Liontrust engagement and voting report 2021 - Flipbook - Page 31
CONCLUSION
2021 was a year in which our engagement progressed significantly. We
recognise that there is more to do and we have identified some of the
ways we plan to do this throughout this report.
Our acquisition of Majedie Asset Management, which completed
on 1 April 2022, will provide extra resource for us to focus on
this in the year ahead and beyond. Our engagement priorities
for 2022 are designed to align more closely with those of the
Sustainable Investment team. We also plan to connect the Liontrust
central engagement strategy with the Multi-Asset ESG process and
begin engaging with investment trusts directly.
Our Liontrust engagement priorities for 2022 build on our 2021
priorities. They are:
• Net zero – encouraging investee companies to adopt
commitments – and assessing those already made – in line with
the Net Zero Asset Managers initiative, which targets net zero
GHG emissions by 2050 or sooner. This complements efforts to
limit global warming to 1.5 degrees Celsius and supports the
alignment of investing with achieving net zero emissions. This
builds on our engagement with the highest emitting companies
in 2021 and will extend to other holdings. We also encourage
investee companies to consider having their commitments
validated by the Science Based Target Initiative.
• Diversity – this will expand to look at diversity more broadly
to encourage more ethnic diversity on boards (and below). In
particular, we will focus on FTSE 250 companies ahead of the
2024 Parker Review target.
• Biodiversity – focusing on companies with the lowest biodiversity
and land-use exposure score on MSCI. We would also like to
explore potential alignment with the London Zoological Society’s
biodiversity priorities – palm oil, timber and pulp and natural
rubber.
Sustainable Investment team’s 2022 engagement priorities
As well as continuing our efforts to increase corporate disclosure of
ESG impacts, impact metrics, mitigation efforts and performance,
the Sustainable Investment team will now focus on delivering
improvements through the following five priority initiatives:
1. Preventing irreversible damage from the climate crisis
2. Preserving and restoring nature
3. Ensuring worker well-being
4. Increasing corporate diversity
5. Encouraging the transition to sustainable investment
For more detail on these engagement priorities, see the Sustainable
Investment team 2021 Engagement and Voting Report.
Voting policy updates for 2022:
• Climate Change. Liontrust updated its custom voting policy
in 2022 to include language that details situations in which
we may vote against a Board Chair or director because of a
company’s lack of action or disclosure over its climate strategy
and/or carbon emissions.
• Gender Diversity. We will continue enforcing a minimum of 33%
female board representation, with a particular focus upon FTSE
Small Cap and AIM companies that naturally have corporate
governance structures that are less developed than companies
with larger market capitalisations.
• Ethnic Diversity. Where there are no board members from an
ethnic minority background, Liontrust’s Sustainable Investment
team already implements a policy that a vote against the Chair
of the Nomination Committee is recommended for all FTSE 350
/ISEQ20 companies. This policy will be extended to the rest of
Liontrust’s investment teams and will cover FTSE 100 companies
in 2022 and will be further extended to FTSE 350 companies
by 2024.
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