Manulife Financial : Y2021 Annual Green Bond Report

2021 GREEN BOND REPORT

COMBINED REPORT FOR THE FOLLOWING TWO OUTSTANDING GREEN BONDS:

• • 3.0% S$ 500 million (Singapore dollars) subordinated debt due 21 November 2029, callable 21 November 2024

• • 3.317% C$ 600 million (Canadian dollars) subordinated debt due 9 May 2028, callable 9 May 2023

In 2017, Manulife became the 1st global life insurer to issue a green bond1. This regular debt instrument with proceeds allocated to the emission-efficient assets aligns our investment and financing activities. Manulife'sGreen Bond Framework2 (the "Framework") is governed by Manulife's Green Bond Council, and is consistent with the global best practice - Capital Markets Associations' Green Bond Principles, as confirmed by a 2nd party opinion3. Together with our second issuance in 2018, the two outstanding green bonds is over C$1 billion4 with the estimated annual environmental benefit of 240,555 tons of avoided carbon dioxide emissions.

Green Bonds

Issuance Type

Allocation of Proceeds

Estimated Annual Environmental Benefit

1st Green Bond issued 21 MFC 3.0% S$ 500 million subordinated November 2017 debt due 21 November 2029

Wind and solar energy projects in Canada and the United States

2nd Green Bond issued 9 MFC 3.317% C$ 600 million subordinated May 2018 debt due 9 May 2028

Wind and solar energy projects in Canada, the US and Uruguay, energy efficiency of public buildings, and sustainably managed forestry

55,063 tons of avoided carbon dioxide emissions annually, or 111 tons per S$ 1 million allocated 185,492 tons of avoided carbon dioxide emissions annually, or 310 tons per C$ 1 million allocated.

About sustainable finance at Manulife

Manulife is a long-term investor committed to steering its investments towards net zero emissions. As of 2021, C$42 billion or 9.8% of the C$427 billion general account assets backing in-force liabilities was invested in long-duration, carbon emission-efficient assets. These green investments are a good economic fit to the Manulife's business model. They form part of an asset mix that optimizes risk-adjusted returns and matches the characteristics of the long-dated insurance liabilities, some of which continue for over 20 years.

Manulife Green Investments

Manulife Green InvestmentsHoldings at 31/12/2021 [CanadianHoldings at 31/12/2020 [Canadian

dollar billion] dollar billion]Description

Green Buildings

$18.9

$16.9

Direct equity investments and commercial mortgages backed by green building certifications Leadership in Energy and Environmental Design (LEED), Buildings Owners and Managers Association (BOMA Best), and Energy Star

Renewable Energy

$9.5

$9.8

Private debt and equity financing of solar/wind/geothermal/waste biomass/hydro energy

Sustainably-managed Timberland

$4.3

$4.0

Assets operated by Manulife subsidiary MIM Timberland and Agriculture and private placements certified to Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC) standards

Energy Efficiency

$3.4

$3.9

Private debt financing of energy efficiency upgrades at US government sites

Clean Transportation

$3.0

$2.7

Private debt financing of electrified transport and mass public transit

Sustainably-managed Agriculture Sustainable Management of Water Resources

$1.6

$1.3

Investments operated by Manulife subsidiary MIM Timberland and Agriculture and certified to the Leading Harvest Standard

$0.7

$0.6

Private debt financing of water recycling and purification businesses

Green Bond Investments

$0.6

$0.7

Mainly private green bond placements in renewable energy, energy efficiency, clean transport, and sustainably-managed forests

General Account investments only, no third-party funds

TOTAL

$42.0

$39.8

Private debt and equity investments, no public securities, except for several green bond investments

Percent of Total General Account

9.8%

9.7%

Total General Account assets: Y2021: $427 billion; Y2020: $411 billion.

