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SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaand upholding accountability. Moreover, USAA has various programs in place to deepenunderstanding around diversity and inclusion (e.g. innovation lab to foster inclusion and innovation,providing diversity and inclusion skill building and training).In terms of its support for the environment, USAA has outlined the following areas: Health & Safety Recycling Paperless Water savings Energy savingsRationale for issuanceThrough the issuance of green, social and sustainability bonds by USAA Capital Corporation, thecompany aims to finance green and social projects that align with USAA’s sustainability priorities.According to the issuer’s statement, the selected Use of Proceeds categories are core and relevant toUSAA’s business. In addition to their corporate real estate footprint being fairly large, USAA can alsohave meaningful social and environmental impacts through the company’s insurance and bankingentities.Contribution of Use of Proceeds categories to sustainability objectives and prioritiesISS ESG mapped the Use of Proceeds categories financed under the Sustainable Bond Framework withthe sustainability objectives defined by the issuer, and with the key ESG industry challenges as definedin the ISS ESG Corporate Rating methodology for the Insurance sector. Key ESG industry challengesare key issues that are highly relevant for a respective industry to tackle when it comes tosustainability, e.g. climate change and energy efficiency in the buildings sector. From this mapping,ISS ESG derived a level of contribution to the strategy of each Use of Proceeds categories.USE OF PROCEEDSCATEGORYSUSTAINABILITY OBJECTIVESFOR THE ISSUERKEY ESG INDUSTRYCHALLENGESGreen Buildings Renewable EnergyEnergy EfficiencySustainable Water andWastewaterManagement ISSCORPORATESOLUTIONS.COM/ESG CONTRIBUTIONContribution to amaterial objective Contribution to amaterial objective Contribution to amaterial objective–Contribution to a nonmaterial objective7 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaClean Transportation Access to EssentialServicesSocioeconomicAdvancement andEmpowermentAffordable HousingCOVID-19 ReliefEmploymentgeneration, andprograms designed toprevent and/oralleviateunemploymentstemming fromsocioeconomic crisesContribution to amaterial objectiveContribution to amaterial objective Contribution to amaterial objective Contribution to amaterial objectiveContribution to amaterial objective Opinion: ISS ESG finds that the Use of Proceeds financed through this bond are consistent with theissuer’s sustainability strategy and material ESG topics for the issuer’s industry for the majority of thecategories. The rationale for issuing green bonds is described by the issuer.ISSCORPORATESOLUTIONS.COM/ESG8 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaPART II: ALIGNMENT WITH ICMA’s GBP, SBP, AND SBG1. Use of ProceedsThe net proceeds of USAA Capital Corporation’s issuance of Sustainable Bonds will be allocated toexisting or future investments in or financings of Eligible Projects that meet USAA’s Sustainable BondFramework Eligibility Criteria as defined below. Eligible Projects are investments and expendituresmade by USAA or any of its subsidiaries beginning with the issuance date of any Sustainable Bonds tothe maturity date of the bonds, or in the 36 months prior to any such issuance, in eligible greenprojects and/or eligible social projects (as defined herein).“Eligibility Criteria” means any of the following:GBP CategoryGreen BuildingsRenewable EnergyEnergy EfficiencySustainable Water andWastewater ManagementClean TransportationSBP CategoryEligible Projects and ExamplesInvestments related to real estate projects that have received orare expected to receive third-party sustainable certifications orverification, such as BREEAM Excellent, Energy Star 85 , LEED Goldor Platinum, or equivalent certification. Investments may include:design, development, construction, materials, and equipment andcertification costs.Investments for new renewable energy generation including theacquisition or development of facilities (including supportingtransmission infrastructure and energy storage) that generaterenewable power from only wind or solar resources, powerpurchase agreements and virtual power purchase agreements.Investments related to energy efficiency projects and technologiesthat are designed to enable energy and emissions reductions, suchas the installation of controls and energy monitoring equipment,heating, cooling and ventilation retrofits, lighting retrofits, smartthermostats, efficient reflective roofs and the purchase of hardwarecertified to be energy efficient