Is PFAS the next asbestos Tyndall Asset Management May 2024 Man-made hazardous byproducts have long been an issue for our health and the environment. Many people understand the deadly impact of products such as asbestos, a once common material in many building products. In addition to the devastating health impacts of asbestos, the financial impacts have been nothing short of astronomical. It is estimated by the World Health Organisation that the annual financial cost of the health effects from asbestos is around US$2.4-3.9bn, excluding the additional costs of pain, suffering and welfare losses. The emerging risks of 'forever' chemicals and a little Australian company trying to make a difference Drawing parallels to the asbestos industry, our research on per- and poly-fluoroalkyl substances (PFAS) indicates that the risk with PFAS can potentially be just as great as the now well-understood risk with asbestos. PFAS are a group of over 4,000 man-made chemicals that have been used in a variety of industries and consumer products due to their unique properties. Given their stain and water-resistant properties, PFAS is most commonly found in clothing, cookware and fire-fighting foam. Despite the obvious appeal of non-stick and water and grease-resistant properties, the production and use of PFAS have led to widespread environmental contamination and raised significant concerns about their potential risks to human health. PFAS has been described as "forever chemicals" because they do not degrade naturally in the environment. Studies on laboratory animals have shown the adverse effects of chronic PFAS exposure on the liver, gastrointestinal tract, and thyroid hormones. While studies of the impact of PFAS on humans have been more limited, the link between PFAS and a variety of health problems (e.g. liver, immune system damage and some cancers) has been strong enough for the USA's Environmental Protection Agency to propose strict limits on two types of common PFAS, namely Perfluorooctanoic acid and Perfluorooctane sulfonate. In addition, the European Union's Restriction of Hazardous Substances Directive restricts the use of certain PFAS, and similar regulations are either being considered or implemented worldwide. Given the heightened scrutiny around the adverse impacts of PFAS on human health, 3M, a Fortune 500 chemicals manufacturer based in the US, has recently announced a US$10.3bn settlement with the US Public Water Suppliers. The settlement is to help fund the monitoring and treatment or filtering of drinking water for a large portion of the US population that is currently exposed to high PFAS levels within their potable water. This settlement follows the US$1.18bn settlement in June 2023 between DuPont de Nemours Inc, Chemours Co, and Corteva Inc and a group of 300 drinking water providers in the US over the treatment of PFAS in drinking water. With growing scientific evidence highlighting the dangers of PFAS exposure, the implicit admission of PFAS manufacturers to the harm posed by PFAS and the need for both treatments and finding a solution is becoming increasingly critical. The Environmental Group and its role in addressing PFAS The Environmental Group (ASX: EGL) is an Australian environmental engineering company that provides products and engineering services to industries to improve environmental outcomes. This includes providing solutions such as dust extraction systems, odour capturing solutions, and noise abatement solutions. The business has been in operation for almost 100 years, servicing a diverse group of customers, from resource companies to manufacturers, waste management companies and healthcare operators. Key products include exhaust silencers, industrial steam boilers, medical waste autoclaves, and dry and wet scrubbers. Over the past five years, through the establishment of its Water division, EGL has looked to expand its capabilities into water management solutions and, in particular, the treatment of PFAS in water and soil. As part of this process, for the past three years, EGL has been working with Victoria University to develop technology focused on the removal of PFAS from contaminated waste streams. As a result of this collaboration, EGL has developed a gas foam fractionation process to treat the presence of PFAS in water, soils and biosolids. In its simplest explanation, gas foam fractionation involves bubbling gases through the contaminated material, which in turn lifts the PFAS particles to the top of the surface, with the PFAS material removed by gently vacuuming the particles. Successful trials have been conducted, demonstrating that the treatment reduced PFAS to undetectable levels. Trial study results published by EGL indicate that the process was able to extract 99.9% of PFAS from a sample of highly contaminated leachate processed (first pass), and 99.94% of PFAS from a sample of highly contaminated wash water (first pass). As the PFAS is separated and compacted to just 1% of the initial volume, the storage of PFAS becomes less of an issue, reducing facility, operational and risk costs.  