Media Centre

Since joining Morley Fund Management (“Morley”) inJanuary 2001, Morley’s 8 strong SRI team of fund managers andanalysts, has made a considerable impact on the market. The teamemploys a philosophy of sustainable development, focusing oncompanies that make a direct link between sustainable developmentand long-term returns.

Here are some highlights from 2001:

Corporate Governance In April Morley launched its revisedvoting policy which requires UK companies within the FTSE 100 topublish environmental reports. Morley believes this was the firstinitiative of its type in the UK fund management industry.

Products Morley’s SRI Pooled Fund range, launchedin July 2001 comprises three funds: Managed, UK Equity and GlobalEquity. The UK Equity pooled SRI fund has already been added to twomulti-manager platforms, and the SRI Managed fund to one. OfMorley's six SRI funds available to institutional and retailinvestors, two have been given an AA rating by Standard & Poorsand two have been given an A rating.

Engagement In a number of high profile cases this year,positive engagement has helped companies to respond to risk in timeto avert irreparable damage to corporate reputation and shareprice:

• Chocolate - In April, following the sighting of a shipcarrying slave children off the coast of West Africa, the issue ofenforced labour in the production of chocolate lead tointernational pressure on major chocolate manufacturers. Followingengagement from shareholders (including Morley) major chocolatemanufacturers and industry bodies agreed in November 2001 to takeresponsibility for the supply chain conditions. Experts believethis is first time an agricultural industry has takenresponsibility for its product from harvesting to market.
• Pharmaceuticals - In May the issue of access toaffordable medicines in developing countries, came to a head when42 pharmaceutical companies took the South African government, tocourt over breach of drug patents. Pressure from campaigningorganisations and positive engagement from Morley and others inthe SRI community contributed to the companies' decision to settlethe case out of court and to agree to offer essential AIDS drugsto South Africa at affordable prices.
• Balfour Beatty - The Ilisu dam project threatens thelivelihood and land of large numbers of Kurdish people and hasbeen linked to ethnic cleansing. In August shareholder pressureand positive SRI engagement from Morley featured significantly inBalfour Beatty’s decision to pull out of the project therebysaving the company time and money and preserving itsreputation.
• Burma - In December Morley Fund Management joinedforces with a group of financial institutions to launch 'Businessinvolvement in Myanmar (Burma) - A Statement from InstitutionalInvestors.' The statement outlines the concerns raised by thepresence of a military dictatorship in Burma and highlights therisks to shareholders in investing in companies that haveinterests in the country. Collectively, the group representsalmost £400 billion in funds under management. This unprecedentedinitiative has been launched to encourage companies to establisheffective procedures for managing risk, as international pressureon companies doing business in Burma intensifies.

Events over 2001 have reinforced Morley's belief that commitmentto sustainable development is increasingly being recognised as aprecursor to long term growth and enhanced returns.

-ends-

For further information please contact:

Morley Fund Management
Paul Moody
Tel: 020 7809 6197

Penrose Financial
Gay Collins
Tel: 020 7786 4882 gayc@penrose.co.uk

Caroline Deutsch
Tel: 020 7786 4871 carolined@penrose.co.uk

Notes to Editors

• S&P ratings as at 18/12/01:

• Norwich Sustainable Future Managed Fund:	AA awarded	May 2001
  Norwich Sustainable Future UK Growth Fund:	AA awarded	May 2001
  Norwich Sustainable Future Corporate Bond Fund:	A awarded	July 2001
  Norwich Sustainable Future Global Growth Fund:	A awarded	July 2001

• Led by Clare Brook, the Socially responsible investment teamis one of the largest, the most experienced in the UK.

Clare and her colleagues have been working together for nearly adecade. In this time, they have grown in reputation and status.Team members are frequently asked for advice by companies,non-Governmental Organisations (NGOs) and government departments.Recently the team was involved with policy making for the newlegislation that requires pension fund trustees to disclose theirstance on social and environmental issues.

The team has a global perspective and a global reputation,having worked with investment consultants from around the world.Its research efforts focus on the world-wide activities of thecompanies in which it invests. Members are regularly asked to speakat overseas conferences on SRI issues.

• Morley Fund Management (‘Morley’) is anindependently managed, London based, asset management businesswith over £100 billion under management. It has investmentmanagement operations in London, Tokyo and Singapore and anassociate office in Boston*.
• Morley is a wholly owned subsidiary of the CGNU Group andmanages both institutional and retail funds under the Morleybrand. It also acts as investment manager for a range of retailinvestment funds, marketed in the UK under the Norwich Unionbrand.
• CGU plc and Norwich Union plc merged on 30 May 2000 to createCGNU plc, the UK’s largest insurance group and one of thetop-five insurers in Europe with substantial positions in othermarkets around the world, making it the world’s sixthlargest insurer based on gross worldwide premiums.

*Norwich Union Investment Management, a CGNU Group company

Morley Fund Management is a business name of Morley FundManagement Limited, registered no. 1151805, 1 Poultry, London EC2R8EJ and Norwich Union Investment Management Limited, registered no.2152949, 8 Surrey Street, Norwich NR1 3NG.

Both are CGNU Group companies and are regulated by the FinancialServices Authority

Past performance is not a guide to the future.