1 Manulife's green bond is a fixed income instrument with an amount equal to the net proceeds allocated to new and/or existing Eligible Assets defined in the Manulife's Green Bond Framework, for example - renewable energy, energy efficiency, sustainably managed forests and other investments that advance ecosystem improvements

2 Manulife's Green Bond Framework is aligned with the International Capital Market Association's Green Bond Principles 2017, and directs the use of proceeds towards renewable energy, green buildings, sustainably managed forests, energy efficiency, clean transport, sustainable water management and/or pollution prevention and control:https://www.manulife.com/content/dam/corporate/global/en/documents/pas/MFC_GBF_2017_EN.pdf

3 The Second-Party Opinion on the Framework, and the Annual Review of this Green Bond report (the limited assurance procedure) are available on the Manulife Investor Relations webpage under Results and Reporthttps://www.manulife.com/content/dam/corporate/global/en/documents/pas/MFC_GB_SPO_2017_EN.pdf It confirms a) the assets meet the Use of Proceeds the Eligibility Criteria outlined in the Framework, and b) Manulife reported on at least one Key Performance Indicator for each Use of Proceeds criteria in the Framework.

4 All amounts in Canadian dollars, unless otherwise stated, and for the year ending 31 December 2021

About Manulife's climate commitments and governance

Manulife is committed to steering our investment portfolio to be net zero by 2050. To ensure best practice in emission reduction target setting, measurement, and progress reporting, Manulife is committed to theScience Based Targets initiative.The net zero transition is managed by the general account's Climate Change Working Group chaired by the Head of Environmental, Social and Governance Integration and consisting of senior investment officers and members of the credit and portfolio management teams.

Manulife's Climate Action Plan is driven by the Executive Sustainability Council - the Chief Sustainability Officer and nine members of the Executive Leadership Team, including the Chief Executive Officer, and is overseen by the Board's Corporate Governance and Nominating Committee.

Manulife is also a member of global collaborations that advance integration of sustainability into financial decision-making:

• •Accounting for Sustainability is a network of financial leaders that inspire action to shift towards resilient business models and a sustainable economy. In 2017, our Chief Financial Officer became the founding Chair of the A4S's Canadian Chapter

• •United Nations Environmental Programme - Finance Initiativeis a partnership between United Nations Environment and the global financial sector that promotes sustainable finance. Manulife has been a signatory since 2005

• •Equator Principles are a set of voluntary guidelines that help financial institutions identify and manage environmental and social risks in project finance. Manulife committed to the principles in 2005.

For more information on Manulife's sustainability performance, please see ourAnnual Sustainability Report.

About this report

Consistent with our Green Bond Framework, we committed to publishing an annual use of proceeds report. This report follows on our five historical reports published in November 2018, November 2019, May 2019, May 2020 and May 2021 which are available on the Manulife'sInvestors Relations webpage. This report combines the two annual use of proceeds reports into one, and shows relevant metrics by issuance, including allocation of proceeds, environmental performance indicators, and project examples. Sustainalytics - a provider of environmental, social, governance research to institutional investors - who issued the 2nd party opinion on the Framework, has reviewed this report and confirmed its alignment with the Framework5.

5 See Limited Assurance Statement accompanying this Y2021 Green Bond Report:https://www.manulife.com/en/investors/results-and-reports.html#Green%20/%20Sustainable%20Bond%20Reports

GREEN BOND 1: 3.0% S$ 500 MILLION SUBORDINATED DEBT DUE 21 NOVEMBER 2029

Key elements

• • Use of Proceeds: Renewable energy (wind and solar)

• • Geography: Canada and United States

• • Management of Proceeds: All proceeds allocated at issuance; no change in allocations since issuance

• • Estimated Environmental Benefit: 55,063 tons of avoided carbon dioxide emissions or 111 tons CO2 per S$ 1 million