In addition, the processing unit does not require human interaction, with the unit being operated from a control station. This reduces the OH&S risk by minimising employee interaction with contaminated materials. EGL's gas foam fractionation process received patent approval in May 2023, with a 20-year patent timeframe. The company has an operational plant in Melbourne, with all documentation having been submitted to the Environmental Protection Agency to obtain the required licence to start operations. EGL expects approval to be granted in the next 3-6 months, which could be a catalyst for the company to expedite the roll out of this offering. EGL estimates that the total addressable market for this product is in the billions of dollars globally, which appears to be a reasonable estimate given the extent of PFAS contamination, and the settlements so far from PFAS manufacturers.  The Tyndall Small Companies Fund is an investor in EGL, recognising that the company possesses many of the attributes that we look for in an investment. EGL is a business that has been listed for over 30 years with proven technology. One key issue was that the company was formally run by engineers, with little financial acumen to extract value from the technology. Enter current CEO Jason Dixon in Feb-2021, a highly regarded executive with extensive waste management experience, having run and developed Tox Free for a decade before it was acquired by Cleanaway. We can readily see what capable management can do to a business's financials. In 30 years of listed life, EGL barely made a profit. In a little over three years, Jason and his team have been able to take the business from a $34m revenue, $1.4m EBITDA enterprise to an FY24 estimated $99m revenue and $10m EBITDA business. Another attribute we like is the industry structure EGL operates in, with structural tailwinds for environmental waste management. Trading on 9-times EV/EBITDA, the business is trading on a reasonable valuation and screens as very cheap assuming it continues to execute as it has done in the past three years, delivering +20% p.a. revenue and earnings growth in its core business. While the PFAS problem has the potential to be detrimental to the scale of disasters such as asbestos, in The Environmental Group, we believe we have found a company that can potentially deliver a solution that helps address a significant portion of the problem. That said, our investment thesis in The Environmental Group is not predicated on the success of the Water Management/PFAS solution. The PFAS opportunity to us is free optionality and one with a very large potential upside. In our view, backing current management to execute their plans is an extremely attractive risk reward proposition, while also delivering a solution to a global problem that has had devastating health and environmental impacts. Author: James Nguyen, Portfolio Manager Funds operated by this manager: Tyndall Australian Share Concentrated Fund, Tyndall Australian Share Income Fund, Tyndall Australian Share Wholesale Fund

The future of mining with AHS Tyndall Asset Management April 2024 Imagine a colossal gold mine, Australia's largest no less, where its scale and longevity could be confused for an iron ore mine in the Pilbara. Where massive trucks navigate the landscape with uncanny precision, devoid of almost all human drivers. This isn't science fiction; it's the reality at Boddington, a mine that has rewritten the rulebook on gold mining best practices in autonomous haulage and is paving the way for future rollouts across Newmont's portfolio. Boddington's drive for efficiency, safety and sustainability and lessons for the future I was fortunate enough to recently visit Newmont's Boddington Gold Mine (BGM), located some 120km south-east of Perth. For 16 years under Newmont's management, Boddington has been a consistent gold producer at scale, churning out copper-gold concentrate and gold bars. Newmont has mine life extension plans that could see the BGM operation extend to 2059. Currently, Newmont mines from the astutely named North and South pits, but by the end of the mine's life, the pit design would eventually merge into one, rivalling Kalgoorlie's world-renowned Super Pit. Source: Tyndall AM, March 2024. A Pioneering Journey: The rise of AHS at Boddington and the learnings Boddington's Autonomous Haulage System (AHS) journey is a story pushing the boundaries of both productivity gains and ESG standards. With a fleet of 41 CAT 793F trucks, these behemoths are guided by the sophisticated CAT MineStar operating system. Launched in 2021, this system has propelled Boddington to the forefront of mining technology, making it the world's first open-pit gold mine to boast a fully autonomous haulage fleet. The US$150 million project to convert the legacy fleet was completed ahead of schedule and under budget, even amidst the disruptions of COVID-19. The AHS roll out encountered several challenges during its commissioning phase including in-pit communications issues, severe weather and heavy rainfall, shovel reliability issues and issues managing in-pit bench hygiene. These obstacles provided valuable learning opportunities through commissioning. Key learnings from the roll out have been focused on optimising the mine plan design to best suit the operating conditions of the AHS fleet, such as straightening roads