks and opportunities in our journey towards achieving net zero.

While data challenges continue to exist, to date we have made significant strides in measuring our scope 3 emissions footprint through the quantification of select data associated with our real estate, business travel, data centres and general account investments. Looking ahead, we aim to enhance our ability to measure our scope 3 footprint, including emissions from our purchased goods and services, employee commuting, remote work and more.

Comprehensive and robust scope 1, 2 and 3 data is foundational to our ability to build and deliver on our climate transition plan. It enables us to create data-based emissions reductions roadmaps that model our interim and long- term pathway to net zero. Importantly, the data allows us to effectively measure progress against our goals and targets. Scope 3 data, however, extends beyond our company to organizations throughout our value chain. As a result of its interconnected nature, expanding our understanding of that footprint is a critical component of the global transition to net zero. We look forward to continuing to advance the measurement of this data and leveraging it to drive the transition to net zero.

5 As defined by the World Business Council for Sustainable Development and World Resources Institute in the Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard - Revised Edition.

Priority 1. Achieve net zero for our investments by 2050

We are committed to reducing the climate change impacts of the investments we own and manage through Sun Life's general account and multiple asset management businesses and subsidiaries.

• As an asset owner: Sun Life plans to achieve net-zero GHG emissions by 2050 for investments in its general account, which holds funds from insurance policy premiums. These funds are invested in a range of assets to back the insurance products that Sun Life sells globally. The general account is primarily managed by SLC Management, the company's fixed income and alternatives asset management firm.
  While our net-zero goal covers all of the general account, our initial focus for interim target setting is on the asset classes where there is industry guidance and ability to have immediate impact. For Sun Life's general account, this means our investments in listed corporate bonds, directly managed listed equities and commercial real estate.
• As an asset manager: Several Sun Life asset management companies have committed to investing aligned with net zero by 2050 that currently covers some or all of their managed assets, and are quantifying and developing decarbonization roadmaps to reduce financed emissions. These companies include: MFS Investment Management(MFS),SLGI Asset Management Inc(SLGI Asset Management), SLC Fixed Income (the investment grade fixed income business of SLC Management) and its affiliate businesses BGOand InfraRed Capital Partners(InfraRed). Just as these businesses are different, so too are their targets and plans for achieving net zero, in alignment with their Clients' objectives
  and preferences.

Sun Life General Account

Learn more

• Sun Life 2023 Sustainability Report
• Sustainable investing webpage

1. As of December 31, 2019, Sun Life's general account invested AUM was $161.6 billion.
2. Financed emission values are calculated in alignment with the Partnership for Carbon Accounting Financials (PCAF), Part A Financed Emissions 2nd Edition (2022). Note this figure is not externally assured and may be adjusted in future publications due to changes in the organizational portfolio in addition to improvements in availability, controls and quality of data. Values are impacted by rounding. The unit tCO2e refers to metric tonnes of carbon dioxide equivalent.
3. Material sectors include utilities (electric, multi and gas); oil, gas and consumable fuels; aviation; chemicals; construction materials, and mining. Alignment metric follows the asset alignment methodology as set out in Paris Aligned Investment Initiative's Net Zero Investment Framework.
4. Interim target and baseline emissions for commercial real estate associated with those of the Sun Life BGO Real Estate Equity Fund. Interim target developed using the SBTi methodology and has been submitted to and accepted by the Net Zero Asset Managers (NZAM) initiative. Note this figure is not externally assured and may be adjusted in future publications due to changes in the organizational portfolio in addition to improvements in availability, controls and quality of data. Values are impacted by rounding.

Learn more

• MFS Climate Action Plan
• MFS Net Zero Progress Report
• MFS 2022 Annual Sustainability Report

1. Aligning towards or aligned to a net zero pathway as defined by criteria set out in the Net Zero Investment Framework. Criteria are asset class-specific. Pathways is the term used to describe the emissions, technologies and investment trajectories that will be needed to deliver net zero.
2. Comprising approximately 90% of MFS' global AUM as of December 31, 2022.

Learn more

• SLC Fixed Income 2022 Sustainable Investing Report
• SLC Fixed Income 2022 Climate Report

12 As of December 31, 2023.

Learn more

• BGO 2023 Environmental, Social and Governance Report
• BGO 2022 Climate Report

1. Emissions intensity expressed as kgCO2e/sqm (kilogram of carbon dioxide equivalent per square metre). Utilizes 2019 baselines.
2. The scope of the targets exclude BGO's global debt series and mortgage investments, European and Asian Core Plus and Value-Add strategies, Asian and European separate accounts, and Asian debt series.