including Energy Star that aim toachieve a 15% or 30%, where feasible, increase in energy efficiencyfor spend associated with the company’s own operations.Investments related to sustainable water management, such aswater reuse and recycling, efficiency, conservation, restoration andwater quality projects. Investments may include: waste waterrecycling and harvesting systems, green roofs, low flow fixtures andappliances, and water including lake restoration projects.Investments related to clean transportation that are designedto/expected to reduce greenhouse gas emissions limited to electric,hybrid, or plug-in hybrid vehicles, hydrogen fuel cell vehicles,electric vehicle charging stations and clean mass transportationincluding electric rail and electric buses. Electric and any hybridsmust be designed to comply with an emissions threshold of 50g ofCO2 per passenger kilometer.Eligible Projects and ExamplesISSCORPORATESOLUTIONS.COM/ESG9 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaAccess to Essential ServicesSocioeconomicAdvancement andEmpowermentAffordable HousingCOVID-19 ReliefEmployment generation,and programs designed toprevent and/or alleviateunemployment stemmingExpenditures focused on advancing economic opportunity andequity for under-represented communitiesTarget Population: youth and students focusing on those fromunderrepresented communities, including the Black, Brown, andLatinx communities, persons with disabilities, rural populations andstudents from households who earn less than 80% of the AreaMedian IncomeInvestments related to low income housing properties, or in fundsthat exclusively invest in such properties in the United States andU.S. territories.Low income housing properties are those which qualify for U.S.Federal Low Income Housing TaxCredits at the time of USAA’s investment or the investment of a fundin which we invest, or meet one or more of the criteria below: At least 50% of the units are qualified low-income rentalunits; that is, units where rents do not exceed 30% of therelevant income limit, where the relevant income limit isless than or equal to 60% of the area median gross income,as defined by the U.S. Department of Housing and UrbanDevelopment; or At least 40% of the units are both rent restricted (those forwhich all or a portion of the units are restricted foroccupancy by tenants with limited incomes and which mayrestrict the rents which can be charged for those units) andwhere rents do not exceed 30% of an income equal to 60%of the area median income; or The average rent of all the apartments within the propertydoes not exceed 30% of an income equal to 60% of the areamedian income; or At least 20% of the units are qualified low-income rentalunits, for investments in areas that are already classified asLow-Income Qualified Census Tracts, as defined by the U.S.Department of Housing and Urban Development.Investments related to addressing the effectsof COVID-19, which may include relief and response efforts relatedto the COVID-19 pandemicsuch as measures taken to alleviate financial burdens on USAAmembers caused by the COVID19 crisis, including: Fee waivers for Insufficient Funds, Overdrafts, LatePayments, CD Early Withdrawals and Annuity Withdrawals; Mortgage payment and consumer loan deferrals; and Deductibles and co-payments waived by USAA for Medicaresupplement clients for testing or treatment of illnessesrelated to the COVID-19 virus.Expenditures and programs related to enabling opportunities forminority-owned small businesses and suppliers.Examples include:ISSCORPORATESOLUTIONS.COM/ESG10 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er ia from socioeconomic crises,including through thepotential effect of smallmedium enterprisefinancing and microfinance Procurement of products and services from certifieddiverse suppliers for USAA’s operationsPrograms that enable minority owned small businessesthrough mentoring and skills training related to technology,infrastructure, and professional developmentTarget Population:Minority-owned small businesses and suppliersExclusions:USAA will not knowingly allocate proceeds from any issuance of Sustainable Bonds to the following: Activities related to the exploration, production or transportation of fossil fuels (e.g., coal, oiland gas);Consumption of fossil fuels for the purpose of power generation;Large hydroelectric power generation (e.g., plants with a capacity of greater than 20megawatts or dams with a height greater than ten meters);Nuclear energyActivities involving exploitation of human rights, modern slavery (e.g., forced labor or humantrafficking) or child labor; orAny other activity that USAA determines is ineligible for allocation of proceeds at the time