A key part of our investment process is ongoing engagement and using the voting rights we have on behalf of investors to enact change for a more sustainable future. This section includes: • Engagement Overview • Proxy Voting • Industry Collaboration For investment professionals only. Not for further distribution
ENGAGEMENT AND VOTING: ENGAGEMENT OVERVIEW
We manage approximately $1.2 trillion* of assets on behalf of our clients, which gives us a powerful position compared to our peers for ESG engagements. Our scale affords us better access to companies and influence.
As a manager of mainly active portfolios, we also have the option not to invest where we see an impediment to reaching investment goals for our clients. Index tracking funds typically do not have this option.
*as at December 31, 2019
ENGAGEMENT AND VOTING: ENGAGEMENT OVERVIEW As of December 31, 2019
Improving disclosure on environmental topics
Investors are increasingly seeking greater transparency about the climate impact of companies in their portfolio.
There is limited regulation mitigating climate change, but we anticipate this to broaden and intensify in the coming years. Subsequently, we see corporate disclosure of environmental data as essential in our ability to measure how a company is placed to respond to changing regulations.
We have sought to nurture steady improvements in ESG disclosure, to help companies understand how to report environmental data, how we use ESG data in our analysis, and how clients use this data to evaluate their portfolios.
ENGAGEMENT AND VOTING: PROXY VOTING As of December 31, 2019
Proxy voting
Proxy voting is a crucial part of our stewardship responsibilities in managing assets on behalf of our clients. It offers a powerful opportunity to cast votes that would aid long-term, sustainable success for the company and its investors, and works alongside our engagement strategy.
What we did in 2019
This summarises our voting record for management-sponsored proposals, where a vote ‘for’ is one that aligns with the board’s recommendation.
Shareholder proposals
In a few markets around the world, shareholders may present items to be voted on at the annual general meeting.
How we voted in 2019
A vote ‘for’ in shareholder-sponsored proposals, is generally a vote contrary to the board’s recommendation.
ENGAGEMENT AND VOTING: PROXY VOTING
Environmental and social voting While environmental and social items represented just one‑half of 1% of all proposals we voted on, we see keen interest in our approach to voting on such resolutions, given mounting investor concern in this area. We do not have a standing voting policy on any matters of a social or environmental nature – we review each voting decision on a case-by-case basis.
ENGAGEMENT AND VOTING: INDUSTRY COLLABORATION
We selectively collaborate on industry initiatives where we can help bring the most viable and impactful change, to supplement our core engagement programme. One of the more recent initiatives where we have been a founding member is the Japan Stewardship Initiative.
Japan Stewardship Initiative
We were one of the original organisations and individuals to sign up to the Japan Stewardship Initiative in November 2019. It is encouraging that the importance of ESG has been embraced so quickly in the Japanese market, but there is much work to do in terms of gaining meaningful insights from ESG data.
Principles for Responsible Investment
We have been a signatory of the Principles for Responsible Investment (PRI) since 2010, reporting annually to the organisation, to aid better disclosure worldwide about important sustainability issues.Our latest scores, released in July 2020, reflect the progress we've made on ESG integration.
Read more in the full report.