and removing intersections. AHS trucks abide by a set of strict rules that ensure a predictable and safe outcome. These rules include slowing down at intersections and around bends and when coming into proximity with light vehicles. Additionally, meticulous road maintenance and assessing ramp gradation became crucial for the improved operations. It is believed that 95% of learnings from Boddington can be replicated across future AHS fleet roll outs at other assets (discussed later). Many of the learnings are also applicable to non-AHS fleet with the issues identified by AHS fleet communicated to Newmont's other open pit operations. Justifying the investment: Outcomes witnessed to date and the benefit of a systematic approach After 13 years of 100% Newmont ownership, it took the AHS fleet only 12 months to beat the tonne per kilometre of movement performance record by 10%. Under the company's roadmap (refer Figure 1), management believes there is another 10% of productivity upside available. These productivity improvements will be achieved via a combination of improved truck availability (reduced downtime) and increased tonnes per kilometre. The benefits of AHS extend far beyond mere operational efficiency, with safety taking centre stage by removing human interactions with large and heavy machinery. Human error is significantly reduced as a result of autonomous trucks meticulously following designated paths and operating parameters. Critically, this translates to a dramatic decrease in the risk of fatalities and vehicle collisions. Figure 1: Newmont's full potential productivity potential roadmap Source: Boddington, March 2024. The environmental benefits are undeniable. Reduced fuel consumption due to optimized operations translates to lower greenhouse gas emissions. Since the introduction of the AHS, the Boddington operation has achieved significant fuel efficiency, saving approximately 1.5 million litres per year. Additionally, less wear and tear on tyres and other consumables contribute to a more sustainable mining operation. The financial and productivity improvements - alongside the improvements in safety - boil down to operating discipline. Human operators compensate when the mine plan or operating conditions are not optimal, making it very hard for managers to identify issues and correct appropriately. Autonomous trucks strictly adhere to all operating constraints, so when an issue is encountered, the system will alert operators in control and the truck will stop operating. This results in bottlenecks being identified and rectified more rapidly than when humans operate trucks. For example, if the optimal path from the pit floor to the crusher is blocked due to poor bench hygiene, the human operator, depending on factors like KPIs and mine culture, could choose a longer route and leave the rectification of the optimal route outstanding. However, the autonomous truck fleet will flag this issue with control and the optional route will be restored, leading to savings on future diesel consumption and increasing productivity. A future powered by AHS: Further opportunities within the Newmont portfolio The potential applications of Boddington's AHS learnings are vast. The ability to remove workers from hazardous environments and improve production efficiency makes AHS a compelling proposition across some of Newmont's core assets. Underground mining operations at Cadia and Lihir are prime candidates for this technology. The Lihir ore body, for example, sits within an extinct volcano where ground temperatures can reach up to 80 degrees celsius. Regular geysers can erupt, making it too dangerous for humans to walk the pit floor, providing a significant opportunity for better remote operated technologies. ESG benefits of AHS offers improved risk adjusted outcomes AHS rollout is just one tool in the toolbox to realise latent operational value from a financial and ESG standpoint, while decreasing the risk of a material safety event occurring and offering improved risk adjusted returns. The benefits of deploying AHS are clear; it can reduce operating costs, reduce fleet maintenance and improve productivity alongside improving safety, all of which align with the ethos of responsible and sustainable mining practices. Other Tyndall portfolio companies are also championing autonomous solutions, including Rio Tinto and BHP. At Tyndall, we analyse these metrics in absolute, relative, and directional trend terms, with safety metrics critical factors in both our assessment of the investable landscape and portfolio construction process. Author: Tom Hays, Research Analyst Funds operated by this manager: Tyndall Australian Share Concentrated Fund, Tyndall Australian Share Income Fund, Tyndall Australian Share Wholesale Fund