ofallocation.Opinion: ISS ESG considers the Use of Proceeds description provided by USAA’s Sustainability BondFramework as aligned with the GBP, SBP, and SBG. The eligible project categories are aligned with theissuer’s sustainability strategy. Exclusion criteria are defined, according to best market practices.2. Process for Project Evaluation and SelectionUSAA’s Sustainable Bond Steering Team comprised of members from Treasury, Legal and otherdecision makers across the enterprise are responsible for the review and selection of the green andsocial projects that will qualify as Eligible Projects. Subject to the Eligibility Criteria, USAA’s SustainableBond Steering Team will review and select Eligible Projects for the final approval of USAA’s Treasuryand Legal Departments. The Sustainable Bond Steering Team will also be responsible for identifyingand managing potential ESG risks associated with eligible projects.Opinion: ISS ESG considers the Process for Project Evaluation and Selection description provided byUSAA’s Sustainability Bond Framework as aligned with the GBP, SBP, and SBG. The issuer has astructured process to identify eligible projects and ESG risks associated with the eligible projects.Moreover, the issuer has set up a Sustainable Bond Steering Team comprised of relevant stakeholders,which is considered best market practice.3. Management of ProceedsUSAA will track allocations of Eligible Projects using its internal recording system. Internal records willshow an allocation of the net proceeds for the full term of the bond. Pending the allocation of netproceeds, USAA may temporarily invest such proceeds in accordance with USAA’s internal liquidityISSCORPORATESOLUTIONS.COM/ESG11 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaportfolio guidelines. Payment of principal and interest on USAA Sustainable Bonds will be made fromthe company’s general funds and will not be directly linked to the performance of any Eligible Projects.USAA intends to allocate an amount of the net proceeds as soon as practicable, with a majority to beallocated within the first 12 months after issuance, where feasible.Opinion: ISS ESG finds that Management of Proceeds proposed by USAA’s Sustainability BondFramework is aligned with the GBP, SBP, and SBG. All proceeds will be tracked in an appropriatemanner, and the temporary investments are disclosed.4. ReportingAllocation ReportingUSAA will provide updates to investors annually regarding the allocations and investments of the netproceeds until such amount has been fully allocated. The updates will be provided to the Issuing andPaying Agent who will make such updates available on a dedicated internet portal.Impact ReportingWhere feasible, the allocation reporting will include qualitative and quantitative environmentalperformance indicators such as those included below.Project CategoryGreen BuildingKPI Renewable Energy Energy EfficiencySustainable Water and WastewaterManagement ISSCORPORATESOLUTIONS.COM/ESGGreen building certificationsTotal number of buildings certifiedTotal square feet certifiedPercentage of overall company square feetcertifiedRenewable energy capacity sourced anddeveloped (MW)Renewable energy procured and produced fromthe capacity above (MWh)Emissions (including metric tons of CO2e) avoidedor reducedAnnual renewable energy procured and producedas a % of annual global electricity consumptionEnergy savings (MWh)Emissions (including metric tons of CO2e) avoidedor reducedOffice energy consumption/square footOffice energy consumption/employeeData center Power Usage EffectivenessVolume of water consumption avoided or reducedVolume of treated or recycled waterVolume of verified water restoration projects inhigh water stress regionsVerified water restoration as a percent of annualwater consumption in high stress regions12 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er ia Commuter carbon Emissions (including metric tonsof CO2e) avoided or reducedNumber of Vehicles Number of underserved people reached Clean TransportationAccess to Essential Services andSocioeconomic Advancement andEmpowermentAffordable Housing Rental costs compared to the national/regionalrent indexParticipation (rate) of tenantsShare of under-served tenantsNumber of dwellingsCOVID-19 Relief Number of affected USAA members servedEmployment generation, andprograms designed to preventand/or alleviate unemploymentstemming from socioeconomiccrises, including through thepotential effect of small-mediumenterprise financing andmicrofinance Number of businesses servedNumber of programs createdNumber of underserved people reachedReporting will cover the full scope of investments towards which an amount equal to the net proceedswill be