Use of proceeds by category on portfolio basis and environmental performance

Category as per Green Bond PrinciplesCriteria in the Manulife Green Bond Framework LocationGreen Bond amount originally allocated to renewableManulife's share of Manulife's share ofO%rigin annual energyal Allocageneration inestimated annual avoided carbonY2021, allocated to dioxide emissions,energy projects tionGreen Bondallocated to GreenData Quality Scoree (MegaWatt hour) a Bond (tons) a,b,c (S$ million)
Renewable Energy: WindDevelopment, construction, operation, maintenance and upgrades of wind energy facilities and equipment Canada 219 44% 296,607	41,146	2b
Renewable Energy: SolarDevelopment, construction, operation, maintenance and upgrades of solar energy facilities and equipment Canada and US 278 56% 85,257	13,917	2b
Total 111 CO2 tons/SG$ 1 MM allocated 497d 381,864	55,063	2b
Notes: a. Estimated avoided carbon dioxide emissions are based on Manulife's share of annual energy generation, whereby our share is the our outstanding debt and equity investments in the projects as a proportion of the projects' total enterprise value as of December 31, 2021. Because we over-allocated the assets to allow for amortization of debt investments over the course of the green bond term, the reported figures are scaled to the S$ 497 million - the net proceeds from the green bond issuance. b. Avoided carbon dioxide emissions were estimated based on the life-cycle emission avoidance factors for wind and solar technologies, as published by the International Renewable Energy Agency. Emission avoidance is a function of displacing emissions from the fossil fuels in the countries energy mix (see Methodology) c. Estimated carbon emission avoidance does not constitute a transfer of right to any person of the tradable carbon credit or other offset that may be associated with all or part of the avoided emission. d. S$497 million is the net proceeds from the green bond issuance, namely SGD 500 million gross issuance amount net of SGD 3 million transaction costs. e. Data quality score of 2b means emissions are estimated based on the project's energy production, per methodology by Partnership for Carbon Accounting Financials - The Global GHG Accounting and Reporting Standard for the Financial Industry, 2020, First edition, page 54. The overall scale is: high quality = 1; low quality = 5.

Examples of projects

Project	Location Description
• total installed capacity: 350 Megawatt • estimated to power 59,500 homes Rivière-du-Moulins Province of Quebec, Canada • 20-year agreement with Hydro Quebec since construction 2014 • largest wind energy facility in Canada under single PPA
• total installed capacity: 100 Megawatt Grand Renewable Haldimand County, Province of • 800-acre farm with 450,000 solar panels, powering 17,000 homesOntario, Canada • 20-year feed-in-tariff contract with HydroOne since 2015 • one of the largest solar farms in Canada

GREEN BOND 2: 3.317% C$ 600 MILLION SUBORDINATED DEBT DUE 9 MAY 2028

Key elements

• • Use of Proceeds: Renewable energy (wind & solar), energy efficiency of public buildings, sustainably managed forestry

• • Geography: Canada, US, Uruguay, Peru

• • Management of Proceeds: All proceeds allocated at issuance and an additional asset was added in 2021 due to underlying loan amortization

• • Estimated Environmental Benefit: 185,492 tons of avoided carbon dioxide emissions, or 310 tons CO2 per C$1 million

Use of proceeds by category on portfolio basis and environmental performance

Manulife's share of Manulife's share

Green Bond Original

% OrigiCategory per Eligibility Criteria in the

Allocatio nalGreen Bond PrinciplesManulife Green Bond Framework

ns (C$

Allocannual energy production, energy savings, and certified acreage, allocated to Greenof estimated annual avoided carbon dioxide emissions, allocated to GreenData Quality Scoree

Location million)ation Bonda

Bond a,b,c,d,e

Renewable Energy: Wind

Development, construction, operation, maintenance and upgrades of wind energy facilities and equipment

31,503

Uruguay

19.8

3%

[energy generated in MegaWatt hour]

315

2bRenewable Energy: SolarDevelopment, construction, operation, maintenance and upgrades of solar energy facilities and equipment

83,593

Canada, US and Peru

333.9

56%

[energy generated in MegaWatt hour]

17,656

2b

41,589

Energy EfficiencyDevelopment, construction, acquisition, installation, operation, upgrades to reduce energy consumption/improve resource efficiency

US

171.6

29%

[energy savings in MegaWatt hour]