Where nature meets business: The TNFD framework. Tyndall Asset Management October 2022 The Taskforce on Nature-related Financial Disclosures (TNFD) is an international initiative that is developing a framework for companies and financial institutions to disclose their nature-related risks and opportunities. Climate and net-zero commitments are well understood, with corporations relying on the Taskforce for Climate-related Financial Disclosures that released a set of recommendations in 2017. The idea of TNFD is not entirely new. It has built upon the foundational success of the Task Force on Climate-Related Financial Disclosures (TCFD), which focuses on the financial implications of climate change for companies. However, as the global dialogue evolved, it became clear that climate was only a part of the broader environmental narrative. Biodiversity loss, land degradation, and ecosystem collapse pose significant risks to economies and businesses around the globe. The TNFD first came into existence in June 2021 to address this gap and ensure a holistic environmental approach in corporate disclosures. Biodiversity is the diversity of all living organisms and is the living component of nature capital. Net zero and nature are intrinsically linked, and both need to be addressed to build a better and more sustainable future. A simple example of this is that forests, which cover about 31% of the earth, absorbed 7.6 gigatonnes of CO2 p.a. over the period of 2001-2019 according to a 2021 study in the journal Nature Climate Change. Preserving - and perhaps increasing - forests are key to preserving biodiversity, helping to lower ambient temperatures of regions and sequester CO2. Importance of a nature-positive economy A 'nature-positive economy' is essential for a sustainable future and is a key concept that drives the TNFD framework. A nature-positive economy is an economy that has a net positive impact on nature, an economy that restores and regenerates nature rather than depleting it. Nature provides us with essential ecosystem services, such as clean air and water, food, and climate regulation. Without a healthy natural environment, our economy and society cannot thrive. There are several things that can be done to create a nature-positive economy. One important step is to reduce our impact on nature. This can be done by reducing our consumption of natural resources, reducing pollution, and protecting and restoring ecosystems. Investing in nature-based solutions will be an important step forward. Nature-based solutions are ways to address climate change and other environmental challenges using nature. For example, forests can be used to absorb carbon dioxide from the atmosphere, and wetlands can be used to filter water and reduce flooding. The transition to a nature-positive economy is essential for a sustainable future. However, it is a transition that will require a concerted effort from all stakeholders, including governments, businesses, and individuals. The sectors that have the most impact on biodiversity are the logical companies that will be the early adopters of the TNFD recommendations. These sectors include materials, energy, agriculture and food & beverage.  A framework for nature-based solutions The TNFD's final framework was published in mid-September 2023. It includes 14 recommended disclosures covering nature-related issues, impacts, risks and opportunities that are structured around four pillars (refer Figure 1). Figure 1: TNFD's recommended disclosures Source: TNFD, Sept 2023. It is hoped that the TNFD provides a clear, structured framework that help corporates understand the implications of biodiversity and natural capital for their activities. The framework is intended to assist corporates and financial institutions manage their nature-related risks and opportunities, and to support the transition to a nature-positive economy. While it is largely based on the TCFD framework, it also considers the specific risks and opportunities associated with nature. The TNFD framework covers four specific areas: Nature-related dependencies: This includes the extent to which a company or financial institution relies on nature, such as for its raw materials, water, or pollination services. Nature-related impacts: This includes the positive and negative impacts that a company or financial institution has on nature, such as through its operations, supply chain, or investments. Nature-related risks: This includes the risks that a company or financial institution faces from nature, such as from climate change, biodiversity loss, or water scarcity. Nature-related opportunities: This includes the opportunities that a company or financial institution can seize from nature, such as by investing in sustainable agriculture or renewable energy. The TNFD framework is expected to be a valuable tool for companies and financial institutions to manage nature-related risks and opportunities. It will also help to promote the transition to a nature-positive economy. Some of the benefits of the TNFD framework include: Helping companies and financial institutions to identify and manage their nature-related risks and opportunities. Improving the transparency of nature-related risks and opportunities. Driving investment in nature-positive activities. Aligning financial markets with the targets of the Paris Agreement and the UN Sustainable Development Goals. Global progress Although the TNFD framework has only recently been settled; governments and intergovernmental organisations have increasingly called attention to the impact on nature. Pleasingly, a rising number of businesses have made pledges relating to biodiversity. Companies globally