allocated. Reporting will be made in an aggregated manner and/or in some cases at a moregranular project category level.Opinion: ISS ESG finds that the reporting proposed by USAA’s Sustainability Bond Framework isaligned with the GBP, SBP, and SBG. The issuer has clearly defined the scope and level of reporting.Moreover, the issuer has defined relevant metrics to report on the social and environmental impact ofthe projects financed, aligned with the ICMA Harmonized Framework for Impact Reporting.External reviewSecond Party OpinionUSAA has obtained and will make available to the Issuing and Paying Agent a Second Party Opinion(“SPO”) from a consultant with recognized environmental and social expertise to provide an opinionon the environmental and social benefits of this Framework as well as the alignment to the GBP andSBP.AssuranceUSAA expects that the Sustainable Bond Report will be accompanied by (i) an assertion by USAA’smanagement as to the amount of the net proceeds from the sale of any Sustainable Bonds that havebeen allocated to Eligible Projects; (ii) an attestation report from a registered public accounting firmin respect of its examination of management’s assertion conducted in accordance with attestationstandards established by the American Institute of Certified Public Accountants.ISSCORPORATESOLUTIONS.COM/ESG13 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaPART III: SUSTAINABILITY QUALITY OF THE ISSUANCEA. CONTRIBUTION OF THE SUSTAINABLE BOND TO THE UN SDGsBased on the assessment of the sustainability quality of the Sustainable Bond Selection Criteria andusing a proprietary methodology, ISS ESG assessed the contribution of the USAA’s Sustainable Bondto the Sustainable Development Goals defined by the United Nations (UN SDGs).This assessment is displayed on 5-point scale (see Annex 2 for ionNoNet ch of the Sustainable Bond’s Use of Proceeds categories has been assessed for its contribution to,or obstruction of, the SDGs:USE OF PROCEEDSCONTRIBUTION OROBSTRUCTIONSUSTAINABLEDEVELOPMENT GOALSGreen Buildings2Including strict sustainable buildingcertificationsGreen Buildings3Including energy performance certificatesRenewable EnergyWind and solarSignificant ContributionLimited ContributionSignificant ContributionSignificant Contribution4Energy EfficiencyLimited Contribution52According to ISS ESG methodology, green building certifications with strict requirements have a significant contribution to SDG 11 (e.g.LEED, BREEAM), while less strict certifications have a limited contribution to SDG 11 (e.g. Energy Star).3 According to ISS ESG methodology, green building certifications with strict requirements have a significant contribution to SDG 11 (e.g.LEED, BREEAM), while less strict certifications have a limited contribution to SDG 11 (e.g. Energy Star).4 This encompasses products/services that enable energy efficiency/savings with a high impact (insulating materials, battery technology thatallows improvements in the field of renewable energy storage, enabling technologies that significantly increase the energy efficiency ofother sectors/products).5 Best market practices are to achieve an improvement of 30% in terms of energy efficiency for green buildings. USAA has defined aneligibility criteria of 15% of improvement, and 30% where feasible. While this criteria does not align with best market practices, ISS ESGconcludes that the energy efficiency improvement still contributes to SDGs 7 & SDG 13, in a limited manner only.ISSCORPORATESOLUTIONS.COM/ESG14 of 21

SECOND PARTY OPINIONSu s ta in ab il ity Q u al ity o f th e Is s u eran d Su s tain ab l e Bon d S e le ct ion Cr it er iaSignificant ContributionSustainable Water and WastewaterManagementLimited ContributionClean TransportationHydrogen fuel cell, Electric, hybrid, and plugin hybrid vehiclesAccess to Essential ServicesSocioeconomic Advancement andEmpowermentAffordable HousingRelated to provision of affordable housingCOVID-19 ReliefEmployment generation, and programsdesigned to prevent and/or all

May 11, 2021 · Sustainability impact of products and services portfolio Social impact of the product portfolio: As part of its product range, USAA provides health insurance, long-term care protection and annuities, which have social benefits. The product portfolio as a whole, however, does not seem to have significant positive or negative social impacts.File Size: 681KBPage Count: 21Explore further2020 SUSTAINABILITY REPORT - USAA Real Estatewww.usrealco.comESG Ratings & sustainability info for Capital One .www.csrhub.comApply for Charitable Contributions - USAAwww.usaa.comLargest U.S. banks by number of employees 2020 Statistawww.statista.com2020 ANNUAL REPORTs23.q4cdn.comRecommended to you b