56,754

1b

15% average efficiency vs.baselineSustainably-Managed ForestryPurchase and operation of forest holdings certified by credible third-parties such as US FSC and PEFC

36,243

72.6

12%

[acres 100% certified to the PEFC standard]f

110,767

1a

Total

310 CO2 tons/C$ 1 MM allocated

597.9g

185,492

Notes:

a. Estimated avoided carbon dioxide emissions are based on Manulife's share of annual energy generation, energy savings, and forest acreage, whereby our share is the our outstanding debt and equity investments in the projects as a proportion of the projects' total enterprise value as of December 31, 2021. The reported figures were scaled to the C$ 597.9 million allocation of the net proceeds from the green bond issuance.

b. Avoided carbon dioxide emissions were estimated based on the life-cycle emission avoidance factors for wind and solar technologies, as published by the International Renewable Energy Agency. Emission avoidance is a function of displacing emissions from the fossil fuels in the countries energy mix (see Methodology)

c. Avoided carbon emissions from our energy efficiency projects were estimated by the project originator Hannon Armstrong. Their CarbonCount® methodology used the estimated kilowatt hours ("kWh"), gallons of fuel oil, million British thermal units ("MMBtus") of natural gas and gallons of water saved as appropriate, for each project. The energy savings were converted into an estimate of metric tons of CO2 equivalent emissions based upon the project's location and the corresponding emissions factor data from the U.S. Government and International Energy Agency.

d. Avoided carbon emissions from our forestry projects were estimated using carbon accounting protocol by our 100%-owned timber subsidiary Hancock Natural Resource Group [see Methodology]. The net greenhouse gas emission profile can fluctuate largely as a result of ongoing forest management activities, such as fertilization, herbaceous weed control, and harvesting schedules. The year-on-year change in the profile may be positive or negative.

e. The environmental benefit estimated by Manulife in the form of avoided carbon dioxide emissions does not constitute a transfer of right to any person of the tradable carbon credit or other offset that may be associated with all or part of the environmental benefit.

f. PEFC: the Programme for the Endorsement of Forest Certification, an international non-profit, non-governmental alliance of national forest certification systems dedicated to promoting sustainable forest management through independent third-party certification.

g. C$ 597.9 million is net proceeds from the green bond issuance, namely C$ 600 million gross issuance amount net of C$ 2.1 million transaction costs.

e. Data quality score per methodology by Partnership for Carbon Accounting Financials - The Global GHG Accounting and Reporting Standard for the Financial Industry, 2020, First edition, page 54. Score 1a means verified emissions from the developer; 1b - unverified emissions from the developer; 2b - emissions estimated based on the project's energy production. The overall scale is: high quality = 1; low quality = 5.

Examples of projects

Project

Location

Description

Campo Palomas

• • installed capacity: 70 Megawatt

• • estimated to power 13,573 households

  Department of Salto, Uruguay

• • annual power generation: 200,000 MegawattHour

• • in August 2017, Manulife participated in the USD 136.8 million financing

Axium Infinity Solar

• • installed capacity: 76 Megawatt

  Province of Ontario, Canada

• • portfolio of eight solar facilities across the province

• • in December 2017, Manulife provided debt financing for C$540 million portfolio acquisition

Smithsonian Institution's National Zoological Park

• • energy efficiency upgrades to the park hosting pandas Tian Tian, Mei Xiang, and her new cub Xiao Qi Ji: high-efficiency air-cooled chillers, solar shades on skylights, 625kiloWatt solar plant, LED lighting

Washington D.C., United States • US Government building of 1,088,000 square feet and 163 acres of parkland

• • annual energy savings 5,852 MegaWh; carbon dioxide emissions avoidance 4,340 tons

• • 18,940-acre timberland property of pine and bottomland hardwood plantations

Vinegar Bend

Alabama and Mississippi, United States

• • 100% of property certified to PEFC (Programme for the Endorsement of Forest Certification)

• • pine plantation is managed on a 27-30 year rotation age, and hardwood is typically age 50 years+

• • merchantable timber totals approximately 690,000 tons of which 70% is pine