are only in the early stages of setting a broad set of nature-related goals whereas most have set climate-related targets (refer Fig 2). The EU set a biodiversity strategy in 2020 that aims to complete 100 target actions by 2030. Some of these targets include restoring degraded and carbon rich ecosystems, converting at least 30% of its land and ocean area into legally protected areas and encouraging at least EUR20bn p.a. in bio-diversity-related financing. Despite this, S&P claims that only 29.5% of the largest companies in the S&P Europe 350 Index have set biodiversity targets Figure 2: Corporate targets are less common for other dimensions of nature compares to climate change Source: McKinsey McKinsey has calculated that ~47% of Fortune Global 500 companies have set nature-related targets against one dimension of nature - generally this is against climate (refer Figure 2). Approximately 16% have set targets against three or more dimensions of nature and no companies have targets against all six dimensions that were looked at in this analysis. The Science-Based Targets for Nature (SBTN) initiative suggests that companies are more likely to focus on the key issues that directly impact their activities which could explain why no company has set targets against all six dimensions.  Cutting the data based on a sector level reveals that the sectors that have a higher exposure to biodiversity risk are leading the charge on target setting. Figure 3: Fortune Global 500 Companies' nature-related targets by sector Source: McKinsey Implementation of TNFD Implementing TNFD is not without its challenges. In particular, there's a need for: Data Collection: Many companies lack the data or the means to gather it to understand their complete environmental impact; Standardization: With no globally recognized metrics to measure nature-related risks, creating a standardized framework will be demanding; Economic Pressures: Short-term profit goals can overshadow long-term sustainability targets, making it challenging for some companies to prioritize nature-related disclosures; and Stakeholder Alignment: All stakeholders, from suppliers and employees to regulators and consumers, need to align for effective disclosure and action. The framework is consistent with the recommended standards of the TCFD, ISSB (International Sustainability Standards Board) and GRI (Global Reporting Initiative). The recommendations have an intention to provide a practical solution for corporates to start their journey to increase the scope and disclosures over the coming years. The expectation is that, as with climate-related reporting, TNFD disclosures will improve over time. The LEAP approach - Locate, Evaluate, Assess and Prepare - has been developed by the TNFD to help organisations to identify, assess and manage nature-related risks and opportunities. While the approach is not a requirement, it is designed to help with identification and assessment. Figure 4 provides an overview of LEAP and its elements, which covers: Locate: Identify the organization's interface with nature, including its direct operations, supply chains, and value chains. Evaluate: Evaluate the organization's dependencies and impacts on nature. Assess: Assess the nature-related risks and opportunities facing the organization. Prepare: Prepare to respond to (and report on) nature-related risks and opportunities. Figure 4: The TNFD approach for identification and assessment of nature-related Source: TNFD, Sept 2023 Conclusion While the challenges are significant, the TNFD offers a critical pathway for integrating nature into financial decision-making and improving outcomes for our environment. The success of the TCFD suggests that with global cooperation and commitment, the TNFD can become an influential tool in driving sustainable business practices. Governments, financial institutions, environmental organizations, and businesses all have important roles to play. By implementing frameworks such as the TNFD, the global community takes a step closer to ensuring that the economic activities of today do not compromise the planet's well-being tomorrow. The shift from merely profit-driven strategies to those that also account for nature-related impacts signifies an evolution in global business practices. It is an evolution that is not just commendable but essential for the longevity and prosperity of both businesses and the planet. Tyndall will be increasingly engaging with corporates around biodiversity and promoting the implementation of the TNFD framework, as we have been with TCFD. According to work by Jarden, only 12 (24%) of ASX50 companies have nature-related targets. It was noted that BHP, Woolworths, South 32 and Origin Energy had undertaken TNFD pilots, and only Brambles and South 32 have linked nature to remuneration.  Clearly, there is plenty of improvement required. We expect that those companies in sectors more exposed to nature-related risks such as agriculture, food and beverage, and mining, are likely to lead the charge.  Author: Brad Potter, Head of Australian Equities Funds operated by this manager: Tyndall Australian Share Concentrated Fund, Tyndall Australian Share Income Fund, Tyndall Australian Share Wholesale Fund